Canadians Assess Impact of Weaker Loonie

Karen Graham

Polls last week indicated that the decline in the value of the Canadian dollar is hurting Canadians. The CIBC poll conducted in September found that roughly 37% of small business owners reported the decline in the Canadian dollar is hurting their business, while 19% said it was helping them. Over the past three years, the value of our currency has fallen 30% against its US counterpart, which is good for businesses which earn income in US dollars, but hurts those whose expenses are linked to that currency.

With a swing that dramatic, it’s not only businesses who are reconsidering their behaviour, but consumers are adapting as well. Snowbirds who usually spend winter months in the southern US states are revisiting their plans based on a new set of calculations. For some, the decline is a non-event. Some local residents had the foresight or luck to purchase a recreational residence in the US in the past few years which means that their investment has significantly increased in value even if there has been no uptick in their property’s local market. They are smiling all the way to Florida. For those who rent, it’s a different story.

Vacationers will also face some price-tag shock if they haven’t already booked their regular winter escape. They might be inclined to follow the advice of Bank of Canada governor Stephen Poloz who provided some travel advice of his own last summer when he announced the second interest rate cut, suggesting we “Try to get … a room somewhere in P.E.I..”

Not all currencies have fared as poorly as ours against the US dollar,…