# Canadian Currency Situation



## Anderson (Jan 10, 2015)

I am not a currency trader (nor do I play one on TV) and I'm not going to make any projections on this front, but I just thought I'd let everyone know that the Canadian dollar is getting close to $.80 US. At the moment, one USD buys about $1.18 Canadian, which is the lowest the Canadian dollar has been in a long time (there was a brief spike in 2008/09, but before that you have to go back to 2005 to find a stronger USD vis-a-vis the CAD). However, per Google Finance it should be noted that the USD bought over $1.50 CAD back in the 90s.

What does this have to do with VIA? When you see prices quoted on VIA's website, remember that they're quoted in Canadian dollars...so the USD price is substantially lower right now. Also consider that exchange rates are as favorable as they have been in a long time...so if you're thinking about booking the _Canadian_, _Ocean_, or anything else on VIA...well, it's as good a time as any to do that booking. Then again, who knows...the rate could go back to $1.50 and the _Canadian_ would suddenly be far cheaper than the _Empire Builder_ on a regular basis!


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## xyzzy (Jan 10, 2015)

As an American who worked for a Canadian company for 24 years, I can tell you that these swings in the FX rate do cause trouble. Even the National Hockey League has seen its operations influenced by the swings. At some point it becomes very inexpensive for Americans to take high-quality vacations in Canada. Of course, at the same time many Florida properties that depend on Canadian patronage will suffer.

The USD is also doing quite well at present against the Euro and the Japanese Yen, although not so well against the British pound.


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## NS VIA Fan (Jan 10, 2015)

As a Canadian.....it makes it more expensive for me to travel to the US and ride Amtrak. But the drop in the value of the dollar also makes Canadian products and services much more attractive to Americans and others and will also increase tourism.....just like readers of this forum who may now decide to take that long awaited VIA Canadian trip.

Heres one Canadian company that says for every penny the dollar drops......it adds 1 million to their profits....

http://thechronicleherald.ca/business/1262079-loonie-crude-losses-a-boon-for-many-n.s.-firms-official-says

But in the end....over the years.....it all balences out!


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## Nanook (Jan 10, 2015)

I think the exchange rate will help draw more visitors from the US. Just don't mention that in reality, where the exchange rate is now about covers the GST and the PST for them. Now under certain circumstances, some of this is refundable, if they fill out the proper paperwork, with documentation, but it is still nice of them to help pay for halfway decent medical care.


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## Bob Dylan (Jan 10, 2015)

Yep, I lived in Canada for a year in the 80s( Vancouver before Hong Kong bought it and things became very expensive!)and enjoyed having a favorable exchange rate! The exceptions were " imported" items like California Wine, Mexican products and cigarettes which even then were highly taxed!

My Canadian friends would drive to Blaine and Seattle ( women seemed to like Nordstroms)to shop for major purchases on the weekends since stuff was much cheaper, merchants took the Loonie @ par, Alcohol was sold on Sunday! and there was no GST!!


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## Swadian Hardcore (Jan 10, 2015)

GST is so annoying, it makes a lot of Canadian products and services more expensive than they already are. Vancouver is way too expensive as with a lot of the other Canadian destinations I've wanted to visit for a long time.

But it's good for me that the exchange rate is getting more favorable for Americans. I've always wanted to visit the Canadian Rockies and I've had Western Canada plans sitting around for too long! God willing, 2015 will be the year to do it! 20% discount? Yes, please! Still got no idea what to do about expensive Vancouver and super-expensive Jasper, even with Hotwire and Priceline.


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## Bob Dylan (Jan 10, 2015)

Vancouver can be fairly reasonable if you don't go in the summer and dont drink alcohol or hit the clubs!, Stay out of the trendy botiques and Trendy cafes also.

There are Hostels and B&Bs that are affordable ( they do fill up fast), We used to stay @ a very one called the Nelson House B& in the West End , and of course there is street food available everywhere! The Food Court inside the Sky Train/ Cruise Ship Docks @_ One Canada Place is a great place to use as a base for exploring Vancouver as well as the Grand Market @ Granville Island under the Granville Street Bridge on False Creek!

