Low loonie good for manufacturers, not consumers
The Canadian dollar dipped below 91 cents yesterday, the lowest value since 2009.
While one economist called yesterday's drop “eye-watering,” it's good news for some Sudbury businesses.
For Brian Burton, who runs a company that makes products that help with oil extraction all over the world, the low dollar helps the company.
"The oil industry works to the US dollar. Everything is based on US dollars,” the owner of Subcoe said.
A professor in Sudbury said for many exporters like Burton, the lower the loonie, the higher the profit.
"Usually, about 70 per cent of Canadian trade is in US dollars,” said Laurentian University’ Sadequl Islam.
While this is good news for manufacturers, that's a small part of the local economy in northeastern Ontario.
In the long run, a low loonie will hurt Canadian consumers, Islam added.
"I travel a lot; I buy foreign books, U.S. books. Even when I buy on the internet, they will be more expensive."
Current estimates say the dollar is probably staying in the 90-95 cent range for the next few months.
The news is alright by Burton’s standards.
“That basically puts another nine points on our bottom line,” he said.
Laurentian University economics professor David Leadbeater noted that, while some manufacturers like Subcoe are benefitting, they are a small part of the local economy.
"It's not just the value of the dollar itself, it's also the value of the minerals,” he said.
“And right now, prices are tending downwards, such as for nickel. You have to basically export more volume to make up for that."