The Alberta Oil Sands and the Canadian Mayor System

Canadian Politics
Student’s Name
Institutional Affiliation
Canadian Politics
The Alberta Oil Sands
It has been boisterous of a century since the remarkable discovery of oil deposits in Turner Valley signaled the emergent of the petroleum industry in the western part of Canada. The 100 years of oil mining and trading has experienced its own high and lows. In that case, the debate on whether the Alberta oils are a boon or a bane for the Canadian economy keeps looming as it is perceived that natural resources come with both blessings and curses. The Canada oil fields, which is largely located in Alberta’s oils sands, ranks as the second-largest oil reserve to Saudi Arabia’s. According to Alberta Energy and Utilities Board, the oil sands is estimated to contain approximately 1.7 trillion barrels of crude bitumen, whereby about 20% of the bitumen deposit are recoverable. Such massive oil reserves are perceived as either a blessing or a curse in disguise. However, many nations with abundant natural resources have in fact experienced economic difficulties.
Alberta province, Canada at large, and the neighboring nations like the US have reaped in the increased economic activity and job growth from the oil business. The economic impacts also come with numerous social benefits in forms of programs rolled out across the country funded with government revenue levied from oil and gas production. In other words, the benefits accrued from Alberta’s oil patch has helped to shape the social-political and economy of Alberta and Canada as a whole by transforming the country into a major oil producer across the world. Smilarly, th negative impacts of Alberta's oil fields affects the social-economic, environmental factors in the country. In spite of numerous benefits, still, the disadvantages of the oil outweigh the advantages and therefore confirming that Alberta’s oil patch is more of a curse than a blessing. Therefore the paper focuses on the negative impacts brought by the occurrence of oil deposits in Canada.
The oil business has adversely affected the Canadian economy epecailly the status of the currency and local industries, and labor markets. The phenomena whereby the local currency become too strong as a result of large exports is called the “Dutch Disease” (Drach, 2013).The Dutch Disease negatively affects the performance of a local manufacturing due to adverse exchange rate effects. Unfavorable exchange rates trigger an effect whereby the strong foreign currencies like the pounds and US dollar become relatively stronger than the Canadian dollar, and therefore causing unhealthy international competition and high costs of inputs to the local manufacturers (Drach, 2013). The oil deposit has encouraged massive foreign direct investment in the Canadian small economy. As a result, the excessive inward inflow of capital exerts upward pressure on domestic currency thus making the local exporters lose their competitive advantage as the prices of their goods and services relatively increases abroad (Drach, 2013). In addition, the high inflow of oil money might trigger excess demand on products and services in the domestic market. Prices of factors of production such as labor and land...