Canada is undermining its own objectives in free trade negotiations around the world by not seeking conditions to ensure that currencies are also free, say economists with the CIBC.
The Harper government has placed negotiating free trade deals around the world as a principal pillar of its economic policy, calling it the "new stimulus."
But in a paper released Thursday, CIBC economists argue that currency manipulation by some of Canada's trading partners is undermining the value of trade deals.
They do not quantify the damage, but note that the International Monetary Fund has pegged the loonie one of the world's most overvalued compared to its trading fundamentals, at more than 10 per cent above its true value.
