Even though we know it's supposed to help the economy, sometimes it's hard to love the low loonie.
It's certainly hurting John Stiles at Calgary-based Planet Foods. But it's Stiles who offers one of the best reasons to appreciate the weak dollar — it won't last.
Planet Foods distributes natural foods and healthy snacks across Canada. Its U.S. import costs are going up, but the company can't even raise prices. The large well-known chains it sells to, such as Mountain Equipment Co-op and SportChek, only allow price changes every four or six months.
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"Like with the dollar right now, we typically can't do a price increase till January," says Stiles, who is in charge of operations.
Waiting it out
According to Stiles, the only real answer is to wait it out. In the roughly 15 years Planet Foods has been operating he has seen three wild swings in the Canadian dollar.
"It's going to take six months to a year to get that back to 90 cents," he says.
Of course there are no guarantees that the loonie will bounce back so quickly. But Stiles offers us a useful reminder. The lower the loonie gets, the more likely it will climb back out of those lows.
The classic example of why the lower loonie helps the Canadian economy is that it is an advantage for Canadian exporters. But while we're waiting, I thought it might be a good idea to imagine some other advantages, if just to make us feel better.
Unfortunately, there are signs a promised industrial rebound may be slow in coming. New export industries don't grow overnight. There are some estimates that, like the effect of interest rate cuts, the wait for a currency-led change in the industrial economy must be measured in years.
Not so the tourism industry, where the rebound has been almost immediate.
Not only are more U.S. visitors coming, but more Canadians are staying home. Canadian resorts and ski areas that in previous years faced closure will have a chance to regain strength, especially if the U.S. economy really is bouncing back.
Ivy League quality
More than ever, Americans will be able to send their children for Ivy League-quality education at loonie prices, all while subsidizing the Canadian university system.
And there's another advantage. You will get to meet lots more nice Americans and you won't even have to travel. They will come to you. Perhaps they will show you pictures of the Grand Canyon.
If you do decide to travel, maybe the low loonie will encourage you to be a bit more adventurous with your winter getaway. Europe could well be cheaper than Florida or Arizona. And a CBC News investigation showed that trips to Brazil and Turkey are a bargain.
But if you want to see the streets of New York as portrayed by Hollywood, you can stay right at home and visit Toronto or Vancouver, which take turns posing as a much cheaper Big Apple.
The longer the loonie stays low, the more likely a local suburb or downtown street will be transformed into a U.S. movie location. That also means you won't have to buy beer for your cool friends in the film industry. They will have jobs of their own.
On the social front, you may notice business at local bars and restaurants feeling more vibrant. Compared to buying expensive foreign goods, food preparation and service are cheap because, unlike imported ingredients, they are still priced in Canadian dollars.
The weak loonie will be another boost to the already bustling farmers' market circuit.
While U.S. produce prices rise with the greenback, Canadian-grown goods are a relative bargain. Even as winter creeps in, indoor growers will be more able to compete with California producers despite the higher overheads of greenhouses and heating. At least we have water.
A low loonie means Canadian real estate is a better bargain than ever for foreign buyers. That will help dampen the effects of decline in house and cottage prices once U.S. interest rates begin to rise.
For investors, buying shares in Canadian companies while they are on the outs may turn out to be a great opportunity once they are back in fashion.
A cheap loonie is green. While crude oil prices sound low, they are priced in U.S. dollars. That's one of the reasons gasoline isn't as cheap as you might expect. But that allows Canadians to feel smug about our contribution to stopping climate change. Yes we drive a lot, but not as much as those profligate Americans. We can't afford to.
There are many opportunities ahead. A great piece by Conference Board chief economist Glen Hodgson in the Globe and Mail yesterday predicts Canada will become a "services superpower," basing our next boom on things like education and health care instead of wood and oil.
In a recent conversation Peter Hall, the chief economist at the Export Development Corporation, said he expected a boom in processed agricultural exports.
Energy and resources aren't gone. They're only resting.
Recent figures, from exports to inflation, show there is still plenty of life in the Canadian economy. The loonie won't stay low forever. We should enjoy it while it lasts.
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