Rising loonie brings 'pain on top of pain'
By Jason Buckland, Sympatico / MSN Finance
Almost a month ago in this space, we tried to compare Canada’s ’09 tourism industry to that of Fallujah’s after news broke of incoming passport rules that would make it much tougher for Americans to make their way north.
Surely we were crazy to suggest that then, but … now? Maybe the number of guests visiting a war-torn Middle Eastern destination this summer is something Canada can shoot for, after all.
Things were already bad for Canadian tourism earlier this week when, starting June 1st, new passport rules made crossing the U.S. border a bit like tip-toeing through a minefield with Aretha Franklin on your back: tricky.
In order to make it across, you now must have a passport (or a new fancy driver’s license that isn’t out yet) where photo ID, a birth certificate and friendly nod would’ve done the job before.
What’s the big deal, you say? Well, the problem’s not on our side. While many Canadians have passports, only about one in four Americans have such documentation, meaning bye-bye to a major chunk of tourism bucks our economy counts on each year.
Of course, this is a recession -- the problems can’t stop there. As the loonie rises through the roof, it creates a dynamic that the Globe and Mail likes to call “pain on top of pain.” With the border restrictions and, now, the cost of the Canadian dollar compared to its U.S. counterpart, it makes even less sense for Americans to leave the States and bring their money into the Great White North.
And I know what some people are thinking, which is, Fine, good riddance. We don’t need a bunch of Yankees leaving trash and butchering our French street names to enjoy our country this summer. But the fact is, without U.S. tourist influence we lose out on millions of revenue dollars in a time where millions of revenue dollars is actually a big deal.
The issue is already a topic of ire out east, where New Brunswick’s Minister of Tourism and Parks is already anticipating the lost income. He’s begun promoting “staycations” to entice members of the province to remain in New Brunswick this summer to help combat some of the loss from lack of Americans.
Creates a bit of a dilemma for us, doesn’t it? Stay in the area and help pump much-needed money back into the Canadian economy or – with the advantage the loonie now has over the USD – take advantage of a quick trip to the States, where everything from lunch to a shopping spree or trip to the theme park is cheaper by comparison?
Posted by: Petey | Jun 4, 2021 9:02:09 AM
I've said for a long time that I wish Canadians would stop spending their money across the border. A vacation is one thing, but this cross border shopping is just dumb, they're only hurting our own economy. SHOP CANADIAN and keep people employed here and we need the tax revenue for our social services especially health care and Americans don't like us anyways.
Posted by: William | Jun 4, 2021 10:18:31 AM
While i do agree that it would be beneficial for Canadians to start spending more in Canada to plump up our economy. I disagree on the point that shopping cross border is "dumb". If I lived closer to the border I would be doing the majority of my shopping the the US, since it is that much cheaper down there compared to what the same retailers up here are charging for; especially when our Loonie is near parity with the US dollar. Unfortunately I live pretty far away from the Can./US. border =(
Posted by: Savy Shopper | Jun 4, 2021 10:38:36 AM
HI!
Can certainly see previous point made by 'Petey' (& I do shop local whenever possible) BUT the bottom line is: when staples like MILK, POULTRY & GAS are sometimes HALF what we are paying in NS/NB, when you can get a motel WITH breakfast (& sometimes coffee all day) for about $50-$70, if you have any amount of shopping to do esp for expensive items like cameras, etc., AND you want a weekend away, dollar for dollar, what you save on your items almost pays for your weekend .... Sorry - but I've done it many times ... 4 women or 2 couples can go to Bangor, stay 2 nights (1 room) for $50-$75 EACH - not counting shopping of course! One can hardly do that in Fredericton, Moncton or Halifax!
Maybe I'm just not aware, but why doesn't Canada come up with 'Room Saver' coupons (like every state) where sometimes you can get a room while travelling for as low as $39 (Yes in very nice places too not dives!)? You can also get a buffet meal at noon in some places for $4.99!!
From what I've read, Canadian specials seem to be more geared to buy 2 nights at regular price (sometimes close to $200) & get a 3rd one free OR include a meal or round of golf for a reduced price, etc. - sometimes just not relevant if one is travelling from province to province on a trip.
I truly think Canadian accommodations & restaurants (tourism in general) has to take a long hard look at exactly WHY Canadians 'cross the border' and step up to the plate if they want us to stay put!!
Just my two cents worth! Perhaps there is a blog for Canadian 'deals' on rooms/meals province by province that I'm not aware of and would welcome!
