Getting your money's worth.
Don't bank on a good exchange rate.
A Parliamentary Bureau reporter went to the bank today to get some U.S. cash for an assignment overseas.
He asked for $400 U.S. The bank charged him $403 plus some odd cents.
"Wait a minute," thought our intrepid journo. "Isn't the Canadian dollar stronger than the US greenback?"
"Of course it is," the bank teller replied. "But we charge a commission."
How much commission?
Much discussion on the phone. Another consultation with a supervisor.
"Can't tell you,'' the teller replied.
"Proprietary information. Competiitive data. And besides, it changes every seven minutes."
Our reporter took the cash, and the hit, and left.
Then he saw a small foreign exchange kiosk across the mall from the bank branch.
They were selling US dollars at $99.52.
The Bank of Canada noon rate today puts the greenback at 98.50 Canadian. That's the nominal rate.
That's $400 U.S. = $394.00 CAD
The exchange house was charging 99.52. That's $400 U.S. = $398.08 CAD
The bank, well it wouldn't disclose the rate. But a quick calculation by our intrepid reporter of his exchange cost of $403.64 CAD meant a rate of 100.909
In other words, the bank charged $5.56 CAD more than a mall exchange house to convert 400 dollars.
The difference off the nominal rate in percentage is 2.409%. Or $9.64
The difference off the little exchange house is 1.389 % ($5.56.)
It used to be conventional wisdom, when the US dollar was worth far more than our own, that banks gave a better exchange rate.
Apparently, the value of the dollar isn't the only thing that changes.
About the Authors
- Rosemary Barton started her television career reporting from Quebec City where she covered the ins and outs of Quebec politics. She moved to the CBC Parliamentary Bureau in 2007. She also stood on the side of road awaiting U.S. President Barack Obama's motorcade for hours in the cold. When she finally spotted him, all of Canada heard her shriek, "I saw him!"
- Alison Crawford worked in Fredericton, Calgary and Winnipeg before returning to her hometown to work in the CBC parliamentary bureau. Her beats include the RCMP, justice, public safety and the Liberals. Alison credits her investigative skills as well as a national etiquette column and coverage of a ferret Christmas party, with having prepared her for covering national politics.
- Andrew Davidson is a producer for the CBC politics page in Toronto. He joined CBCNews.ca's national desk in 2006 and was the lead news writer for the website's 2008 federal election coverage.
- Chris Hall is the National Affairs Editor for CBC News. He's been a member of the CBC Parliamentary Bureau since 1998. That adds up to 11 budgets, four elections, three prime ministers and too many confidence votes to count. Chris started his career in print before moving to the CBC in 1992. Since then, he's worked in Toronto, Halifax and St. John's, as well as Ottawa.
- Leslie MacKinnon Leslie's been working in news and current affairs since newsrooms used teletype, televison was shot on film and radio tape was edited with a razor blade. She saw through The Journal's long run on CBC-TV, and since then has worked in Halifax, Toronto and Ottawa in the CBC's various permutations. Right now, she's a TV news reporter in the political bureau, and likes certain parts of Ottawa - the canal, the Hill - a lot.
- Janyce McGregor has been a television producer in the CBC's Parliamentary Bureau since 2001. She started her career working for Studio 2 on TVOntario. In 2005 her then-doctoral student husband persuaded her to follow him to the U.K., where she worked for BBC World Service Radio in London. Janyce is originally a farm girl from southwestern Ontario. Her most important job title is "Norah's Mom."
- Chris Rands has been a member of the Parliamentary bureau since 2001. He started at Toronto's AM Radio giant CFRB before moving to CBC's National Radio News in 1996. Chris has worked in Toronto, Moncton, Sudbury, Regina, Washington and St John's. Every time Chris walks up to the Peace Tower, he wants to throw his hat in the air like Mary Tyler Moore.
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