The Loonie – A Hindrance or An Opportunity?

Whether it was to catch a cheaper flight from Bellingham to Las Vegas or to shop at an I-5 outlet mall, since 2013 many British Columbians were flocking to the nearest lower-mainland border crossing and travelling to the states in search of a good deal.

Canadian dollar the loonieHowever, a weakened Loonie curbed many Canadian shoppers who’d been making the trip south of the border to stay home. Indeed throughout Washington State’s Whatcom County, retailers in border towns like Sumas, Blaine, Lynden and further south to Ferndale and Bellingham have seen dramatic drops in Canadian shoppers since 2013 (BPRI Winter 2017 Brief: Changes in Canadian Shopping Visits in Northwest Washington, 2013 to 2016).

Interestingly though the loonie has rallied in value to a little over 80 cents to the American dollar. Will we see a surge in cross-border activity again here in Whatcom County? We hope so! However, even in light of recent news, there’s more to the ‘cross-border currency’ story than shopping. Like SELLING! CADUSD20yrs

Historically the USD has dominated over the Loonie as reflected in this 20 year chart. (Source)

A paradigm shift. Can Canadians consider the exchange rate between the Canadian Dollar (CAD) – USA Dollar (USD) not as a hindrance, but rather as an opportunity? They should! Here’s why.

Assuming all the proverbial ducks are in a row, ‘I’s dotted and ‘T’s crossed, the savvy B.C. business owner and entrepreneur stands to earn at least 20% more on their U.S. sales in part due to the favorable exchange rate.

“Here are the simple facts” says UCanTrade, Inc. president and dual citizen, Jim Pettinger: “(1) most U.S. land border crossings have been upgraded and are fully open for Canadian goods and people, (2) each sale you make for US$100 nets you C$120 or more, (3) your business presence in the U.S. can lead to a green card and dual-citizen status if you wish , and (4) American buyers (a) love Canadian goods, (b) have double the available money of their Canadian counterparts and (c) make their buying decisions at least  three times as fast.”

If history is an indicator then a long-term outlook is for a weak Loonie. Canadian companies need to immediately seize the opportunity to stake a position in the lucrative U.S. market. With careful planning, the initial cost can be minimal, but the payoff could be enormous.

Interested in learning more about doing business in the USA? Attend our next DBUSA Seminar &/or download this whitepaper “Ten Tips for Better Border Business”.

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

Subscribe to our TradeTips Newsletter for the latest import/export events and trade news, and/or call us at (360) 380-6900.

UCanTrade
Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade

Export By Way of the U.S.A.

Recognized as the world’s largest economy, the United States of America offers Canadian business owners and entrepreneurs the perfect springboard from which to launch their international business further abroad.

Given the similarities between the Canadian and American cultures and their geographical proximity, selling to the U.S. first simply makes sense, says Jim Pettinger, President of UCanTrade, Inc.  As well, he adds, quick-to-buy Americans perceive Canadian products to be ‘a cut above the rest’ and as such are willing to pay more.  Combine that with favorable exchange rates and U.S. sales become more profitable than domestic Canadian sales. (Related article: “Selling to Americans”)

In a recent interview with Export Development Canada (EDC), Halifax’s LED Roadway Lighting CEO, Peter Conlon said, “to be a legitimate exporter you have to have business in the U.S.” “If you’re not in the world’s leading market”, adds Conlon, “you’re not really a contender.”

After establishing their U.S. presence, the EDC reported that ‘opportunities came up’ for LED Roadway Lighting in places ‘seeking out clean energy’ listing countries in Europe, the UK, India, Latin America, the Caribbean, Australia, New Zealand and the Middle East.

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

Subscribe to our TradeTips Newsletter for the latest import/export events and trade news, and/or call us at (360) 380-6900.

UCanTrade

Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade