US$ decline hasn't encouraged foreign shoppers

[KipWellsFan]

courtesy cbc.ca

http://www.cbc.ca/story/business/national/...vel-050210.html

 

Soaring loonie hasn't caused more U.S. shopping: StatsCan

Last Updated Thu, 10 Feb 2005 15:36:06 EST

CBC News

 

OTTAWA - The soaring Canadian dollar made it cheaper for Canadians to shop in the United States. But a new study by Statistics Canada says there is little evidence it has led to an increase in cross-border shopping.

 

International travel figures show that Canadians made 21.4 million same-day auto trips south of the border in the first 11 months of 2004. That was only slightly higher than the 20.9 million trips recorded for 2003 as a whole, which was the lowest number since 1974.

 

"Even with the loonie at 84 cents US, Canadian consumers have not not shown a greater inclination to cross the border to shop," Statistics Canada said.

 

The study points out that this marks an end to a 20-year phenomenon that saw the number of cross-border visits correspond directly to how much a Canadian dollar buys in the United States.

 

The Statistics Canada study says the last time the Canadian dollar appreciated noticeably against the U.S. dollar – in 1991 – the number of Canadians making same-day car trips into the U.S. exploded to 59.1 million. When the loonie lost some of that strength after 1992, the number of cross-border trips plunged 55 per cent to 35.9 million.

 

And it's not just Canadians who have been staying away from the United States recently.

 

"Canada has been very much like the rest of the world in shunning the United States as a destination, despite the surge in several other major currencies against the U.S. greenback," the study's author wrote.

 

The drop in cross-border shopping has shown up in the dramatic decline in Canada's travel deficit with the United States. It improved from a record deficit of $1.9 billion in 1991 to $930 million in 2004, the federal agency said.