Thank you.
I will just make a few brief comments.
I would like to remind you what we mean by “Dutch disease”. It means that the increase in the development of one or more natural resources causes the exchange rate to go up, which leads to a relative decline in the manufacturing sector. That is the standard definition.
One of my colleagues has studied the phenomenon very closely. He tried to measure the impact on the Canadian economy for the growth period in the 2000s. His study shows that about 42% of the impact on the manufacturing sector of the increase in the exchange rate is the result of an increase in the prices of raw materials.
There are debates on the mechanism causing this negative impact on the manufacturing sector, but in general, the emphasis is on the increase in the domestic prices of services in Canada compared to what is happening elsewhere, an increase that has a negative impact on the entire manufacturing sector.
I would like to mention two other points that are not often mentioned in this debate.
Professor James Hamilton noticed a negative relationship between rising oil prices and economic activity around the world. That is one more effect on Canadian manufacturers. If the increase in oil prices has a negative impact on economic activity worldwide, there is clearly a negative impact on the Canadian manufacturing sector, regardless of all the other effects that may occur.
We must also remember that Canada is a large country and that transportation costs are relatively more significant for the Canadian economy than for the other economies of industrialized countries. Therefore, an increase in oil prices affects the transportation sector, which causes additional challenges for Canadian manufacturers.
The last point has to do with an ongoing debate among economists regarding the effect of this relative decline in the manufacturing sector or the effect on the overall productivity of the Canadian economy as a whole. I would simply like to say that this issue has not been resolved, although we often hear comments about this relationship.