OTTAWA, Sept. 18 /CNW Telbec/ - Reacting to the Canadian dollar's
recording setting flight to over 97 cents U.S., the head of the Forest
Products Association of Canada (FPAC) urged the federal government and Bank of
Canada to take swift action to mitigate the damage that the rapid appreciation
of the dollar is doing to Canada's manufacturing sector.
The dollar is trading above 97 cents for the first time in 30 years. It
is up over 10% from the 88 cent level it was at the start of 2007 and more
than 53% from the 63 cent range it was at five years ago this month. This has
placed enormous pressure on Canada's forest products industry and Canada's
manufacturing sector more broadly. Since 2002, 110,000 jobs having been lost
in Canada's manufacturing sector, including 32,000 jobs in the forest sector
"Canada's forest products industry employs over 340,000 Canadians in
high-wage, high-tech, high productivity jobs. In fact, one study estimated
that average forestry wages and benefits approached $70,000 annually - big
city salaries found in rural communities," said Avrim Lazar, President and CEO
of FPAC. "The industry today is the backbone of the rural economy, accounting
for 3% of Canada's GDP-larger than oil and gas, mining and auto manufacturing.
It is also by far the largest and most widely dispersed industrial activity in
Canada's rural/land-based economy with over 300 communities from Newfoundland
to Vancouver Island depending on the industry for their economic well-being.
More needs to be done to ensure that these jobs remain in Canada."
The forest products industry which annually exports over $40 billion
worth of products to external markets is especially vulnerable to the rapid
and sustained appreciation of the dollar. The export intensity of Canada's
forest products industry combined with the fact that all of its major
inputs-fibre, energy and labour-are sourced in Canada makes it among the most
vulnerable to exchange rate shocks. The industry has made significant efforts
to improve productivity and reduce costs in order to stay competitive. The
pressures created by the surging dollar lend renewed urgency to the need for
government policy reforms to improve the business climate for the forest
products industry and other export-oriented manufacturers. This is of critical
importance to ensure that the Canadian industry can remain cost-competitive
and attract scarce investment capital.
Lazar called on Canadian monetary authorities to use what discretion they
have to manage the appreciation of our currency and the impact it is having on
large regions of the country. "The Bank of Canada must act in the interests of
the Canadian economy more broadly and expand its focus to more consider broad
economic and regional factors, including the rapid rise of the Canadian
dollar, in its decision making. With the Canada-U.S. exchange rate already at
a generational high, we believe that the Bank is not giving adequate
consideration to the economic well-being of hundreds of communities across
large regions of Canada."
"As industry adapts and improves its efficiency and productivity to help
mitigate the impact of the rising dollar, governments have an equal
responsibility to adjust in the face of a shifting global economy," concluded
Lazar. "Rapid action by governments in such areas as tax reform, mergers
policy and a more competitive rail transport sector can also play an important
role in enabling industry renewal and in assisting the forest sector to adapt
to a higher Canadian dollar. A good placed to start would be to extend the
accelerated Capital Cost Allowance (CCA)."
FPAC is the voice of Canada's wood, pulp and paper producers nationally
and internationally in government, trade and environmental affairs. Canada's
forest industry represents 3% of Canada's GDP and exports $45 billion of wood,
pulp and paper annually. The industry is one of Canada's largest employers,
operating in hundreds of Canadian communities and providing over
900,000 direct and indirect jobs across the country.
For further information:
For further information: Jeremy Dunn, Curve Communications, (604)
684-3170, (604) 726-8350 (cell), firstname.lastname@example.org; Laura
Ballance, Curve Communications, (604) 684 3170, (604) 771 5176 (cell),
email@example.com; Isabelle Des Chênes, Director, Communications,
Forest Products Association of Canada, (613) 563-1441 ext: 323,