Canada-US dollar: the High Prairie perspective

Mac Olsen
South Peace News

There has been a lot of news coverage lately of the rising value of the Canadian dollar against the American dollar; it was at $1.0546 Nov. 1. One of the issues raised is why Canadian prices haven’t dropped, or don’t drop, to the American price levels for various products. Some local retailers have offered explanations why they cannot do this, including Cori Burgar, owner of Pegasus Stationers and Woodland Foto Source. Customers have asked her why they can’t purchase merchandise with their American money. Burgar sympathizes with her customers, but says she cannot afford the loss on that currency. She would lose her profit margins, and there’s no savings to pass on to consumers. In addition, she has to purchase merchandise from her suppliers 6- 8 months in advance. “Those prices are set long before we get the merchandise,” says Burgar. Calendars are items that she has to order months in advance. She’s making a long-term commitment to purchase this product at a fixed price. Susan Richter, owner of Trends & Images, has not had any complaints about her prices. Richter offers a lot of made- in-Canada products, which will not change in price. But she hopes that her offshore suppliers will lower their prices to reflect Canadian prices. “As a small retailer, I don’t have large buying power to be able to bargain for lower prices,” says Richter. She, too, has to order products six months in advance, and the prices are locked in at that time. But she makes all her purchases in Canadian dollars, and doesn’t see large price fluctuations. Some consumers sympathize with the retailers’ position that they cannot lower their prices. Louise Lambert accepts the Canadian and American prices as a given. “People forget the flip side of the argument,” says Lambert. “When the (Canadian) dollar is low, our prices don’t go up. The price stays fixed whether the dollar goes up or down.” She adds that if Canada diversified its markets away from the U.S., Canada would be less vulnerable when exchange rate shifts occur. She cites oil and beef products as examples. There are other factors to consider, such as transportation costs and import duties. Further, buying more local and Canadian products would make the Canadian dollar versus American dollar issue less relevant, she adds. Another person interviewed was Michelle Cook. She commented that prices should be a little fairer. She says it will take about a year for Canadian prices to come down to American prices. “It’s just a given,” Cook says. She doesn’t purchase anything from the U.S., even online. Carey Unsworth, owner of Dads ’N Lads Work & Western Wear, sells two American products that will be decreasing in price, and they should be comparable to U.S. prices. Unsworth emphasizes that Canadian and American prices cannot always be compared to each other. Take a shoe that’s made in China, for example. He says if one company in Canada and one company in the U.S. buy that same shoe from China, the Canadian price will reflect the exchange rate with the Chinese currency. But, as the US dollar is dropping value, it will cost that American company more to purchase that same shoe. It also means that the American company’s price will go up. In effect, the U.S. and Canadian prices for that shoe made in China cannot be compared to each other. But they could be compared if that shoe was being imported from the U.S. In that case, Canadians would have more buying power for that shoe. One American who welcomes the higher value of the Canadian dollar is Reid Caldwell. Up from Missouri to construct houses in High Prairie for six weeks, Caldwell says that he can take the Canadian money that he’s paid in and exchange it for more greenbacks when he gets home. Caldwell comments that items like food and construction materials are 30 per cent higher in Canada compared to the U.S. “Everything is higher here, compared to the U.S. Midwest,” says Caldwell. He plans to return to High Prairie for another four weeks and do more housing construction.

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