Canadians could be paying $2 for a litre of gasoline after oil rises as high as US$200 a barrel during the next economic cycle, says a Canadian author.

Former CIBC chief economist Jeff Rubin argues in his book, "Why Your World Is About To Get A Whole Lot Smaller: Oil and the End of Globalization," that while oil has been cheaper during the current recession, it's not going to be that way for long.

Because global demand remains strong and oil reserves are continually being depleted, he said prices will go up.

This will then drive up shipping costs, forcing many countries to rely on their local economy to support manufacturing and other key industries.

So it will no longer make "economic sense" to produce goods in one part of the world and sell them in another "no matter how much the wage difference is," he told CTV's Canada AM Tuesday.

"Who would have dreamt that triple-digit oil prices would breathe new life into our rust belt? But that's exactly what's going to happen. Long lost jobs are soon going to be coming home."

He said raw materials are sometimes shipped from Europe and processed in China before being sold in North America.

Rubin said if the price of oil is too much to make this type of industry profitable, businesses will have to cut down on transportation costs and produce goods closer to consumers by hiring local workers, he said.

Rubin was the chief economist and chief strategist at CIBC World Markets for 20 years but quit earlier this year. He's also credited with being the first economist to predict triple-digit oil prices.

Rubin argued while the global recession has been blamed on a faulty financial sector plagued with toxic assets, oil is really to blame.

"When we look around the world, we see recessions that were twice as deep as they were in the U.S. and occurred even before the U.S. recession. That can't just be about sub-prime mortgages."

Rather, he said oil prices that reached about $150 a barrel is what caused the globe to slip into its deepest recession since the 1930s.

"Every time we've had huge oil shocks in the past we've had global recessions. Guess what? This was the biggest shock of them all, so why wouldn't we have the deepest recession of them all."

On Monday, the average price of gasoline in Canada rose to $1 per litre for the first time in seven months.

At this time last year, oil was trading for US$130 a barrel on world markets. But on Monday, a barrel of crude was around US$61.

Leaders from the Organization of Petroleum Producing Countries have said this year that they want the price of crude at US$70 a barrel.

Most analysts say if oil remains at its current price, it will keep the group from cutting production any further.

Oil has rallied because of investor optimism that the worst of the recession is over and that demand for crude may start to rise.