Weak loonie is good for some exporters on P.E.I., bad for Islanders travelling south of the border
Tuna exporters are happy, but snowbirds heading south to the U.S.? Not so much
The weakening Canadian dollar may send shivers through snowbirds heading south this winter, but it's good news for some exporters on P.E.I. and others who benefit from a stronger U.S. dollar.
The Canadian dollar is currently worth just 70 cents U.S., down from 75 cents in September. Many economists expect the downward trend to continue, meaning it will take more Canadian dollars to buy the same American item or service.
Tuna exporter Jason Tompkins said that's made a strong season even stronger because most of P.E.I.'s tuna is sold to foreign markets in U.S. dollars.
"My job as a tuna exporter and marketer is to take care of Canadian boats. So a low Canadian dollar, which means higher returns to our fishermen, is OK for us," he said.
The local tourism industry also sees a weak loonie as possibly positive because it makes a trip to P.E.I. an attractive bargain vacation for a very large potential market.
"You look at Americans trying to get the best bang for their buck on travel. If they can come to a Canadian destination, that could potentially increase visitation, extend visitation, or even increase spending," said Corryn Clemence, CEO of the Tourism Industry Association of P.E.I.
"The other way we could look at that too is Canadians maybe putting off that trip to the U.S. and staying in Canada this year."
As for Islanders planning to travel abroad, travel agent Travis Stewart said he hasn't seen much of an effect — at least not yet.
"If this continues to take that little bit of a dip, where economists are saying we may not be to the bottom of this yet, I think then maybe the latter part of Q3 next year, it might start…. Folks are going to be a little more conscious [of] what they're going to do."
Tuna could become more expensive
Tompkins also sees a downside if the Canadian dollar stays weak.
In the winter, after the tuna season wraps up on P.E.I., he imports foreign tuna for the Canadian market. With the loonie low against the U.S. currency, he said tuna will become less affordable for Canadian buyers, which will hurt demand.
"Once you look at the exchange rate and the cost of freight — which a lot of these times from other countries is also charged in U.S. because it's the normal, easy currency — when you start to look at the cost to bring it in, the cost of the raw materials, it just prices itself out of our market."
While Clemence is happy about what a weak dollar could mean for local tourism operators — "I think could be a great boost for us moving into the new year" — she realizes it could change the travel plans of Islanders.
"It's not ideal from a shopping and spending standpoint when we're down there, so that might alter what we do when we're in that environment," she said.
Stewart said the low loonie won't affect just those travellers heading to the U.S., but people seeking a European stay as well.
"We do see, especially as we go to buy our euros, 'Oh wow, that's not as much as we used to get.'"
With files from Steve Bruce