Canadian businesses, consumers adjust to life with a lofty loonie

The head of one of the country's largest seafood exporters said his company has been preparing for the arrival of Canada-U.S. dollar parity for the past five years.

Speaking in Halifax, Colin MacDonald, the president and CEO of Clearwater Seafood, said all Canadian exporters face the same challenges from the loonie's ascent.

"You're going to have to get better at being able to produce a better product at a lower cost. You are competing with countries such as China, India and Vietnam and Thailand that have much lower labour costs than you have here in Canada," he told CBC News.

MacDonald said he's more concerned about a possible downturn in the American economy.

Canada's tourism sector is also making adjustments to thehigh-flying loonie.

"When you're selling Canada to the rest of the world, obviously, our prices continue to rise and they have for the last couple of years," said Randy Williams, the president of the Tourism Industry Association of Canada.

The rise of the loonie, coupled with other factors, such as border congestion and the cancellation of the GST visitor rebate, have contributed to a slide in the number of annual visits to Canada from the United States to about 28 million from close to 45 million, Williams said.

"We are now looking at long and mid-haul markets in the United States — usually that market needs to fly to Canada — as our prime market because they're less price sensitive."

Domestic travel has been a lifeblood over past five years, he said, while China, Mexico and Europe have also been growth markets.

Investors and consumers will also notice the impacts of the loonie's rise, market watchers note.

"[Parity] certainly will make for some painful investment statements for anyone that has an unhedged U.S. portfolio," said Shaun Osborne, chief currency strategist for TD Securities.

BMO Nesbitt Burns deputy economist Douglas Porter said Canadian retailers could begin feeling more pressure from consumers over disparity in Canadian and U.S. pricing of goods.

"I do think the pressure is going to build enormously now that we've hit parity," he said.