The seemingly unstoppable Canadian dollar surged to its highest level yet Wednesday, topping 106.17 cents (U.S.).
The record came just after 4 p.m., when official trading ended for the day. Officially, the dollar closed at 105.85 cents, up nearly a cent from Tuesday's close, but trading continues virtually around the clock.
By cracking through 106 cents, the dollar topped what most observers believe to be the old record of 106.14 cents set on Aug. 20, 1957.
As a Canadian it looks like I'm going to have to rewrite my own contracts with US customers so I don't lose even more money to this. Funny how your own advice (I was writing about the dollar's inexorable rise years ago) is the hardest to take.
Canada's a petro-economy now. That's a mixed blessing, but it is making consumer goods cheaper and it is fueling a massive boom in Alberta. It's also gutting Canada's manufacturing sector, and is especially hitting southern Ontario hard, since it's caught between Detroit's collapse (which is now so extreme that even cheaper costs due to universal healthcare can't make up the difference) and the dollar's rise.
The dollar's rise is one reason why Quebec, whose economy can be summed up as "power to New York, farm goods to the rest of Canada," is feeling generous towards the conservatives - those export earnings are going far.
Overall I'm not pleased with the dollar's rise. In 7 years it's risen around 50% against our main trade partner. Since Americans have to have oil, natural gas and electrical power no matter what, they've had to pay, but it's devastating our industrial sector. What would you do if, for no reason you have any control over, the majority of your expenses rose 50%? In many cases there'd be nothing you can do, you can't pass on those sort of increases to your customers when China has been spending about 10% of GDP to keep their prices down.
Eventually the oil boom will end. All resource booms do. And when they do Canada's going to have a lot less of an industrial sector than it used to. Resource wealth is, generally, fake wealth. It builds very little permanent prosperity for those who have it. It is, though those getting wealthy in Canada's oilfields won't believe it, a curse.
Once the Maritimes, with their great tall straight trees, were one of the jewels of the British Empire. Today maritimers live on what amounts to federal government aid. When the trees (and later the coal) were no longer needed, none of the money that had poured out of the ground stayed.
That's the future of Alberta, almost certainly. What I fear is that it is the future of Canada.