The soaring loonie is a good-news, bad-news story for Alberta as the Canadian dollar opened on par with the U.S. dollar Friday before dropping slightly.

Travellers were all smiles at a foreign exchange kiosk in Edmonton as they anticipated stretching their dollar a bit further outside Canada.

At Audreys Books, books and magazines still had the more expensive price tags. Co-owner Steve Budnarchuk said it will take about a year and a half before prices drop.

Canadian prices on books are expected to stay the same for 18 months.
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"So much of what is being published for the fall has already been decided. Those prices are already decided. We're probably going to see a 20 per cent differential between the Canadian and the American price for quite some time."

The best way to cash in is to shop online and get cheaper American prices, according to University of Alberta business Prof. Karim Jamal.

Jamal said Canadian companies will eventually have to lower their prices or lose their customers.

"People are even going to the U.S., and buying cars and just driving them back. So I think there will be pressure on Canadian businesses. There may have a little bit of a lag, but they will have to adjust."

Exporters struggle with loonie

The strong dollar has created struggles for Alberta businesses that send their goods south of the border.

Jerry Bigam, who runs Kinnikinnick Foods in Edmonton, said the loonie's rise has meant a drop in his company's revenues.

"Now today, every single advantage we had is lost. On top of that, we have the difficulty of the labour situation in Alberta. Now we've got the dollar, and now we've got higher commodity prices.

Kinnikinnick Foods has turned to automation to hike efficiency.
(CBC)

"It is a particularly trying time and I'm afraid whether it's doomsday or not, there will be some casualties in the manufacturing sector," he said.

Bigam's company, which makes gluten-free bread products for the North American market, has turned to automation to hike efficiency.

"If we had not done that, I'm not sure that you could respond fast enough," Bigam said. "I don't think anybody really expected a 10, 15 per cent increase in value in the dollar in the last six months. In the food industry, things don't change that rapidly generally."

As well, the province's exports of oil, gas and agricultural products now cost more.

At a business conference in Banff, Alberta Premier Ed Stelmach said every cent the Canadian dollar gains costs the provincial treasury more than $100 million in revenues a year, but pointed out some of it is offset by other revenue such as corporate taxes.