Very recently the Canadian dollar has depreciated in terms of value in comparison to the USD. The currency has gone down due to the decline in crude oil prices over the last 18 months. This is the lowest Canadian dollar has gone in the past 11 years. $1 USD is now equal to $1.33CDN.
Canadian finance minister, Morneau claims,”In a situation like we’re in right now, where the currency is lower than it was a year ago, it presents opportunities for exporters … and presents challenges for people as they purchase their equipment”. “But I’m confident that Canadian firms will be able to react effectively to the change in currency,” he added.
I believe that the drop in the Canadian dollar will act as an incentive for producers to export more and import less. This would suggest that most producers in Canada will now buy the machines and raw materials from the country itself while shipping of the end product to other countries. This would lead to less choices for consumers in Canada as producers have an incentive to export more, ‘higher prices’. Higher exports might also result in dumping in various countries.
All the effects explained above might only be in the short run as the value of currency keeps fluctuating.
References:-
http://ca.reuters.com/article/businessNews/idCAKCN0T414T20151115
