The Canadian dollar took another hit on Jan. 26 as it fell another 0.2 per cent, bringing its value to about 80.29 of the US dollar. Earlier this week, the dollar dipped to its lowest value in nearly six years, an instance which was promptly followed by the Bank of Canada surprising Canadians with a near quarter-point cut to its rates, dropping to a modern low of 0.75 cents.
According to economists, Canada’s gross domestic product(GDP) grew at a mere 0.1 per cent throughout November, with manufacturing and whole sales reporting disappointing earnings. Coupled with this, the dropping value of oil has proven troublesome for Canada, as analysts have stated that future GDP reports will be able to show just how pivotal the oil decline is in the weakening economy.
Despite the diminishing spending value of the dollar, it is argued by some business owners that the dropping value helps generate business, more specifically touris, from Americans.
According to Rick Hunter, the President and CEO of Ottawa’s amusement part manufacturer ProSlide, the busines make more money when the Canadian dollar falls.
“Most of our business is done in U.S. currency. Certainly with export, the devaluation of the Canadian dollar does help us a lot. There’s no doubt about it,” said Hunter.
While some businesses do clearly profit from the loonie dropping in value, people should be more worried about what this says about the instability of our economy as opposed to being able to save a few bucks when on vacation.