Get used to the name Mark Carney.  He’ll be our new Bank of Canada governor starting on February 1st, 2008.  Gone will be our old friend David Dodge.  It’s a job I’d take in a minute.  However, something tells me I wasn’t on the short list.  Managing our economic levers with inflation on one side and unemployment on the other certainly doesn’t open up visions of grandeur.  However for the dismal scientists who call themselves economists, its the stuff dreams our made of.  With Canada’s unemployment rate dipping to a 33 year low last week of 5.9%, it would seem Mark Carney gets the job at an opportune time.

However, is it what it seems?  Remember, this is a world hungry for Canadian agricultural and assorted other commodities.  Even with the loonie wafting over $1.02 US, it’s pretty clear to me we need a re-vamped fiscal policy and a re-jigged agricultural policy to move the greater Canadian economy forward.  New Bank of Canada governor David Carney surely has his work cut out for him.

Key in this debate will be how innovation and new technology intertwines with the nuances of our new post parity Canadian agricultural economy.  In other words we need something within the abyss of what’s going on within our greater Canadian agricultural economy to keep farm income healthy.  Simply put, you can’t have a 17% increase in our currency and not affect the economic well being of Canadian farmers who for the past 30 years have farmed with a sub-par loonie. Canadian farm country cannot win in this present fiscal and monetary environment unless we embrace and foster greater innovation and new technology.

What you say?  Simply put if you work in the agriculture and food sector of our economy there is no way your business plan could have factored in the long term cost of an above par loonie.  No way, unless you were a prophet and if you were I hope you cashed in and never have to work or farm again.  The key for the immediate future on Canadian farms will be to do things even better, be more competitive through the use of new technologies and make innovation job one.  I’m not being preachy here.  I cannot see it any other way.  The better mousetrap we perpetually talk about is now coming the other way.  With American agricultural commodities becoming cheaper and cheaper guess what’s arriving at the factory and farm gate door?  It’s cheap American agricultural goods.

Hmmmm, I don’t like it either.  If 2007 represents anything it represents a year where we consistently hear about “30 year economic milestones”, whether that is the value of our currency or a super low unemployment rate.  For many Canadians in the non-farm economy they are only indirectly affected by this new world.  For others like myself, we find ourselves hoping to go back to days of yore when the dollar was at 75 cents and our agricultural economic life was more stable.  The unwelcoming news though is I don’t see that on the agricultural economic horizon.  Our non-farm Canadian economic news is so sound; I cannot see the loonie going back down to those 2006 values any time soon.

So for the immediate future here we are.  Newer technologies and innovative thinking will be key.  However, there are things that government can do with their fiscal policy to make things better on Canadian farms.  How about an aggressive new capital cost allowance schedule so farmers can write off capital costs more quickly.  This would not only foster new technological innovations but also stimulate the farm economy at a time when it is sorely needed.

That could easily be done especially when you consider our final federal budget surplus of $13.8 billion for the 2006-2007 fiscal year.  In fact with money like that there could be a lot done to stimulate innovation and technological improvements through targeted government programs to say nothing about a federal agricultural safety net policy, which works.  The problem might lie with the fact our federal government’s fiscal policy needs to catch up with our new post parity world.

Key to that debate may be the opening of Parliament on October 16th.  If they are prudent the Conservatives will have some of those innovation and technology planks in their throne speech.  However, don’t count on it.  It would seem at this time the election sabre rattling seems much more paramount.

That rattle will surely grow increasingly shrill.  Nonetheless, it’ll be a pity if our politicians miss the point.  What we need is a strategy to manage our farm economy in this post “dollar parity” world.   Innovation and new technology will surely be key.  A solid federal agricultural safety net is another.  As it is Canadian farmers are working in a world they’ve never seen before.  Realizing and adjusting to that salient truth as we move ahead may be our greatest challenge.