I wonder if our soaring dollar could turn around and bite us in the tookus?
Any economists out there?
This is a fair bit off topic, but I figured I'd answer anyway.
While I'm not an economist, you'll note that the dropping US$ hasn't exactly re-opened a bunch of factories or manufacturing industries across the border.
Canada lagged behind the US$ in advancing this country to a value-added or service based economy. I've read several articles that said the businesses and industries that will survive in Canada (if the dollar stays up there as predicted).. are those that successfully :
- Maximize efficiency and reduce waste &
- Transition to a value-added or service based proposition
Exporting raw goods, usually natural resource based, has been Canada's raison d'etre in the world for the last 70 years. We need to transition away from that and make those raw goods into produced final products in an efficient and cost effective way.
Some companies have already started that transition. Others haven't but will and still others just won't figure it out in time.
Despite that, Canada has had a huge trade imbalance .. that is to say we import way more goods than we export. Those imported goods are going to be cheaper for Canadian companies to buy on the world markets now.
The smart companies and organizations will take sharp advantage of that and offer goods and services to Canadians at significantly reduced prices... AND won't waste any time doing it.
In the rush to complain about our dollar hurting manufacturing sectors, nobody seems to think about the raw ingredients, custom machinery, etc.. that are imported for those manufacturing efforts which will now be cheaper to acquire.
It's a complicated system. But those who will hurt the most are companies and organizations involved in the harvesting and export of wood, coal and other natural resources that aren't processed in Canada .. They are in for a rough ride no matter how slice it.