From Our Friends North of the Border

By September 18, 2007Economy, Technology, Trade

Pretty frank report on the health of the Canadian manufacturing economy by Jayson Myers, president of the Canadian Manufacturers and Exporters group. The Canadian dollar today stood at $0.9769 U.S., a 30-year high.

A 30-year-high. Wow.

From the Canadian Press:

The steep rise in the loonie, coupled with the slowdown in the U.S. economy, is forcing the kind of adjustment in the Canadain manufacturing sector that hasn’t been seen since the signing of the Free Trade Agreement with the U.S. in the late 1980s, said Jayson Myers, president of the Canadian Manufacturers and Exporters group.
By most estimates, the sector has shed 250,000 jobs – almost all in Ontario and Quebec – over the past three years.

“Quite frankly, what’s happening is companies are closing their production in Canada and shifting production down into the U.S. because there is too much capacity due to the slow-down in the American market,” he said.

“I think they have to be prepared to compete at parity or higher and the only way they can do that is to have world-class operations, investing in high-valued products and services and by using the best technology.”

A good discussion of the possibilities and problems posed by the high Canadian dollar. Smartly, the manufacturers seek to improve their status the same way other countries have, by making their corporate tax rates more competitive — reducing the tax to 15 per cent by 2012, from the current projected reduction to 18.5 per cent.

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