Free Post #2

I am very interested in the fluctuating Canadian dollar and I like to read some articles on that subject when I have the time. Recently, I have come across a very interesting one that can be found here.

Basically, it talks about the Federal minister of finance, Jim Flaherty, who encourages Canadian retailers to lower their prices in order to reflect the value of the rising loonie. In the last months, Wal-Mart and Zellers both announce they would lower their price in order to accomodate the consumers and reflect the strength of our dollar. In the article, Flaherty also mentions that it is up to the consumer to find good deals. If he is not satisfied with the prices of a certain product in Canada, he has the freedom to look in other markets to find a better deal. Another important fact mentioned in the article is that people are putting a lot of pressure on car dealers to have access to lower prices. Therefore, the Big Three in that industry, Ford, General Motors, and Chrysler, will probably respond to that shortly because the pressure is getting very strong.

Personally, I think it is very nice to see that our minister of finance tries to influence retailers and store owners to let us take advantage of the rising dollar. I also think that the fact that Wal-Mart and Zellers are following the trend of the dollar is a key thing in this case, because if the other stores want to keep competing with them, they will need to follow their lead and do like them. I also believe that Canadians can change things in a certain way. If they complain but keep buying products in Canada, there will be no big impact on the situation. However, if people start looking for better deal in other countries, things will change rapidly. Moreover, with today's technology, it has become much more easier to order things online and it is very affordable. In most of the cases, because of the powerful loonie, ordering online will result in good savings on most of the products. A very good example of buying a product in another country in order to save money would be the car market. When I was back in Quebec, during the Christmas break, they were interviewing people on the news and these people were claiming to have saved as much as $5000 on a car only because they traveled to the States to buy it. The savings one can benefit from in this market are so big that most of the car companies in the U.S. have told their salesman not to sell to Canadians. Therefore, this puts tons of pressure on car dealers in Canada, and I believe that their prices will probably drop soon enough because otherwise they will lose lots of money as consumers will not want to pay more than their southern neighbors.

All of this can also be linked with tourism. Since our only neighbor is the USA, this country represents our main source of revenue as for tourism. The Americans already lose money when exchanging currency to come here, so I think that if on top of that everything is overpriced it will have an even worse impact on our revenue. The rise of the loonie is probably a very good thing for Canadian consumers, but for tourism it is the opposite as they get no benefit at all from it. I think that good price drops on the goods in Canada seems to be the best solution. It would contribute greatly to attract more tourists and would make Canadian consumers very happy. I believe that it is only a question of time for the prices to drop, because companies just want to make sure that the loonie stays high, since a drop would mean big losses of money for them.

To conclude, I must admit that I am happy that the Canadian dollar is rising because I do not own a touristic store or do not really care about tourism in Canada. For me, the strength of the loonie can only be a good thing and I hope it keeps going up.

Thanks for reading,

Chris

Video Post

The following is a news video made by a French television channel in Quebec. It talks about the increasing value of the dollar and about the convenience of changing canadian money into american money.

click here
I could not post the video due to technical problems with the site. Sorry for the inconvenience.

There are not really any opinions shown in this video so it is totally bias neutral. The video was made by a news channel that has a very good reputation and a lot of credibility. They are only showing the facts and helping people take good decisions not to lose money.

At first, they exchange 100 Canadian dollars in a bank. Because of the high interest rates, they receive 99 US dollars. Then, they go in a specialized currency place and they get 101 US dollars for 100 Canadian dollars. The same situation is present in the United States. This little experiment is very relevant to my topic because any tourist will need to exchange his money in order to come to Canada.

The value of the dollar is already causing less American tourists to come visit Canada, and the fact that banks and exchange places take even more money off of them does not help the situation at all. At the end of the video, they mention that the smartest thing to do for a Canadian when traveling to the US is to use a credit card as much as possible because these companies charge less for converting money and it is a safer way to pay. I believe that this is definitely the best alternative, but everybody needs cash money at some point, especially during a trip. Therefore, it is only logical to believe that the high conversion rates charged by banks will not help tourism in Canada.

Thanks for reading.

