CANADIAN DOLLAR

Otago Daily Times, Issue 26198, 8 July 1946, Page 5

CANADIAN DOLLAR

THE EXCHANGE RATE PARITY WITH AMERICA RESISTING PRICE INCREASES (Rec. 10 p.m.) OTTAWA, July 6. The exchange rate for the Canadian dollar was adjusted to parity with the United States dollar from 11 p.m. yesterday, stated the Minister of Finance, Mr J. L. Ilsley, in the House of Commons. The American dollar has hitherto been at a premium of 10 per cent. . „ . Mr Ilsley referred to the American abandonment of the Office of Price Administration and outlined four major steps which would go a long way toward insulating Canada against unfavourable external conditions and the easing of inflationary pressures at present so strong. These were: —First, the adjustment of the exchange rate with the United the establishment of a long but clear list of all goods services which would continue to be subject to price control, including practically all the significant articles in a normal household budget and production costs of farmers, fishermen, and other primary producers. Thirdly, all imports of the kind subject to price control will be priced on the basis of importers’ landed costs, plus the prescribed maximum mark-up which will be somewhat less than the mark-up usually obtained by distributors of similar domestically made goods. Fourthly, subsidy payments will remain to prevent undue increases in the prices of the most important articles in the cost of living or primary prorucers’ costs. Mr Ilsley said that the new programme was aimed, first, at preventing undue increases in living production costs; secondly, improving the effectiveness of price controls; thirdly, encouraging a greater supply of scarce goods from other countries; and fourthly, facilitating the orderly postwar adjustment of Canadian economy while protecting it from the major effects of adverse developments outside of Canada’s borders. ” Mr Ilsley said that owing to the strong commercial ties between Canada and the United States, rising prices in the United States naturally exercised a strong upward pressure . a S all ?st Canadian costs- and prices, which the Government sought to resist or neutralise.