TORONTO (Bloomberg) -- Within the past five years, General Motors moved the production of its trucks and Buick LaCrosse sedan in Oshawa, Ontario, to the United States.
While the 323-horsepower Camaro is still made in Canada, GM said the next generation of its top-selling sports car will be built in Lansing, Mich.
The shift is a symptom of Canada's currency trading at about parity with the U.S. dollar, from as low as 62 cents in 2002.
As the outlook for industrial exports dims, hedge funds and other large speculators have increased bets against the Canadian dollar to the most since 2007, data from the Washington-based Commodity Futures Trading Commission show.
"As those costs increase -- 40, 60 percent -- we simply can't compete anymore," said Ron Svajlenko, the president of Canadian Auto Workers Local 222, the union whose membership has dwindled to 3,500 from 12,000 in 2002. "When it comes to a decision about where you're going to do things, you go to where the costs are low."
The Canadian dollar's relative strength is starting to weigh on the world's 11th-largest economy just as tumbling commodities prices detract from growth.
Its slice of global non-commodity exports, adjusted for differences in growth among trading partners, has declined about 35 percent since 2000, according to Nomura Holdings Inc.
Automotive companies globally spent about $43 billion in North America from 2010 to 2012, of which $2.3 billion, or 5 percent, was pegged to Canada, according to the Center for Automotive Research.
The United States and Mexico received $3.7 billion each last year, while Canada took about $200 million.
Canada's exchange rate "is not an advantage anymore," said Kim Hill, research director at Center for Automotive Research in Ann Arbor, Mich. "We've seen a lot more investment going to Mexico."
Mexico's peso is the best performing major currency this year, appreciating 5.6 percent to 12.1747 on Friday.
The decision to move the production of GM's Camaro to Lansing "was based on a comprehensive business case," said Adria MacKenzie, a spokeswoman for GM. "Lower capital investment and improved efficiencies were key factors."
GM has committed to invest about $850 million in research and development in Canada through 2016, according to MacKenzie.
"Canada lost a lot of market share, and I think you can actually see it in the economy," said Jens Nordvig, the New York-based global head of foreign-exchange strategy at Nomura. "You're starting to see broad-based growth disappointment. Part of that is the currency is starting to bite."
The nation's employment shrank in March by the most in four years, and its merchandise trade deficit was the 11th in a row.
Policy makers at the Bank of Canada are hesitant to raise interest rates to ward off a burgeoning bubble in real-estate prices because of the potential damage to the broader economy.
Canada's loonie, as the currency is called by traders because of the aquatic bird featured on the nation's one-dollar coin, rose 0.3 percent to C$1.0171 in New York on Friday. One Canadian dollar buys 98.32 U.S. cents.
The currency has lost 2.5 percent versus the U.S. greenback in 2013, and is down 1.2 percent over the past year against a basket of nine other developed-market peers based on Bloomberg Correlated-Weighted Indexes.