Sent $102USD payment via palpal yesterday. Cost $137CDN. OUCH! The added insult will be Canada Post (maybe) relaying the taxes at the USD value.

What gives? We're told the banks are solvent. Ottawa has been slowly chipping away at the national debt. The provinces have been fiscally responsible for the most part. We even recently elected a conservative (by Canadian standards) government. These are the kinds of things that are supposed to make the money markets happy in theory (?).

The usual explanation is the loonie reflects the price of oil and other commodities. Are we truly and simply just the world's natural resource warehouse? Sad if it's true.

Anyone happy about the sinking loonie? Maybe you, or your employer,
landed a nice export contract? Would be nice to hear someone's benefiting from the situation.

/end of rant

....Anyone happy about the sinking loonie? Maybe you, or your employer,
landed a nice export contract? Would be nice to hear someone's benefiting from the situation.

/end of rant

You are damn right I am happy. I sell over 95% of my production into the US and overseas and during the past five years have taken an enormous hit to my bottom line; now maybe I can start getting some of it back.

The loonie 'falling' does not have much connection to what is happening in Canada and is only partly connected to the oil and resources situation. Investors are dumping a lot of currencies in order to put their money into US Govt T-bills because these are seen as a safe place to have money when there is the chance of a recession or depression.

You are damn right I am happy. I sell over 95% of my production into the US and overseas and during the past five years have taken an enormous hit to my bottom line; now maybe I can start getting some of it back.

The loonie 'falling' does not have much connection to what is happening in Canada and is only partly connected to the oil and resources situation. Investors are dumping a lot of currencies in order to put their money into US Govt T-bills because these are seen as a safe place to have money when there is the chance of a recession or depression.


Good example of how one thing hurts in one area and helps in another.

Geof sells more down south and maybe has to hire another person... One more person off social assist and spending more in that local economy.

Big picture, a loonie at .85US would be a good thing for our economy.

I think the question is why are there not more retailers in Canada that can supply these things locally at a fair price. All things being equal, I always buy Canadian. The problem I see is that most of the few domestic sources, price so much higher (even beyond the currency difference).

Just my .02 (0.016USD) worth...

....Geof sells more down south and maybe has to hire another person... One more person off social assist and spending more in that local economy....

What makes you think I would hire someone off social assist.:)

I have to admit I did it twice; what a disaster both times.

What makes you think I would hire someone off social assist.:)

I have to admit I did it twice; what a disaster both times.


Perhaps badly worded.
If you hire someone, that is one person not on UI.

Perhaps badly worded.
If you hire someone, that is one person not on UI.

That is better. :)

One of my most reliable guys was hired from a UI (EI these days I think) training program.

Maybe the loonie isn't directly tied to oil but there is a definite trend. Today oil climbed a little and so did the dollar.

Hmm, if an 80 cent dollar is partly a reflection of lower energy costs I could learn to like this idea. No need to guess I don't live in an oil producing province ;)

the low dollar is good for some sectors of business ,it is bad for others
Geof's exporting gets room to breath , i import from manufacturers in the US and elsewhere , watching the power of my dollar drop a penny a day has been brutal ,and in order to be competetive i didn t leave any kind of huge buffer , so it will be interesting to see how long i can ride the bumps before i have to do some tweaks

lower loony is a double edge sword to me, i live in Canada but work in foreign countries in the mining industry, when the loony drops it generally means oil and gold has dropped in price also, lower gold prices mean less job opertunities ... regardless, we are kicking off our cnc plasma business next spring, been 1.5 years in the making, renovating, buying equipment, learning how to use it, coming up with a marketing plan and so on, no guarentee it'll be successful, but you never know unless you try, and it would be nice to just stay home for a change.

EDD

With the lower dollar you would think it would help in a lot of businesses that export but with a rescission there I do not see a lot of spending going on .I,m not sure how much product we buy from the states, most of every thing is from china I would say so either way I don't see much difference what our dollar does. I think we should be looking for more trading partners more than any thing right now. Graham

We have to look at the big(ger) picture.
Lower loonie means more contracts and exports to the states (Canada's biggest trading partner).
I do not do anything for the states, so what do I care?
WRONG
I build, repair and modify the machines and assembly lines for the companies that make sub-products. They sell the sub-products to a Canadian manufacturer who makes the main product. Then 90% of that product is sold to the USA.
If I am repairing a farmers combine, it is because he can make money harvesting a crop that is driven by commodity prices and exports to the states.
Everything is tightly interwoven.
The less us buys the less work I have (even though I do nothing "for" the states). The less money I spend at the local butchers....etc, etc.
With our high wages (dictated by our COLA), we need a weak loonie to compete with manufacturing out of the southern US (and Mexico).

We have to look at the big(ger) picture.
Lower loonie means more contracts and exports to the states (Canada's biggest trading partner).
I do not do anything for the states, so what do I care?
WRONG
I build, repair and modify the machines and assembly lines for the companies that make sub-products. They sell the sub-products to a Canadian manufacturer who makes the main product. Then 90% of that product is sold to the USA.
If I am repairing a farmers combine, it is because he can make money harvesting a crop that is driven by commodity prices and exports to the states.
Everything is tightly interwoven.
The less us buys the less work I have (even though I do nothing "for" the states). The less money I spend at the local butchers....etc, etc.
With our high wages (dictated by our COLA), we need a weak loonie to compete with manufacturing out of the southern US (and Mexico).


