Canada, the Loonie and Manufacturing

By September 5, 2007Trade

Just like to check in with our confreres north of the border every so often. The Loonie reached its 30 year high in July at 96.71 cents and currently stands at a shade under 95 cents, making its exports more expensive than in previous years. But U.S. exports to Canada are cheaper.

TORONTO (CP) — Job losses in manufacturing in Ontario – like the 1,200 cuts just announced at General Motors – have been painful, but economists say the impact has been softened by growth in other sectors as the economy diversifies.

Free trade and the loss of manufacturing jobs to the developing world, including emerging economic titans like China, have all been linked to a flat lining Ontario economy.

Meanwhile, the resource-rich western provinces have seen employment and economic growth rates spike up like the gush from an oil strike.

Alberta’s growth rate, which reached seven per cent, was so high it was not sustainable, economists say, and TD Bank said it expects Alberta’s economy to expand by only four per cent this year.

Thank goodness for Alberta and its energy exports.

Major investments are taking place to ensure that Canada will increase its energy production long into the future. There are mega construction projects underway in oil and gas production and delivery systems (i.e., pipelines) in western Canada (Saskatchewan, Alberta and B.C.) and off the East Coast. Canada is also about to embark on a new era of mega electric power projects in almost every region of the country. These projects, in both oil and gas and electric power, are geared towards export potential as well as domestic demand.

Glad somebody’s doing it.

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