‘Protectionist sentiment’ creates ‘heightened uncertainty’ for Canada on international trade – Saskatoon StarPhoenix
Bank of Canada (BOC) Deputy Governor Timothy Lane’s visit to Saskatoon was an opportunity for the federal banking authority to gain insight from people on the front lines of Saskatchewan’s economy, says the president of the Saskatoon Regional Economic Development Authority.
Lane, who oversees the BOC’s analysis of economic developments on an international scale to help shape its monetary policies, spoke at a luncheon hosted by SREDA on Monday.
Alex Fallon, SREDA’s president, said open communication between the BOC and economic stakeholders in Saskatoon is critical.
“The Bank of Canada plays a key role in a lot of the economic issues facing Canada and Saskatchewan. Anytime we can host the Bank of Canada in Saskatoon, and in Saskatchewan, to get their view on the economy and important issues, it’s always good for the business community.”
Lane told the group international trade is the “lifeblood” of the Canadian economy, and that “populist movements” in some of Canada’s major trading partners are calling current trade relationships into question. He cautioned against increasing barriers.
Canada must embrace global value chains — where various stages of production take place in different countries — emerging technology industries and intra-industry trade, which includes two-way, import-export trade within a single industry, he said.
“Within any given industry, lowering trade barriers enables more efficient producers to expand to supply a wider market.”
Lane said innovation can drive trade, noting Saskatchewan’s search for a protein crop to compliment wheat in the 1970s resulted in the province becoming the world’s largest exporter of green lentils.
Lane was also scheduled to speak with stakeholders during an industry roundtable following the luncheon. Fallon said representatives from about 15 companies in Saskatchewan’s key sectors would participate.
Fallon said he expected trade agreements and trade exports to dominate the conversation at the roundtable, along with interest rates, which he described as a “hot topic.” Federal officials are currently in talks on the North American Free Trade Agreement, and earlier this month the BOC announced it will raise interest rates by one per cent.
Lane said Canada’s openness to international trade is an “important determinant of Canada’s economic growth” noting the BOC will closely watch movements calling for more barriers.
“With the rise in protectionist sentiment in some parts of the world, we have been entering a time of heightened uncertainty about the rules of the game on international trade,” he said. “The possibility of a material, protectionist shift — particularly regarding the outcome of negotiations on possible changes to NAFTA — is a key source of uncertainty for Canada’s economic outlook.”
Fallon said anytime a representative from the BOC is in Saskatchewan, it’s also an opportunity for business owners to gain some perspective on where the Canadian economy is headed and what that might mean for the province, as it allows for “two-way discussion” on issues of national and provincial importance.
— With Canadian Press files