Monday, July 23rd, 2007
Tourism to U.S. Climbs as Canadian Dollar Hits 30-year High
By Mike Caggeso
Last week, the Canadian dollar hit a 30-year high, trading for 96 cents on the U.S. dollar. And some are going as far to predict the loonie will eclipse the greenback by the end of the year.
The Canadian dollar has already gained 11.7% this year, but its ascension began five years ago, when the currency was trading for a skimpy 62 cents. Slowly and steadily, it gained ground on its American counterpart, and for several reasons.
First, the Canadian dollar is tied to commodities — half of Canada’s exports — and the prices of copper, zinc, lead, oil, uranium, corn and soybeans have risen in the past few years. Crude oil, one of Canada’s top exports, topped off at a record $76 a barrel last week. Translation: We’re putting more of our money in Canada’s pockets. On top of that, the Canadian dollar gained momentum from the Bank of Canada’s July monetary policy report, which estimated the economy would grow 2.5% in 2007.
And let’s not forget the U.S. dollar has been falling for a while. Canada is just one of many countries whose currency is gaining ground on the greenback. Just as Canada’s dollar celebrated its 30-year high on the U.S. dollar, so did New Zealand’s and Australia’s, posting 22 and 18-year highs, respectively.
But the news isn’t entirely bad for us here in the States. Canadians are spending their newfound wealth in the nearest place that gives them the most bang for their buck — the United States. On the same day the Canada’s dollar hit its peak, the Associated Press ran a story set in Old Orchard Beach, Maine, where locals report the influx of Canadian tourists has returned.
“They say there are more Canadians than ever before. It’s good for everyone,” Claire Beaulieu, an owner of the Motel Kebec 2, told the Associated Press. Motel Kebec 2 is a stone’s throw from the waves in Old Orchard Beach, Maine, a popular summer getaway for Canadians. All totaled, Canadian tourism in the United States has risen 23% in the last five years, the Commerce Department reports.
And in Grand Forks, N.D., Canadians are cheerfully going through the hassle of border security and currency exchange because they’re saving thousands on cars, appliances and other big-ticket items that would be subject to higher taxes on their side of the border, KFYR-TV reports.
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