Saturday, September 22, 2007

Canadian Dollar Equals US Dollar

For the first time since I've been alive the Canadian Dollar has hit par with the US Dollar. This has a whack of implications but here I'm only going to talk about how it effects us as consumers. The price disparity between Canadian and American goods. Canadians have always payed more for goods than we should. Considering on average Canadians make less money this is especially true. This new event though will remove that perception that exchange + shipping + duty will make it about equal. Well, one of those is now out of the question. If things keep going as they are, the duty factor will be wiped out by the exchange rate. So you have a Nikon D80 going for $150 less in the US. How about a Subaru WRX? $8k less. Books? I hear the publishers are re-considering printing prices on their books. It goes on and on.

For us it means that one of two things will happen.

A. The US Dollar will stay weak and our Dollar Strong. Suppliers will have to lower their prices to match and in turn Retailers. This unfortunately will take some time.

B. Our Canadian Dollar will weaken. Possibly even due to a weaker retail sector due to falling sales (everybody shopping online in the states now).

Currency rates are a complicated thing which I won't pretend to know about. I'm just happy that suppliers of goods to Canada will finally have to bring their prices in line or face loosing sales.

No comments: