Government kills independent science body

[Cabbagesandking]

There really is little argument among economists about the causes of the strong Canadian dollar. It is resource extraction and export in a high priced regime. Talk of it being cyclical is a copout when it is causing the restructuring of the Canadian economy and taking us back to the role we so recently escaped when. less than 20 years ago Canada became for the first time a net owner of foreign industry. The dollar has exactly tracked the price of oil for the past ten years.

It is not all oil but it is almost entirely resource driven with oil being, likely, more than half ot the total. Manufacturing takes a double hit as it becomes relatively uncompetitive and investment shifts to resources away from manufacturing. That is, to capital intensive and away from labour intensive economic activity. The spiral then leads to loss of employment and less national disposal income.

Services are also negatively affected. We can sell less and we buy more. Tourism is hurt and that, again, impacts central Canada mostly with the Atlantic provinces also feeling the hit. More Canadians make foreign visits and purchases - again mostly at the expense of central Canada.

But the greatest damage may lie in the future. When the next major downturn in commodity prices comes, and it will come, manufacturing will not be there to underpin the economy. Canada will be returned to the boom and bust of its past when, as a "hewer of wood and a drawer of water" it was helpless against recessions in those.

And this is what the present government wants for Canada's future. Along with a low wage, subservient workforc

 

[CDNBear]

Well this certainly explains why we go around in circles most threads.

Of coursde it does, your Der Leader spouts off, stuffs foot in mouth and you back him to the very end. No matter how many times you spin around and stomp your feet.

Now that was a pretty divisive statement, wasn't it?

No different than all of yours.

Does the fact that a Harper appointed committee admitting there elements of dutch disease make you feel uncomfortable?

No, does the fact that manufacturing in Ontario has steadily been in decline for years, even when oil and our dollar traded low?

I don't agree with Mulcair that the number #1 reason for the manufacturing decline is dutch disease, btw.

Here comes the back pedal.

There really is little argument among economists about the causes of the strong Canadian dollar. It is resource extraction and export in a high priced regime.

You already admitted that wasn't the cause here...

The principal reason for the high Canadian dollar is the deliberate, unofficial devaluation of the US dollar.

You know if you stick to facts and stop making up as you go along, you won't look like such a dolt.

The dollar has exactly tracked the price of oil for the past ten years.

Do you just make this up as you go along?

It is not all oil but it is almost entirely resource driven with oil being, likely, more than half ot the total.

I guess making it up as you go along it is. Since you contradict yourself so often.

And this is what the present government wants for Canada's future. Along with a low wage, subservient workforc

I'm buying stocks in Alcan because of people like you.

 

[petros]

Hello? McFly?

Where do you think our resource boom will come from?

???? WILL COME FROM?

 

[CDNBear]

Oh oh, I see another pic or gif on the horizon, when the usual suspect doesn't understand or can't refute your post.

 

[petros]

oooOOOOooo a graaaaaph

 

[CDNBear]

What about Potash Pete?

Now there's a hot commodity on the world stage right now.

 

[petros]

It's the last one.

 

[captain morgan]

There really is little argument among economists about the causes of the strong Canadian dollar. It is resource extraction and export in a high priced regime. Talk of it being cyclical is a copout when it is causing the restructuring of the Canadian economy and taking us back to the role we so recently escaped when. less than 20 years ago Canada became for the first time a net owner of foreign industry. The dollar has exactly tracked the price of oil for the past ten years.

The cyclical observations are absolutely relevant. It wasn't so long ago that oil traded at $40/bbl and yet the N.Am mfg sector was still declining. This points directly to questioning the consumer patterns and the nation of origin of those products that are being provided... Tell me that you're not advocating for regressive protectionist policies that have done nothing but create misfortune for all industry in past attempts.

For years, Canada and the USA had punitive duties and tariffs in place to protect domestic mfgrs from intl competition. Those barriers have fallen and now we (as the consumer) get better access to a raft of more products at lower prices. That said, if you want to pin the blame on anything on this, blame the gvts for instituting those protectionist policies in the first place that created the artificial business enviro that Canadian mfgrs basked in for all those years.

It is not all oil but it is almost entirely resource driven with oil being, likely, more than half ot the total. Manufacturing takes a double hit as it becomes relatively uncompetitive and investment shifts to resources away from manufacturing. That is, to capital intensive and away from labour intensive economic activity. The spiral then leads to loss of employment and less national disposal income.

Investment dollars flow to the opportunities that represent the best returns based on the risk profile suitable for the cash. The commodities game is vastly different from manufacturing, but to look to a recent example, CAT moved it's Canadian operations for specific reasons, and those had nothing to do with the price of a bbl.

The underlying point is that mfgrs aren't being bypassed by investment dollars because of oil, they are ignored because they aren't competing with the other investment options available. Make no mistake, investment won't flow to mfgrs just cause the resource option is not made available in Canada, the money will move to those jurisdictions where it is available.

Services are also negatively affected. We can sell less and we buy more. Tourism is hurt and that, again, impacts central Canada mostly with the Atlantic provinces also feeling the hit. More Canadians make foreign visits and purchases - again mostly at the expense of central Canada.

