CALGARY, Oct. 2, 2013 /CNW/ - Economy watchers have a new disease to
worry about: Canadian disease. A report published today by The School
of Public Policy argues that while many politicians and pundits blame
the resource boom for recent employment declines in the manufacturing
sector, also known as Dutch disease, these accusations are misguided.
Serge Coulombe, the report's author, argues that most of the job losses
observed during the period of 2002 to 2008 were in fact caused by the
Canadian disease: the economic trouble that can be caused by Canada's
extraordinarily heavy reliance on the United States as a trading
"A sudden depreciation of the U.S, dollar will deteriorate the
competitiveness of Canadian manufacturing exporters," Coulombe writes.
"The depreciation of the U.S. dollar is a phenomenon that is
independent of the resource boom and the resulting consequences on the
Canadian economy cannot be endorsed to a Dutch disease."
In terms of numbers, Coulombe argues that 31 per cent of the job losses
in Canada's manufacturing sector could be attributed to Dutch disease,
while 55 per cent could be attributed to Canadian disease. The
remaining losses were due to structural issues in the economy.
With Canada's dependency on the U.S. being the principal cause of
employment losses here at home, the author recommends steps be taken to
protect ourselves against economic fluctuations south of the border.
One of these steps is market diversification for manufacturing outputs,
which he acknowledges is a measure already underway.
The report can be found at http://www.policyschool.ucalgary.ca/?q=content/canadian-dollar-and-dutch-and-canadian-diseases.
SOURCE: The School of Public Policy - University of Calgary
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