A Blessing In Disguise: Low Dollar Draws Tourists To Canada

 Giuseppe Valiante | The Canadian Press
 From British Columbia to Montreal, the low Canadian dollar is proving a boon to the tourism sector.

Dragged down by cheap oil and an international slump in commodity prices, the dollar is trading at around 70 cents against the greenback and enticing Americans to travel north of the border.

"We're getting more reservations at the last minute from Americans planning trips for the weekend," says Eve Pare, head of the Hotel Association of Greater Montreal.

Montreal-area hotels in December made more than $40 million, up more than nine per cent from a year earlier, Pare noted.

The city's tourism bureau said last summer's season — between June and August — saw a 10 per cent increase year over year in the number of American tourists crossing the border into Quebec.

For Katie, 20, a McGill University student from New York State, the low Canadian dollar means her tuition is "basically nothing."

Loonie Continuous Downward Spiral After New Year

The Canadian Press - Canadian dollars are pictured in Vancouver, Sept. 22, 2011. The Canadian dollar closed lower Monday amid sliding prices for oil and gold.

CBC

After a break on New Year's Day, the Canadian dollar resumed trading down more than half a cent from where it ended 2014, and was trading hands at 85½ cents US.

The sell-off appeared to be largely driven by strength in the U.S. dollar, as opposed to weakness in Canada`s currency.

Virtually all of the world`s major currencies have been losing ground when compared to the U.S. dollar of late, because the greenback is perceived to be a safe haven that people flock to during times of uncertainty.

Thirsty! 50Cent makes sandwich with wads of dollar bills

Canadian Dollar Plunges To 5yr Low

The Canadian dollar plunged to 86 cents today in the wake of turmoil in oil and stock markets. | CP

CBC
The Canadian dollar plunged to 86 cents today in the wake of turmoil in oil and stock markets.

The loonie was trading at a 5½-year low of 86.69 cents US.

Oil prices seemed to pause in the steep descent they’ve made in the last two weeks.

West Texas Intermediate crude, the contract traded in New York, was down just 18 cents at 11.30 a.m. ET, to $60.76 US a barrel, after falling more than $2 Wednesday.

Brent crude edged higher, up 23 cents, to $64.47  US. It is down 37 per cent over the last three months.

The discount for the Canadian contract, Western Canada Select, has widened in the past six weeks as the extent of the oil glut became evident.

Hockey | NHL salary cap hangs on Canadian dollar

 NHL commissioner Gary Bettman says he's keeping a close eye on the loonie and how it will affect next season's salary cap. Mary Altaffer/AP

Stephen WhynoThe Canadian Press
Fans and executives of teams that can spend up to the salary cap should put their rivalries aside to root for the Canadian dollar.

That’s because the value of the loonie for the rest of this NHL season will help determine just how far the cap deviates from the preliminary estimate of US$73 million the board of governors was given Monday. Commissioner Gary Bettman, owners and general managers will continue to watch the loonie carefully.

“Our best guess, and it’s got some variation in it, is that if the Canadian stays where it is now for the rest of the season, which is about 88 cents, that the cap for next season would be approximately $73 million,” Bettman said. “That’s a guess, it’s subject to variation, and it also assumes that the Canadian dollar stays where it is now.”

The NHL, more than any other major professional sports league, is beholden to the Canadian dollar because it has 23 U.S.-based franchises and seven in Canada. The Toronto Maple Leafs and Montreal Canadiens generate significant revenue, but when the Canadian dollar is weak, that amount is less when it’s converted to U.S. funds.