Our View: Paying the price for rising loonie

The Canadian loonie is migrating south by way of consumer choice in where to buy goods.

The Canadian loonie is migrating south. It’s not an uncommon phenomenon, but one which grows when the Canuck buck nears parity with the American dollar, or as is the case now, actually surpasses it in value.

Armed with that robust currency, Canadian shoppers are more prone to look across the border for deals. The motivation is simple—saving money. The ramifications are much more complex.

Southbound shoppers have a direct negative impact on revenue for local businesses.

And that, in turn, has a negative impact on B.C. communities, even reaching Kelowna where the airport has seen a fall-off in passenger traffic due to cheaper flight options south of the border.

Local business owners provide thousands of jobs for their community’s residents.

Those jobs generate income which is circulated through the community, at grocery stores, auto dealerships, and countless other retail and service outlets.

Each dollar paid out by local employers has a multi-layered, knock-on effect.

And in addition to paying local taxes which provide services and infrastructure for all, many of those businesses also voluntarily support public activities, such as minor sports, community support services, and fundraisers for myriad causes.

Local business owners also face realities which challenge their ability to be competitive with American pricing, such as duty charges, Canadian distributor fees, wage levels, shipping costs, store overhead versus low-cost online warehouse sales, and in some cases, disadvantages in terms of volume purchasing of products for resale.

Can you get some items cheaper in the U.S.? Yes.

Do your dollars stay in this community, with all the associated benefits?

Obviously not.

And there’s a price to pay for that.

Kelowna Capital News