OTTAWA - A new report warns of the perils to the Canadian economy of relying too much on the oilsands.

The Canadian Centre for Policy Alternatives study says Canada is heading towards a "staples trap," whereby the more quickly bitumen is exported, the less diversified and productive the economy becomes.

The study's authors also warn of a looming "carbon trap" in which the Canadian economy is so closely linked to carbon-producing industries that it becomes difficult to adopt measures to deal with climate change.

"What goes up always comes down where commodities are concerned," co-author Jim Stanford, an economist with the Canadian Auto Workers, said in an interview.

"Our concern is that Canadian policy makers who were so quick to jump on the bandwagon of us becoming an energy superpower forgot those lessons of the potential downside of a staples-based strategy for our whole economy."

A big danger facing the oil industry is shrinking markets for fossil fuels as a result of global efforts to address climate change, says the report.

The report was co-written with Tony Clarke, head of the left-leaning Polaris Institute; Diana Gibson, former research director of the Parkland Institute in Alberta; and Brendan Haley, a PhD candidate at Carleton University in Ottawa.

Countries that rely too heavily on raw materials can fall into a dangerous cycle, they argue.

"Staples-based economies must make enormous fixed-cost investments in production and transportation infrastructure, generally undertaken by large, often foreign-owned companies," the report says.

"To pay off these overhead costs and reward investors, staples industries face an enormous motivation to produce and export their staple faster."

Doing so can drive down the price.

Investing so much into one industry can also cause others to wither, say the authors, who point to manufacturing as one industry that has suffered from a high Canadian dollar linked to soaring oil prices.

"The brunt of resource-driven sectoral restructuring in Canada's economy has clearly been borne by the manufacturing sector," the report says.

The report recommends tighter regulations and control of the oilsands to slow development, and transitioning to a low-carbon economy in which governments play a greater role than they now do.

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  • Total Jobs

    If unhindered, it's estimated that expected investment in the oilsands will result in 100,000 new jobs a year for the next 13 years, either directly or in companies supplying goods and services.

  • Alberta Reaps

    As much as 54% of the benefits accrued from ongoing investments in the Alberta oilsands will stay in Alberta.

  • Ontario Gets Its Share

    Within Canada, the biggest winner outside Alberta is Ontario, which is expected to benefit from 10,000 new jobs per year.

  • B.C. Gets A Little Smaller Share

    British Columbia comes next with approximately 5,400 new jobs per year. Alberta and B.C. are currently locked in a fight surrounding the proposed Northern Gateway pipeline, which would carry bitumen from the Alberta oilsands to the B.C. coast for shipping to Asian markets.

  • The Prairies

    The prairies would gain 2,700 new jobs per year.

  • Quebec

    Quebec would benefit from approximately 2,500 new jobs a year.

  • Atlantic Canada

    Atlantic Canada can expect to see approximately 530 jobs a year, says the study.

  • The Rest Of The World

    Other countries will reap approximately 27 per cent of the benefits from continued, expected investment in the oilsands. In the U.S., 8,300 jobs a year

  • The U.S.

    The biggest benefactor of continued investment in the oilsands outside Alberta would be the U.S., with 8,300 new jobs being created each year.But the benefits for the U.S. extend beyond mere jobs alone.