Summary
This article by Patrick Daniel discusses how Canada’s energy industry completely relies on the United States as its sole customer for petroleum as they import around two million barrels of oil per day. This is a profitable relationship brought about by the strong ties and close proximity of between these two countries. However, despite the advantages it may offer, Canada still suffers from lack of alternative markets for their vast oil supply while the United States have plenty of other options to choose from.This factor is the hindrance that prevents Canada from becoming a major economic superpower. So Canada has been contemplating on the Northern Gateway pipeline project which will allow safe transport of energy to the West Coast and open up new markets for oil in the Pacific Rim nations. It would considerably raise Canada’s GDP by $270 billion over 30 years by providing more work for people. This would definitely strengthen Canada’s economic status as a world leader in the future.
Connections
This article relates to chapter 6 because there are factors that will relate to Aggregate Demand. One of the factors is disposable income because the more money they have the more they will be able to spend. As a result, a raise in the Gross Domestic Product levels will occur. The Northern Gateway pipeline project will help by opening up many new job opportunities, because the construction of this project requires a lot of labor. So if more people had work, the level of spending would increase because more people would be able to afford buy goods and services that they would not have been able to afford previously. Another factor that would change would be that oil prices would be lower due to mass production and available markets. Lower oil prices mean that people and countries will purchase more oil. As you know, exports are an injection to the economy and the increase of sales will raise the Gross Domestic Product of the country. To kick-off this project, there will be a demand for company invesments in the energy industry to build this pipeline which could do a lot of good to GDP. So it seems like results of this project would be improve the economy.
Reflections
I agree with the article when it says that Canada’s economy is too dependent on the United States because the decisions made by them constantly influence Canada’s economy. Canada has vast resources, such as oil and wood, since it is such a huge country. However, Canada does not have enough economic power and trading partners to use its resources to the best advantage. So I think that the Northern Gateway pipeline project will be a great opportunity for this country to expand its rich energy resources to other markets. However, I wonder what the budget for the construction of the pipeline would be because if it is too expensive, it might cause a major impact on the government’s budget. Then, we might receive a poorer quality of services because they might use the tax dollars towards this project. What about the environment? Will it be affected by oil leakages and damage the wilderness? I really hope not, because I think that this idea could bring out a potential stable future for Canada.
I agree with how Canada is dependent on the economy of the United States, because as we saw in our recent recession, or in the Great Depression, Canada's economy fell along with the United States. Canada needs to build up its list of connections and partnerships with other countries. This Northern Gateway Project will be good for the GDP and economy. Canada will have more exports, and more jobs will be created. With more jobs means more consumer purchases. All of this leads to a larger GDP. It is mentioned in the article that the GDP will increase by, hopefully, $270 billion over the next 30 years. This seems like a very good move for the economy of Canada.
ReplyDeleteI thought you did a wonderful job Elena. I agree with everything that you said in the article and your opinions. This project IS very good for our economy and I hope it goes forward.
J. Savage