The lower Canadian dollar will leave cross-border shoppers with less incentive to head south this holiday season.

Lower loonie to crimp cross-border shopping

B.C. retailers likely to benefit if currency gap prompts holiday shoppers to spend more money at home

The falling Canadian dollar may bring a merrier Christmas for local merchants and other small businesses by spurring B.C.’s legions of avid cross-border shoppers to instead spend their money at home.

Over the last two years the loonie has slid from $1.02 U.S. to around 88 cents and the decline has been close to 10 per cent from one year ago, when the Canadian dollar stood at 97 cents to the greenback.

“With the Canadian dollar being rock bottom it certainly makes any kind of retail prices in Vancouver look relatively more attractive,” SFU marketing professor Lindsay Meredith said. “A 12 per cent spread is a big number. That should certainly work in favour of the Canadian retailers.”

Canadian governments will also benefit by collecting more in sales tax, but Meredith said consumers will be the losers – whether they opt to pay the generally higher retail and wholesale markups in Canada or the higher exchange rate on their purchases in the U.S.

But he noted consumers should have a bit more money left in their pockets to spend this holiday season as a result of cheaper gasoline in the wake of the global drop in oil prices.

B.C.’s economy will also benefit in other ways from the lower dollar.

Besides making American imports more costly against Canadian products, B.C.-based exporters will benefit – particularly the forest industry.

“That can lead to more employment and more money to spend in retail,” Meredith said.

Then there are the tourism operators, who struggled to get Americans to come north when the loonie was riding high and their money didn’t go as far.

B.C. is now a bargain destination from the U.S. point of view.

“Operations like Whistler Blackcomb are loving this,” Meredith said. “And it’s perfect timing for the ski season.”

Even the panic over Ebola may actually be good news for Main Street B.C. if some winter vacationers decide it’s getting riskier to fly.

The deadly virus is likely to crimp demand for flights not just to Africa but also to Europe and prime snowbird destinations in the southern U.S., Meredith said.

“If that money stays home it’s more likely to be spent here.”

The Canadian dollar is well down from its recent highs against the U.S. dollar. Chart via xe.com.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Slideshow: Hope’s winter weather in photos

Readers submit photos of Hope under a blanket of snow

Borrow $8 billion for Fraser Valley rail link, Abbotsford mayor urges province

Henry Braun urges province to borrow billions to connect Abbotsford & Chilliwack to Metro Vancouver

Vandals destroy sign at Hope Legion

Sign found to have fire damage and missing letters Tuesday morning

Upper Fraser RCMP joins Twitter

Twitter feed once limited to Chilliwack expands

Three concerts in two weeks at Bozzini’s Upstairs Lounge in Chilliwack

Jon Brooks and Lynne Hanson are up first, followed by WiL and then Dan Bern for February concerts

Four things ‘not’ to do if you run into Prince Harry and Meghan in B.C.

Here is a list of some things you definitely should NOT do, according to the BBC

B.C. RCMP spent roughly $750K on massive manhunt for Port Alberni men

Manitoba RCMP helped with 17-day search through the province’s northern terrain

Much-raided Langley animal rescue society loses registered charitable status

Revoked following an audit by Canada Revenue Agency, records show

Future space homes could be made of mushrooms

NASA explores use of fungi to build structures in space

Youth hit with gun butt during fight at Lower Mainland mall

RCMP are investigating the fight between two groups of youths

Weather warning: 80 mm of rain expected overnight in Metro Vancouver

Environment Canada is urging caution when driving

Man killed by police in Lytton called 911, asking to be shot: RCMP

Howard Schantz, also known as Barry Schantz was killed following a standoff at his Lytton home

Canadian public health agencies ramping up preparations in response to new virus

Health officials have said there are no confirmed cases of the emerging coronavirus in Canada

Most Read