Low Loonie Translates to High Demand in Manufacturing
Residents in Canada generally abhor a drop in value of the nation’s currency, largely because of it reduces buying power on shopping trips south of the 49th parallel or when travelling abroad. The reality is, as a country with a relatively low population, a slightly devalued currency is vital for businesses to remain competitive both domestically and internationally. Simply put, a moderately lower currency value can be a boon not only to the manufacturing sector, but also to other facets of the economy (think tourism, natural resources, etc.).
Jeff Kowalsky/Bloomberg News
Though it’s admittedly difficult to come to a definitive conclusion as to whether or not the inevitable rise in the value of currency will once again cause manufacturing operations to seek more profitable shores, one way to combat the exodus is to make Canadian products indispensable; and that means offering a calibre of highly skilled professionals that is hard to find anywhere else, regardless of the value of the dollar.
Why Is a Low Dollar Good For Canada?
Canada’s low(er) currency gives Canadian manufacturers a very distinct competitive edge in the exportation of goods. Provided the buying nation’s currency is valued higher than Canada’s, the prevailing theory is that their money will go further, which in turn will help the buying company post greater end of year results. This makes Canadian goods a very lucrative buy when compared to similar goods produced by other nations.
Though many Canadians were undoubtedly over the moon when the loonie first matched, then exceed the American greenback a few years ago, that elation was to a degree, a sentiment that resulted from not really understanding how having a higher currency than our largest trading partner impacts the economy. In reality, many manufacturers, including those in the pharmaceutical, automotive, aerospace, food processing, and furniture production sectors, suffered significant losses or had to close up shop altogether.
Now that the currency value has stabilized, the aforementioned industries are again seeing big sales figures (the pharmaceutical industry for instance, brought in roughly $11 billion in 2015, compared to just under $6 billion in 2011). Many however claim that while the drop in the value of the dollar certainly played a role in this economic recovery, it’s not the only factor that’s made a contribution.
Canada it would seem is a beacon of industry talent, and our manufacturing facilities use state of the art technology a lot of which is not employed elsewhere.
These three factors – modest currency value, skilled workforce, and unrivalled technology – coalesce into a perfect storm of manufacturing possibility.
Poised to capitalize on this trend is the next generation of students that will be graduating in the coming years, but this economic strength is not simply something that they can just inherit. A favourable dollar is only one part of the equation. They’ll have to develop and possess the kinds of skills that will continue to make Canada an appealing nation from which to import goods. To that end, many young Canadians are enrolling in courses like electronics technician, PLC programming, and robotics technician (to name just a few), and it’s easy to see why. The global manufacturing sector is undergoing a massive change – one that is exchanging manual labour for a means of production that is highly automated and flexible.
A nation like Canada whose skilled workforce is one of the primary reasons the goods that are produced here are in such high demand has to do everything possible to ensure that this view doesn’t change in the eyes of foreign buyers. But there’s only so much room in classrooms, only so many students can be enrolled in a particular program at time. For that reason, online technology courses, like the ones offered by George Brown College are becoming an increasingly popular alternative to the traditional classroom. Not only do they allow a greater number of students to develop the skills necessary to work in a highly skilled manufacturing role, they allow students to complete them at their own pace. This means that each fall, there will be more graduates ready and willing to meet the challenge of keeping Canada a manufacturing leader.