Low loonie is a double edged sword

For the Sault economy's sake, the Canadian dollar should ideally be worth between 80 and 90 cents U.S.

That from Tom Dodds, Sault Ste. Marie Economic Development Corporation CEO.

Having a lower loonie can be good for local exporters to an extent, but there is a point where the loonie goes too low for Canadian comfort.

The Canadian dollar has declined in value recently, and closed at 77.05 cents U.S. Wednesday.

"For example, with Essar Steel Algoma, you would think with a lower Canadian dollar you could sell a lot more steel in the U.S., but if you're buying a lot of materials from the U.S. like iron ore and coal then you're paying more because of the exchange rate," Dodds said.

"Having a very low Canadian dollar like what it is right now really hurts us and has an impact."

"The low Canadian dollar will raise prices of domestic goods in Canada if the importers, such as retailers right across the board, are paying more, and in turn the consumer will have to make up for those costs," said Monica Dale, Sault Ste. Marie Chamber of Commerce president.

"We haven't specifically heard from any of our members regarding the low Canadian dollar at this point but we do understand it'll become a factor for local business," Dale said.

"What businesses really like is stability," Dodds said.

"They want something they can count on, so if it stayed at 85 cents all along, to the point where they can project forward and know this time next year the dollar would be 85 cents, that gives them comfort, that allows them to do forecasts where they don't have to worry about exchange rates having an impact on their business," said the EDC CEO.

"I don't think it's a great situation because it does affect a lot of local businesses in a negative way, it affects very few sectors in a  positive way, so I would say a Canadian dollar value somewhere in the middle would be more beneficial for businesses in our city," Dale said.

"It's a double edged sword," Dodds said.

"It bodes well for tourism and our numbers are up on the Agawa Canyon Tour Train."

"The good news is that from the service side of our economy, particularly as it relates to tourism and accomodations, our tourism numbers are up and that has a positive impact on the community."

"The way the chamber sees it currently is…we see the tourists coming to Canada with the intent to spend money and infuse dollars into our local economy," Dale said.

Dodds said the lower loonie also cuts down on cross-border shopping, giving Sault, Ontario retailers a break.

"Because the U.S. dollar is high, those people that would embark on cross border shopping are less inclined to cross over," Dodds said.