My colleague Christina informed me this week that our “Loonie”, the Canadian dollar, is at its lowest value now since 2009. “Isn’t that cool?” she exclaimed. “Wouldn’t it make a neat blog post?” “Yeah,” I laughed. “It’s a little loonie, but it’d work.”
Loonie is the slang name for the Canadian dollar. We call it that because it has the image of a beautiful Canadian bird, the loon, on it. Also, loonie (or loony) is another way of saying someone or something is ‘crazy’. And let’s face it, there’s a lot of things in Canada that are pretty loonie!
So how is a lower dollar value a good thing for the Canadian economy. I admit, I am no economist, so I had to do the research on this. What I learned is rather cool.
1. A lower Loonie will help our economy
Canada sells a lot of stuff to other countries (export). This includes manufactured goods and services. Canada’s tourism and services industry is big, too. So with a lower dollar, suddenly our stuff isn’t so expensive compared to the rest of the world. As a result, more countries will want to buy Canadian.
2. A dip in the dollar will help employment
Our lower dollar will make the U.S. exports more expensive. This means that other countries won’t buy as much from the U.S., and American workers could lose their jobs. Meanwhile in Canada our exports are busier than ever, which creates work for Canadians to keep up with the demand.
3. A bargain buck means ‘buy Canadian’
A lot of Canadians shop ‘over the border’, or in the U.S. because their prices are usually cheaper than ours. This is especially true for groceries and gas. But with the Canadian buck (slang for dollar) low, it doesn’t make sense to buy in America. Canadians will buy in Canada, and a higher volume of business is great for the economy. Also, Americans will come to Canada to buy Canadian! It’s a win win!
4. Cut-rate cash is great for tourism
Canadian music and theatre festivals, ski resorts and summer resorts, will all benefit from a lower dollar. Why? Because other countries’ money is higher value, making Canada a great place to travel too.
There are drawbacks, of course. People with Canadian investments and retirement savings won’t be earning as much. Bank rates haven’t been lowered either, which means people are paying more on their credit cards while the dollar is technically worth less. In the end however, this was a good lessen for me. When people say the ‘dollar is low’, it doesn’t always mean it’s a bad thing. It’s when people say your pants are low, or your marks are low – that’s pretty much always a bad thing.