Posted by: I Am Canadian | Jun 4, 2021 10:56:01 AM
I have always been facinated by the irrational notion that a continuosly weaker dollar in Canada was so disastrous. Yes I understand the impact on the grater Canadian economic conditions. Yes I understand the impact on trade. But isn't it about time that as Canadians we are rewarded with a strong national currency in comparison to the economic beast that "WAS" the US dollar. Look what happend to them. Essentially a false economy that was overvalued over priced and over protected. It is a broken system! It can not work for the long term. This is evident. Greed, hunger, power leads to more greed and an uncontrolable urge to make up the rules as you go. This is time for Canadians to stand up and be proud of our financial systems, banking policies and economic stability. We can no long be held hostage to American trade. It is time to be "Innovators" Canada, not "Imitators" We can be leaders in production and manufacturing that lead the world in new technologies and development. We can produce high quality goods that can service the world markets. Home grown and developed! We need to drive our own economic growth, invest in back into a better Canada. A Canada that is interdependent! Not a Canada that is driven by foreign ownership and foreign companies that employ Canadians. A stronger Canadian dollar allows Canada to enter world markets a far cheaper cost to allow for our growth, to build long lasting dynaties on the world stage. The new stamp says "Made in Canada"
Posted by: Chad | Jun 4, 2021 11:08:08 AM
I'm not sure why Petey thinks Americans don't like us... In my many trips/vacations to the States I have not seen that at all. For the most part they like Canada and Canadians. I do find the service much better in the States. At grocery stores the cashiers are talking to you and not across your shoulder to other cashiers ... and severs seem to actually be happy serving you where here at most places it is just a job and they are putting in time. Last I checked Canada was still a free and capitalist country so we can shop where we want and the market will set the price. If Canadian businesses price themselves out of business that is their choice. If the government prices Canada out of business (by taxation) then we have a choice if we get someone to vote for!
Posted by: earl hall | Jun 4, 2021 11:10:26 AM
When are Canadians gonna pull their heads out of their butts and realize that a strong Canadian dollar means a cheaper cost of living for all Canadians!
Posted by: Tired of Being Plundered | Jun 4, 2021 11:52:20 AM
I agree totally with I AM Canadian blog. We travelled to USA and stayed for a while this past winter while the melt down in their financial system was unfolding and it was extremely illogical to understand why during that train wreak caused by their greed I was paying up to a 30% premium for their $ ? Our Cdn. currency is continually being manipulated DOWN to acommodate trade to USA.
In short this is simply a way for USA to aquire our natural resources at a on average 20% discount for their countries benifit and that's all they care about. Why do we continue to sell out or resources and our future assets of our country and that of our children & grandchildren at a substantial discount while they are so greedy and irresponsible and continue to bankrupt their country. Given the state of their overall financial condition(virtually bankrupt) our Cdn $ should be at a 20% or better premium to theirs. Lets stop giving our assets away so cheap. Everyone write or e mail your MP & the PM and demand some answers. Lets stop getting sucked into the vortex of their continuing financial mismanagement. At the rate the USA is printing their money it should be almost worthless or at best that of a third world currency. Wake up Canadians we are being swindled out of our assets by a big USA government ponzy scheme. Those US dollars aren't worth what you think! ! !
Posted by: R B FOLLETT | Jun 4, 2021 12:00:37 PM
The Canadian Tourist Industry has been gouging Foreign Tourists for years utilizing our low dollar as a way to set ridiculous prices for acommodations and attractions. They have virtually out priced themselves for Canadians wanting to travel in our own country and have destroyed their own internal market. Now that the dollar is so much higher they have done the same thing to the foreign travelers as well and they still can not see that it is their own ridiculous pricing that is keeping people away. The only thing that a higher dollar is going to do is force them to lower their prices so that BOTH Foreign AND Canadian tourists can now enjoy our great country.
Posted by: CROSS WHEN YOU CAN | Jun 4, 2021 1:00:18 PM
I understand we should keep our money in Canada, but with retailers charging a heck of alot more for the same item, I saw cross over and get 2-3 items for the same price. I live close to the border and with the dollar so strong I cross all the time. WAKE UP CANADIAN RETAILERS, and stop price gouging.
Posted by: walter | Jun 4, 2021 1:02:32 PM
Petey,
Get your head out of your bum. You have it all wrong. Americans, for some reason,even with all the anti American B. S.,that typically comes out of big mouth Canadians, like you. Get over your insecure inferiority complex.
Walter.
Posted by: Croos While You Can | Jun 4, 2021 1:42:06 PM
The USSA is now a defacto communist country. I less than 6 Months! It is easier to get into Portugal than it is to fly somewhere in Florida. The facial recognition software you routinely are subjected to - without your permission make you time and place easy to follow. Many of my US friends are agast at what is happening over there and figure the only possible chance ot stop this party is to throw each and every politician out on their ass in Nov 2010. Lots of luck with that. I used to go to the states at least 6 to 10 times every year. I've been their once this year that may be to last time for a long time.
Posted by: Petey | Jun 4, 2021 2:05:33 PM
OK thanks Walter, I think.
