Canada's resource-centred economy will feel the effects of declining oil prices in a big way
Canada's resource-centred economy will feel the effects of declining oil prices in a big way - for better and for worse.
Crude oil for October delivery was trading at US$92.56 on the New York Mercantile Exchange Tuesday - a major drop from its all-time high of US$147.27 set in July.
TD economist Derek Burleton claims fewer dollars will flow into government coffers now that crude prices are falling. He says oil-producing provinces will collect less in royalties and Ottawa will get less in the form of tax revenue from businesses and even individuals who benefit from the oil and gas sector.
However, Burleton predicts there will be some "offsetting benefits" from the lower oil prices, especially in Central Canada, where the manufacturing sector has taken a major hit.
The lower oil prices may depreciate the exchange rate of Canada’s dollar , which means those manufacturers may have an easier time selling their goods south of the border.