A background study for the latest IMF report on Canada (see pages 42 to 51) adds further weight to the argument that the rise in the exchange rate of the Canadian dollar, driven in large part by high commodity prices, has underpinned a sharp decline in the US market share of Canadian manufacturers since 2000 and a major shift in the composition of Canadian exports from manufactured goods to energy and minerals. This report notes that China has taken market share in the US at the expense of Canadian manufacturers without underlining the fact that China’s currency is closely linked to the US dollar ie. the high Canadian dollar puts our manufacturers at a disadvantage compared to both US domestic producers and China based exporters to the US.
Add this to the list of authoritative references which refute the view of Harper et al and the Macdonald-Laurier Institute that the manufacturing crisis has nothing to do with resource dependency and the exchange rate.
- A Taxonomy of Linkages (March 10th, 2013)
- Dutch Disease is Dead … Long Live Dutch Disease!!! (March 4th, 2013)