The Standing Senate Committee on Banking, Trade and Commerce

Steady decline of Canadian dollar: Senate Committee to identify causes, consequences and possible remedies

February 3, 2016

Ottawa – The loonie recently dipped to its lowest level since 2003, and its consequences on the Canadian economy and consumers remain unclear. Is this depreciation good or bad for the country? It is this question the Senate’s Banking, Trade and Commerce Committee will try to evaluate in a detailed study it undertakes today on the sliding exchange value of the Canadian dollar.

“Canadians deserves some clarity on what is happening with their dollar and why. This is not something that is abstract to them, it has an impact on their everyday life. Through this study, the Banking, Trade and Commerce Committee can help provide them with some of that clarity,” said Senator David Tkachuk, Chair of the Committee.

“We need more than a low dollar for exportation, Canada needs a new and comprehensive trade strategy,” added Senator Céline Hervieux-Payette, Deputy Chair of the Committee.

While the Committee expects that the decline of the dollar is due in large part to the low price of oil and a strong United States economy, it will be calling economists from the banking and financial sectors and from government to contribute to a more detailed picture. It will examine the impact of trade agreements and the effect of the diverging approaches Canada and the United States are taking to monetary policy. It also expects to hear whether the loonie can increase in value if oil prices remain depressed.

The Committee will also drill into federal policy changes that could mitigate any negative impact of the low relative value of the Canadian dollar. Based on its findings, it will make some recommendations on the way forward.

The Committee is holding its first hearing in the study today, calling witnesses from Finance Canada, the Bank of Canada and Export Development Canada.

To read the report and recommendations, or to learn more about the Standing Senate Committee on Banking, Trade and Commerce, click here.

The Senate of Canada is on Twitter: @SenateCA, follow the committee using the hashtag #BANC.

For more information:

Lynn Gordon
Committee Clerk
Senate Committee on Banking, Trade and Commerce

Mélisa Leclerc
Director of Communications
Senate of Canada