That's One for the Loonie
But, it's a team effort.
The Canadian dollar, or loonie, overtook the American dollar due to China, the American mortgage crisis, and Canadian good sense. But, it's always a mixed picture, and never just a national struggle only.
Firstly, Canada has China, and its rapacious thirst for raw materials, to thank for a loonie worth more than the greenback.
«When the [Canadian] dollar was trading just above 60 [American] cents, people thought there was something wrong,» says Darrell Bricker of Ipsos-Reid, a polling firm. «Now it seems that we are doing something right.»
That and good fortune: the industrialisation of China has boosted the world price of Canada's exports of oil, gas, minerals, metals and farm products. But the country has also done its housework: ten years of federal budget surpluses and a current-account surplus contrast with the twin deficits in the United States. In the end it was the «subprime» mortgage woes south of the border that elevated the loonie over the sickly greenback (or should that be the «Yankee lira»?).
Ouch!
But it's not all good news amid the nationalistic cheer:
As well, the province's exports of oil, gas and agricultural products now cost more.
At a business conference in Banff, Alberta Premier Ed Stelmach said every cent the Canadian dollar gains costs the provincial treasury more than $100 million in revenues a year, but pointed out some of it is offset by other revenue such as corporate taxes.
Some Americans are benefiting, too.
While the rise of the loonie - nicknamed after the image of the national bird, the loon, on the Canadian one-dollar coin - has made it less attractive for Americans to travel to Canada, it has been a boon to some Washington businesses. Issaquah-based Costco Wholesale Corp. has seen a steady increase in sales at its Bellingham warehouse near the Canadian border, and a Bellingham mall has reported substantial Canadian business. Seattle-based Kenmore Air is considering additional marketing toward our neighbors to the north for its seaplane service.
It just goes to show how much nationality and borders really count for.
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