Prices won't fall soon despite rising loonie: retailers

The rising Canadian loonie is once again revealing the tale of two economies as industries and consumers assess what a strong dollar means to them.

Ultimately, the consumer should be the winner, retailers and manufacturers say.

The Retail Council of Canada said the dollar's fast rise inevitably brings out consumer anger at retailers when prices don't fall immediately.

"As the dollar reaches parity, retailers get a lot of it — a lot of people out there pointing fingers, complaining about gouging," said Mark Beazley, the council's director of communications.

Even in the most optimistic scenario, it could be three to nine months before consumers notice prices falling because of the "buying cycle," Beazley said.

That means some prices may not fall until next spring, he said, and even then, products sold in Canada will never be a cheap as those in the U.S: "There's a number of factors. In Canada, there's higher labour costs, higher transportation costs, and even higher labelling costs."

However, the gap between pricing in the U.S. and Canada has shrunk because of the rise of the internet.

"Retailers recognize they serve consumers without borders and they know they have to work harder than ever to keep customers in Canada," Beazley said.

Massive fluctuations

As for the manufacturing industry, it has been trying to diversify its markets to reduce reliance on the American market for the past several years.

The Canadian Manufacturers and Exporters Association said strong Canadian dollar is never good for business, but  the massive fluctuations are worse.

"It's not so much the value but the volatility," said Jeff Brownlee, vice president of communications for the association. "Through this whole recession, we've been telling our members they have to be able to compete on par with the U.S. dollar."

Those who will see an immediate benefit to a strong dollar include the approximately 70,000 snowbirds who spend up to half the year living in the U.S.

This weekend marks the first wave of snowbirds leaving for the U.S., and they're more than happy with the strong dollar.

"It's good for snowbirds, that's for sure," said Michael MacKenzie, director of communication for the Canadian Snowbirds Association.