Finance minister speaks about manufacturing sector

Federal finance minister Jim Flaherty hinted last week that the government may offer some relief for manufacturers in the next federal budget.

At a speaking engagement at the Greater Oshawa Chamber of Commerce on Friday, Flaherty discussed the rise of the Loonie and its impact on Canadian manufacturers and exporters.

The minister said he was pleased that the Canadian dollar had come back from some of the “speculative heights,” but noted that Canadians should not expect the dollar to recede to 2002 levels.

“The Bank of Canada is responsible for monetary policy. We have limited tools. There’s only so much government can do or the Bank of Canada can do to affect the value of the Canadian dollar,” he said.

“We are going to have to adjust to the reality that our dollar is not going to be a 62-cent dollar vis–vis the U.S. dollar and we are going to have to adjust to the reality that there is a depreciation in the U.S. dollar internationally, not only vis–vis our dollar but vis–vis the kiwi in New Zealand and the Brazilian currency, the South African rand, the Australian dollar,” he continued.

Additionally, Flaherty also said that he might consider extending the two-year capital cost allowance (CCA), which allows businesses to write off equipment investments.

Groups such as the Canadian Manufacturers and Exporters have been lobbying the government to extend the CCA, noting that it would allow Canadian manufacturers to boost productivity and enhance their competitiveness.