Rising dollar creating
"challenging times" for Canada: PM
Politics Watch « News Services
November 8, 2007, updated 5:00 p.m.
|Prime Minister Stephen Harper.
OTTAWA (PoliticsWatch.com) —
Prime Minister Stephen Harper said Thursday that the rapidly rising
Canadian dollar was creating a challenge for Canada and was a factor
in last week's announcement of massive tax cuts.
"While our economy remains strong, Canada is not immune from the significant uncertainty that has grown in the world economy in recent
months," he said in a speech to the Canadian Club of
"With weakness in some of our export and
the rapid appreciation of the dollar, we are living in challenging
The Canadian dollar has been rising rapidly in recent months
and passed the $1.10 US mark for a brief period this week. The
Canadian dollar has increased in value 25 per cent this year due
largely to high oil prices and a declining U.S. currency.
The strong dollar has put a strain on Canadian exporters and has
created anger from consumers who are not seeing prices of products
sold in Canada drop.
The prime minister said last week's economic statement that
contained $60 billion in new tax cuts was spurred partly by the
"We felt a need to act early to send a clear message for those
looking for optimism about the future that this country is rock
Harper spent the rest of the speech tempering jitters about the
economy, noting unemployment levels were at lows not seen since the
early 1970s, Canada's tax rates had not been this low since
the early 1960s.
"Federal taxes will fall to the level they were at in the last
year of the Diefenbaker government, before the policies of the late
1960s, before Trudeau, back to the lowest level in nearly half a
century," he said.
While Harper was upbeat about Canada's economic performance the
premiers of Canada's two largest provinces both publicly sent
warnings Thursday about the impact of the high dollar on Canada's
Quebec Premier Jean Charest called on Harper to convene a
special premiers' meeting to discuss the soaring loonie.
"It's one thing to see the dollar increase in value, it's another thing to see it increase at such a rapid rate,"
Charest said. "I believe it's important we be able to sit down and try to better measure the impact, and what we should be doing, to ensure that our economy is not adversely impacted by these changes."
Meanwhile, Ontario Premier Dalton McGuinty said he raised his
concern about the appreciating dollar and its impact on Ontario's
manufacturing sector in a private meeting with Harper in Toronto on
Federal Finance Minister Jim Flaherty told reporters he
expects the sinking U.S. dollar will dominate next week's meeting of
G-20 ministers. Flaherty also said he and Bank of Canada Governor David
Dodge have already held discussions about the dollar with other
finance ministers and central bank officials.
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