No nation can expect to live in its own little bubble. As a nation that imports many of its finished products, a strong dollar allows everyday Canadians to have a better quality of life and lower cost of living. The mfgr's problem is that they don't want to evolve with the times and accommodate these changes in terms of how they do business.

In terms of tourism, do you really want to be equated as being Mexico North? It's a marginal short term solution at best, but the moment that another option is on the radar, you still get dropped like a bag of bricks and have a low dollar with little purchasing power to boot.

But the greatest damage may lie in the future. When the next major downturn in commodity prices comes, and it will come, manufacturing will not be there to underpin the economy. Canada will be returned to the boom and bust of its past when, as a "hewer of wood and a drawer of water" it was helpless against recessions in those.

A downturn in commodities will be observed and when that happens, it'll be a nasty situation due top the weakness in sectors like manufacturing. That said, it won't be because the commodities prices are affected, it will be because other sectors of the Canadian economy never grew up and learned to compete on a global scale. Punishing the resource sector won't force manufacturers to become more competitive over night, all it will do is provide a little more time for the mfgrs to flounder before they get eaten alive by foreign competition.

So, is the answer to punish the resource sector thereby reducing its profitability and the taxes they pay for the good of society in order to temporarily prop-up inefficient and uncompetitive mfgrs by virtue of transforming your currency and economy into a virtual peso?

And this is what the present government wants for Canada's future. Along with a low wage, subservient workforc

The present gvt is doing a bang-up job in terms of weaning Canadians off the nanny statism and expectations for every little entitlement imaginable.

 

[Cabbagesandking]

The old refrain that the decline was happening before. Well, it was not. The decline was happening for all the Globalisation reasons but in Canada it was mederate. Until around 2000 Canada was outperforming the US and other Western countries in manufacturing success. The decline set in around that time and hit with a vengeance following the commodity boom about 2002.

There is no way out of this. Canada has a petro dollar and that is devastating the economy.

 

[petros]

There is no way out of this. Canada has a petro dollar and that is devastating the economy.

Says who? You?

 

[Goober]

The old refrain that the decline was happening before. Well, it was not. The decline was happening for all the Globalisation reasons but in Canada it was mederate. Until around 2000 Canada was outperforming the US and other Western countries in manufacturing success. The decline set in around that time and hit with a vengeance following the commodity boom about 2002.

There is no way out of this. Canada has a petro dollar and that is devastating the economy.

Exporters were riding a low dollar - rcall when it was in the low 60's

Daily noon exchange rates: 10-year lookup - Bank of Canada

 

[CDNBear]

The old refrain that the decline was happening before. Well, it was not.

Yes it was.

The decline was happening for all the Globalisation reasons but in Canada it was mederate.

Oh, so it was happening in Canada. Why do you keep making contradictory statements?

Until around 2000 Canada was outperforming the US and other Western countries in manufacturing success.

For a specific reason, NAFTA. Then it went back to declining as it had been doing since the 50's.

Although our downward trend was faster than the US by a few percentage points.

http://www.statcan.gc.ca/pub/11f0027m/11f0027m2009057-eng.pdf

The decline set in around that time and hit with a vengeance following the commodity boom about 2002.

Since the mid 50's, Canada's manufacturing sector have been in a steady decline.

http://www.statcan.gc.ca/pub/11f0027m/11f0027m2009057-eng.pdf

There is no way out of this. Canada has a petro dollar and that is devastating the economy.

Again with the contradictory commentary...

The principal reason for the high Canadian dollar is the deliberate, unofficial devaluation of the US dollar.

 

[Tonington]

Since the mid 50's, Canada's manufacturing sector have been in a steady decline.

http://www.statcan.gc.ca/pub/11f0027m/11f0027m2009057-eng.pdf

Except for the 1980-2000 period, when the loss as a share of GDP stabilized at about 17%. Since 2000 it has been dropping steeper than it was from the post-WW2 period to 1980.

That's just from a GDP perspective. From job losses, well the manufacturing industry has seen better than average productivity gains, so it's understandable that job losses have fallen faster than output has.

I don't really think it's controversial to state that a resource boom leads to currency appreciation against the US dollar, and that this will have negative effects on export manufacturing firms. I'd rather hear more solutions. For instance, using the same currency for both sales and purchasing inputs. Maybe most of the manufacturers in Southern Ontario have done that already, it would be worthwhile to investigate though. I know currency issues have caused the company I work for to have less than stellar financials, even though we had tremendous growth in sales.

 

[CDNBear]

I don't really think it's controversial to state that a resource boom leads to currency appreciation against the US dollar, and that this will have negative effects on export manufacturing firms.

Neither would I. But to try and finger one resource, one sector, is absurd.

The devaluation of the US greenback, is as much to blame, as our stronger economy due to more rigid banking regulations.

For instance, using the same currency for both sales and purchasing inputs.

Makes more sense than throttling the oil flow. Which will only artificially lower the Canadian dollar, and cause inflated and wild price hikes across all industrial sectors.

 

[LiesOfTheIntell]

Meh another foppish tax payer supported "think tank" which produces reports, that often serve their own interests while claiming higher goals.

