Canada’s down dollar hurts consumers

Get used to paying more for everything from travel to groceries, thanks to the lower flying loonie.

Our dollar edged up slightly Tuesday, a tenth of a cent to sit at just over 90 cents U.S. and experts say it will likely head south in the near future.

We’re already seeing the effects of the lower dollar with WestJet raising fares last week in response by two per cent; other airlines soon followed.

Experts also believe we shouldn’t be surprised to see the cost of vehicles becoming more expensive.

University of Guelph Distribution and Food Safety Expert Sylvain Charlebois says our diminished buying power will mean importers will want to renegotiate their three month contracts with Canadian suppliers.

“What it means is at the retail level, we’re probably going to be asked to pay more for imported projects from the U.S. like produce, particularly in the winter,” he explains.

According to Charlebois, the average Canadian consumes at least $585 dollars in fruit, vegetables and legumes from California alone.

He says it’s too soon to tell how much things could rise, it will depend on a large number of factors including the weather.

ScotiaMcLeod Director of Equities Fred Ketchen says it’s just a fact of life in this country.

“It’s going to make life difficult for consumers, the cheaper our loonie falls,” he says. “At the same time, people look at our dollar, they look at it as an indication of pride that we have in our country, in our economy and it bites into that, the weaker it gets the more questions we get outside of Canada saying ‘what’s the matter with your currency?!”

Ketchen says it’s going to impact those businesses providing goods and services affected by import prices.

According to the economist, airlines and big businesses are going to have to raise their prices to protect their profitability and to ensure their shareholders aren’t pinched

He adds it’s unclear if there’s a real winner or someone who benefits the most out of this balancing act.

“The benefit will be for those who stock away their Canadian dollars now and wait for the improvement somewhere down the road,” says Ketchen. “It’s like playing the oil or stock market, if you can buy and hold these things, the price will come back and you can make money.”

“We’re going to have to grin and bear it until things turn around and all of the sudden the Canadian dollar has levelled off and started going the other way,” he explains. “This happens, when I look back over the years that I’ve been in the business, it’s happened many, many, many times.”

Top Stories

Top Stories

Most Watched Today