January 11, 2010 / 10:40 PM / in 8 years

Harper says concerned about effects of loonie rise

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper said on Monday that the rising Canadian dollar had put a damper on the economic recovery, a factor which he said continued to concern him.

<p>Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa December 9, 2009. REUTERS/Chris Wattie</p>

The Canadian dollar is near a three-month high and is closing in on parity with the U.S. dollar.

The Bank of Canada said last month the strong dollar -- which is hitting the hard-pressed manufacturing sector -- could act as a significant drag on growth.

“The governor of the Bank of Canada has talked about this -- obviously, the rising Canadian dollar has put somewhat of a damper on our recovery, so it’s something we continue to be concerned about,” Harper told BNN television in an interview.

He also said the government’s strong sense was that the economy had stabilized and would be growing, but he did not give a specific figure.

Harper, who has continually expressed concerns about the relatively high rate of joblessness, said he was pleased the unemployment rate had stabilized so early.

“I thought we might be seeing significant job loss all through 2009 and it’s stabilized in the last part of the year,” he said.

The December jobless rate was unchanged at 8.5 percent. Employment was 240,000 below December 2008 and 323,000 lower than the peak in October 2008.

Last January, the government unveiled a two-year C$47 billion ($45.6 billion) stimulus package. Harper said he was not looking at a second package.

Reporting by David Ljunggren and Randall Palmer

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