Parity: Not As Good As We Think
The strong Canadian dollar, currently trading in the 97 cent range, could actually slow the recovery of the Canadian economy. Sure, it is fantastic for all of us vacationers looking to get out of here for a few days and head south to warmer climates, but there is a strong, potential negative side to this as well. A higher dollar translates into a high cost for exports, and the foreign community may not be up to paying these costs. If Canadian companies suddenly find that their product pricing cannot compete with those from other countries, the economic recovery could be severely slowed.
The last time that the Canadian dollar reached parity with the US, the manufacturing and tourism industries suffered. Now, that being said, the tourism industry will likely be fine in the short term, largely due to the Olympic Games in just a few months. But how does one save the manufacturing industry from demise when there is simply nobody that can afford to buy materials from Canada? In 2008, it was cheaper for companies in the oil sands to purchase steel and completed pre-fab modules from China, ship them across the Atlantic on freighters and float them down the Athabasca River on tugs than it was to buy steel from plants within Canada. If even our own country stops buying materials from within its own reserves how do we convince the rest of the world to do so?
Our politicians haven’t been very forthcoming with a solution. Harper indicated last Thursday that the Bank of Canada has the ultimate responsibility for the Canadian dollar and the economic situation in Canada, however, he came up short on offering solutions. Apparently it is simply easier to say that it isn’t his responsibility, but as our Prime Minister his guidance would be nice.
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October 14th, 2009 at 2:54 pm
Well, there simply is not an easy solution to any of the current and recent turmoil. This is because we have obliged ourselves to a policy of globalization. That’s it, that’s the problem. Funny this wasn’t mentioned in an article where enough regulation or subsidies would make a moot point of the issue at hand.
Just thought I would throw that into the dialogue before we threw one poster boy under the bus (oooh let it be a campaign bus for irony’s sake).
Hey Alison,
I have virtually no geographic knowledge, and my internet searching skills have failed me in this task but:
how does one get to the Atlantic from China? or the Athabasca from the Atlantic?
Pardon the, I am sure overzealous, urge to fact check.
October 14th, 2009 at 3:21 pm
Valid geography question…
Simply put I definitely messed up on the ocean… clearly it would be across the Pacific Ocean and not the Atlantic Ocean (which thanks to the Panama Canal could technically be used). The more important question that I will address is in regards to the route that is actually used to get to Fort McMurray.
Modules and steel are shipped from China to Tuktoyaktuk, Canada and then floated down the MacKenzie River and through the Greater Slave Lake. From Fort Smith for Fort Fitzgerald, shipping is done via land, and then barged the rest of the way down the Athabasca River. This shipping route has been mapped out by Mammoet and Canada’s Northern Transportation Company Limited, and a test run was done in 2006.
The following comes from the Oil Sands Review:
“The portage, which is around four sets of rapids on the Slave River, is one of the challenges facing NTCL, especially because of the heavy loads the company would like to transport. For the voyage of the Marjory, Lawrence Stark and Jeff Richardson were waiting at Fitzgerald, the south end of the portage. Stark, a veteran of 37 years with NTCL, came out of retirement to manage the task of pulling the tug and barge from the river and returning the vessels to the water at Bell Rock, 22 kilometres north.
“For the demonstration project, Camsell ordered fir beams covered in tallow to make slipways that could be carried easily between the two sites. Caterpillar tractors pulled the tug and barge from the water and up the gentle slope to the staging area, where the vessels were raised with air jacks and blocked in place.
“Richardson supervised the task of easing the hydraulic beds of two multi-wheeled Scheuerle trailers beneath the vessels. The tractors and their loads filled the entire width of Highway 5 during the two-and-a-half-hour journey that started at 4 a.m.
“Heavy rain softened the staging area and hatched clouds of insects, but the portage ran smoothly. It took two days, coming and going, to move the tug and barge between Fitzgerald and Bell Rock.
“Heavy-lift specialists have used multi-wheeled Scheuerle trailers to move loads of 1,000 tons and more in the past, and Dave Foster is confident the feat can be repeated on the Slave River portage. That view is shared by a senior official at Mammoet, the heavy-lift specialist company that raised the Soviet submarine Kursk from 108 metres below the Barents Sea in 2001.
““Technically, it’s certainly feasible,” says Bas Bronder, vice-president of operations for Mammoet Canada Western Limited; however, loads of 1,000 tons or more exceed legislated limits on Highway 5. The portage road crosses the Alberta–Northwest Territories boundary at the south edge of Fort Smith, and Mammoet is preparing technical documents for both governments.”