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HomePolicy Articles Article Summary

Counting the Cost: Impact of the Rising Loonie on Western Commodity Exports

Report by Todd Hirsch

The strong rise in the Canadian dollar vis-à-vis the US dollar since the beginning of 2002 has created a serious challenge for many businesses that rely on international exports. According to Todd Hirsch, because the Canadian economy is so dependent on exports, the soaring loonie has led most economic forecasters to revise real GDP growth downward in 2004. The West is much more dependent on natural resource commodity exports.

Appreciation of the Canadian dollar alone has cost Western Canada’s commodity producers export revenues of nearly $10.5 billion during the 2002-03 period. Alberta has taken the biggest hit in export revenues due to its volume of oil and natural gas exports. As Hirsch points out, this does not count revenue foregone in other sectors such as manufacturing or services. He concludes that, although one must keep in mind the partially off-setting benefits of less expensive imports, the appreciating Canadian dollar has nonetheless created difficulties for Canadian exporters and for the resource-dependent Western Canadian economy.

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Policy Publication Details

Author(s): Todd Hirsch;
Publisher: Canada West Foundation [ Visit Website ]
Year Published: 2004; Publisher Type: Research Institute
Publicly Available: Yes Research Focus: Provincial;
Registration Required: Yes Language: English
Payment Required: No Publication Format: Adobe PDF

Subjects / Categories:

Policy Articles / Monetary & Capital Management / Exchange Rates
Policy Articles / Monetary & Capital Management / Exchange Rates / 2004
Policy Articles / Monetary & Capital Management

Keywords / Tags:

Canadian dollar; US dollar; appreciation of Canadian dollar; Canadian export revenues; natural resource commodities; western Canadian economy;