The value of the Canadian dollar is a lot like gas prices. Everybody talks about it when it's either very high or very low and everybody is an expert on what's happening.
Most of the actual experts don't know what's going on, either. There seems to be an expectation that economists can predict the future, yet they are no more reliable than weather forecasters when it comes to anything past 72 hours.
Financial reporters were breathlessly reporting Thursday morning that one market analyst was predicting the dollar could hit 59 cents against the U.S. buck this year, eclipsing the record low hit 14 years ago, when the loonie was only worth 61.79 cents US on Jan. 21, 2002.
The prediction came from David Doyle of Macquarie Capital Markets Canada and it's gotta be true because last February, when the Canadian dollar was worth more than 80 cents, Doyle looked in his crystal ball and said he saw a 69 cent loonie arriving in the next 12 months.
And now here we are!
One spot-on prediction isn't much of a sample size and it doesn't make Doyle or any other economist the Amazing Kreskin.
A quick Google search quickly proves the point. In July of 2014, when the Canadian dollar was worth more than 93 cents, he predicted the Canadian dollar would hit 80 cents by the end of 2016. On one level, he was right... except that it reached 80 cents last spring, more than a year-and-a-half earlier than he thought it would.
This is not to say Doyle or other economists don't know what they're talking about. Rather, it's to stress that their forecasts are educated guesses and they are guesses with quite a bit of leeway. Take his most recent prediction. If the dollar hits 59 cents by spring, that's still an accurate forecast for him and if it's 55 cents at Christmas, he'll still be correct.
So let's get past largely meaningless predictions to get to what this all means for area residents.
While fuel prices have tumbled, particularly in Prince George, food prices, especially fresh fruit and vegetables coming from south of the 49th parallel, have soared. Any savings accumulated at the gas pump are being eaten by the cash register at the grocery store, although it's a great excuse to stop eating yucky fruit and vegetables and support exclusively Canadian food producers.
Less cauliflower, more bacon.
Excellent!
All joking aside, locally and regionally grown food, particularly fruit and vegetables, suddenly looks quite appetizing. The local farmers markets could be seeing brisk business this summer and fall, thanks to the suffering loonie.
At an economic sector level, if the dollar stays low for several years, that could help Prince George and not just in forestry. When Canadians have to mortgage their home for a stateside holiday, that means our American cousins can come up here for good times dirt cheap. Suddenly, there's plenty of value for Americans travelling through Prince George on their way to their bucket-list holiday to Alaska to stick around for awhile. Guide outfitters and other area tourism operators should be rubbing their hands in glee, since the low Canadian dollar is also coinciding with growing U.S. consumer confidence. The national tourism sector will also benefit from Canadians looking at "stay-cation" options over trips to Vegas, Palm Springs and Oahu.
While Canada shouldn't expect a flood of heavy industry opportunities moving north, there could be some significant business to be done for American customers, particularly if that product or service can be provided digitally. That opens the door to everything from call centres and financial services to creative opportunities in music, writing, design and software development.
Vancouver and Toronto could be hopping again soon with a flood of TV and movie production crews, looking to exploit the currency value difference. Prince George saw a few crumbs from that activity the last time the dollar tanked for years at a time. Remember the Northern B.C. Film Commission? How about Eight Below, Dreamcatcher, Reindeer Games and Double Jeopardy, the Hollywood movies that spent millions during local shoots?
So don't cry and pout for too long about that low loonie. That bird could be delivering some nice benefits onto Prince George in the not-too-distant future.
