Loonie back at par

Last Updated: Thursday, December 20, 2007 | 11:18 AM ET
CBC News
The Canadian dollar was trading above par with the U.S. dollar for the first time in more than two weeks on Thursday.

The loonie was quoted at $1.0018 US in mid-morning trading, up just over half a cent from Wednesday's close. It went as high as $1.0045 US in earlier trading.

"It doesn't appear that there was any news to fuel the move, likely just a big buyer," said BMO Capital Markets economist Benjamin Reitzes.

The loonie hit a modern day high of $1.1030 US in early November before it began a steady retreat as investors sold off positions in the Canadian dollar as commodity prices slipped from record highs.

The dollar fell below 98 cents US on Dec. 13 before slowly recovering to parity.

Since early 2002, when the Canadian dollar was worth 61.79 cents US, the currency has seen a steady increase in value as prices of oil and other commodities Canada surged and the U.S. dollar weakened against a wide range of currencies.

Lofty loonie named Time's top Canadian newsmaker

Last Updated: Thursday, December 20, 2007 | 6:41 AM ET
CBC News
The Canadian dollar made headlines throughout 2007, and its turn from lacklustre to lofty secured its fame Thursday as Time magazine's Canadian Newsmaker of the Year.

Over the past 12 months, the loonie has flirted with parity and smashed record highs against the U.S. greenback.

It began the year at 87 cents and for the first third of the year seemed to be a currency that had peaked.

Then in April, the loonie's value began to climb. It was trading at 96 cents by July.

"And suddenly what seemed unthinkable was entirely possible — that we could have a Canadian dollar worth the same as the U.S. dollar," said CBC's business host Danielle Bochove.

In late summer, though, the explosion of the subprime debt crisis south of the border created a bit of a setback as global investors scrambled, abandoning the Canadian loonie.

But as markets stabilized, the loonie resumed its climb and hit parity in September.

The Canadian dollar rose to $1.10 US in early November before falling in the middle of that month.

Michael Elliott, international editor of Time, said there were other candidates for the title, such as former media baron Conrad Black, but the loonie interested him because it represented a wider issue.

"The currency of Canada is not solely a Canadian story. It's a global story that has to do with changing balances in the international economy and significantly … a weakening of the American economy," he told CBC News.

Time's Canadian Newsmaker of the Year is an annual editorial special that began more than 10 years ago.

Time defines the newsmaker as the person, place, group or thing that has the most impact — for better or for worse — on the news in Canada.

Loonie briefly dips below parity as oil prices tumble

Last Updated: Tuesday, November 27, 2007 | 5:30 PM ET

CBC News

The Canadian dollar briefly fell below parity with the U.S. dollar on Tuesday, as oil prices shed more than $3 US a barrel.

The loonie dipped as low as 99.97 cents US in mid-afternoon trading, the Bank of Canada told CBCNews.ca.

That marked the first time since Oct. 4 that the Canadian dollar was worth less than its U.S. counterpart. But the loonie's journey below parity lasted only a few minutes. The dollar quickly regained ground to close the trading day at $1.0050 US, which was off 0.39 of a cent from Monday's close.

The Canadian dollar reached parity with the U.S. dollar on Sept. 20 — the first time it had been that high in almost 31 years. It continued to rise over the next few weeks, topping out at $1.1030 US on Nov. 7. In the three weeks since, however, it has been on a long slide.

Some analysts say it's simply a case of the value of the dollar falling after going up too quickly.

Allison Mendes, portfolio manager with MFC Global Investment Management, said the loonie needed to come down. "It was in overbought territory," she told CBC News.

Steve Butler, director of foreign exchange trading at Scotia Capital Markets, called it "a healthy correction."

BMO Capital Markets said the number of Canadian dollar "net longs" — the difference between the number of futures contracts that are betting the loonie will rise and the number betting on a fall — is it the lowest level in eight months. That "net long" number has fallen for six straight weeks as traders increasingly bet against a rise in the Canadian dollar.

Curbing the loonie's ascent has been the expectation that the Bank of Canada may cut interest rates to keep the economy going. The bank's next interest rate decision comes on Dec. 4.

Also weighing on the Canadian dollar Tuesday was a sharp drop in the price of crude oil. On the New York Mercantile Exchange, January light sweet crude was down $3.28 at $94.42 US a barrel.

