July 18, 2012
Manufacturers should target oilsands: Carney
By Mark Dunn, Senior National Reporter
OTTAWA - Bank of Canada governor Mark Carney has some advice for the country's struggling manufacturers - take advantage of the booming resource sector.
Carney said Wednesday Canada is not alone in seeing manufacturing shrink as global demand drops for certain products and demand for others increases.
He said that while fundamental challenges face the economy - from finding new markets to productivity and sales - Canadian businesses could become more integrated with the parts of the economy that are growing.
"And certainly the resource sector ... and we are not un-integrated in this respect, but we can become more so," he said after delivering a quarterly update on the state of the economy and lowering growth expectations.
Ontario - once the engine that drove the economy until the bottom fell out in the auto sector - could benefit further from what's going on out West, he said.
Instead of blaming the high value of the Canadian dollar and Alberta's oil sector for the woes in manufacturing as NDP Leader Thomas Mulcair has done, Carney noted that one in 12 suppliers to the oilsands is based in Ontario.
He said Ontario exports to Alberta have increased by about 40% based on figures from about a year ago.
"So there are some links there that are important and can be deepened," he said.
In his update, Carney said the financial crisis in Europe, a sluggish U.S. economy, and slowing growth in China and other emerging economies are having an impact on Canada and driving down commodity prices, including oil.
He said household debt continues to be worrisome and that the Bank of Canada will leave its benchmark overnight interest rate at 1% for the time being.