Mark Carney told the Canadian Auto Workers union Wednesday that exporters face more challenges than just the rising value of the Canadian dollar.
Carney became the first governor of the Bank of Canada to address the annual convention of the Canadian Auto Workers union in Toronto on Wednesday.
The CAW has criticized the central bank's monetary policy for the soaring value of the dollar.
In his comments, Carney acknowledged Canada's poor performance on exports such as automobiles in recent years. Canada ranks second-worst in the G20 over the last decade, with only nine per cent of exports going to fast-growing emerging markets such as China and India.
"Some blame this on the persistent strength of the Canadian dollar," Carney said. "While there is some truth to that, it is not the most important reason."
Lewenza blames higher loonie
"Over the past decade, our poor export performance has been explained two-thirds by market structure and one-third by competitiveness," Carney continued. "Of the latter about two-thirds is the currency while the rest is labour costs and productivity."
"So, net, our strong currency explains only about 20 per cent of our poor export performance."
Canada's over-reliance on the U.S. as a trading partner also shoulders some of the blame, Carney said.
"Our underperformance prior to the crisis was more a reflection of who we traded with than how effectively we did it," Carney said.
"We are overexposed to the United States and underexposed to faster-growing emerging markets."
CAW president Ken Lewenza said the high dollar means autoworkers earn a few dollars an hour more their U.S. counterparts, making Canadians less competitive.
"We think the Canadian dollar is 20 per cent above its value. Are we concerned about it? Of course we're concerned about it," said Lewenza.
Merger vote on agenda
Also at the convention, CAW delegates voted in favour of a proposal for the union to merge with the Communications, Energy and Paperworkers Union of Canada (CEP).
- CAW members vote to merge into super-union with CEP
The two unions say the merger comes in response to multiple attacks on the country's labour force, including several pieces of back-to-work legislation passed by the federal government.