They'll have to find more productive work. Good riddance, my heart "does not bleed for them."

 

[captain morgan]

The old refrain that the decline was happening before. Well, it was not. The decline was happening for all the Globalisation reasons but in Canada it was mederate. Until around 2000 Canada was outperforming the US and other Western countries in manufacturing success. The decline set in around that time and hit with a vengeance following the commodity boom about 2002.

So which is it? Was the decline happening or was it simply moderate?

Further, Canada may have compared well to other Western mfg nations, but those nations were not the chief competition. In fact, other than a few examples of healthy Mfgrs in the Western world, many are struggling to compete with Asia and China. That said, comparing Canada to other Western world mfgrs is like comparing lepers from different colonies... One may be better (or worse), but they're still all lepers.

There is no way out of this. Canada has a petro dollar and that is devastating the economy.

Call it whatever you like. In the end, nations that truly have petro dollars basically don't have any diversified industries. In Canada's case, we haven't had a mfg sector for years as they have fallen out of competitiveness the moment that the protectionist tariffs/duties were altered.

Whining about the only bright spot in the national economy is no solution

 

[Cabbagesandking]

I thinl what I wrote was clear, Captain. The decline was happening in the way that it was happening eveywhere. It was less in Canada than elsewhere in the last quarter of the twentieth century. Tonington expanded on that.

Most job losses at that time were to factors other than currency exchange rates. Tonington expanded on that.

The inescapable fact is that the precipitous decline in employment - it is not now due to productivity gains - has been since the appreciation of the Canadian dollar. And Canada was not just "riding" the low dollar before that. The Canadian dollar was quite high vs the US for some ot that time. In the .90s. Neither was NAFTA much of a factor. Nafta did more about easing the flow of Canadian energy into the US than improving manufacturing exports. More than 90% of our exports saw no change in duties.

There is no contradiction in what I am saying.

 

[mentalfloss]

Australia sees signs of ‘Dutch Disease’

THE Eurozone crisis continues to dominate the markets as the Aussie recovered from its weakest trading day on Tuesday where it closed out at 1.612GBP/AUD. The Aussie traded at 1.5907 GBP/AUD on Friday down from the 1.6033 AUD on Monday.

There is growing fear in the Australian Economy that the ‘Dutch Disease’ is creeping in and threatening the economy’s labour market. The ‘Dutch Disease’ stems back to the 1959 giant natural gas discovery in Holland. This is where the currency appreciates on the back of a booming commodity industry that is mainly capital-intensive which threatens the survival of labour-intensive industries. Australia’s biggest trading partner, China is one of the biggest driving forces behind this market shift as their need for raw materials (iron ore, coal and natural gas) continues to rise and with it the demand for Australian Dollars. This creates a ‘duel economy’ where mine workers real salaries rise and the rest of the economies real wages stagnate due to a rise in the cost of living.

The uncertainty in the Eurozone prevails as the fate of the Greek-Eurozone relationship will not be decided for some time as they prepare to hold secondary elections in a few weeks’ time according to Minori Uchida, chief analyst at the Bank of Tokyo-Mitsubishi UFJ. With the opinion polls showing signs of a deadlock between political parties, the fate of Greece hangs in the balance.

International news will dominate the Aussie dollar this week as the market will closely follow the Eurozone crisis. Thursday will see China’s release of HSBC purchasing managers index (PMI) for May.

GBP / AUD: 1.6073
EUR / AUD : 1.2986
USD / AUD : 1.0159
NZD/ AUD : 0.7687

Exchange rates as of 08:22, 21 May 2012

Australia sees signs of 'Dutch Disease'

 

[CDNBear]

I thinl what I wrote was clear, Captain.

Clear as mud and wrong. Which is why you're trying to back pedal from it now.

The decline was happening in the way that it was happening eveywhere.

But you said it was not happening in Canada, right before you said it was happening in Canada.

It was less in Canada than elsewhere in the last quarter of the twentieth century. Tonington expanded on that.

Actually, Tonington was expanding on what I said. But your fragile ego just can't accept that eh, lol.

Most job losses at that time were to factors other than currency exchange rates. Tonington expanded on that.

No, that would me that proved your BS wrong, yet again.

The inescapable fact is that the precipitous decline in employment - it is not now due to productivity gains - has been since the appreciation of the Canadian dollar.

And the strength of our economy based on our banking laws, and of course the devaluation of the American greenback. Which you already admitted was the principle cause.

And Canada was not just "riding" the low dollar before that. The Canadian dollar was quite high vs the US for some ot that time.

Yep, while oil was trading low. Which of course pokes holes in your BS.

In the .90s. Neither was NAFTA much of a factor. Nafta did more about easing the flow of Canadian energy into the US than improving manufacturing exports.

and the report I posted says differently, but hey, you've been proven wrong so many times, we'll take your word for it.

There is no contradiction in what I am saying.

Your cowardice aside. Except for the contradictions I have already pointed out more than once.

Your dishonesty is only out done by how often you're wrong. Don't you ever get tired of being wrong and embarrassing yourself?

 

[Cabbagesandking]

Silly Teddy!