Like many Americans, at least those living close to the border, the draw of a weekend trip to Canada is more attractive with the U.S dollar here worth nearly $1.40 there. So I headed to Banff, Alberta last weekend for the first time, and along the way tried to get some sense of how tourism and the economy were faring with the latest down of the periodic up-and-down cycle of our neighbor’s currency.
Before the trip even began, at the last minute, I added an extra night to the mini-vacation, booking a room at Fairmont Hot Springs – named the same as Montana’s resort – about two hours from Banff. I never do this, assuming the cost will be too high. But with the exchange rate that translates to about 30 percent off everything, and with a low-end room available, I thought, “Why not?”
This would not have been the case even one year ago, before the Canadian dollar’s precipitous drop, when everything there (for good reason) was considered expensive. Now, I’ve traveled north twice in three months, mostly because of the exchange rate and partially because of what caused it – cheap gas prices. So much of the country’s economy, especially Alberta’s, relies on energy that the soft market has hit it especially. Tourism, on the other hand, has experienced a mild renaissance.
Rob Taylor, vice president for the Tourism Industry Association of Canada, told CNBC that last year inbound tourism to Canada from the U.S. was up 8 percent over 2014. And Wayne Thomson, chair of Niagara Falls Tourism, said “2015 was the best year we’ve had since 2008, when Canada saw a big dip in U.S. tourism because the U.S. was requiring Americans to show a passport to re-enter the country.”
Flathead tourism has been impacted in the opposite way, with fewer Canadians spending money in the valley. But as low fuel prices lure more domestic travelers, bed tax collections in Whitefish and Kalispell were still solid in 2015. And both Glacier National Park and Glacier Park International Airport are coming off record years.
People are still coming here, including Canadians. And those I talked to during my weekend up north were aware of the Flathead, had visited, or wanted to in the future. Even with the exchange rate, goods and services in Montana are about the same for Canadians as they are in their country, where a beer costs about $7 and a lunch upwards of $15. They’re simply not getting the discount anymore. We are.
More problematic to Canadians, especially those in Alberta, is their country’s reliance on the energy sector, which has continued to shed jobs. Earlier this week, the International Energy Agency published a report that predicted oil sands “growth slowing considerably, if not coming to a complete standstill, after the projects under construction are completed.”
The jobless rate in Alberta hit 7.4 percent in January, the highest since 1996. Yet many of the Canadians with whom I spoke, while acknowledging their concerns, said, “It will bounce back” – referring both to the economy and the value of their currency.
After all, they’ve been through these cycles before. And so has the Flathead, for that matter. It happened in 2008. It really happened in 2002, when the Canadian dollar was worth a record-low 61.8 cents. When commodities stabilize, the exchange rates will begin moving in different directions again.
Northwest Montana’s economy is in much better shape than during the years following the recession, when the retail and service industry placed out welcome mats for Canadians, whose strong dollar and increased tourism to the area relieved some of the pain. Now the roles are reversed. Take advantage of it while you still can.