Quebec's Jean Charest nags for a conference to discuss the recent rise in the value of the loonie against the US Dollar. What this would result in is another big wonk talking shop. The Premier's concerns for his province's exports are legitimate, but what can Stephen Harper do? This sounds like dragging a political opponent at federal level into a debate that shouldn't be held.
Firstly concerns about the currency should be addressed by the market. A rising loonie was fuelled by the turmoils in the US economy as well as the rising costs of oil. The tempest has passed, and the two currencies are approaching parity again. What's the urgency?
Secondly, despite the Premiers and the Prime Minister presiding over the respective executives, financial and trade matters are better discussed by the portfolio owners, the (duh) finance and trade ministers.
Thirdly, the Bank of Canada belongs to the federal government, but this is no excuse to see it as an all-encompassing solution for all the economic woes. The current loonie surge is helping Canadian manufacturers realize that competitiveness isn't something they can take for granted. Surely this sudden shift couldn't be predicted or budgeted for. I am however sure that the overall consequences of this shock will be beneficial for the country's competitiveness.
The same cannot be said for the consequences of a government intervention, be it tinkering with the interest rate, dumping or bailing out manufacturers. Charest's Liberals might fancy this kind of economic dealing. I for one do not. I am sure Stephen Harper and his cabinet don't either. As a politician Charest should know this, and no quantity of nagging can do the job of fixing the situation. His time will be better spent finding ways to mitigate the negative consequences of the recent shock and emphasize the positive ones.
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