Loonie's drop may profit tourism, exports
Canadian dollar at 4-year low
The recent drop in the Canadian dollar could benefit P.E.I. tourism operators and exporters.
This week, the loonie reached a four-year low, coming in at about 89 cents to the U.S. dollar. This is because the U.S. economy is coming out of its recession and their dollar is getting stronger.
When the Canadian dollar was strong, Island tourism operators saw a drop in U.S. tourists.
Kevin Mouflier, president of the Tourism Industry Association of P.E.I., said he hopes that will turn around this year.
"The fact that the Canadian dollar has more value now to U.S. travellers, particularly for group markets, I think it will be an advantage for Prince Edward Island," Mouflier said.
Exporters more competitive
It's a bit late in the game for tourism operators to increase marketing to the U.S., but tourism operators are already reporting an increase in U.S. bookings.
Tourism PEI said it is looking at ways to enhance its marketing plan to capitalize on the favourable U.S. exchange rate.
A low loonie is also good for businesses who are exporting products, like potato farmers and fishermen, said Erin McGrath-Gaudet, the P.E.I. representative of the Canadian Federation of Independent Businesses.
"So for instance, if you're an exporter and you do a lot of exporting, particularly through a U.S. market, then a low dollar is actually a really good thing for you because it means your goods or service is more competitive on the world market because the price is lower," said McGrath-Gaudet.
With about 70 per cent of Island exports going to the U.S., at a value of about $550 million, the lower Canadian dollar could have a significant impact, says Kal Whitnell, senior director of trade negotiations for the province.
"It's good for the exporters," said Whitnell.
"Their dollar has greater purchasing power, so they can buy our or purchase our goods at a lower cost for them."
On the flip side, said McGrath-Gaudet, for any business that imports products this could mean an increase in costs.
The downturn should have little effect on the cost of U.S.-imported products in Island stores, McGrath-Gaudet said.