Dollar's toll continues on Atlantic business

Whilethe high value of the Canadian dollarhas consumers heading south for cross-border shopping, Atlantic exporters are starting to wonder how much more they can take.

"We have seen closures of some of our larger plants, we've seen other manufacturing plants close, other firms are really struggling, trying to make adjustments, cutting labour," David Chaundy, an economist with the Atlantic Provinces Economic Council, told CBC News Wednesday.

"Other firms may have decided, look, the cost advantage now in Atlantic Canada is much less, so you don't see maybe the new investment that might have come had the exchange rate remained at a lower level."

'Exports are what really can drive and should drive the economy here.' — Ron Keefe, BioVectra

In Nova Scotia, the largest Christmas tree grower in the province has announced it will shut down after this season.

Workers at Kirk Forest Products in Bridgewater are preparing the final shipment of balsam firs to Panama. The 200 employees were told Tuesday they will not have a job to come back to in the new year.

"I think everyone realizes what's happening with the increase in the value of the loonie and so they're accepting it," said owner Rick Kirk. "It's a real emotional challenge for me because I know we're affecting so many people."

At the newsprint mill in Liverpool, hundreds of people are waiting to find out if they still have jobs. AbitibiBowater, which is also feeling the effects of the high dollar,says it will decide the fate of the plant in the next 30 days.

"Without Bowater, Liverpool would be devastated," said Anne Thompson, a realtor for 20 years. "With this 30-day thing going on, I'm sure people will be sitting on the edge of their seats."

In Prince Edward Island, BioVectra, a Charlottetown company that makes active ingredients for the pharmaceutical industry, ships85 per cent of its product to the U.S.

CEO Ron Keefe said it's been a challenge to adjust to a dollar that has moved from $0.76 to $1.10 since 2003, a 45 per cent increase in value.

"It takes time, it takes a lot of effort on the part of our employees, on the part of a lot of different people, to ensure we remain profitable when the dollar is so strong," said Keefe.

In the last four years, he estimates the company has lost $10 million as a result of the climbing dollar.

"It does affect our local economy and it does affect our exporters and exports are what really can drive and should drive the economy here so every cent increase causes us to be slightly less competitive," he said.

BioVectra is making new investment to help it absorb the loss. There have been no layoffs. Instead, it increased productivity by investing in training and technology.

"We've adjusted, we'll continue to adjust to the Canadian dollar increases, but we are hoping we're at the end of that and it will level off to a better rate," said Keefe.

Even for longtime exporters, making a profit in the U.S. market can be difficult now.

Jerry Bidgood of Prince Edward Aqua Farms, a mussel producer and exporter, is on a trade mission to New England this week. He's finding it difficult even to get his most loyal customers to stick with him.

"We've always been known for having a superiour product and a year-round supply, so we have to keep banging on that and hope that some of our people stick with us," said Bidgood.

The Kensington businessman says he's seriously considering a shift in his export market.Bidgood says the strong European currency is making that part of the world, and Japan, more attractive for his mussels.

With the dollar moving rapidly upward, having gone from $1 to as high as $1.10 in less than seven weeks, that may be something more businesses have to think about.