Canadian cross-border travel is heavily influenced by the currency exchange rate and a recent slip in traffic coincides with a slight slide in the dollar
There is a simple bellwether sign that Canadian cross-border day trippers, stung by a worsening currency exchange rate, are staying home a little more often, said Lynden, Wash. business representative Gary Vis.
“It’s easy to find a parking spot at Costco,” said Vis, executive director of the Lynden Chamber of Commerce, with a laugh.
“I wouldn’t say it’s huge,” Vis said of a recent decline in Canadian traffic, “but it’s definitely significant enough you can tell.”
Traffic of Canadians making cross-border trips was down some 16 per cent in February, according one measure tracked by the Canada Border Services Agency.
CBSA counted 323,100 Canadians crossing back into B.C., primarily from Washington, compared with 388,200 in the same month a year ago, according to numbers reported by Statistics Canada.
Stats Can analyst Peter Kalhok cautioned that the sharp drop in crossings also coincided with the Feb. 12 snow storm that hit the Lower Mainland, so it was “not a surprise that it dampened cross-border travel that weekend.”
However, Stats Can data also shows a shift in the number of Canadians crossing the border that started last November, which coincided with noticeable changes in the exchange rate.
After trending higher, with increasing numbers of Canadian travellers crossing the border from January through October, compared with the previous year, the trend switched.
From November through January, the Statistics Canada report found that traffic returning to Canada was down four per cent, 129 million versus 1.34 million for the same period a year ago, which coincides with a slump in the exchange rate.
“There is a definite correlation,” said Statistics Canada economist and analyst Sean Clarke.
“It’s hard to say, one for one (that) the dollar changes this much so the number of travellers changes this much,” Clarke said, because the agency hasn’t done analysis to isolate the exchange rate from other factors.
However, when the value falls, fewer Canadians travel and last fall, the value of a Canadian dollar went from a high of 78 cents against the U.S. dollar at the start of last October, to about 75 cents by the beginning of December.
Then the Canadian dollar fell as low as 73 cents by Dec. 26. Over the last month, the dollar’s value has wavered in the 74-to-75-cent range.
Edaleen Dairy in Whatcom County notices the difference when the exchange rate changes, said general manager Mitch Moorlag.
British Columbians, coming from the Lower Mainland’s metropolitan region of some 2.8 million, have long played a big part in Whatcom County’s economy just across the border, with its population of 221,000
For Edaleen Dairy, with stores in the border towns of Lynden, Blaine and Sumas, Moorlag said Canadians are a significant part of its market and with the exchange rate “now down in the low 70s, yeah, (traffic) is definitely in decline.”
Dairy products are among the staple products where U.S. prices, can be an attraction for Canadians crossing the border.
Moorlag said Edaleen charges US$2.89 to $2.99 for a gallon of milk, for example, which translates to about $4 Canadian, which is still a bit of a bargain for British Columbians, compared with a price of $4.49 to $4.89 on four-litre jugs of milk at Superstore.
“For us, the sweet spot is in the 80-cent (dollar) range,” Moorlag said. “Historically, it’s the number, at 80 cents or above, when we see a spike (in business).”
Irwin Cruz is a Canadian who works for a Seattle-based company who used to shop regularly in the U.S., spending $500 to $700 Canadian a month on groceries, but has pared back that spending due to the exchange rate.
“To answer your question, yes, we travel less for groceries, but we do it once every two months,” Cruz said in an email. “But we cross the border every weekend for gas, no brainer,” as gasoline remains a bigger bargain, even with the exchange rate.
Cruz estimates he and his wife save about $150 Canadian per month. Late last week drivers could buy regular gas for US$2.95 per gallon, the equivalent of about $1 per litre Canadian compared with anywhere from $1.34 per litre to $1.58 per litre at stations between Abbotsford and Vancouver.
For Richmond-based digital marketer Tim Wong, the differential adds up to about $15 per tank of gas. Otherwise the selection in stores south of the border draws him on his trips, every month or so, to shop in the U.S. hitting outlet malls as far as Lynwood or stores in downtown Seattle.
“There are a lot of products, whether its clothes or general retail items or groceries, you cannot find in Vancouver, or Canada,” Wong said, and the dollar hasn’t slumped enough to dull the attraction.