The petrodollar effect: Just how much is the loonie tied to oil prices?

Financial Post | Business

The recent crash in oil prices has set the stage for the most-anticipated OPEC meeting in years on Thursday. As oil-producing powerbrokers prepare to gather in Vienna, the Financial Post and Calgary Herald this week present Oil Pressure, a look at the forces buffeting, and buffeted by, the new oil world order. Today, the ties that bind Canada’s economic fate to energy prices.

CALGARY – Calling the Canadian dollar a “petrodollar” certainly makes sense if you mean the fact that the latest batch of bank notes are made out of polymer plastic, derived from petroleum products. But more than ever, economists are split on whether or not the term makes sense any longer in describing the correlation between the value of our loonie and the price of oil.

If it is a petrodollar, “it isn’t a very good petrodollar,” said Jack Mintz, director of the University of Calgary’s School of…

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