industries

High Canadian Dollar Provides A Chance To Diversify

The strong Canadian dollar should have us looking farther around the world for goods and investments. It’s time the world became our market instead of just the U.S. There was much weeping and gnashing of teeth in the press today about the high Canadian dollar and what it means to Canadian business.

By Tony Wanless /

Strong Canadian dollar

The strong Canadian dollar should have us looking farther around the world for goods and investments. It’s time the world became our market instead of just the U.S.

There was much weeping and gnashing of teeth in the press today about the high Canadian dollar and what it means to Canadian business.

Canadians are going to hurt our retailers by running south of the border to buy, they say. Canadian businesses will be put at a disadvantage when they export to our largest trading partner, the U.S., they add. Everything is going to be more expensive (it should be the opposite, but it never seems to be), they continue. Insert your own complaint here.

But hold the tears, folks. This happens every once in a while. And it provides some wonderful opportunities.

The usual suspects form the reason for the loonie’s flight. We’re a commodity-producing nation, and the prices of commodities are soaring. So our dollar is naturally more valuable. Similarly, the price of oil is climbing again due to the middle east problems, and since we’re America’s largest oil supplier, we’re making more money. Europe is in financial trouble another country is asking the Euro community for financial help as I’m writing this – because money traders recognize a weakness and have been attacking its currency.  

 
But the biggest reason is that we haven’t borrowed up the yin-yang like our neighbours to the south, so we’re seen by money traders as more stable. 
 
Our dollar is high because the U.S. dollar is so low.

It has been weakened considerably by the borrowing binge the U.S. government has been on to try to repair its economy. 

 
Various pundits are predicting we’ll have a high dollar for years, while a few suggest it’s only temporary. 
 
It seems immaterial to me, although I do think it will eventually fall back to its natural level just below the American dollar. 
 
More importantly, Canadian businesses and investors start looking at the world community and stop focusing almost exclusively on the U.S.  
 
For too long we have been riding on America’s coattails because it was easy money. Now it isn’t, and that dependency has come back to haunt us. 
 
Remember when our currency was the weak sister and we got an automatic profit bump by selling into the U.S.? No longer. 
 
So let’s use our new-found riches to expand into the rest of the world, instead of constantly looking across the border for salvation.