Canadian Economics

I s the future of Canadian auto market bleak

The suppliers are themselves suffering from shrinking s because of the appreciating Canadian dollar , shrinking product lines from assemblers , stiff competition from low cost part manufacturers , and the rising market share of imported vehicles (Kar , 2006 . The American market has for many years relied on light tracks market for growth , but this section 's not to mention the competitive entry of foreign products (Hargrove Stanford , 2002 . Kar further says that North American carmakers are introducing new models to deal with competition , but it

will be a disaster if their new cars fail to capture the targeted market . Domestic parts makers can also outsource low-skilled manufacturing jobs to low cost countries like china , whereas highly skilled jobs of research design and management are left in Canada . This could give them even access to other markets of Europe and the expanding Asia instead of relying on just North American Market

In the age of globalization , Canadian automakers and their suppliers should put emphasis on expanding to the upcoming markets worldwide instead of looking for ways to protect their home turfs and local work force . It 's the failure to shift to low cost manufacturing areas and targeting upcoming markets that will destroy the future of the local motor industry . Relying on the bigger southern neighbor has been a bad omen to Canadian auto industry this has to change . It will further hurt the Canadian economy considering that the motor sector employs more that .5 million Canadians , provides a 40 billion market for autopart makers and 167 billion of Canadian merchandise trade , 20 of the national decade despite the bleak performance portrayed by Stanford . Indeed Industry Canada (2006 ) statistics indicate that motor vehicle and associated autoparts exports have been rising : exports of assembled vehicles have risen from 47 .9 billion in 1996 to 59 .8 billion in 2006 whereas exports of motor vehicle auto parts rose from 21 .1 billion in 1996 to 28 .5 billion 2006 . Number of motor vehicles produced by Canada during the same period increased by 7 .26 percent , whereas that of the United States decreased by 4 .83 percent

Government officials both at federal and provincial level have confidently asserted that the industry will finally recover because they have set Canadian economic fundamentals (balanced budgets , lower taxes and competitive labor laws ) right (Hargrove Stanford , 2002

Is Canada at risk of Dutch disease

Define Dutch disease ? Canada has for few years been experiencing warning signs of Dutch disease appreciating currency and rising share of primary commodities in the economy

A 2005 poll indicated that 57 percent of Canadians business leaders expressed fears that the economy was experiencing Dutch Disease , whereas 24 percent said they were not sure and only 19 percent said that those fears were far fetched (Compass , 2005

Does Dutch disease only affect countries with heavy government involvement in the economy , because it is Canadian corporations are getting commodity windfall that can be used to buy foreign companies...