Loonie putting forestry at risk: Industry group

OTTAWA — The head of the Forest Products Association of Canada called on the Bank of Canada to more fully consider broad economic and regional factors, including the rapid rise of the Canadian dollar, in its decision making.

Reacting to the Bank’s decision to increase its overnight interest rate, FPAC says exports in many manufacturing industries, especially forestry, are at risk because of the rise of the Canadian dollar.

“Those that say Canada’s manufacturers are suffering because they hid behind a weak dollar are simply wrong,” said President and CEO Avrim Lazar. “… Canada is the most successful forest products exporting nation in the world, and we can confidently say that we have been striving to succeed in global markets. But, as in other trade-exposed sectors of our economy, even world-class mills in the forest products industry are struggling to remain economically viable due to the dollar rising 45 percent over five years.”

The unparalleled rise of the dollar has placed enormous pressure
on more than 300 forestry dependant communities, says FPAC.

The unparalleled rise of the dollar has placed enormous pressure on Canada’s forest products industry and the more than 300 communities from Newfoundland to British Columbia that depend on the industry, adds Lazar.

“The Bank of Canada must act in the interests of the Canadian economy more broadly and expand its focus to more fully consider other economic and regional factors,” continued Lazar. “With the Canada-U.S. exchange rate already at a generational high, we believe that the Bank is not giving adequate consideration to the economic well-being of hundreds of communities across large regions of Canada.”

Lazar also directed his remarks at the federal and provincial governments emphasizing the need for policy to make Canada more competitive in global markets.

“Governments in Canada have been slow to adjust economic policies to take into account the rising dollar and increased global competition. It is industry’s job to adjust so that we can compete with low cost countries but government must move much more quickly to create world-class competitiveness conditions,” he says.

“Taxes that penalize investment, out-of-date mergers policies and uncompetitive transportation, fiber and energy policies which were simply disadvantageous when the dollar was lower have become damaging to Canadian jobs with the high dollar. The result is severe and potentially irreversible damage to Canada’s economic base.”