Saturday, September 20th23.9°C
23518
22646

54 per cent of business owners say lower loonie is no big deal, says BMO poll

TORONTO - The fluctuating loonie may actually have little impact on most Canadian businesses, suggests a new survey by the Bank of Montreal (TSX:BMO).

About half (54 per cent) of business owners recently polled said changes in the dollar have no impact on them. While slightly more (55 per cent) of those who head small businesses, described as firms with less than 50 employees, said that held true for them as well.

This contrasts with 27 per cent who said their businesses benefit from a weak dollar and 18 per cent who believed they were worse off when the loonie falters against the U.S. dollar.

Those polled, on average, expect the Canadian dollar to drop to 89 cents US by the end of this year.

The Canadian dollar has been hovering around the 90-cents US mark in the last few weeks after falling as low as 89 cents in March. However, that is still below the currency's 2014 high of 93.99 cents US on Jan. 3. The last time it reached parity with the U.S. dollar was in February 2013.

BMO chief economist Doug Porter says the valuation is on par with forecasts from the bank, which anticipates the loonie will drop to 87 cents US by the end of this year and stay within the 85- to 86-cents range in 2015.

Determining who wins and who losses when the dollar falls "very much depends on the business and sector they're in," Porter said.

"Certain industries tend to benefit from a weaker currency — it could be a mixed blessing for some and for others it could be a curse."

Generally speaking, he said producers tend to benefit and consumers tend to lose in that environment. Broadcasters, sports teams, utility companies and retailers tend to be potential losers from a lower loonie, while manufacturers, tourism and resource companies tend to win.

The survey found that those in Atlantic Canada (62 per cent) and Alberta (55 per cent) were the most likely to say a fluctuating dollar does not impact their business, while those in Saskatchewan and Manitoba (32 per cent) and British Columbia (31 per cent) reported that their companies would fare better amid a weaker dollar.

It also found that sentiment varied across sectors. Business and financial companies (76 per cent) were the most likely to say they wouldn't be affected by a weak Canadian dollar, followed by 61 per cent of energy companies and 57 per cent of service sector companies.

Dan Kelly, head of the Canadian Federation for Independent Business, says many companies are used to dealing with currency swings, with many already factoring that into their business plans.

"When there is a sudden swing, that's when it can really change the balance," he said.

"Over the last five to eight years, there have been considerable swings in the Canadian dollar and small business owners have been finding ways to manage that risk better, either with hedging or other strategies, prepaying for other products and services and figuring out ways to address some of those challenges."

Kelly said there is an "assumption" that a weak Canadian dollar is more beneficial to business, but that is not necessarily the case, particularly for small businesses like hair salons and restaurants.

The telephone poll was conducted by Pollara with 502 Canadian business owners — including 476 small business owners and 26 larger businesses with 50 or more employees — between March 7 and March 24. The claimed margin of error was plus or minus 4.4 percentage points, 19 times out of 20.

Follow @LindaNguyenTO on Twitter.

The Canadian Press


Read more Business News

23104


Recent Trending




Today's Market
S&P TSX15265.35-200.19
S&P CDNX955.06-10.73
DJIA17279.7413.75
Nasdaq4593.426-13.637
S&P 5002010.40-0.96
CDN Dollar0.9126+0.0004
Gold1216.90-10.00
Oil92.45-0.62
Lumber329.00-0.90
Natural Gas3.911-0.064

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.37+0.05
Cantex0.05-0.01
Anavex Life Sciences0.223-0.0031
Metalex Ventures0.060.00
Russel Metals35.75-1.26
Copper Mountain Mining2.66-0.02
Colorado Resources0.165-0.01
ReliaBrand Inc0.0249+0.0009
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.29-0.01

 



22967

FEATURED Property
1687640317, 3550 Woodsdale Rd
2 bedrooms 2 baths
$229,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...


Power-save your way to a down payment

Part 1 of 2 Photo: Thinkstock.com1. Move in with your parents or in-laws Explain that you're thinking strategically in moving back home. The quickest way to get into the housing market is to ma...

_








Member of BC Press Council


23087