Page 8 - Flathead Beacon // 2.4.15

8 | FEBRUARY 4. 2015 NEWS FLATHEADBEACON.COM As Canadian Dollar Drops,
Just
Sayin’...
“It’s no coincidence that the President is releasing his budget on Groundhog Day – it’s yet another budget that never balances, bursting with massive big government spending and burdensome taxes and regulations.”
Montana Sen. Steve Daines responding to President Barack Obama’s budget proposal.
“Any infrastructure plan that is paid for by all Montanans, but only prioritizes pet projects of certain legislators, will be met with a veto.”
David Parker, Gov. Steve
Bullock’s spokesperson, responding to a Republican- backed plan that would break up the governor’s Build Montana Act into seven different bills.
“Graham obstructed justice by lying to investigators about the crime ... The conviction and sentence should be affirmed.”
Assistant U.S. Attorney Zeno Baucus in his response to the appeal of Jordan Graham, the Kalispell woman convicted of murdering her husband in Glacier National Park.
Concerns Rise for Local Businesses
Value of Canadian currency hits six-year low, raising likelihood that visitor spend- ing could wane in Northwest Montana
By DILLON TABISH of the Beacon
Last week a family from Alberta visiting Montana would have needed to exchange $129.92 Canadian for $100 U.S. dollars.
The tumbling value of Canada’s currency is coming into per- spective, for both those who frequently flock to this corner of the state and local businesses that have relied on visitors from up north as vital economic buoys.
Plagued primarily by plummeting oil prices, the Canadian dollar — the loonie — reached its lowest value in six years last week, trading on the global market for 79 cents U.S.
A year ago, anxieties were already rising after the loonie dipped below 90 cents for the first time since mid-2009.
Now a series of events are compounding the situation up north, raising concerns that the country, or at least the prov- ince of Alberta, could be sliding back into a recession. Falling oil prices have created a ripple effect for an economy closely tied to oil values. Last week the Bank of Canada dropped the country’s lending rates in an attempt to offset the shock of sagging oil pric- es. Meanwhile, Prime Minister Stephen Harper, facing re-elec- tion this year, has said he intends to achieve a balanced budget by spring, meaning decreased government spending and the likeli- hood that there will not be any potential stimulus packages to aid the economy in the near future.
As a result, the loonie is expected to keep dropping in value through spring and potentially summer, and analysts are pre- dicting it could reach as low as 75 cents U.S., foreshadowing a po- tentially massive deterrent for Canadian visitation.
So what does that mean for places like the Flathead Valley, which have relied heavily on Canadian visitors and second home- owners as economic cornerstones?
“Canadians will still come if there’s something they want to do down there. But the spending is not going to be what it was,” said Canadian economist Donna Townley, an instructor at the University of Lethbridge in Alberta. “People are going to change their spending habits. They definitely will want to come for the weekend but they’re going to have to reconsider what they’re go- ing to do.”
She added, “It is going to impact the valley.”
More than 913,000 Canadians visited the state annually in recent years, collectively spending $275 million on average, ac- cording to government data.
Concerns about reduced Canadian spending cast a cloud over last week’s annual Flathead Valley Economic Forecast event at
The Canadian, American and Montana flags. BEACON FILE PHOTO
Flathead Valley Community College.
Brad Eldredge, director of Institutional Research, Assess-
ment and Planning at the college, described the situation as one of the largest risks facing the local economy in 2015.
Eldredge said the valley experienced slower employment growth last year of roughly 0.6 percent. Projections are that the county will see 1.7 percent job growth in 2015, although several risk factors could deflate gains, including uncertainty in the na- tional economy and rising interest rates that could affect the real estate market.
“I see slow, steady broad-based growth continuing (in 2015),” he said.
Yet the Canadian factor looms large.
Eldredge said the Flathead Valley has developed an impor- tant relationship with Canadians, especially during the reces- sion when the loonie traded high and visitors increasingly trav- eled to nearby border towns such as Whitefish and Eureka.
On the flip side, gasoline prices are the lowest in over five years, and Eldredge said this could fuel greater tourism in the U.S., benefiting popular destinations like Northwest Montana, where Glacier National Park is a significant attraction.
“Gas prices are extremely low and that should help tourism. It makes it cheaper to drive here and hopefully fly here,” he said.
“But as the American dollar continues to go up, that could hurt the (tourism) industry in terms of international visitors.”
The declining Canadian dollar could also impact the local construction and real estate industries, which have been aided by second-home buyers or retirees from up north.
Chuck Stearns, city manager in Whitefish, echoed Eldredge’s assessment.
“Canadian investments have really helped us. I’m a little con- cerned about the Canadian influence now,” he said. “We may see a lot of Canadian investment that helped us in the past years dry up a little bit.”
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