Many investors looking at Canada see a country with substantial potential but also significant risks. Thus they are discounting Canada and investing elsewhere.
Document Highlights
These risks arise from a combination of poor policy decisions made in the past, adverse international developments that threaten access to the U.S. market, and internal political uncertainty.
The most visible result is the chronic weakness of the Canadian dollar. The investment climate must become more receptive over a long period of time, or our economic potential of 2010 will not improve over what we now foresee.
The weakness of the Canadian dollar goes well beyond differences in price levels in Canada and other countries. It has been discounted about 25 per cent below its purchasing power parity rate of about U.S. $0.85.
Canada must move further into the production of high value-added innovative goods and services that will increase our income. This will also make the Canadian economy less vulnerable to American protectionism, which focuses on protecting U.S. declining sectors.
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