The Chicken Littles of the manufacturing industry are
running around saying "The Sky is Falling" because of the Canadian dollar being near parity. The question becomes is it the "loonie's" performance or is there a deeper issue for consideration.
The Canadian manufacturing sector and by extension the export business is certainly being "hurt" by the rise of the Canadian currency. Yet in my opinion there are other mitigating issues that are causing the panic and it is being unearthed now due to the dollars trajectory.
Canadian companies have allowed themselves to get sloppy and inefficient because they didn't need to be at the top of their game. It has engendered the
dangerous thought process of "if it ain't broke, don't fix it", and many questioned the need for continuous (and creative) improvement -- because why bother? The Canadian dollar will always be there to protect us -- "The Good North Loonie Weak and Low!"
Now the screaming has begun and the pandering to the government for bailouts has begun. Yet before the government starts handing out dollars to what can be a very long "bread line", it is important that they first consider looking into the effectiveness of the enterprises that are asking for money.
If an individual becomes unemployed, there is tremendous rigour around the actions and activities that they should take in re-asserting themselves in the workplace. Why doesn't the same type of rigour apply to corporations?
If companies are asking for government money (i.e. my tax dollars) then this should be provided on a short term basis, contingent on an improvement plan which demonstrates how they will become competitive regardless of the state of the currency. From what I've read to date, there is just a desire for the hand-outs -- no strings attached and this could become a recurring visit to the public trough -- so that inefficiencies are rewarded.
The cry for the bail-out smacks of Hem -- a character in the popular book "Who Moved My Cheese", who eventually starves because he keeps on waiting for things to go back to the way they always were -- and has great faith in that occurring. From my perspective, if he can't get out of the box -- let him starve!
running around saying "The Sky is Falling" because of the Canadian dollar being near parity. The question becomes is it the "loonie's" performance or is there a deeper issue for consideration.The Canadian manufacturing sector and by extension the export business is certainly being "hurt" by the rise of the Canadian currency. Yet in my opinion there are other mitigating issues that are causing the panic and it is being unearthed now due to the dollars trajectory.
Canadian companies have allowed themselves to get sloppy and inefficient because they didn't need to be at the top of their game. It has engendered the
dangerous thought process of "if it ain't broke, don't fix it", and many questioned the need for continuous (and creative) improvement -- because why bother? The Canadian dollar will always be there to protect us -- "The Good North Loonie Weak and Low!"Now the screaming has begun and the pandering to the government for bailouts has begun. Yet before the government starts handing out dollars to what can be a very long "bread line", it is important that they first consider looking into the effectiveness of the enterprises that are asking for money.
If an individual becomes unemployed, there is tremendous rigour around the actions and activities that they should take in re-asserting themselves in the workplace. Why doesn't the same type of rigour apply to corporations?
If companies are asking for government money (i.e. my tax dollars) then this should be provided on a short term basis, contingent on an improvement plan which demonstrates how they will become competitive regardless of the state of the currency. From what I've read to date, there is just a desire for the hand-outs -- no strings attached and this could become a recurring visit to the public trough -- so that inefficiencies are rewarded.
The cry for the bail-out smacks of Hem -- a character in the popular book "Who Moved My Cheese", who eventually starves because he keeps on waiting for things to go back to the way they always were -- and has great faith in that occurring. From my perspective, if he can't get out of the box -- let him starve!
1 comment:
I suppose I'm dating myself but when I was young, the Canadian dollar was worth more than the American dollar and the world didn't come to an end.
I can recall crossing the border to Niagara Falls and Buffalo to go shopping many times (for booze) but also because items like paper products, which used Canadian trees and were manufactured in Canada, were much, much cheaper in the U.S.
That never made any sense to me then and it still doesn't make any sense to me now.
When the Canadian dollar crashed and became worth less and less, Canadian politicians told me it was the greatest thing that ever happened in the entire history of the world - but I never believed them. Much like Free Trade, I never made a cent off the low Canadian dollar but it sure cost me a lot over my lifetime.
I read in one of the big Canadian newspapers last week the manufacturers are already adjusting and the forecast for the manufacturing sector is positive, not negative. Of course we can compete with Americans one on one.
The only people who are really upset are the corporations, who want to purchase cheap natural resources in Canada and ship them to Mexico, where they can hire cheap labor to manufacture things and then sell it all back to the wealthier North Americans at a huge profit.
With the U.S. debt, I think maybe Hem is going to be waiting for his cheese for a long, long time!
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