Friday, October 06, 2006

Industry and oil moving south

When the Canadian dollar was very low, American Industry found it profitable to set up in what they view as a third world country. One dollar American bought 2 dollars Canadian.

The US suffered job loss as their major companies such as Honeywell took US government subsidies to upgrade plants and invested this money off shore. A double loss for the US! The same manner of business happened in other venues.

The pulp and paper is easier to follow than the food industry. While the Canadian dollar was low a number of the old smoker pulp plants in Wisconsin were closed down, jobs terminated as the pulp and paper companies looked north to Canada.

Provinces heaped cash subsidy onto these plants as they opened up in Saskatchewan and other provinces.

The dollar became stronger and, the Canadian plants were abandoned, the subsidy lost to the Canadian economy and the plants south of the border was re opened.

This same game was played in the furniture business where a Calgary furniture plant was tooled up to run 24/7 while the dollar was low, closing down 7 or 8 furniture plants in the US.

The dollar changed; the Calgary plant is now working one shift, just. Some of the plants in the US have opened. Other manufacture has gone off shore.

We now see the same thing happening with ENCANA and oil companies who find no reason to invest in Canada. They see the relative strength in the Canadian dollar and are opting for the US side of the border as producing more profit for them.

Even that turkey Dinning had the correct idea when he said they had to work the crude in Canada or leave it in the ground!

I think Canadians can turn this around if they become a little more active and less complacent about what is happening to them.

Our Governments have to fear the population; that is where the policy will originate.

John Clark
cyberclark@shaw.ca

V for Vendetta is a good watch!
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