Ottawa, ON — The Canadian dollar is continuing its record-setting rise, reaching parity with the U.S. dollar this …
Ottawa, ON — The Canadian dollar is continuing its record-setting rise, reaching parity with the U.S. dollar this past week for the first time in 31 years. The Forest Products Association of Canada (FPAC) has called on the federal government and the Bank of Canada to take action in order to mitigate the damage occurring in Canada’s manufacturing sector due to the rising currency.
The Canadian dollar has risen over 13% since the beginning of this year, and 58% over the last 5 years. The rising dollar makes Canadian products harder to price competitively in a global economy. The forestry sector, which exports over $40 billion of wood, paper and pulp annually to external markets, is particularly vulnerable because all the major inputs into these products, such as fibre, energy and labour, are sourced in Canada, and therefore priced in Canadian dollars.
“Canada’s forest products industry employs over 340,000 Canadian in high-wage, high-tech, high productivity jobs. In fact, one study estimated that average forestry wages and benefits approached $70,000 annually big city salaries found in rural communities,” said Avrim Lazar, president and CEO of FPAC. “The industry today is the backbone of the rural economy, accounting for 3% of Canadas GDP larger than oil and gas, mining and auto manufacturing. More needs to be done to ensure that these jobs remain in Canada.”
“As industry adapts and improves its efficiency and productivity to help mitigate the impact of the rising dollar, governments have an equal responsibility to adjust in the face of a shifting global economy,” Lazar noted. “Rapid action by governments in such areas as tax reform, mergers policy and a more competitive rail transport sector can also play an important role in enabling industry renewal and in assisting the forest sector to adapt to a higher Canadian dollar.”
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