Highlighting the impact on manufacturing of the Canadian dollar’s record setting flight over recent months, the head of the Forest Products Association of Canada (FPAC) urged the House of Commons Standing Committee on Finance to recommend that the federal government and Bank of Canada show stronger leadership in addressing the unprecedented and unchecked rise of the Canadian dollar.
“There should be no illusions- a 64% unchecked rise in our currency relative to the currency of Canada’s largest customer is a disaster for our economy, its most vital sectors and the hundreds of thousands of jobs they support. The government must act urgently”, said Avrim Lazar, President and CEO of FPAC.
The dollar has risen by over 60% in the past 5 years placing enormous pressure on Canada’s forest products industry and Canada’s manufacturing sector more broadly. Since 2002, nearly 280,000 jobs having been lost in Canada’s manufacturing sector, including 32,000 jobs in the forest sector. Correspondingly, Canada’s overall business sector productivity growth has slowed markedly over the past 9 to 12 months, as forest products mills and other high productivity sectors of our economy have been driven out of business. In the first 9 months of 2007 alone, Canadian mills have announced 54 instances capacity closure, resulting in the loss of over 6500 jobs.
“Industry appreciates that it needs to be ready to do its part to adjust to a higher Canadian dollar, but governments must also consider what the long-term implications of a dollar at parity and beyond are for our economy and take immediate action. In February of this year, the House of Commons Industry Committee issued an all party report that contained several important recommendations that would create a significantly more positive business climate for Canada’s manufacturing sector. Specifically, extending the accelerated capital cost allowance to 5 years and encouraging innovation by making the SR&ED tax credit refundable would help off-set the impact of the dollar’s rise. Government should wait no longer to implement these recommendations”, concluded Lazar.
FPAC is the voice of Canada’s wood, pulp and paper producers nationally and internationally in government, trade and environmental affairs. Canada’s forest industry is an $80 billion dollar a year industry that represents 3% of Canada’s GDP. The industry is one of Canada’s largest employers, operating in over 320 Canadian communities and providing nearly 900,000 direct and indirect jobs across the country.
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For more information, contact:
Vice President, Government Relations and Communications
Forest Products Association of Canada
(613) 563-1441 ext: 312