You may have noticed fewer Canadians shopping here in Niagara Falls, USA. While bridge congestion continues to exist, there is a definitive issue keeping our friends on the other side of the border: a weak loonie.
As reported by the CBC, Canadian trips to the United States dropped eight percent in May compared to the previous month.
The Canadian dollar was sitting at a horribly weak 72 cents to the US dollar. While Canadian shoppers usually flock to the US to save, a weak exchange rate has left the value of crossing the border to save on goods a wash at best.
The Bank of Canada hiked interest rates earlier this month, which may alleviate the exchange issue. The current Canadian to US exchange is 79 cents, which is a significant rally from the low point it was at last month.
This is not the first the a weak Canadian dollar has hit Niagara Falls, NY. In the 90s, traffic levels on Canada Day went from being categorized as “bananas” to being just about average. A similar situation occurred in the mid 2000s, with the Fashion Outlets becoming a ghost town. Niagara Falls was able to bounce back from the 2008 recession due in large part to the influx of Canadian shoppers.
Of course, Niagara Falls does not have the time to wait for a rally, with the city’s finances reaching a breaking point. A stronger loonie would certainly help, but time is running out.