The Canadian dollar’s continuing slide, which saw its value drop below 90 cents against the U.S. dollar this week, presents something of a double-edged sword for the Interior’s residents and small businesses.
Consumers accustomed to cross-border shopping or annual winter getaways south of the border face diminished purchasing power as the loonie continues its downward spiral.
Just a few months ago, travelling on the Canadian dollar meant comparatively cheaper prices than consumers could find locally, however, now many shoppers and travelers are wondering if they’re better off staying at home says, Geoff Willers, a branch manager at Valley First.
“We’ve certainly heard members comment on the value of the loonie,” says Willers.
“While there are positive and negatives that come with a strong dollar, there is also some pride. We often compare ourselves to our southern neighbour. Regardless of the benefits or drawbacks, Canadians like having a strong currency, especially against the greenback.”
The dropping value of the loonie may have an even more noticeable effect on many small businesses in the Interior, particularly those further south, says Dave Finner a commercial banking manager at Valley First.
“Given how close we are to the border, many small business owners watch the loonie very carefully,” says Finner. “Small businesses with exporting interests may see their products become more attractive abroad. However, businesses that rely on service or suppliers in the U.S. or other countries may end up paying more, just to keep their supply lines open and their operations running.
“On the upside, if consumers are turned off cross-border shopping by the weakening dollar, local businesses stand ready to benefit,” says Finner. “Instead of seeing cash run out of our communities toward apparent bargains or savings, those dollars will be spent at home. This activity is great for strengthening our local economies, not to mention small businesses.”