CIBC Bankers Says That Loonie Could Drop By 70 c If Canada Doesn’t Up Its Exports
According to two bankers from the Canadian Imperial Bank of Commerce, currency exchange Ottawa might see the Canadian dollar, or the loonie, drop even further, by 71c, by the time 2020 rolls in, if the country doesn’t improve its export numbers.
According to Avery Shenfeld and Royce Mendes, CIBC Capital Market economists, say that, in simplest terms, that the country’s exports volumes have grown at a slow pace, as plants in the country shut down and move to other countries, which they stated in a report released on May 28.
They say that Canada still needs to up its export capacity, to get more facilities into the country to further bolster its exporting capabilities. They say that the primary issue is that there hasn’t really been any new openings on facilities, like factories, labs and office towers, that the country needed to expand the country’s exporting powers.
Furthermore, according to the report, Canada’s slow export growth has led to the country’s imports to the US to drop by 13% from 20% in 1999, which has taken a toll, something visible to currency exchange Ottawa and across the country, as 75% of the country’s exports goes to the US.
The two economists also noted that Canada’s auto production has been weakening over the past two decades, which has lead to fewer profitable manufacturing jobs across the country. The report says that Canada needs to pay very close attention to the NAFTA talks, as if it goes wrong, the Canadian automobile manufacturing industry will become uncompetitive against the foreign competition.
Shenfeld and Mendes says that, while Canada’s lack of pipelines have been the topic of discussion recently, particularly with the May 31 deadline regarding the Trans Mountain expansion project, that’s not the only problem that’s holding back Canada’s competitiveness.
The two suggest that improved education and training, faster government approval for development projects, as well as lower corporate taxation might be what Canada needs to improve its competitiveness in the global market. They say that if Canada can’t tilt the field into their favor, they can always make the market do if for them.