Low Canadian dollar a ‘double-edged sword’ as more Americans travel north: economist

A Calgary economist says the low Canadian dollar is a mixed blessing, with data showing that more Americans are travelling north to make the most of their spending.

U.S. residents took 1.8 million trips to Canada in October, according to Statistics Canada, which is up 8.2 per cent from the same time last year but still shy of numbers seen before the pandemic.

The number of U.S. resident and overseas travellers hit 2,252,283 in October, up around five per cent since the year before, but still representing 93 per cent of the number seen in October 2019.

The Loonie has been in decline since October, falling to its lowest level since March 2020 at USD $0.69.

“The Canadian dollar isn’t worth as much as it was just a few weeks ago, and there are lots of explanations for this,” said Keith Brownsey, an economist at Mount Royal University.

“The American economy is just roaring along right now, the Canadian economy is just not in such a good position.”

Brownsey called the conditions around the low Canadian dollar a “double-edged sword,” as it’s beneficial for the local tourism industry but will ultimately cost Canadians.

“Other things are going to cost more. My grapefruits, my oranges, my lettuce, my red peppers, all of that is coming from the American southwest and southeast and will certainly cost more, and the average family will feel that,” Brownsey said.

Americans benefitting

As the U.S. dollar rises in value, Americans are looking to reap the benefits of the favourable exchange rate during their trips to Canada.

Katherine and James Dearborn flew into the Calgary International Airport from California on Monday and said the exchange rate is a nice perk of their trip.

“It’s nice when we give money and it stretches it further,” said Katherine Dearborn.

“We have the upper hand in the value of our dollar,” said Shirley Castro on her first trip to Canada from Mississippi. “That’s cool.”

It’s a shared sentiment from Zoe Pei, who flew to YYC from Los Angeles to head to the mountains.

“We come see a friend and go ski,” she said. “We heard Canada’s snow is better than California so we want to see.”

The October numbers are still about five per cent lower than those seen in October 2019, before the pandemic, but the recent rise in U.S. visitors bodes well for Alberta’s tourism industry.

Kendra Scurfield, the vice president of brand and communications at Banff Sunshine Village, said the ski resort has noticed an increase in American visitors during the winter months.

“It’s not at pre-pandemic numbers, but it is being split more throughout the seasons. Traditionally, the summers made up over 60 per cent of visitation at Banff National Park and we are seeing shoulder seasons shrinking on both sides,” she said.

Twenty-four per cent, or 421,400 trips, from U.S. residents came into Canada by plane in October.

The busiest points of entry by air to the country from the states were in Calgary, Vancouver, Montreal and Toronto, representing around 89 per cent of all U.S.-resident arrivals in Canada by air during the month.

In October, 4.1 million Canadians returned from trips abroad, representing a 0.6 per cent decrease compared with September.

Canadian travellers are also noticing the exchange disparity.

“Big time,” said Taylor McNabb, who returned to Alberta from Hawaii on Monday. “You don’t know what you’re paying, just pay everything by one and a half and see the bill later, I guess.”

“It was 190 bucks Canadian for two drinks, two meals, and an (appetizer), so it is just getting pretty crazy, especially with Hawaii being so expensive already out on the island there, so yes, it’s definitely noticeable,” said Matt Dimitrijevak, another Canadian traveller.