Finance committee  Okay. Yes, and that's a major issue in the short term, because you have a lot of companies that have bought oil or other commodities, bought high even in terms of a higher Canadian dollar, and now, as the Canadian dollar has dropped, they're left with materials and inventory that are relatively highly priced here.

Finance committee  I think it comes down to all of the impacts on cashflow. Right now, in the short term for companies that are caught with high inventory costs and high materials costs and that aren't able to take advantage of the lower dollar immediately, that does eat into their cashflow and their operating cash.

Finance committee  The improved fiscal situation, the steps that have been taken to encourage companies to make investments in productive assets and to be more flexible, the response of the Bank of Canada, all of that, which has been enabled by a lot of the improvement on the fiscal side, I think has been very positive in being able to cushion the Canadian economy against the rapid plunge in oil prices.

Finance committee  I think, reiterating what Jim said, too, we're seeing sectoral and regional impacts on employment and on economic activity, particularly for the suppliers in oil exploration and oil drilling in the oil sands sector. It has a pretty large range right across the country, but particularly in western Canada, we're seeing that there.

Finance committee  Maybe I'll just focus on three key points. The first one is the need to secure a new investment in terms of assembly, because that drives the auto supply chain. The movement of assembly down into the southern states and Mexico means that we've lost a lot of the potential for growth here in Canada, so to secure a new investment there is critical.

Finance committee  It does, both in terms of volume as well as price terms. For companies that are contracting in U.S. dollars, as the Canadian dollar falls against the U.S. dollar, that will show up as a price increase for the export side. As well, of course, a stronger U.S. economy and lower dollar will make Canadian goods relatively more competitive, although as I think the point has been made, we're also seeing other currencies fall as well.

Finance committee  According to our statistics, not very well, but I don't think our statistics really measure productivity very well, or manufacturing output. For instance, It's very difficult today when companies are competing more on customer service. Our GDP numbers don't differentiate very well between that increase in value as a result of service versus just a price increase.

Finance committee  I think the extension of the accelerated depreciation is key, particularly in this budget. The other thing is that around the world we're seeing a revolution in technologies being used in manufacturing, not only product technologies, but the types of technologies being used in manufacturing processes.

Finance committee  I agree. Investment in advanced technology and manufacturing is at record levels, even though we have fewer companies in the field, so we are building capacity there. As I said before, I think it will be easier to find skilled workers in the manufacturing sector. That should also be positive and help to allow production to increase, but it's going to continue to take investment in new products, new technology, and in skills training.

Finance committee  Right now, probably many of those cost savings are going to be reinvested in better capacity and better productivity and in more people working.

Finance committee  If you look at the macroeconomic statistics, I think you can draw those conclusions. In the meantime, if you look from 2002 to 2012, we've seen 20,000 manufacturing operations go out of business as part of that adjustment. So it's not an easy adjustment there, and it has very important employment effects, of course—600,000 fewer people employed in manufacturing—although we're at record levels of production right now.

Finance committee  Sure. I think in terms of potential cost savings from a lower price of oil, the number one assumption is that it would lower energy costs for manufacturing, but energy costs from oil represent only 0.3% of total costs in manufacturing.

Finance committee  That is not really going to mean a big cost savings on the energy side; there are potentially greater cost savings as a result of lower feedstock costs, plastics, petrochemicals, and refined petroleum products for some industries in particular. I have to say, we're not seeing the trucking industry or the rail industry passing along the lower energy costs that they're incurring to their customers yet.

Finance committee  I wish I could forecast like that—

Finance committee  —but I think we're already seeing the positive impacts in terms of stronger consumer buying power in the United States, as well as and to some extent correlated with, a stronger U.S. dollar and a weaker Canadian dollar. Those are impacts that are being felt right now, and they are very positive.