TORONTO, Dec. 4 /CNW/ - Canadian Auto Workers union President Buzz
Hargrove welcomed today's 25-basis-point reduction in interest rates by the
Bank of Canada, but warned that the Bank must quickly cut rates further to
avoid an even more serious downturn in Canada's export-oriented manufacturing
"The Bank of Canada made a serious error in raising interest rates this
summer, as our loonie was soaring to such destructive heights," Hargrove said.
"Now it is starting to unwind those actions, but it must go further."
Hargrove called on the Bank to fully match recent and upcoming U.S.
interest reductions. U.S. interest rates have declined by 75 basis points
since mid-September, and further cuts are expected.
"Today's interest rate reduction is a small step in the right direction,
but more action by the Bank is needed, and soon," Hargrove said.
Hargrove called on the Bank to take a more flexible approach to managing
the Canadian economy through interest rate adjustments and its monetary
policy. He said the bank has a responsibility to take a much broader approach
than just controlling inflation, it also must make economic adjustments that
help create jobs for Canadians and that help boost Canadian economic output.
"Other countries successfully manage their exchange rates in the
interests of domestic production, investment, and exports," Hargrove said,
"and Canada should too."
Hargrove pointed to the Japanese experience, where deliberate efforts to
suppress the currency have largely protected Japanese exporters against the
impacts of U.S. dollar weakness. Hargrove estimated that those efforts to
suppress the yen have reduced the price of Japanese auto exports to North
America by at least 30 percent to the detriment of Canadian auto workers jobs.
Slowing auto sales are the latest reflection of the Harper government's
inaction on the unfair trade and a soaring dollar. The government's lack of
auto policy and vision are destroying this Canadian industry and putting
thousands out of work, according to Hargrove.
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For further information: CAW Communications Director, Shannon Devine,