The dollar, closing at 1.08 U.S. this week, represents
an appreciation of 10% in the last month and around 50% over the past
couple of years. Against other currencies, it has done almost as well. On
average, it has risen around 30 percent. How has this affected you
If you are a shopper, itís been wonderful. The prices of
imported goods should fall by an equivalent amount. Your Canadian dollar
can buy 30% more than it could a year ago. If you are working here and
sending money overseas, you can get a lot more foreign currency per loonie
Hereís the downside: if you are receiving money from
abroad, it takes a lot more foreign currency to buy the same amount of
Canadian dollars. If you are a new immigrant who has just sold your
property overseas with the hope of buying a home in Vancouver, you will be
facing a double jeopardy: fewer Canadian dollars to buy very costly
property here. Generally, buying a house in Vancouver now will have cost
you at least double in most foreign currencies what it would have cost you
two years ago.
The other problem is that prices are not coming down
fast enough. For example, while I was trying to get more information on
the internet about a chair I saw in a local flyer, I accidentally got into
the storeís U.S. website. It was frustrating to see that same chair
advertised for almost half the price.
To get the same 8 chairs locally would cost roughly $500
more. An identical dishwasher I was shopping for cost $500 less down south
than here. In other words, I could take a short two hour trip down to
Bellingham and save myself a thousand bucks if I were to buy my chairs and
dishwasher in the U.S.
I am reluctant to shop in the U.S. because I feel I
should support the local Canadian businesses. Besides which, the U.S.
immigration and customs folks are a pain to deal with. The long waits at
the border are another big discouragement.
So, what is a shopper to do? You get to make your own
decisions. I am going to wait one more month to see if local prices are
adjusted to reflect the rise in the Canadian dollar. Canadian retailers
say that our costs here are higher than the U.S. I can understand a price
difference of 10%, and would be willing to pay that much more. A 50%
difference means that they are either trying to clear off their old stock
bought at higher prices, or that they are hoping to make extra profits.
In either case, their lack of responsiveness makes it
difficult for customers to continue paying the unjustifiably high prices.
The next time, I visit my local store, I might just mention that their
U.S. counterparts in the same chain are selling the item I want for half
the price. Maybe that will help encourage them to take the prices down a
little bit quicker.