Canada as an emerging energy superproducer

Because of the impact that development and export of Holland’s North Sea natural gas resources had on the value of its currency and the ability of its manufacturing sector to compete, the economic literature warns of the perils of becoming overly dependent on the resource sector, often called “Dutch Disease” or the “resource curse”. [...] Canadian oil production and net exports will increase through at least the next quarter-century as the result of continued expansion in the capacity to produce bitumen from the oil sands and oil from shale formations such as the Bakken formation in Saskatchewan and the Canol formation in the vicinity of Norman Wells in the Northwest Territories. [...] Because Ontario water-rental fees are a function of both the price of electricity and the volume of power that is generated, the total revenue from this item (also referred to as a “royalty” by the Ontario Ministry of Natural Resources) can fluctuate more than in most other provinces, where the fees are generally based solely on the volume of production. [...] An article in The Economist in 1977 argued that development of the Netherlands’ offshore natural gas resources since 1959 had caused that coun- try’s manufacturing sector to shrink because inflated labour and other costs as a consequence of the resource boom, and appreciation in the value of the Dutch florin as the result of the gas exports, had made the manufacturing sector less competitive (The [...] Certainly the degree to which this argument may be applicable to a particular country depends on the country’s policy and institutional framework, includ- ing the size and composition of its manufacturing sector and the degree of synergy between, say, the oil-producing sector on the one hand, and manu- facturing on the other.