Anecdotal evidence points to an increase in cross-border shopping, with the loonie's buying power increasing, but some experts say new U.S. restrictions could limit how many Canadian make the trek.
Merchants in Grand Forks, N.D., less than three hours south of Winnipeg, told the Grand Forks Herald that sales were up over the Canadian Thanksgiving long weekend.
"It was awesome," said Roberta Manaigre, who manages a Super Target store. "The last time the loonie was at par, we saw a huge increase in Canadian traffic, a lot of them first-timers that have been coming back as repeats."
Retailers in upstate New York also reported an increase in Canadian shoppers, said Ted Potrikus, executive vice-president of the Retail Council of New York State.
"We're hearing from Buffalo and folks in Plattsburg that there are increases," said Potrikus.
Buffalo and Plattsburg are about an hour from Toronto and Montreal respectively, and usually see more cross-border shopping when the loonie is strong.
"As long as people want to go through the rigamarole of the border, it's still worth it," Potrikus said in an interview with CBC News. "It was the reverse a decade ago, when New Yorkers were going to places like Toronto to get a deal."
The dollar, which has been rising toward parity in recent weeks, declined against the U.S. dollar for a second day on Friday. The loonie ended the week at 96.32 cents US, down from Thursday's close of 96.67 cents. On Wednesday, it closed at 97.48 cents — the highest level in more than 14 months, the Globe and Mail reported.
Bank of Montreal economist Douglas Porter told Canadian Press this week there is some evidence that shoppers are starting to head south in search of bargains.
Hard to plan
"The chatter I'm hearing is there were big lineups at the border to get back into Canada on Monday night," said Porter.
"You have to have sympathy for retailers and Canadian companies. When you see a 30 per cent swing in the Canadian currency both ways in the space of a year, it's almost impossible to plan in that kind of environment."
The Retail Council of Canada told CBC News earlier this week that retailers are definitely under pressure to lower prices as the loonie rises, knowing consumers will get in their car and drive several hours for an American bargain, he said.
However, it's difficult for retailers to react as quickly as consumers would like, because much of their stock was bought and priced three to nine months ago, said Mark Beazley, the council's director of communications.
Still, one roadblock may keep cross-border shopping in check.
Statistics Canada compared the loonie's rise in 2007 with the 1980s when cross-border shopping was booming. It found far fewer Canadians were travelling to the U.S. because of border restrictions following the Sept. 11 attacks.
Cross-border shopping could be further hampered after the U.S. slapped passport restrictions on all travellers in June. That month, same-day return trips from the U.S. fell to 1.5 million, a new low, from 1.74 million in May.
In 2007, when the loonie last reached parity, about 2.2 million Canadians were making day trips into the U.S.
"Every time that getting across the border gets tighter, we see the relationship between exchange rate and cross-border trips deteriorate further," Philip Cross, Statistics Canada's chief economic analyst said this week.