Yankee businesses celebrate recovering Canuck buck
A car drives towards the Peace Arch Border Crossing in Surrey, B.C. on July, 24, 2017. American shopkeepers are celebrating the rise of the Canadian dollar. (Richard Lam/Postmedia Network)
After two years in the doldrums, Canadian cross-border shoppers are heading south again.
Bellingham Whatcom County Tourism CEO Sandy Ward said hotel booking in Whatcom County were 12 per cent higher compared to the same period last year.
"It's been a little bit tough the last couple of years, because we had seen quite a drop in Canadian traffic," she said. "We know that when the dollars are closer we see people staying longer, spending more time, spending more money."
The Canadian dollar touched 80 cents U.S. on Monday, capping a 10 per cent rise in just two months.
"We have not seen this number since 2015, so we really think that it's headed in the right direction for us," Ward said. "It's great news."
When the Canadian dollar passes through a number like 80 cents it produces headlines and serves to wake up Canadian shoppers to the option of crossing the border, said Guy Occhiogrosso, CEO of the Bellingham Whatcom Chamber of Commerce.
He expects to see an immediate bump in retail sales, "which are closely tied to exchange rates."
Ward added that with a strong dollar, she expects same day and overnight shopping trips to pick up.
Canadians returning after more than 24 hours abroad can claim tax and duty exemption on goods worth up to $200. After 48 hours, the exemption rises to $800.
The dining scene in Bellingham seems specifically designed to attract overnighters from Vancouver.
"We have 13 craft breweries here and a new one just opened up," Ward said.
While Bellingham is usually quite busy with tourists during July and August, local business really appreciate Canadian cross-border shoppers during shoulder season in the spring and fall.
A strong Canadian dollar is also a powerful incentive for Canucks to hop across the border to take cheap flights from Bellingham International Airport to Hawaii, Palm Springs, Las Vegas, San Diego and other sunny destinations.
Traffic at the airport peaked in 2013 thanks in part to a 95 cent Canadian/U.S. exchange rate. About 65 per cent of Bellingham airport's passengers are Canadian.
But as the Canadian dollar fell and discount travel from Vancouver International Airport expanded, passenger traffic in Bellingham plummeted 32 per cent by the end of 2016, according to Sunil Harman, director of aviation.
Allegiant and Alaska Airlines responded by cutting capacity, but with the Canadian dollar on the rise that will start to reverse, he said.
"We've seen an uptick recently and we've seen the economy stabilize, but the leisure market is the last to come back in any economic recovery," he said.
Consumers still sitting on their wallets probably shouldn't expect the Canadian dollar to fly much higher.
Shaun Osborne, chief currency strategist at Scotiabank, said he doesn’t expect the Canadian dollar to rise much more, despite Canada's strong economic performance as of late.
“A lot of the good news is already priced in at this point,” he said.
with a file from The Canadian Press