Posted by: Ri | Jun 4, 2021 2:26:27 PM
I'm a proud Canadian from Ontario and I live on a border city. I totally agreed with Chad. US residence consider Canada to be sort of the caring and nuturing country. In my many visits to the states for vacation and especially shopping, I find that customer service to be better. As for the price between Canada and the US it's like ying and yang, day and night, apples and oranges, north and south,... and I can go on and on. We must remember that we cannot tell people what to buy and where to buy it from. People do compare prices and shop where there is a better deal. This fact only makes sense to me because in our daily lives we budget. We are consumers and we naturally want more for our dollar. This is especially true now in this tough economy. For those people who believe this fact not to be true than tell Wal-Mart that. This is not an anomaly. Their success rings true and shines even in turbulent times.
As for the comment from Earl Hall. This statement is true if you still have a job and shop in the US to see the value of the Canadian dollar. As the loonie strengthens and Canadian tourism does not re-adjust its pricing to pass on the savings than in essence it's getting more expensive. This is true for all segments of the economy. We saw this last year when Canadians started to cross the border to buy US cars from the same car company. Even though they paid duty, it still came out to be a lot less. This caused the big 3 and soon to be the big 2 to re-adjust their Canadian prices. Need I say more.
This comment goes to Tired of Being Plundered. The canadian government can increase the value of our currency at any time that they want. All they have to do is increase the interest rate. Right now the rate is close to zero percent. They can raise to ten percent next time they have their meeting. The value of the canadian dollar maybe worth more than the pound over night. We can than go over to the states and buy two cars for the price of one. Just think about this. There has to be a double edge sword for the government not to drive up the value of the canadian dollar. What I told you is a positive side of the story but the negative side of the story will be devastating. Tourism will plumment and export will only be for commodiites which the US is lacking. Unemployment will go thru the roof. In this side of the world the US is the driving engine for our economy. They must have the advantage in the currency value. That is why there has been so many complaints against the Chinese Yuan and how they artifically keep their currency low. Canadians cannot compete against this. Holding the US hostage for commodites sounds just like what the middle east is doing. Something to ponder about. Should Canada join OPEC and bring the US to their knees?
Posted by: Mac | Jun 4, 2021 2:44:17 PM
Why wouldn't I shop across the border? I go across the border shopping at least four times a year and spend the max every time I go over there. We buy food as well as all of our clothing for a fraction of the price that we would pay in Canada. Hotel rooms are cheaper and gasoline as well. When I return to Canada I file a form to the USA and get my taxes back that I paid while I was down there. Why would I shop in Canada? There is no incentive to shop in Canada.
Posted by: david | Jun 4, 2021 2:45:34 PM
stop you whining, that is all you here, is whining whining whining, what a bunch of spoil brats, re invent yourself, and more on, life is short enough without listening to complaining people
Posted by: Trepidum | Jun 4, 2021 2:57:41 PM
Have you ever been in downtown Toronto the weekend of Caribana?
Trash on the roads so thick and widespread you can barely see the pavement.
Hearing language on the subway you would never hear any other time of the year (I have been a rider for 17 years).
Teenagers jumping over the turnstiles with impunity.
Cars parked wherever they like (New York State license plates)
Sure they are our friends, but certainly there is no need to grovel.
Posted by: walter | Jun 4, 2021 4:15:33 PM
Trepidum
So are trying to say that the Carabana mess is caused by New York people?
Walter.
Posted by: w | Jun 4, 2021 4:22:10 PM
@Petey,
I would be more than grateful to start spending more and buying more items in Canada. But first you have to get the Canadian retailers to pull their heads out of their arses and match the prices of American retailers; or else I am going to go where I can get the most value for my dollar.
Posted by: A Canadian | Jun 4, 2021 4:24:08 PM
I can't see things with our neighbours getting better;Blackhawk helicopters patrolling the borders along with UAV(unarmed as far as i know) coast guard vessels mounted with twin .50 cal machine guns and cameras peering across the border. Add to that all the personal information they are gathering about you when you cross doesn't exactly give me a warm and fuzzy feeling. Remember most Americans still believe we are the ones who let in the terrorists.
Here is my take...let's go back to our original trade partner, Europe...The EU would be a bigger trading partner than the U.S.A and they need our natural resources just as badly. And with the Euro being as strong as it is our dollar could still be a dollar and we would be ahead.
I also agree we have far to long been subservant to the U.S.A and seem to have forgotten how to be inventive and self sufficient, we can either start changing or wait until the Coast guard kills someone or the U.S. arms their UAV's and decide that the need to take out something or someone in the name of Homeland security.
Posted by: Trepidum | Jun 4, 2021 4:28:13 PM
As much as I have to regret stating so, for a large part at least, yes.