A new report out by Bank of America Merrill Lynch says that Canada’s oil and gas sector has caused a dutch disease in the country.
This idea of dutch disease is nothing new, and what it’s implying is that the oil industry has in fact driven up the value of the loonie to the point that it is hurting other export-reliant industries.
The term “dutch disease” has been a political trigger point in recent years, but it was shot down by the Bank of Canada, saying that the oil and gas industry should jump at the chance to expand.
There is no doubt that the oil and gas sector has had a positive effect on the Canadian economy, but there is no denying that it has had a negative impact on other areas of the economy as well. But as long as the price of oil stays high, I don’t see things changing any time soon. And I feel this report will fall on deaf ears, especially in western Canada.
To read the whole story on the Bank of America Merrill Lynch report, head over to HuffPost Canada.