As the Canadian dollar hit parity with the U.S. dollar, some suggested this was hardly cause for celebration as the rapid rise of the dollar has meant massive job losses in Canada's manufacturing sector and in Canada's forestry and paper manufacturing sector.
A look at the data, however, suggests the correlation between the dollar's rise and job losses is weaker or stronger depending on when the measurement end points.
Here's the data checkpoints:
- For the month of January 2003, the Canadian loonie's average value was 64.88 cents US. By August, 2007, the monthly average was 94.5 cents, a rise in nearly five years of 45.7 per cent. In the same period, Canada lost nearly one in ten forestry and paper manufacturing jobs. For all manufacturing sectors, there were 129,000 or 5.8 per cent fewer in August, 2007 than there were in January, 2003. So that sounds bad but …
- Just comparing August 2007 to the beginning of 2007, the loonie and employment levels are all up. For the first eight months of the year, the loonie climbed more than 11 per cent; there are 30,200 or 23 per cent more people working in forestry; and there are nearly 60,000 or 2.9 per cent more manufacturing jobs.
- Things look less cheery, though, if we compare August of 2007 to August of 2006. In that twelve-month period, the loonie climbed 5.7 per cent; there are 7,700 or 4.5 per cent fewer forestry jobs; and there are 51,300 or 2.4 per cent fewer manufacturing jobs.
Data sources: Statistics Canada and X-Rates
I'll confess to total ignorance when it comes to percentages, employment rates, etc.
I can grasp the concept of most exports not being as much in demand as previously because of a higher Canadian dollar.
I can also understand/accept why dollar parity does not immediately translate into lower prices here in Canada compared to the same US items, something which some consumers are already howling about.
What I can't understand is Canadian consumers apparently shopping with frenzied abandon in the States, thus depriving local merchants of their business, and perhaps contributing to some Canadian small businesses going under.
Mel Hurtig once told me that statistics are like bikinis: what they hide is more interesting than what they show. I have more than once seen the same set of statistics used to prove opposite theses, so I'm pretty skeptical when people use simple correlations to prove their point. There's so much that isn't being said.