(Adds interview with Morneau, background)
By Richard Leong and David Ljunggren
NEW YORK/OTTAWA, March 30 (Reuters) - Canadian Finance
Minister Bill Morneau on Wednesday said it may take more time
for the country's economy to reap the benefits of a weaker
Canadian dollar as domestic manufacturers adjust to its impact.
The dollar hit its weakest level in more than a decade in
January, dragged down by the steep drop in oil, a major Canadian
export. It has since recovered slightly as energy prices
stabilized. CAD/
"Positive effects of the lower dollar may take longer to
materialize, especially as our manufacturing sector adjusts
after a longer period where the dollar was strong," Morneau said
in a speech to an event sponsored by the Canadian Association of
New York.
Morneau later said that while a lower Canadian dollar should
boost exports, firms would first have to invest in plants and
equipment to boost capacity and thereby take advantage of
increased foreign demand.
"We believe we're starting to see the green shoots from that
activity with some positive indicators," he said in a phone
interview.
"We think that will continue to be the course over the next
four to six quarters ... from Canadians making investments to
enhance our ability to export."
Separately, Bank of Canada Deputy Governor Lynn Patterson
said on Wednesday that it takes up to two years for the full
effect of exchange rate movements to be felt in the economy.
Given that the Canadian dollar dropped 15 percent against
the U.S. greenback in 2015, this means the non-commodity sector
should start to see more benefits, she added.
In his phone interview, Morneau also said the new Liberal
government had no specific plans to relax regulations limiting
foreign investment in the sensitive domestic telecommunications,
energy and airlines sectors.
Canada welcomed foreign investment but would also ensure it
was good for the country's long-term economic health, he said.
(With additional reporting by David Ljunggren; Editing by Alan
Crosby)