Opinions The Sexy Loonie Makes Her Move By Dennis Leong fe just in! The Canadian dollar is at par with the US! Those of us with even a slight interest in our economy —or rather, our economy in relation with the American economy —have probably been watching our loonie creep up on the US greenback over the course of the past year. And by “watching,” I’m talking about occasionally glancing in the business section of the newspaper. After all, when you’re done checking out the sports section and the “new” Peanuts comic, what else is there to read? But something strange happened a month ago: The Canadian dollar reached par. Well actually, it cock- teased us by stepping over par only to withdraw at the end of trading. It wasn’t until the next day when it finally pulled off those cotton fibre panties and said “use me and abuse me— greenback style!” It was like a switch had been flicked. The teeming masses, salivating at the deals to be had, broke loose the minute the dollar hit the big one dot-oh- oh. Border trips were hastily arranged and we rolled en masse towards the 49th, eager to snap up cheap bargains across the border. It was fast, and it was furious. And like all good things, it didn’t last long. Two things snuck up: Politics and ignorance; it’s funny how those two are always together. People demanded cheaper prices in Canada. Why, if our dollar was so magnificent, should we be paying higher prices in Canada for the same goods that are cheaper in Uncle Sam’s neck of the woods? Our dollar is strong! And like a... well, like a minority government scrounging for every last vote, the federal Conservatives leapt to the defence of consumers across the country. 8 Finance Minister Jim Flaherty agreed with consumers and called for all retailers to lower their prices to reflect the buying power of our sexy, shiny loonie. To show he meant business, he called a meeting with the retailers of Canada as if they were a physical entity joined at the hip and easy to transport into meeting halls. But Jim Flaherty had an ace card. Nobody calls a poker game without an ace or two up his sleeve. Harry Potter and the Deathly Hallows, read it and weep: Flaherty stunned retailers by revealing that he saved a whole $11.75 on the book by purchasing it in Washington D.C. instead of in Canada. And oh yes, he didn’t stroll across the border to purchase the book, he flew on our dime. And so our hero saved $11.75 minus the cost of a plane ticket. This should be a nail in the coffin, not of the retail industry of Canada, but of Mr. Flaherty’s pathetic career as a cabinet member. It’s not the retail industry that he should be cautioning, it’s his own government. Let’s forget that most of the stock “Our dollar didn’t become strong because of smart government policies; our dollar became strong because the American economy is tanking.” on retail shelves was bought before the dollar reached parity. The retailers are still buying stock from suppliers, and the suppliers haven’t lowered their prices. Why is the attention not on the suppliers? Is it because the suppliers will turn it around and blame duties and taxes imposed by our government on imports for the price difference between the countries? That would be bad for a minority government. Taking the side of your voters, no matter how financially irresponsible it may be—irony of ironies for someone with Flaherty’s position title in the cabinet—is by far the safer route for his political career— but not for the country’s economy. So to pre-emptively cover that angle Mr. Flaherty stated that the government wouldn’t be intervening by lowering prices for consumers. Sounds like a plan. We’ ve been paying the higher prices for our goods because our dollar has been consistently below the American line for decades. This is the way things are: A weaker dollar means one of our biggest purchasers is willing to buy our goods and pump money into our tourist and entertainment industry. Our dollar didn’t become strong because of smart government policies; our dollar became strong because the American economy is tanking. Our prices shouldn’t stay at the current level if the dollar stays strong, but it will take more than one month of currency parity before they come down. But spending our dollars in the USA doesn’t help our own country and economy one iota; we'll be back down below par in no time. It doesn’t take a genius to figure that out, and at the very least our own finance minister should know the consequences of what he’s implying. Unfortunately, he’s not concerned about our economy or our jobs; he’s only concerned about getting votes so he can still fly across the border on our dime to purchase trivial things. At least our dime is worth ten American cents now.