Columnist Doug Saunders writes (from his Mediterranean cruise) in today’s Globe:
“It’s a little like the decision being faced by the Bank of Canada, which can print money and ease the dollar’s value downward to please Ontario’s manufacturers, or let it rise to please Alberta’s petroleum exporters – but not both.”
Huh? Petro exporters get more Canadian dollars and higher profits if they can convert their US dollar denominated oil exports back into Canadian dollars at a low exchange rate. It is importers and consumers – not exporters – who gain from a high Canadian dollar. The partial exception would be exporters who import a lot of components, but that’s not the oil industry. It is true that high resource prices drive up the Canadian dollar, but not true that a high dollar is a great thing for resource exporters.
- Dutch Disease is Dead … Long Live Dutch Disease!!! (March 4th, 2013)
- The IMF and the Canadian Manufacturing Crisis (February 15th, 2013)
- Exchange Rates, the Price of Oil and the Enbridge Northern Gateway Project Joint Review Panel (October 25th, 2012)
- Oil Prices and the Loonie Again (August 30th, 2012)
- Spinning Mr. Carney (August 28th, 2012)