Free Post #1

In the past few days, the value of the loonie has kept its usual habits of the past few months by oscillating just over and just under the US dollar value. Before the weekend, the CAD was at 1,001 USD. Today, on Tuesday the value now sits at 0.9928 U.S. dollars. Even if the Canadian dollar is unstable in a certain way because it goes over and under the American value constantly, we can say that it has been constant for the past few months because it always stays in the same range of value.

The fact that the Canadian dollar has become strong can be seen from different ways. If I owned a store in a touristic region, I would not be very happy about it. This is because the increasing loonie leads to a decrease in the tourism in Canada. This is very easily explained by the fact that our only neighbor is the United States of America. Because their dollar is worth less Canadian dollars than before, everything becomes more expensive than it used to be so less people come to visit us.

The other way that we could see the situation would be from our personal perspective. I am glad that the loonie is now worth more because I can pay less for some products. I agree that the prices in Canada do not change, no matter what the value of the money is, but I can still save some money by buying products in the US. Some people might say that traveling to the States and buying a product is more expensive than staying here and buying the same product because of the high price of gasoline, and these persons are mostly right. However, for some goods that are very expensive, we can still save a good amount of money by traveling over the frontier. As an example, one can save thousands of dollars on something like a car. In this case, the value of the loonie is very helpful even if the purchase involves some compromises. Moreover, with the technology we have today, it has become extremely easy to buy things over the internet. The delivery costs change according to the size and weight of the products, but in most of the cases the items are worth it because they make you save good amounts of money. Sites like "eBay.com" are very popular for Canadians right now because they allow them to get extremely good deals.

Personally, I am glad that the dollar in Canada is rising because I do not really worry about the impacts it has on tourism. I am happy to have the option to buy things I want for a cheaper price. However, I think that if the loonie stays in the same price range for a little while, the companies and stores in Canada should adjust and charge less for their products in order to accomodate Canadian citizens and help our economy.

Thanks for reading,
Chris

Article Response

La Presse Canadienne
Le dollar canadien affecté par l'état de l'économie
No authors mentioned

The subject of this article is the fall of the Canadian dollar on January 31. On that day, the loonie fell by 1.32 cents, which is a very big change for only one day. This value decrease is due to the fall in the Canadian economy this month. According to Avery Shenfeld, an economist of the CIBC bank, the fall of the loonie is surprising because the economy almost met its monthly expectations. However, Shenfeld mentions that "he believes the decrease has mainly occurred in order to correct the value of the Canadian dollar which had increased a lot, maybe too much in the last weeks".

Personally, I agree with Mr Shenfeld because I think he is a reliable source. The loonie probably dropped a lot on January 31 because it was a little bit too high than it was supposed to be. Moreover, Avery Shenfeld is one of the principal economists of the CIBC Bank, so he is very informed about what is going on and I trust him.

One thing that was not mentioned in the article was the effect of this decrease has on the tourism. In Quebec, where the french people of Canada mostly live, there are a lot of ski resorts. I believe that the increasing value of the loonie is not very beneficial for tourism, because Americans have less Canadian money than they would with a lower Canadian dollar. Therefore, it makes trips for Americans to Canada much more expensive. So, this drop was a positive effect on tourism because more people from the USA will go to Quebec. For people in the French province, the value of the loonie does not change anything regarding tourism because the ski resorts do not change their prices according to the value of the exchange rates.

More to follow, thanks for reading.

First Post!

Hey! Welcome to my blog!

For my English blog assignment, I have decided to talk about the rising value of the Canadian dollar. Since I am from Montreal, I will try to find some differences in the opinions of the francophones and anglophones in Canada. Currently, the value of the loonie is at 0.97 USD, which is very high compared to the values of the past years. In 2002, Canadians had to pay 1.62 CAD in order to have 1 USD. However, in November 2007, the Canadian dollar surpassed the USD for a short amount of time. After a few days, it went back to 0.99 American dollars. Since that time, it kept going up and down but it still stays very high. Of course, since French and English people of Canada use the same currency, there will not be many differences in their points of view at first. However, the loonie has a huge impact on tourism, and people will not react the same way in Quebec as they will in the rest of Canada so I believe that it will be a very interesting subject to follow considering the fact that several politicians in the French region want it to separate from Canada and become a new country.

Thanks for reading me,

Chris