The shrinking loonie is bad news for Canada, but good news for B.C.’s retail industry which has been plagued in recent years by a steady exodus of cross-border shoppers hoping to strike a deal in the U.S.
Now at 77 cents for every U.S. Dollar, the loonie’s decline is making shopping in and travelling to the United States more expensive than its worth, causing many B.C. residents to stay local. Prices down south used to be much cheaper when the loonie was on par or above the dollar. Because goods are generally less expensive in the U.S., a pair of running shoes that might cost $210 in Canada could be found for $180 CAD in the U.S. Now with today’s exchange rate, those shoes would cost $234 CAD.
The shift in prices has caused more than half of Canadians to rethink a trip down to the states.
According to a recent survey by RetailMeNot.ca, 58 per cent of people said that the low Canadian dollar would stop them from visiting the U.S. and 66 per cent believe crossing the border to shop is no longer worth it.
That goes for purchasing gas as well. With local taxes, fueling up has long been much more expensive in Vancouver than just across the border in Bellingham. Residents, especially those living close to the border, have been known to drive the extra mile and get cheap gas in Washington State. Filling up in Bellingham today costs 89 cents per litre USD, appearing to be a considerable discount, but take the exchange rate into effect and it’s only about 15 cents less per litre than you might find at home.
Canada’s economy should benefit from more money being kept inside its borders, especially when it comes to tourism. The same survey reported that 66 per cent of Canadians would rather visit cities in their own country than in the U.S. because of the dollar. It’s also an added incentive for Americans to visit Canada as prices are inversely less expensive now for them.
Today: $260 CAD
July 2014: $216 CAD
Today: $26 CAD
July 2014: $21.60 CAD
Today: $1690 CAD
July 2014: $1404 CAD
Today: $52,000 CAD
July 2014: $43,200 CAD