More evidence of how ‘great’ the economy is doing…
While the Trudeau government oversees an epic exodus of investment from Canada, there are other problems on the horizon.
Due to weakness in exports, a report by CIBC Capital Markets says the loonie could fall down to 71 cents US in the upcoming decade.
According to the report, “Simply put, export volumes have grown at a snail’s pace as plants shut their doors in Canada and opened elsewhere.”
Interesting, the government keeps telling us how great the economy is doing…
According to BNN Bloomberg, the authors of the report – Avery Shenfeld and Royce Mendes – recommended “more education and targeted training, faster government approval for projects, and lower corporate taxes as remedies that would help improve Canada’s competitiveness.”
They added, “If we don’t make progress in tilting the playing field back to Canada, there is always the market’s invisible hand to do the work for us. A poor current account balance will, over time, tend to push the Canadian dollar weaker against other majors. That will particularly be true if, given an elevated household debt level, the central bank has to proceed more cautiously on rate hikes than the U.S.”
A big issue is that not enough plants are opening up in Canada, so even if there are some months where export output increases, the capacity to expand exports isn’t there.
Unfortunately, in the current anti-business environment under the Trudeau Liberals, there is little incentive for companies to build a new plant and invest in the country. The government keeps making it more and more expensive to do business here, while other jurisdictions like the US are making it easier to succeed and prosper.