Learning to Live With a Strong Canadian Dollar: Four Options for Business and Government

Over the past year, the Canadian dollar has moved steadily higher, going from a floor of about 77 cents U.S. a year ago during the worst of the global economic recession to just below parity with the U.S. dollar today. That has created new challenges for many Canadian businesses, and they will have to come to grips with this new reality. Ignoring the problem, or implementing quick fixes, won’t work.

This briefing looks at four options and strategies for adapting to a strong currency, and finds that only two will work——boosting productivity within firms and across the economy, and expanding the internationalization of Canadian businesses. Those businesses that fail to adapt quickly enough will fall prey—and could well succumb—to “Dutch disease.”