The Bank of Canada asserted this week that a weaker Canadian dollar is not a business strategy and is not something to rely on, especially in a recovering economy.
In a speech in Edmonton, Senior Deputy Governor of the Bank of Canada Tiff Macklem urged industry leaders and business owners to invest and lower their costs in order to stay competitive in a globalized economy.
"At the Bank of Canada we don't forecast the value of the Canadian dollar, but counting on a much weaker dollar to regain business competitiveness looks like a risky business model," Macklem said.
"A cheap currency is not a business strategy. Business needs to get on with investing and turning these investments into lower unit labor costs and improved competitiveness," he added.
Last month, BOC Governor Mark Carney said the Canadian private sector was losing ground and, in particular, is becoming less competitive in the U.S. market because of lower productivity and higher labor costs.
However, Finance Minister Jim Flaherty told an audience in Washington, D.C., last month that he expects the Canadian dollar to remain on par with the U.S. dollar for some time.
