Is Canada suffering from Dutch Disease?
In early January 2013 the Conference Board of Canada, which is an independent social/public policy think-tank, released a report evaluating the environmental records of countries around the world. Canada came in 15th out of 17th, and received an overall grade of a “C.” The Conference Board identified one of the reasons why Canada scored so low is because of Canada’s recent push to focus on our newly found natural resources such, as oil for example, while ignoring crucial environmental needs.
‘Dutch Disease’ was coined in the late nineteen fifties and used to describe the situation in the Netherlands when they discovered Natural gas, is the idea that upon discovery of abundance of a particular natural resource, countries begin to focus on developing it at the detriment of other sectors, such as manufacturing. When the resource dries up, economies are often left in peril, and environments left ravaged for decades to come. Could this become Canada’s fate?
In the January 2013 study the Conference Board found that since Canada’s shift to focusing on resource development, our fresh water is at risk, as well as greenhouse gasses increasing in our atmosphere.
“ Canada must do more to lower greenhouse gas emissions, to use its freshwater resources more wisely, and to reduce waste,” the study suggested.
Other troubling results from the study were the fact that Canada had been identified as under-preforming on nine crucial environmental aspects, including: forest cover change, nitrogen oxides emissions, sulphur oxides emissions; Marine Trophic Index, greenhouse gas (GHG) emissions, water withdrawls, volatile organic compound (VOC) emissions, municipal waste generation, and energy intensity.
That being said, Canada did show improvement in a few areas such as air quality, as well as increasing growth of forest resources. Moving forward, the Conference Board suggests Canada to incorporate more sustainability into their environmental policies, while balancing economic needs.
“To improve its overall performance, Canada must promote economic growth without further degrading the environment, partly by encouraging more sustainable consumption.
The results of this study are important, as Canada was lined up against its peers and compared on several environmental aspects. On most of these aspects we fell short, however the bigger issue is the importance of not ignoring the history of other countries such as the Netherlands and Nigeria who found themselves with a full-blown case of Dutch Disease. The expropriation of natural resources may seem like a good idea in the short-term, however if the long-term environmental as well as economic outcomes are more detrimental, public policy must adjust to reflect this.