For the first time since 2003, the Canadian dollar has dipped to under $0.70 U.S.
But beyond an abstract line on a graph, what does that mean for every day British Columbians?
The effects aren’t being felt evenly. Some are having the wind knocked out of them, while others are seeing windfall.
In B.C., among the biggest exporters are the resource sector. Ken Peacock, Chief Economist of the BC Business Council says that’s good news for the mining industry, which has been hard-hit by low commodity prices.
But he says the big winner will be forestry.
“Our lumber products and some of the panel products that are produced here in B.C. will be sold in greater quantities into the U.S. because of the increased competitiveness.”
B.C. exports more than $1.7 billion in agrifoods every year, and about about three quarters of that goes to the U.S.
Peacock says the sector is already seeing results. He says greenhouse producers and other farm products are seeing sales up about 20% year over year in 2015, something bound to accelerate as the dollar drops.
B.C. agrifood exports by market ($ millions)
Ian Crosby, CEO of local tech startup-success Bench Accounting says the low dollar could help it get there.
“Most of these companies raise their capital denominated in U.S. dollars. So when they raise that and they convert it over to Canadadian dollars, the lower the Canadian dollar is, the further that their investment goes. So a company which raises $2 million U.S. converts it over, right now it would turn into $2.8 million. They’re getting a good 30-40% more out of the same investment.
He says higher returns on sales will also help stabilize young tech startups, who’s biggest challenge is staying alive and keeping a positive cash flow.
As far as attracting tech companies to set up shop in Vancouver, Crosby says the dollar would have to stay at these levels for a few years before companies committed to moving to town.
No surprise here. The low dollar has been drawing tourists in flocks. 2015 was a record year for Vancouver, with more than 9 million overnight visitors. It was the third consecutive year the city set a record.
The Canada West Ski Association says resorts have been seeing record breaking numbers in both visits and revenues across the province this year.
Michael Wintermute, with Sothbey’s International Realty says the pickup has been particularly noticeable in Whistler, where the low dollar has reawakened American interest in buying condos.
“When the dollar was down in the ’90s, about 20% of our market was from the U.S. And that kind of fell over the years and has been around 6, 7%. It’s too early to say what the percentage will be, but clearly there are more Americans looking.”
Film and Television
Hollywood North is seeing another boost, with the weak dollar. Production costs for film and TV are notoriously expensive, and the opportunity to shoot for dramatically reduced labour costs is never overlooked by Hollywood bookkeepers.
Recent big budget film productions include Marvel’s Deadpool, Star Trek 3, and Tomorrowland. Television has also seen a big boost, with popular serials Arrow and The Flash finding homes here, along with recent one-off productions like The Man in the High Castle and the X-Files mini series.
With more than 34,000 people employed in the industry, workers are also feeling the bump.
B.C.’s wine, craft beer, and craft spirit industires have all been growing exponentially in recent years, and are set to cash in on the low dollar.
Miles Prodan of the B.C. Wine Institute says local producers will benefit in two ways.
“It means more access to the export markets. It means BC wine will be that much less expensive for export. And similarly, it means what we’re importing – U.S. wines – will be that much more expensive… it’s good news for the industry.”
That second point, that B.C. booze will be cheaper than imported alternatives should boost sales of local products.
But is bad news for drinkers who like their imported beer and wine, which brings us to…
Paul Beaudry from the Vancouver School of Economics says in some areas, consumers are already feeling the pinch.
“Sometimes it will take a while, but we’ve already seen it on a lot of things that come in quickly like fruits and vegetables and things like that.”
But food isn’t just getting more expensive because it costs more to import.
Chrissy Stubel with The British Butcher Shoppe says in some cases it’s because the success of our exports are driving prices up.
“A lot of the meat products are being exported to the U.S., because they’re willing to pay more for it. And unforutnately with them buying a lot of our prodcut, it drives our prices up as well.”
But it’s not just food. Electronics, clothing, car parts, wine… expect sticker shock on anything from out of country.
Online shoppers are also feeling the burn, as the slide continues to bulk up the prices of American goods.
“That’s exactly the kind of transfer that we’re seeing. Not only will Canadians go less across the border for vacations, on the flip side, the number of Americans coming into Canada is on the increase.”
The numbers tell the story.
Statistics Canada says trips abroad in 2015, Janurary to October, were down by about 6% from 2014. Trips to the U.S. were down by more than 15%.
That’s no surprise – earlier this year a report by the B.C. Business Council found cross border shopping had dipped by 28% from 2013.
Businesses that rely on imported inputs – like packaging, ingredients, or parts, are paying more.
So are businesses that need equipment and machinery from outside the country, says Ken Peacock, something that could hurt the overall economy.
“If you think of industries investing in machinery or equipment purchases from the U.S. So that could dampen investment in equipment which enhances productivity and is good for long term growth.”
In some cases this may get passed on to the consumer, but in others it could simply chip away at a business’ bottom line.
With files from Shelby Thom