With the spectacular rise of the dollar, along with rising natural-resource prices during the first decade of the 21st century, Canadians heard a great deal about Dutch disease. Many politicians and pundits blamed the phenomenon — in which a country’s currency, inflated by rising commodity prices, renders manufacturing exports increasingly uncompetitive — for rising unemployment in the Canadian manufacturing industry. But a close look at what happened during that period reveals that the Dutch disease mechanism was only part of the story. The other part, and quantitatively the most important, is an affliction of an altogether different providence: Canadian disease. Canadian disease is the economic trouble that can be caused by Canada’s extraordinarily heavy reliance on the United States as a trading partner. As a consequence, a sudden depreciation of the U.S, dollar will deteriorate the competitiveness of Canadian manufacturing exporters. Such a phenomenon was at work during the “Great Appreciation” of the Canadian dollar between 2002 and 2008 — the largest such appreciation on record in this country. The depreciation of the U.S. dollar is a phenomenon that is independent of the resource boom and the resulting consequences on the Canadian economy cannot be endorsed to a Dutch disease. Almost 2/3 of the employment losses that are exchange rate related in the trade-exposed manufacturers in Canada during the 2002–2008 period could be attributed to the Canadian disease. The Canadian dollar is partly driven by commodity prices, and the appreciation of the Canadian dollar exerts a negative impact on manufacturing industries that are exposed to international competition. This phenomenon can be coined as a Dutch Affair. The Dutch Affair becomes a disease in the long run when the non-renewable resource is depleted and the manufacturing base is gone. New manufacturing activities might not reappear due to a variety of obstacles. In Canada, we may only have a Dutch Affair, not Dutch disease. Only the future, however, will ...