By: Rolf Li
The Canadian Dollar has not had a good start to the 2016 trading year, dropping to around the $0.68 USD range an remaining low for several trading days. Following a reported slowdown in China, Canadian commodities exporters have seen a serious drop in income, and the new Liberal government seems not to realize that the foundation of our resource-rich country is collapsing into the oblivion.
Canada for the past decade has seen a large increase in income from the commodities sector, particularly oil and copper, with other industrial metals and materials following close behind; however with the demand waning from China, prices has fallen dramatically, and the companies that once defined Canadian job growth and GDP are loosing money at an alarming rate, and nothing is being done. Following the downturn in the economy, Prime Minister Justin Trudeau proclaimed that his government was leading Canada through a period of “diversification” and “growth”, but where is all this growth that has been promised?
It is evident at this point that the commodities sector needs support from the federal and provincial governments to continue operations in these tough times, but the aid is just not there. In Alberta, the NDP have pushed through tax increases and royalty changes, and the federal Liberal government seems to have taken a page out of their book. Business mogol Kevin O’Leary recently pleaded for Rachel Notley to step down and have some real leadership[ in Alberta for once, but that plea has fallen on deaf ears. The Liberal government on the other hand, is pretending to not notice the drop in the Canadian economy, citing reasons of “development” in other sectors. Trudeau it seems, is dealing with this tough economic solution as if it were a story out of a textbook – a drama textbook, as Trudeau would be familiar with. All energy and commodities companies need support, but Canada is letting them down. In the end, Liberal policy seems to state that “doing nothing is something” and “let’s enjoy the ride of the commodities when they make up cash, but refuse support when they need it, although they provided so much for us in the past.”
So what do you think about this ridiculous economic policy?