Opposition MPs are accusing Deputy Prime Minister John Manley of being irresponsible for suggesting a weak dollar may be saving some firms from bankruptcy.

Earlier in the week, Manley noted that some companies are not as productive as they could be and hinted that a low Canadian dollar was helping them stay afloat.

"I worry that too many Canadian firms are profiting mightily from a 62-cent dollar and would be hard-pressed to compete at an 80-cent dollar," he said in an interview published Wednesday. "If they don't make the investments in research and development and technology and innovation, when the dollar gets to that level they'll be out of business."

John Manley

On Thursday, NDP Leader Alexa McDonough called Manley's statement "grotesquely irresponsible." Other opposition parties joined the attack.

Manley responded by saying he's not in favour of a low dollar, and outlined ways that the Liberals have helped stop the currency's slide by strengthening the overall economy by lowering taxes and reducing public debt.

"In order to have a strong currency, you need strong economic fundamentals," Manley said. "That, in fact, is what we have been producing."

John Reynolds

Manley then repeated statements he made as industry minister, when he called on Canadian companies to become more productive. "They need to prepare by making the investments in equipment ... and technology that's going to ensure they win those markets and retain those markets."

But interim Canadian Alliance Leader John Reynolds told Manley that some firms have trouble competing because taxes are too high.

"Instead of blaming Canadian businesses, he and his cabinet colleagues should look in the mirror," Reynolds said.

Martin, central bank join damage control

Finance Minister Paul Martin and officials at the Bank of Canada, meanwhile, were busy Thursday clarifying the government's position on the loonie.

They said Ottawa wants a strong dollar – a position outlined during a recent trip to Wall Street by Martin, central bank governor David Dodge and Prime Minister Jean Chrétien.

"The governor of the Bank of Canada, the prime minister and myself were very, very clear about the dollar in our comments a couple of weeks ago. Mr. Manley shares those views," said Martin.

"Our position is: we were not happy at all about the direction of our dollar and that position remains."

The Bank of Canada's deputy governor, Pierre Duguay, issued a statement Thursday dismissing the theory that a weak dollar gives inefficient Canadian companies a trade advantage.

"There has been a great deal of public concern about the decline in the value of our currency," he told the Canadian Club in Kingston, Ont.

"The argument goes something like this: the low Canadian dollar allows Canadian exporters and import-competing firms to sit back and take it easy. The facts do not support this story," Duguay added.