More foreign investment in our natural resources could ease financial burden on Canadians – by Mark Le Dain (Calgary Herald – January 22, 2023)

The Canadian loonie has been sitting near multi-year lows, making life more expensive for Canadians. In the past, our country had a natural mechanism that cushioned the inflation impact of a falling loonie.

As the value of the currency dropped, global operators would invest in and develop the country’s abundant natural resources. This would then lead to increased demand for Canadian currency and increased jobs and exports during critical periods when the low loonie suggested weakness in other sectors.

However, this mechanism weakened recently, making current inflation more persistent and resulting in a higher cost of living. It has taken a few years to play out, but we now find ourselves in this new regime.

Canada has been lucky to experience minimal inflation for decades, similar to the U.S. Both countries pat themselves on the back for sound policies leading to stability, but the impact of currency is underappreciated.

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