WASHINGTON (Reuters) - Canadian businesses may wish the Canadian dollar was weaker, but the market will decide its value against the U.S. greenback, Canada’s ambassador to the United States said on Thursday.
“Obviously, manufacturers would like the dollar to be lower. Other sectors would like the dollar to be lower. The tourism sector, etcetera. But what people would like to have and what it’s going to do are two different things,” Canadian Ambassador Gary Doer told Reuters in an interview.
The Canadian dollar is currently worth around 99 U.S. cents, almost at parity with its U.S. equivalent, and analysts say its only a matter of time before it climbs above the greenback and stays there.
That makes the price of Canadian exports more expensive in the United States, its No. 1 export market, and in other countries around the world.
“Well, there’s not much I can do about it,” Doer said, when asked how he felt about the strong Canadian dollar.
He noted that Canada and the United States currently have “pretty similar” monetary policies. There is one significant difference, though, that gives Canadian manufacturers an advantage, Doer added.
“Provinces and the federal government have been reducing corporate taxes and those are now, I think in almost every provincial case, below the U.S. corporate tax,” he said. “And the nonbanking capital taxes has been reduced as well in Canada, which is good for the manufacturing sector.”
Canada is also making investments in education and training also should keep its manufacturers competitive in the longer run, he said.
“It’s not, in my view, just today’s comparative cost structure. It’s also tomorrow’s skill and training,” Doer said.