A day pass on the Sky Train is a great way to cheaply see the City and the Trolley Buses run all over town also!


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## Swadian Hardcore (Jan 10, 2015)

Sounds good, don't know about Jasper or Banff though, really expensive. Canmore sounds better, Field looks to be just as expensive, argh.......

VIA Rail is quite reasonable compared to all these expensive hotels. I tried staying at a "budget hotel" in San Francisco, The Mosser, and it didn't work out. I prefer Super 8 or Best Western.


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## Anderson (Jan 11, 2015)

One other thing is that at least as far as I can tell, Canadian gas prices are pretty well insulated from currency swings...the price of gas in CAD in Canada has roughly tracked the price of gas in USD in the US, albeit at a higher level.

By connection, this means that the decline in the CAD plus the general decline in gas prices has sent the price of gas in a good chunk of Alberta under $3.00 in USD (Canada-wide it is about $3.40, but that's down to Quebec, BC, and the North being rather expensive; it's down to about $3 Canadian in Calgary, which translates into $2.54 US right now). For reference, if the CAD drops below $1.30, you might actually see prices in Alberta be lower than prices in Montana/North Dakota if this holds. At $1.50 (where Canada spent much of the '90s), gas _would_ be cheaper in Canada than the US.


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## Blackwolf (Jan 11, 2015)

I can say that, converting $250USD into CAD last week for our upcoming travels on the 19th rendered a nice return. I had to unfortunately fork over Wells Fargo's non-member fee of $7.95 to do the transaction (thanks to US banking laws forbidding Credit Unions from dealing in foreign currency) but I got a flat rate of $275CAD in return.

Also, got a nice stack of the new Canadian $10 notes with _The Canadian_ on the reverse. One is now on permanent display in our curio case.


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## Nanook (Jan 11, 2015)

Anderson said:


> One other thing is that at least as far as I can tell, Canadian gas prices are pretty well insulated from currency swings...the price of gas in CAD in Canada has roughly tracked the price of gas in USD in the US, albeit at a higher level.
> 
> By connection, this means that the decline in the CAD plus the general decline in gas prices has sent the price of gas in a good chunk of Alberta under $3.00 in USD (Canada-wide it is about $3.40, but that's down to Quebec, BC, and the North being rather expensive; it's down to about $3 Canadian in Calgary, which translates into $2.54 US right now). For reference, if the CAD drops below $1.30, you might actually see prices in Alberta be lower than prices in Montana/North Dakota if this holds. At $1.50 (where Canada spent much of the '90s), gas _would_ be cheaper in Canada than the US.


One thing that is worth noting on gas prices: Taxes on gas are a lot higher in Canada than the US. Where IS all that extra money collected at the pump going in the US? NOT for transportation improvements, that is for sure! Of course where the tax money from gas goes in Canada doesn't seem to be for transportation either...


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## Anderson (Jan 12, 2015)

In the US, it doesn't go for transportation improvements...maintenance is eating that all up (and more). Bear in mind that where the US put in a national system of limited-access highways starting in the 50s, Canada's equivalents were put in much later and are far, far less extensive (they really seem to resemble about what the US had right around WW2).


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## Nanook (Jan 12, 2015)

Anderson, I was not clear. What I'm saying is that more money goes into the pockets of shareholders, etc. in the US.

One could argue that, due to Canada's lower population and size, more needs to be spent _per capita _on transportation, but the differences are interesting to think about and look into.

If the market will bear only a certain price range, it could be that companies take less of a profit in Canada.


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## Guest (Jan 12, 2015)

Regarding Anderson's comments, the differences between the highway systems in the two countries reflect both geography/population density considerations and differences in federal systems. There is no National Highway Trust in Canada; roads are primarily the responsibility of each province (though it is somewhat more complicated than that, as there is federal money involved)..

Canada ha twice the length of paved roads per capita as the US, though in absolute terms the US has 4.5 times as many miles of road. Clearly the cost per person of building and maintaining highways in Canada is higher, hence the higher taxation on gasoline.

