Loonie Lows Present “Remarkable Opportunity” for Canada: Sorenson
The weakening of the Canadian dollar presents a “remarkable opportunity” for the Canadian economy, according to the nation’s Minister of state for Finance.
Conservative Cabinet member and Minister of state for Finance Kevin Sorenson sees strong upside to the Canadian dollar’s recent lull. By making exports more attractive, a weaker loonie should help Canada’s struggling manufacturing sector get back on track.
The Canadian dollar remained elevated for much of the period following the global financial crisis, straining Canada’s trade relationship with the United States. The United States is by far Canada’s largest trade partner, accounting for more than three-quarters of the true north’s export market.
“I would say that with the dollar being low there is remarkable opportunity,” Sorenson said. “We’re an exporting country and as you know by far the majority of everything we manufacture here and everything we grow here we export…”
The Canadian dollar declined every day last week before falling to a four-year low on dismal employment data. The loonie snapped its losing streak Wednesday after a marginal gain.
Canada’s business climate remained subdued at the end of 2013, with companies citing domestic uncertainty and global headwinds as their major concerns. Around one-half of enterprises expressed plans to hire in the next 12 months, which may partly explain the unexpected drop in employment last month. Canadian employers let go of nearly 46,000 workers in December. The unemployment rate increased 0.3 percentage points to 7.2 percent as population growth outpaced workforce expansion.
Bank of Canada Governor Stephen Poloz doesn’t expect the Canadian economy to return to full capacity until the latter half of 2015. In the meantime, a weak Canadian currency could boost demand from Canada’s largest trade partner and help the world’s eleventh largest economy rebound.
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