Ontario Chamber of Commerce

Ontario Chamber of Commerce

July 12, 2007 23:44 ET

Ontario Businesses Believe Canadian Dollar Should Be Left to Market Forces

TORONTO, ONTARIO--(Marketwire - July 12, 2007) - Businesses in Ontario stop short of recommending governments step in to control the high Canadian dollar, despite the fact that many are feeling the squeeze of the strong currency. That, according to a survey of members by the Ontario Chamber of Commerce.

"The high dollar is definitely putting the squeeze on a substantial number of businesses in Ontario, forcing some to trim jobs and make inventory adjustments that could further affect the supply chain," admits Len Crispino, President and CEO of the Ontario Chamber of Commerce, "while others are taking advantage of its strength. But regardless of the dollar's impact on their business, they resist suggesting that governments interfere with market forces."

Forty-one percent of survey respondents report that a strong Canadian dollar has had a negative impact on their business. Industrial and Manufacturing industries have overwhelmingly reported a negative impact (79%) with Agricultural industries close behind (77%). Negative impacts have also been heavily reported in the Automotive sector (65%), Tourism, Accommodation and Recreation (64%), Trade and Export (63%) and Transportation (62%).

These companies reported having to make substantial corrections to their business strategies including cutting jobs (18%), reducing inventory (13%) and changing marketing strategies and export markets (11%).

On the other hand, a quarter of those surveyed reported the high dollar was positively impacting their business and enabling them to take advantage of increased sales, cheaper imports and cheaper financing.

But while the strength of the Canadian dollar is affecting them differently, most businesses are content to allow market forces to prevail. "Our members consistently urge governments to leave monetary policy to the market and the Bank of Canada," explains Crispino.

Survey respondents throughout Ontario also consistently recommend:

- that the government take advantage of the exchange rate to pay down foreign debt while encouraging companies to reorient their export markets and invest in new technology and equipment and improve productivity;

- that governments review their fiscal policies in order to "level the playing field" with competing jurisdictions;

- and that Ottawa promote competition and open trade and ensure that NAFTA is observed by all signatory parties.

"There's no question that the negative pressures on some businesses and the reductions they're forced to employ will negatively impact our economy," says Crispino. "But with sound government policy including measures that reduce the regulatory and taxation burden on businesses, promote competition and open trade, and encourage investment and innovation, we can limit the negative impacts and further capitalize on the positive implications of a strong currency."

The survey was conducted from June 14, 2007 to June 21, 2007. 570 respondents from across Ontario participated. The survey is accurate 19 times out of 20, with a plus/minus margin of 4.1%.

The OCC represents over 57,000 businesses through 160 local Chambers of Commerce and Boards of Trade, and has been Ontario's business advocate since 1911. Its advocacy and policy initiatives focus on six areas key to the economic well-being of the province: health; education; energy; finance & taxation; transportation & infrastructure; and border issues.

Contact Information

  • Ontario Chamber of Commerce
    Amy Terrill
    W: (416) 482-5222, ext. 241 or C: (416) 605-8205