Watch above: The loonie hit a five-year low earlier this week but experts say it shouldn’t have a direct impact on holiday shoppers, at first.
SASKATOON – The Canadian dollar is sinking with the price of oil. On Tuesday, the Canadian dollar dipped to a five-year low.
With the Christmas shopping season fast approaching, experts say it shouldn’t directly affect consumers, at first.
According to Kent Smith-Windsor, executive director of the Greater Saskatoon Chambers of Commerce, most stores already have bought their holiday product, which means the prices are set.
It’s a different story for online shoppers though.
“You have some shipping costs and often some duty, but you’re now talking 12 or 13 or 15 per cent on a differential, so I expect it will have people doing online shopping, but not necessarily online buying,” said Smith-Windsor.
The same goes for retailers who buy product from here on in. If the doomed dollar keeps up, consumers can expect to pay more in the coming months.
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“That means some of our product we get from the states, I may not be able to get as much, or I may have to try and get different suppliers for them because for us we pay the cost on those then the duty and shipping and it all adds up,” explained Bernadette Gaudet, owner of Peppers Kitchen.
“I don’t want to be over charging for something if I don’t have to be. “We’ll have to watch it for the next six months to a year.”
On a provincial level, the declining loonie is supportive for exports focused toward United States business but means input prices will slightly go up.
“It’s got a downward pressure on the value of commodities to some extent, on the other hand something like potash is priced in American dollars so it’s probably strangely supportive for the activity in that area,” said Smith-Windsor.
Even with the falling stock market, low oil prices and loonie dip, Saskatchewan is still expected to have a great holiday shopping season with the province being a leader when it comes to growing wage and employment rates.
“Those two parameters continue to support the Saskatoon and Saskatchewan economy … that’s been a fairly consistent pattern in Saskatchewan over the last five years,” said Smith-Windsor.
“It’s quite logical, relating to growing employment base and the wage rates, that the disposable income is going up therefore you’d likely see slightly stronger retail performance in Saskatchewan.”
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