Sinking Canadian dollar: Quebec's winners and losers

Consumers can expect to see higher prices, especially on imported groceries, but some sectors like tourism and film production stand to gain from the slumping loonie.

Consumers will feel pinch, especially at grocery store, but film, tourism industries stand to benefit

The low Canadian dollar is hurting some Quebecers, but others stand to benefit. (Paul Chiasson/Canadian Press)

The Canadian loonie fell below the 70-cent U.S. mark this week for the first time in more than a decade, and some analysts predict it could drop another 10 cents in the coming year.

The slumping dollar is leaving behind a host of winners and losers across the province. 

Here's a look at how the low dollar could affect you:

Winner: Tourism industry

More American tourists made their way to Montreal in the summer of 2015 than in the year prior, according to a new study. (Ryan Remiorz/Canadian Press)
Montreal already benefited from the slumping dollar last year, with one study suggesting the number of visitors from south of the border jumped by 10 per cent between June and August over the same period in 2014.

"There's a direct correlation with the foreign exchange," Yves Lalumière, the president and CEO of Tourism Montréal, told CBC last year.

The Conference Board of Canada says overnight travel from the U.S. increased about seven per cent last year and is expected to rise another 3.3 per cent this year.

Loser: Consumers

The prices of fruit and vegetables are rising quickly because of a low Canadian dollar, according to a study from the University of Guelph Food Institute. (CBC)
The tales of $8 cauliflower heads around Montreal are likely far from over.

Quebecers are paying more for a bag of groceries these days, and the prices are expected to go up.

"It's crazy. It's 30 years I'm in the business. I've never seen prices like that," Javed Iqbal Sheik, the owner of Fruiterie Mile-End in Montreal said in December.

The University of Guelph's Food Institute estimates the average Canadian household spent an additional $325 on food in 2015 and is expected see an additional increase of about $345 this year because of the low dollar.

Winner: The film industry 

X-Men: Days of Future Past (2014) was filmed primarily in Montreal, on a budget of $200 million. (Alan Markfield/20th Century Fox/Associated Press)
Movie crews in Montreal, along with other cities like Vancouver and Toronto, stand to benefit from the slumping dollar.

Peter Leitch, president of North Shore Studios and chairman of the Motion Picture Production Industry Association of B.C., says American studios are increasingly heading to Canada to take advantage of the low dollar.

"That does make Canada one of the top choices of places to come to," said Leitch. "A few years ago when it was at par, it was quite a challenge to attract business."

Loser: Snowbirds

Canadians enjoy the sun on Dania Beach, Fla. The Canadian Snowbirds Association says the low Canadian dollar isn't stopping their members from making the annual trip south. (Marsha Halper/The Miami Herald/Associated Press)
Montrealers planning their winter escape to the southern U.S. will be feeling the pinch as their money won't stretch as far. But that doesn't mean they will necessarily tough it out in the snow.

Evan Rachkovsky, director of research and communications at the Canadian Snowbird Association, says so far members don't seem to be cutting down on the duration of their visits to the U.S., but they will likely be spending less on everything from meals to rounds of golf.

"What I would say is happening is a reduction in discretionary spending," said Rachkovsky.

Winner: Manufacturers

Manufacturers like Montreal-based Bombardier will be affected by the low dollar. (Christinne Muschi/Reuters)
A lower loonie typically provides a boost to the manufacturing sector by making Canadian goods cheaper for others to import. But some analysts warn the dollar is only one factor when assessing the state of manufacturing.

"If you want to be an optimist, you lean on the one side that it will help boost exports," said David Watt, chief economist at HSBC Bank of Canada.

"I tend to lean more to the second side: that it reflects a degree of concern about the global economy."

Loser: The Habs

Montreal Canadiens owner Geoff Molson will have to hand out more Canadian cash when paying his players in U.S. dollars.
Montreal Canadiens' players sign their contracts in American dollars, which means they just got a lot more costly for the hockey club.

When the dollar was last in a slump and hitting sports teams in the late 1990s, Ronald Corey, then-president of the Habs, offered the following to a parliamentary subcommittee: "It costs us $300,000 extra whenever the Canadian dollar loses one cent."

Of course, the Canadiens are the NHL's second-richest team, valued at $1.175 billion U.S., according to Forbes, so the club won't be struggling to pay the bills.

with files from The Canadian Press


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