Limited access freeways are not new in Canada. The Queen Elizabeth Way from Toronto to Niagara Falls was the first intercity divided highway in North America and opened in 1937, three years before the PA turnpike. Highway 401 across Sothern Ontario was started in 1952. The stretch across Toronto is the busiest highway in North America (yes more than I95 or I5), and at 16 lanes, one of the widest.

That reflects the high population density of Southern Ontario, whereas much of Canada is sparsely populated.Hence the Trans Canada Highway is still a two lane road through Northern Ontario, and likely to remain so, as there is no need for higher capacity.

BTW, on the matter of exchange rates it is highly unlikely that we will see the Canada dollar at its 1990s level, as the economic fundamentals are much different currently. The CAD is now about at its purchasing power rate, but since exchange rates tend to overshoot is could certainly go lower, obviously depending on how low the price of oil goes. I think it unlikely to fall much below $1.25 (i.e. US $ .80)


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## Anderson (Jan 14, 2015)

The CAD just went through $1.20 earlier this evening and it is currently straddling the line there.

My gut tells me I'm hungry that there will be something of an overshoot. The CAD has swung about 10% in a little over three months (which is a big swing in currency terms), and over half of that has been in the last five weeks or so. I think the prevailing question is how far down oil goes in the short term (and that is a very big, open question given how shattering the fall has been as of late).


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## seat38a (Jan 14, 2015)

Blackwolf said:


> I can say that, converting $250USD into CAD last week for our upcoming travels on the 19th rendered a nice return. I had to unfortunately fork over Wells Fargo's non-member fee of $7.95 to do the transaction (thanks to US banking laws forbidding Credit Unions from dealing in foreign currency) but I got a flat rate of $275CAD in return.
> 
> Also, got a nice stack of the new Canadian $10 notes with _The Canadian_ on the reverse. One is now on permanent display in our curio case.


Charles Schwab Bank. No forex fee, No ATM Fee, and they refund the ATM fee of the ATM owner at the end of the month. Also, the don't skim on the exchange rate. They convert it at the wholesale rate of that day. My dad and I used it for our trip to Asia. Very convenient and saved a ton of money on ForEx and ATM fees. Forgot to add NO MONTHLY FEE. They also have a phone app so you can snap a picture of checks to make deposits.


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## jebr (Jan 14, 2015)

Blackwolf said:


> I can say that, converting $250USD into CAD last week for our upcoming travels on the 19th rendered a nice return. I had to unfortunately fork over Wells Fargo's non-member fee of $7.95 to do the transaction (thanks to US banking laws forbidding Credit Unions from dealing in foreign currency) but I got a flat rate of $275CAD in return.
> 
> Also, got a nice stack of the new Canadian $10 notes with _The Canadian_ on the reverse. One is now on permanent display in our curio case.


I usually try to just hit up a currency exchange place at the border, or ideally go to an ATM across the border. I happened to hit one in Morris, MB that I don't think charged me an ATM fee or a conversion fee (or if it did, it wasn't noticeable.)

That being said, I didn't realize credit unions couldn't exchange foreign currency. I guess I'll have to remember to hit up one of the banks around here to do that conversion if I ever need to.


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## Ispolkom (Jan 15, 2015)

jebr said:


> Blackwolf said:
> 
> 
> > I can say that, converting $250USD into CAD last week for our upcoming travels on the 19th rendered a nice return. I had to unfortunately fork over Wells Fargo's non-member fee of $7.95 to do the transaction (thanks to US banking laws forbidding Credit Unions from dealing in foreign currency) but I got a flat rate of $275CAD in return.
> ...


My main credit union (Hiway FCU in St. Paul) is happy to exchange foreign currency (at least Canadian dollars and euros). They get it from Wells Fargo, but don't charge a fee. Like you, though, I just look for an ATM, or use a credit card that doesn't charge foreign exchange fees. Chase Sapphire is my go-to for that, as it is for most purchases.

That being said, I've found that the best credit union for foreign currency issues is the World Bank/IMF Staff Credit Union.


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