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Canadian dollar's decline has various impacts on economy: Senate

Xinhua, March 25, 2016 Adjust font size:

The Canadian Senate on Thursday blamed falling oil prices for its currency decline, saying the low exchange rate has caused mixed results which include higher import prices and a boom in tourism and manufacturing industries.

The Canadian dollar, which was at parity with the U.S. greenback in 2013, has lost some 25 percent of its value since then, closely following the drop in oil prices.

A 10-percent decrease in oil prices generally causes the Canadian dollar to fall by between three and five cents, the Standing Senate Committee on Banking, Trade and Commerce said in a report.

The report listed the negative impact of a weaker currency, saying Canadian consumers paid between 30 percent and 40 percent more for American-made goods since the currency depreciation. The price of fresh fruits and vegetables also increased by 13 percent between November 2014 and November 2015.

Among the positive effects, the report said more than 37,000 jobs were created in the manufacturing sector in 2015, the largest number since 2012.

Auto, aerospace and communications technology exports all increased.

The tourism industry also saw an 8-percent increase of U.S. visitors in 2014 and 2015, which added four to five billion Canadian dollars to last year's gross domestic product (GDP). Endi