Very well stated...

Living in Ontario, I think I have seen the effects of the high Canadian dollar in the way jobs have been lost this past year or so.
It certainly is nice to see our buying power increase but, like all things, there is a price elsewhere.

Hi Guys

I am from the US and how do you feel about NAFDA has it been good or bad for you?
The Chinese imports are killing us down here.

budP

Hi Guys

I am from the US and how do you feel about NAFDA has it been good or bad for you?
The Chinese imports are killing us down here.

budP


NAFTA is the North American Free Trade Agreement. China is not involved in NAFTA.

As a Canadian, I would like to see NAFTA re-negotiated. I hate that we get lumped in with Mexico; the deal should be between Canada and the USA. Let the Mexican government negotiate their own darn deal.

Canada provides the USA with oil, hydro electricity, metals, chemicals, lumber, and other resources that help to drive it's manufacturing sector. Canada is also the largest customer of US exports. Wages betwen the two countries are similar, neither country really has a competitive advantage.

Mexico is cheap labour, pure and simple.

budP: Chinese imports are hurting us big time as well. The companies best able to weather the storm are ones that offer niche products that are quality.

Hi Guys

I am from the US and how do you feel about NAFDA has it been good or bad for you?
The Chinese imports are killing us down here.

budP

From my point of view NAFTA was a bit of a wash; we are in the business of making equipment for people with a disability and do not have effective competition anywhere in the world so people buy from us no matter what. Our products are all tax exempt and mostly exempt import duties so the reduction in duties as a result of NAFTA was negligible, but the increase in paperwork and all sorts of bureaucratic nonsense made more work for us.

I am from the US and how do you feel about NAFDA has it been good or bad for you?

In my not very informed opinion it's worked ok for Canada.

When the idea was first suggested there was a lot of fear mongering. Loss of Canadian sovereignty regarding social programs, etc. If these type of things have happened the changes have been pretty subtle.

One thing for certain. Protectionist policies in the US would be a disaster for Canada.

The Chinese imports are killing us down here.
That's kind of unrelated to NAFTA, but here's an anecdotal tie-in;

My previous employer was offered a killer deal on castings from China. We normally got these castings from a local foundry. After drilling and tapping a couple of holes, these Chinese products were considered 'Canadian'. A 'Made in Canada' label was applied and the products entered your country under NAFTA. This type of loophole needs to be reexamined.

I think the question is why are there not more retailers in Canada that can supply these things locally at a fair price. All things being equal, I always buy Canadian. The problem I see is that most of the few domestic sources, price so much higher (even beyond the currency difference).

I had a short conversation with the vp of sales for a mid-size wholesaler/retailer yesterday. Here's sort of my 'tim-the-toolman-interpreting-wilson' version;

Once a year they peg a value on the Loonie. They use this value to set a (hopefully) year-long price for American imports. For this year they set the Loonie at 84 cents despite the fact the exchange rate was in the 90 cent range at the time. We're the lapping up the gravy at that rate? Dunno, didn't have the nerve to ask. The 78 cent Loonie was causing him some concern and he was happy to see it bounce back.

If this is common practice it might explain some Canadian retail pricing. Didn't get a chance to ask about imports from Asia.

.....Once a year they peg a value on the Loonie. They use this value to set a (hopefully) year-long price for American imports....If this is common practice...

To some extent when you are an importer or exporter you have to do this type of thing; that is give your customers a stable price. This means that when the exchange goes one way you take a bath a when it goes the other you benefit in the short term. Throughout the 1990s when the Canadian dollar steadily declined the prices in Canada for many items did not rise by the amount they should have to cover the decline; not surprisingly when the dollar recovered they also did not change by a similar ratio.

Being an importer or exporter can be a bit nerve wracking sometimes because you can lose or gain many thousands of dollars in a very short time if your timing is off for converting currencies. Which is why the machinery importers in Canada tend to price things in US dollars.

NAFTA is a crock
what did it do for us when Bush decided to throw his illegal tariffs against our softwood , i was literally out of a job within 5 days
we lost more Canadain jobs to that than we ever lost to China
free trade is a bad joke

In my opinion, after the US election is over our dollar will go back up again. (Near Par)

Bad for the Canadian Manufacturing sector.

Good for the everyday consumer.

who knows
a thought struck me as i was in my truck listening to the radio , they were saying that the economists for the TD bank was predicting blah blah blah , all these economists that make these predictions that boost the consumer confidence all work for the banks

it was about a month ago the biggest economist (once again banker) here in BC was blowing out that we would be rockin here untill at least 2011 , my how things change within a couple of weeks , and they want to tell us noone saw this coming , i know when i'm about to over extend myself and go broke , does that make me a better economist than them ?

did you ever watch the video "money as debt" check it out on google video its about 45min and tho it is nothing new its pretty educational