Pedro Antunes, the Deputy Chief Economist for the Conference Board of Canada, speaks with host Stephen Henderson about the Canadian dollar. The value for Canada’s dollar dropped to about 77 cents of an American dollar, but what does this mean for the country’s economy and businesses?
- Was it too high?: Antunes says some have said the Canadian dollar’s value may have actually been too high in the past decade. This was linked to rising oil prices and the abundance of oil sands in Canada’s territories. He also notes that at the same time there were high commodity prices for minerals which were also being mined in Canada. These factors combined and began drawing many investments into the country.
- Sector Shifts: While the value of the Canadian dollar was high it actually had an adverse effect on some of their business sectors. Antunes explains that during that time industries like tourism and manufacturing were hurt by the high dollar and commodity values, but now their economy could be shifting towards non-resource sector trade that is integrated into U.S. supply chains and manufacturers.
- Partners in Business: Antunes also says Canada’s dollar could benefit from the U.S. economy’s rise. He explains that pressure on the greenback will raise its value and in turn other currencies will rise along slowly as well, and he expects that Canadian industry will be able to benefit even while their dollar value is low.
- International Salary: Stephen also asks about what it means for the NHL Salary Cap. Antunes says he isn’t clear on possible changes to the NHL salary cap, but notes all contracts are termed under American dollars. This means that Canadian hockey teams will earn less revenue from the devalued Canadian dollar, but will have to pay expenses in American dollars, which makes them less profitable for owners.
Listen to the full conversation by clicking the audio link above.