This is a little off topic from my regular posts but it is relevant. For those of you south of the border you likely don’t follow the Canadian/US exchange rate (for that matter who is our Prime Minister?). Canadians follow it closely, because the great majority of goods we purchase come from the US so the exchange rate affects our cost of living (plus Canadians have a perverse need to follow all things American). Over the past year or so the US economy has gradually declined while the Canadian economy has been booming, the exchange rate difference has been gradually getting smaller and just recently it has been hovering around par … for the first time in over 30 years!
For the average joe that likely doesn’t mean much until you consider what the average American pays for goods vs what the average Canadian does. A Toyota Prius (20,950 vs. 29,500, 40%), Mac Book Pro 17" (2,799 vs 3,099, 11%), Adobe CS 3 Bible (49.99 vs 59.99, 20%), flight from Buffalo to LA vs flight from Toronto to LA (almost exact same distance) (239.60 vs 1,258.20, 524% … cough) . So my Canadian dollar is worth the exact same as the American dollar when I go to the bank, the NAFTA (free trade) agreement means these goods cross our borders with no tariffs, yet Canadians are getting hosed.
The other reason for this post is that unlike most Canadians I happen to have the majority of my income paid in US dollars since I mostly do contract work for American companies. In the past this has been great for two reasons. First, with a weak exchange rate I could get paid a good rate in US dollars and then convert those US dollars to Canadian currency and see a decent gain (sometimes over 30%). Secondly, when needed to I could discount my rates to land a deal, knowing that the exchange rate difference would help cover off any discounting I had to do. Now that the exchange rate is par, I have effectively taken a decent pay cut (factored with the price gouging I’m getting killed) and I have to be much more competitive to secure US deals since I can no longer easily undercut the competition.
So where is all this going. First, it’s just a rant because I’m ticked off at getting so blatantly price gouged. Second, an at par exchange rate is a huge wake up call for people doing business with American companies. We need to be much more competitive and offer much more than a good price in order to stay in and land deals. Third, the large cost differential means substantially higher costs, so I need to focus even more on being super competitive, pick the right jobs, offer the right services, and keep clients super satisfied.
The down trend of US dollar is not going to change for the time being, with their subprime woes, outher currency like aussie and canadian are going to appreciate more in future. Guess you may have more pay cut in future, but who knows, maybe you will have lots of clients from canada in future.
Good luck pal.
Looks good! Thanks for share this. Adam.
You think you have it bad? Just try living in the UK… everything costs the same in pounds as it does in dollars, e.g. if you pay $30 for Adobe CS3 Bible then it will be on sale in the bookshops here for £30, effectively double the price! Then we have the fiasco of paying over $2 a litre of petrol and don’t even get me started on the cost of housing…
here within holland we have a problem with the low dollar price. The euro is too strong and we are suffering from that with our export. The import however is quite good. THe iphone was very cheap
regards
Liu
Yes Liu, but euro doesn’t threaten position of dollar.
Obozy Rejsy
WOWW
For the average joe that likely doesn’t mean much until you consider what the average American pays for goods vs what the average Canadian does. A Toyota Prius (20,950 vs. 29,500, 40%), Mac Book Pro 17″ (2,799 vs 3,099, 11%), Adobe CS 3 Bible (49.99 vs 59.99, 20%), flight from Buffalo to LA vs flight from Toronto to LA (almost exact same distance) (239.60 vs 1,258.20, 524% … cough)
that’s interesting
thax man. didn’t fnd any thing for write
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I’m completely POed at the blatant gouging. Why why do they think Canadians are stupid?? I wanted to buy an Onkyo stereo receiver and the mark up is 50% over the US price! I hear there’s free trade? I hear our dollar is at par? With today’s shipping the costs are minimal and anywhere in North America in lets say 3 days depending on supply. I just want to know who to yell at to get things changed anyone know??
Just ran across this article on a report from BMO regarding the price differential between Canada and the US, ughhh.
Well you should try living in the UK, we just pay more for everthing due to price fixing
Yeah, the truth is you’ve had it good for so long you got used to it. It may be a shock to the system but it’s the times we live in unfortunately.
There’s plenty of people around the world who are in real financial trouble trying to keep pace with the cost of living.
You should try living in the Republic of Ireland. Everything seems cheap until you realise how much taxes and tolls add to the cost of living.
Absolute nightmare.
I’m moving to the Isle of Mann!
I personally have been shopping in the USA for books, just today I was about to purchase a book with a US price of $19.95 only to be told it’s going to cost me $27.95 + 7% PST, +6% GST ($31.58 total), needless to say, I found the book for $19.95 USD (no Taxes)across the border and only $2.00 for shipping, the book was published in August 2007. Why are we still paying large differences in prices despite parity with the USD.
The annual inflation rate has dropped to below 2%. This is a direct result of the stronger Loonie against the US. With so many of our imports coming from China and Chinese currency being fixed against the US, the weaker the US dollar gets, the more we can buy. Prices in electronics and household goods are definately falling. Made in Canada stuff is not. Makes sense to me.
just try to live in the United Kingdom, we pay for everthing because of pricing.
According to the 2008 NatWest Student Living Index survey, the average undergraduate student in the UK worked about 14 hours per week during term, and earned about £90 before deductions (tax and National Insurance).