Originally Posted by shreddog
Not sure I agree with your statements. Looking at AB (the largest GDP in the west, #3 in the country) all energy related activites comprised 31% of the total GDP in 2010, as compared to 44% in 1980. While energy prices are higher today, overall their contribution to the overall GDP in AB is less. And as for Dutch disease, personally I think that this is really much ado about nothing. Two key things on that: Ontario and east get a good chunk of their oil externally. For ever 2 barrels of oil we export to the US, Canada imports 1 barrel from the Brits/Norway/Algeria. And secondly, while Canada exports $6B of oil every month, Canada also does over $50B of total financial clearing every day - including the money related to oil exports. At the end of the day, oil prices impact the Canadian economy less than many believe.
That said, you are correct that Ontario will have to adapt going forward as energy gets more expensive. Mind you that applies to most jurisdictions.
It doesn't really matter whatsoever how much of Alberta's GDP is based on the energy sector or where Ontario gets its energy. What matters is how the commodity price run up has affected the Canadian Dollar. It is pretty well accepted as fact that our currency's value has climbed because of the rise in commodity prices, oil in particular. This has made manufacturing less competitive internationally while capital has flowed to resource producing regions. When that happens, Ontario gets hammered and certain other provinces boom.
In the event that this becomes a more permanent situation, it isn't high energy prices that Ontario will have to adapt to since, as you point out, it affects everyone. What Ontario will have to adapt to is a higher dollar that makes manufacturing exports more expensive.