Canada's economy shed a record 42,000 factory jobs last month, the biggest drop in manufacturing employment since the harrowing recession of the early 1990s.
The country's industrial heartland, Ontario, has lost 61,000 factory jobs in three years and much of that occurred last year alone.
Gross domestic product is estimated to have expanded by 3 per cent last year - faster than in most of the Group of Seven industrialised economies. But growth has mainly come from the red-hot oil and commodities sector, while manufacturing is losing more and more of its competitive edge.
Analysts and bankers in Toronto quickly attributed the decline to the high-flying loonie, the nickname for Canada's currency.
Since 2002, the rise in the currency has raised the cost of doing business in Canada for US multinationals by 34 per cent. Its meteoric rise has had devastating effects, as Canada sells 85 per cent of all its exports to the United States.
Douglas Porter, deputy chief economist at BMO Nesbitt Burns, describes the rising challenge as nothing less than a 'deepening trauma' and ponders whether it is appropriate for the Bank of Canada to go on raising rates.
