Enjoy Canada's low dollar while you can: Don Pittis

Canada's currency has hit an 11-year low against the U.S. dollar. Don Pittis offers some suggestions about how to enjoy it.

There's not much you can do about the low loonie, so just look on the bright side

While imported produce from the U.S. gets more expensive as the loonie falls, farmers' markets are more vibrant than ever as Canadians seek out locally grown products. Don Pittis looks at the bright side of a falling loonie. (Canadian Press)

Even though we know it's supposed to help the economy, sometimes it's hard to love the low loonie.

It's certainly hurting John Stiles at Calgary-based Planet Foods. But it's Stiles who offers one of the best reasons to appreciate the weak dollar — it won't last.

Planet Foods distributes natural foods and healthy snacks across Canada. Its U.S. import costs are going up, but the company can't even raise prices. The large well-known chains it sells to, such as Mountain Equipment Co-op and SportChek, only allow price changes every four or six months.

"Like with the dollar right now, we typically can't do a price increase till January," says Stiles, who is in charge of operations.

Waiting it out

According to Stiles, the only real answer is to wait it out. In the roughly 15 years Planet Foods has been operating he has seen three wild swings in the Canadian dollar.

"It's going to take six months to a year to get that back to 90 cents," he says. 

Of course there are no guarantees that the loonie will bounce back so quickly. But Stiles offers us a useful reminder. The lower the loonie gets, the more likely it will climb back out of those lows.
While a rebound in Canada's traditional industries may take years, the impact on tourism has been immediate with Banff "thriving." (CBC)

The classic example of why the lower loonie helps the Canadian economy is that it is an advantage for Canadian exporters. But while we're waiting, I thought it might be a good idea to imagine some other advantages, if just to make us feel better.

Unfortunately, there are signs a promised industrial rebound may be slow in coming. New export industries don't grow overnight. There are some estimates that, like the effect of interest rate cuts, the wait for a currency-led change in the industrial economy must be measured in years.

Not so the tourism industry, where the rebound has been almost immediate.

Not only are more U.S. visitors coming, but more Canadians are staying home. Canadian resorts and ski areas that in previous years faced closure will have a chance to regain strength, especially if the U.S. economy really is bouncing back.

Ivy League quality

More than ever, Americans will be able to send their children for Ivy League-quality education at loonie prices, all while subsidizing the Canadian university system.

And there's another advantage. You will get to meet lots more nice Americans and you won't even have to travel. They will come to you. Perhaps they will show you pictures of the Grand Canyon.

If you do decide to travel, maybe the low loonie will encourage you to be a bit more adventurous with your winter getaway. Europe could well be cheaper than Florida or Arizona. And a CBC News investigation showed that trips to Brazil and Turkey are a bargain.

But if you want to see the streets of New York as portrayed by Hollywood, you can stay right at home and visit Toronto or Vancouver, which take turns posing as a much cheaper Big Apple.
A plane crash scene in the streets of Toronto as Hollywood chases the low loonie. Travel may be too costly but residents got to see Gotham City in the forthcoming Suicide Squad without leaving home. (Ashley Poitevin/Twitter)

The longer the loonie stays low, the more likely a local suburb or downtown street will be transformed into a U.S. movie location. That also means you won't have to buy beer for your cool friends in the film industry. They will have jobs of their own. 

On the social front, you may notice business at local bars and restaurants feeling more vibrant. Compared to buying expensive foreign goods, food preparation and service are cheap because, unlike imported ingredients, they are still priced in Canadian dollars.

California's competition

The weak loonie will be another boost to the already bustling farmers' market circuit.

While U.S. produce prices rise with the greenback, Canadian-grown goods are a relative bargain. Even as winter creeps in, indoor growers will be more able to compete with California producers despite the higher overheads of greenhouses and heating. At least we have water.

A low loonie means Canadian real estate is a better bargain than ever for foreign buyers. That will help dampen the effects of decline in house and cottage prices once U.S. interest rates begin to rise.

For investors, buying shares in Canadian companies while they are on the outs may turn out to be a great opportunity once they are back in fashion.

A cheap loonie is green. While crude oil prices sound low, they are priced in U.S. dollars. That's one of the reasons gasoline isn't as cheap as you might expect. But that allows Canadians to feel smug about our contribution to stopping climate change. Yes we drive a lot, but not as much as those profligate Americans. We can't afford to.

There are many opportunities ahead. A great piece by Conference Board chief economist Glen Hodgson in the Globe and Mail yesterday predicts Canada will become a "services superpower," basing our next boom on things like education and health care instead of wood and oil. 

In a recent conversation Peter Hall, the chief economist at the Export Development Corporation, said he expected a boom in processed agricultural exports. 

Energy and resources aren't gone. They're only resting.

Recent figures, from exports to inflation, show there is still plenty of life in the Canadian economy. The loonie won't stay low forever. We should enjoy it while it lasts.

Follow Don on Twitter @don_pittis

​More analysis by Don Pittis


Don Pittis

Business columnist

Based in Toronto, Don Pittis is a business columnist and senior producer for CBC News. Previously, he was a forest firefighter, and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?