Ian McLean, President & CEO, Greater KW Chamber of Commerce
Over the past 6 months Canada has seen two very important changes in its national economy that will impact business here at home in Waterloo Region. The first is that the Loonie has fallen to roughly $0.88 to the U.S. Dollar, and the second is that commodity prices—specifically crude oil—have fallen dramatically.
Falling Loonie
We have seen over the last 6-9 months a steady decline in the power of the Canadian dollar compared to that of the U.S. Dollar. For over 3 year the Loonie has maintained near parity levels with the currency of our southern neighbours that has resulted in stronger consumer buying, but has also hurt many industries in Ontario, including manufacturing. The falling dollar can help our exports and manufacturing sector as the prices of goods become even more competitive on the global market.
The Canadian Chamber of Commerce is predicting that in the coming year the Loonie will likely average 85 cents. With a stronger U.S. economy that will result in interest rate increases sooner than later, the Canadian economy’s weaker growth, comparatively, will mean rate increases will be pushed farther back.
Lower Commodity Prices
You have likely noticed the dip in the cost of gasoline lately to that of 3 year lows not seen since the heart of the economic down turn. These lower commodity prices have large scale implications on oil producing regions in Canada, but they also mean growth potential for locally produce products. Exporting costs will continue to drop as the price of oil does and with the far reaching benefits of the CETA trade agreement with the European Union and the new free trade agreement with the 13th largest economy in the world, South Korea, innovative and exporting focused companies will likely see valuable markets much more reachable.
As we enter the new year, these are two of the economic shifts we and the Canadian Chamber of Commerce see as shaping our exporting economy. These changes will not only effect those large scale enterprises like oil and gas companies, but will have ongoing opportunities for small and medium-sized enterprises.
