Two sides to the falling oil prices: Benoit

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October 21, 2014 9:06 AM

Vegreville-Wainwright MP Leon Benoit is taking the falling oil prices in stride, but is cautiously looking at the European markets to see if the world could be seeing another economic downturn in the near future. - Christopher W. Brown Photo

With lowering oil prices and the Canadian dollar shrinking against the U.S. greenback, some economists are speculating an economic downturn in the not too near future.

Local MP Leon Benoit said that there are two sides to oil prices dropping.

“The impact outside of the oil and gas industry is possible,” he said. “Our dollar drops, (it can) make trades in goods and services more attractive to other countries.”

Benoit said that the conservative agenda has been about opening more markets around the world, which would be beneficial to the lower Canadian dollar.

“I think that the finance minister (Joe Oliver) isn’t really concerned yet,” said Benoit. “There is a loss of revenue with the lower oil prices, but on the other hand, there will be increased trade because of the lower dollar.”

Benoit said that the lower dollar will bring in more revenue trade
wise.

“There is two sides to the issue right now.”

If the dollar and oil prices do continue to drop, then there is need to be worried, according to Benoit.

“At this level, I’m not terribly unhappy to see (the decrease),” he said.

If the dollar and oil prices continue to drop, Benoit said that Canada would be brought into another possible recession.

“The matter is that Canada is relatively positioned well in the world, compared to most countries.”

Benoit said that if Europe goes into another recession, then it’s hard for Canada not to follow suit.

“We have seen some very discouraging numbers out of Germany, which is the key economic driving country in Europe,” he said. “That has to be a worry, the consumer numbers in the United States are discouraging, and that is worrisome, since they are our largest trading partner.

“Asia is also feeling some of this as well.”

Benoit said that there is some concern about the world going into another downturn.

“Our markets have seen a pretty substantial hit,” he said. “They are almost down to the level they were at the start of the year.”

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