:: PoliticsWatch Archives

> Frontpage

:: Inside PoliticsWatch

> Contact PoliticsWatch

:: PoliticsWatch News

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 Toronto. 

"With weakness in some of our export and the rapid appreciation of the dollar, we are living in challenging times." 

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 dollar's rise. 

"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 solid."

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 economy.

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 Thursday morning. 

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.

:  Related Links

> Canada cuts GST to five per centá

© Politics Watch News Services 2007. All rights reserved. Republication or redistribution of Politics Watch content, including by framing, copying, linking or similar means, is expressly prohibited without the prior written consent of Public Interests Research and Communications Inc (PIRCINC). Fees and charges may be applicable for the copying and or redistribution of Politics Watch content. Politics Watch « is registered trademark of PIRCINC.

> PoliticsWatch Home

:: Got a News Tip?

Call the PoliticsWatch
tip-line at 613.232.0516


Politics Watch « News Services
Public Interests Research and Communications Inc. 
85 Albert Street, Suite 1502, Ottawa ON K1P 6A4 |  phone: 613.232.0516
info@politicswatch.com  |  Terms of Service, Copyright, Trademarks, and Disclaimers Statement