Effects of slumping dollar showing up on price tags
WATCH ABOVE: The dropping dollar is good news for foreign tourists but not so great for Canadians, who are watching their buying power slide right down with the dollar. Reid Feist reports.
CALGARY — Shoppers are not only having to deal with the changing styles of the season, but now they’re faced with fluctuating prices.
Megan Szanik’s ESPY Experience clothing store has already had to pass along $10 and $20 increases to the cost of a pair of jeans because of the loonie’s slumping value.
“We really are seeing it whether the goods are American-made or the goods are Chinese-made because the world is operating in U.S. dollars right now,” Szanik told Global News.
The Calgary business owner expects a 10 to 15 per cent rise in her store alone.
“We will definitely see increases in prices, specifically for fall but for the spring again. We’re about to start the spring buying season and I’m curious what we’re going to see.”
Canadians already seeing other impacts to their wallets and they don’t need to cross the border to feel it.
Fruit, mostly imported from the U.S., saw a 3.3 per cent increase in price over 2014, while sporting goods were up 7.4 per cent compared to last year and furniture was up nearly 9.5 per cent.
The costly trend is only expected to keep increasing, as the full effect of the low dollar still hasn’t been felt.
It’s not good news for consumers.
“If they do go up, I don’t think that’s a good idea. I feel like people will stop spending if they go up,” one shopper told Global News in downtown Calgary.
READ MORE: Are discount grocery stores becoming a myth?
While many argue whether Canada is in a recession or not, there’s no doubt the country is in a slow down.
With interest rates at record lows and hints they may drop further, some say the low Canadian dollar may push up inflation and leave Canada stuck in the middle of a big economic mess.
“Because on one hand, if the Canadian economy is under-performing, they’re going to want to keep those interest rates low,” ATB Financial’s Chief Economist Todd Hirsch said.
“If we do start to see inflation because of imported items, that does generally indicate to the Bank of Canada that it’s time to start raising rates.”
But the central bank can leave some of the most fluctuating imports, like produce, out of its calculations.
And if the American dollar stays strong, Canadians won’t escape the increasing costs.
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