Business in the Canadian Context
Question 1
Over the past decade the Canadian dollar experienced a significant rise in value compared to the US dollar, breaking through “the 90 cent US level – its highest rate since 1978” (CBC. 1). This sudden growth was triggered by multiple events and in part caused multiple effects on the Canadian economy. Because of Canada’s vast geographical diversity, it affected each province in different ways and forced the government to adapt to these changes. And since those changes occurred on a multi-industrial level and have not been felt equally across Canada, federal and provincial governments of Canada will need to step in and deal with affects of the rise of Canadian dollar to ensure prosperity and further economic growth of the country.
The most obvious explanation to unequal affects of the rise of the Canadian dollar across Canada would be that high exchange rate affected different Canadian industries in different ways. And since each province has a different industrial structure, this effect reflected on provincial economies differently – “[exchange rate appreciation] crippled the manufacturing sector, based largely in eastern Canada, while the commodity-producing provinces in the west were more than compensated by the rise of export prices of oil and energy” (Brean. 42). In order to asses the unequal affects of the rise of Canadian dollar across Canada, it is necessary to compare two provinces - Alberta and Ontario where those affects differ drastically. Alberta is a province rich in natural resources, which it extracts and exports to other provinces and countries, and its economy has been prospering mainly from profits due to the rise in prices on oil and energy in the province - “Record oil prices, along with surging dema ...