--although I'm eating up my time right now.
Thank you very much, Mr. Orr, for coming before the committee. I just have a few questions.
We just heard from Mr. Dodge about how adaptive our economy has been. It's faced a lot of obstacles and it's been able to meet them very successfully to this point. We have a very robust economy. In fact, globally I think the economy has done very well in the face of a lot of things that we would have thought would have had a larger impact.
The question is, of course, going forward. There are a lot things facing both the Canadian economy and the manufacturing sector in particular that are of concern on a go forward basis, and there's a question of what is the capacity of the economy to sustain these going forward? Obviously you have the slowdown in demand that's likely to occur south of the border, and given our trading relationship, that's going to have a major impact on us. And there's the rapidly appreciating dollar and the fact that, as you mentioned, there's a risk that acceleration could continue and that we could see the dollar move to a point of parity or greater. On energy prices, it's not looking to become a peak period of high energy prices, but rather a sustained period of increased energy prices.
All of these things are going to put tremendous strain on the economy. So obviously the imperative is there, not only for this committee but particularly the government, to take action to ensure that this process of adaptation can continue so that we can continue to be successful in the face of a lot of obstacles.
I want to come to the budget, if I could. We have a budget that's increasing income taxes on the one hand and cutting sales tax on the other, and I'd like to know whether you see that as helpful or detrimental to this goal of adapting and moving forward the economy. And there's the removal of the contingency reserves, essentially in the last budget, utilizing most of Canada's fiscal capacity for the existing programs in the budget, therefore removing a lot of the ability to do perhaps some of the things you're suggesting.
So I'd like to get your take on the last budget and its implications on some of these things we're talking about.