The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Calgary — Mark Carney strode in front of the most powerful members of Canada’s energy industry with a message that was sure to please: the Bank of Canada has done the math, and oil companies are not setting the country on a course of economic destruction.
In short, he said, high oil prices aren’t hurting Canada. “In a world of elevated commodity prices, it is better to have them. Bank of Canada research shows that high commodity prices, regardless of the cause, are good for Canada,” he said.
Strong crude pricing does force a rise in the loonie, he said. But the overall impact is a net rise in “income, wealth and GDP in Canada.” While the higher dollar does harm non-commodity exports, that pain is “partially offset by the fact that a stronger currency reduces the cost of productivity-enhancing machinery and equipment imports,” he said at the annual Spruce Meadows Round Table just south of Calgary, which draws business leaders from across the world.
And, Mr. Carney added, any central bank efforts to ward off so-called Dutch disease – by tampering with Canada’s currency to protect manufacturers, for example – are likely to do more harm than good.