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The plunge of the dollar will affect many Canadians `Oh me, Oh my, The Canadian dollar, Fell from the sky.' 27 | Thursday, February 5, 2015 | OAKVILLE BEAVER | www.insideHALTON.com L ast Wednesday, our Canadian dollar dipped below 80 cents U.S. It has fallen 14 per cent over the past six months and 20 per cent within the past two years. Our dollar is down and our national pride is bruised. Our giant neighbour, the U.S. tends to give us an inferiority complex. Now, we have to react to the economic implication of such a vast difference in the value of our respective currencies. So, the million dollar question is: how does the lowering of the Canadian dollar affect us? For some it hurts and for others it helps. The negatives Consumer spending on all U.S.-imported items -- including groceries, clothing and furniture -- just got 20 per cent more expensive. If you want fresh fruits and vegetables this winter, you will notice those items imported from the U.S. will cost more. If you run a business where a signi cant number of supplies come from the U.S. or are priced in U.S. dollars, then you have a huge nancial problem unless you can pass Dollars & Sense Guest Contributor Peter Watson on those higher costs to your customers. Generally, pro t margins are small so that an increase in the cost of materials from the U.S. will suddenly turn a pro t into a loss. Some rms will go out of business and staff will lose their jobs. Many Canadians will be hurt by our loonie's sudden plunge. Canadians vacationing in the U.S. will nd it more expensive. Some will change their holiday plans to a less expensive option or look for something in Canada. The positives Some Canadians will bene t from the drop in the Canadian dollar. Tourism will be more affordable for Canadians to stay at home and Americans can use their strong dollar to get a signi cant discount on Canadian vacations. From an investment perspective, a sudden drop of the Canadian dollar for those whose U.S. investments are held in U.S. currency will translate into an increase of their investments based on the currency value change. Think of the world as one big mass of economic activity. There are seven billion people on the planet and four per cent of all economic activity is done in Canada. Suddenly, the other 96 per cent of world's commerce gets a 20 per cent incentive to do business in Canada versus the U.S. because of our lower dollar. That is the key. Canada is now a signi cantly more affordable place for the world to do business. This is Canada's extended Boxing Day sale. Everything is 20 per cent off compared to our American friends. Timing is everything The timing is excellent. There are signs the Canadian economy is slowing. The Bank of Canada recently lowered insee Lower on p.29 Personalized Tree Care in Oakville Call Storybook to assess your Trees Today 905-491-6860 G I V E U N F O R G E T TA B L E GIFT SET with a Pandora * Introducing the 2015 Valentine's Day Collection from PANDORA AVA I L A B L E S TA RT I N G JA N U A RY 1 5 Purchase the "Always in my Heart" Gift Set for $175.* Purchase the "From the Heart" Gift Set for $230.* *While supplies last. See store for details. Experience at: "From the Heart" Gift Set "Always in my Heart" Gift Set MAPLEVIEW CENTRE Burlington · Upper Level Centre Court 905.632.5400 Some jewelry displayed patented (US Pat. No. 7,007,507) · © Pandora · PANDORA.NET