Falling Oil Prices Could Rock Canada's Politics: Expert

What do the plummeting oil prices tell us not only about our near term economic future in Canada, but the political fragility of the world's petro states?

If Canada fully joins the petro state club, as our prime minister and his party desire, is oil's volatility just the cost of doing business, or a threat to our nation's well-being?

The ideal person to ask is Terry Lynn Karl, one of North America's foremost experts on the politics of oil. The Tyee recently caught up with Karl, who teaches at Stanford University and lives in San Francisco.

Asked in a wide ranging interview what Canadians might expect if oil prices stay low for a few years, she predicted "a rapidly declining Canadian dollar, greater problems over pipelines, the reduction of future investments, and a very bumpy oil ride, especially for Alberta.

"Any adverse effect low oil prices will have on Canada's high cost oil industry will have a multiplier effect on the economy and polity. Government services will be cut back, house sales will decline, and banking will slow down. Canadians will not be so happy with their government."