Watch the video above: the falling loonie is both good and bad news for Saskatoon businesses
SASKATOON – As the Canadian dollar continues to take a dive, local tour operators are feeling the pinch.
The loonie has tumbled to it’s lowest point in four years, sitting at around 90 cents against the greenback on Thursday.
“The tour operators that come to Saskatoon and provide us with our charter flights to Mexico, Caribbean and Cuba, their contracts for hotel and what not are all signed in US dollars so of course now their per night rate is going up,” said Ixtapa Travel’s Barb Crowe.
As of Monday, Jan. 27 those planning to ditch the cold and snow for some sun, sea and sand will face a currency exchange surcharge of $35 per person.
“They’re just passing that onto the consumer,” Crowe stated.
And how long will it last?
“The season ends out of here at the end of March as far as the charter companies go so we’ll see it until the end of March for sure,” Crowe said.
While the lower dollar isn’t great for consumers, lowering their purchasing power, it is good news for local export businesses such as Saskatoon-based Morris Industries which designs and manufactures farm equipment.
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“Going forward it means that obviously we’ll be more competitive in the market if the dollar’s going to stay at this range, if we can hedge and lock our position in then we can go out and be more aggressive on selling into other markets where they sell in US currency,” said Casey Davis, Morris Industries president and CEO.
The Greater Saskatoon Chamber of Commerce says it goes both ways.
“Exporters probably good news, importers probably less good,” said Executive Director Kent Smith-Windsor.
“If you think of the agricultural community for example some of the declines in the value of wheat, canola and to a lesser extent barley will see a benefit because it will cushion the decline,” he added.
With the Bank of Canada indicating the loonie may still be over valued, it’s hard to see it clawing its way back any time soon.
The Canadian dollar hasn’t been below 90 US cents since mid 2009.
The recent drop follows weaker than expected Chinese manufacturing data.
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