The sinking Canadian dollar and record-low oil prices may mean higher grocery bills for people in Nunavut, but some sectors in the territory, including Arctic fisheries, say the conditions will help their business.
Experts lowered the forecast for the Canadian dollar to 59 cents US this week, while oil prices are at a 12-year low at $30 US a barrel — with the possibility of dropping even lower.
In Nunavut, where food prices are already sky-high, the sinking Canadian dollar may mean even higher grocery bills.
"Since a majority of all vegetables and fruit consumed in Canada are imported, we are highly vulnerable to currency inflations," said Derek Reimer, the director of business development for the North West Company, one of the main food retailers in the North.
"As such, we would expect to see inflation in an environment where the Canadian dollar is depreciating."
Lower utility bills
While it might cost more to stock their fridges, the current economic conditions mean Nunavut residents will be paying less to gas-up their cars and heat their homes, according to a territorial government official.
"Petroleum Products Division has lowered the cost of home heating fuel for Nunavummiut by 10 cents or 10.5 cents when you factor-in GST, said Ford Widrig, the comptroller with the territorial government's petroleum products division. "The same applies for gasoline.
"At this point in time, we felt that those were the largest possible decreases we could pass on from those low-fuel prices."
Widrig said the added difficulty of importing fuel to Nunavut limits the government's ability to lower prices.
"We import our fuel during a short window during the ice-free months," he said, "it can be a one to two year time period, to actually realize those sales."
This means that even though fuel may be bought at a lower price in the present, those cost savings may not be realized for 12 to 16 months, when the fuel is actually sold.
Some Nunavut businesses are hoping that the lower oil prices may translate to lower utility bills and help offset the cost of importing products from the United States.
"The utilities are one of the key, key areas where the cost of operation in the North are dramatically higher than they are in the South," said Dwayne Wilson, a vice president at Arctic Co-operatives.
A win for Nunavut fisheries
For Nunavut's fishing sector, the low dollar and cheap oil add up to good news.
"This is an exciting year, from a fisheries perspective," said Jerry Ward, the director of Qikiqtaaluk Fisheries Corporation and chair of the Nunavut Offshore Allocation Holders Association.
Ward said the depreciating Canadian dollar, coupled with the the fact that fish products are sold primarily in US dollars, means that on average, there's about a 15 to 20 per cent increase in the market value of Nunavut fish.
"We get more for our product and ultimately it's more revenue for our company," said Ward. "Our crews in particular are making more by fishing this year than they were the prior year."
The cheap oil is an added bonus, added Ward.
"It means that we're spending a lot less on the cost of oil itself."
No decreases in airline ticket fares
For regional airlines who buy jet fuel from the territorial government, the economic situation is less exciting.
"We're not benefiting from the differential between the drop in fuel prices and the increase in the value of the US dollar," said Gary Bell, the President of Calm Air. "The price of jet fuel is a huge expense for us."
Despite the low price of crude oil, the cost of jet fuel sold to airlines by the government of Nunavut has not been lowered. It has remained at approximately $188 since 2014, with no changes slated for this year.
"The price that the government would have bought the fuel at this year was significantly lower than the price from the previous year, so we were surprised not to see any decrease in the price," added Bell.
In addition, all the parts for the company's aircraft are purchased in US dollars, which also translates into higher operating costs — all leading Bell to say that "Nunavut travellers should not expect any decrease in the price of ticket fares."
In fact, said Bell, Calm Air could make an argument to actually increase fares under these conditions, although he said no price hikes are planned at this time.