The sharp drop came amid reports that members of OPEC are considering an output increase to help reduce the price of oil, which hovered near $100 US a barrel recently.

Concerns over an economic slowdown that could reduce demand were also cited by analysts as contributing to Tuesday's drop in prices.

Iran leader dismisses US currency

Iranian President Mahmoud Ahmadinejad has suggested an end to the trading of oil in US dollars, calling the currency "a worthless piece of paper".

The call came at the end of a rare Opec summit, and was opposed by US ally Saudi Arabia.

The Iranian president had wanted to include the attack on the dollar in the summit's closing statement.

The communique made little mention of the dollar, however, focusing instead on energy security and the environment.

The summit in Saudi Arabia was only Opec's third in 47 years.

During the talks, Opec members revealed differences about the future direction of the exporters' group.

But Opec leaders ended with a pledge to provide the world with reliable supplies of oil.

Unfair trade?

Speaking after the end of the summit, Mr Ahmadinejad said all leaders at the meeting were unhappy with recent falls in the value of the dollar.

The dollar has weakened considerably against the euro and other currencies in the past 12 months.

Its decline has affected the revenues of Opec members because most of them price and sell their oil exports in the US currency.

Mr Ahmadinejad said that all Opec countries had showed interest in converting their cash reserves into other currencies.

"They [the US] get our oil and give us a worthless piece of paper," he told reporters.

But Saudi officials were against including any such language in the declaration. One is reported to have warned that it could add to the pressure on the dollar.

However, in the communique Opec did make a reference to the debate, by committing itself to studying "ways and means of enhancing financial co-operation".

Iran's oil minister said that this would allow the formation of a committee to study the dollar's affect on oil prices and investigate the possibility of alternative trading currencies.

Political agenda

The summit was also marked by divisions over the role of Opec in the world oil market.

Venezuelan President Hugo Chavez and his Ecuadorean counterpart, Rafael Correa, whose country rejoined Opec at the summit, both argued for a more political agenda for the group, but ran into opposition from US ally Saudi Arabia.

King Abdullah, the head of state of the host nation, Saudi Arabia said: "Those who want Opec to take advantage of its position are forgetting that Opec has always acted moderately and wisely.

"Oil shouldn't be a tool for conflict, it should be a tool for development."

President Chavez had opened the meeting with a warning that oil prices could double if the US attacked Iran.

Oil has been hitting record peaks of well over $90 a barrel as markets believe the Organisation of Petroleum Exporting Countries will not boost production, despite calls from oil-consuming countries such as the US to do so.

Venezuela's president said the price of crude could reach $150 or even $200 a barrel.

Canadians shopping in U.S. pushing border resources to limit

They're filling a border refugee processing centre to capacity on the weekends, but these weary travellers entering Canada from the U.S. aren't seeking asylum — they're cross-border shoppers lured south by the loonie's record-breaking showing against the Yankee greenback. Bargain-hungry shoppers — often arriving by the busload — have been choking key border crossings across the country on weekends, straining resources at the border and forcing officials to scramble to find staff and facilities to process their purchases. In Ontario, a building intended to handle refugee claimants has been pressed into service to deal with the sheer volume of shoppers. All across Canada, the story is much the same as Canadians cash in on a dollar that's been worth more than its U.S. counterpart for weeks. Residents of St. Stephen, N.B., endured a two-kilometre lineup of vehicles snaking through their small town bordering on Maine during the Remembrance Day weekend. At the same time, the wait at the Pacific Highway border crossing in Surrey, B.C., was about four hours long. In Ontario, the crush of cross-border shoppers has led to extraordinary measures. Last Sunday, 50 chartered shopping buses carrying up to 55 people each began arriving after 4 p.m. at the Fort Erie crossing from Buffalo. With no personal exemptions on same-day travel purchases, hundreds of shoppers had to be processed for tax and possible duty payments. "We had to park the buses in our commercial area so that we could orderly process them, [and] we did open up extra facilities," said Jean D'Amelio-Swyer, a spokeswoman for Canada Border Services Agency. "We opened up a refugee processing centre and we had some extra cashier capability."
Problem is, there's only so many people you can put in those buildings at the same time, said D'Amelio-Swyer. As a result, after waiting an hour to cross the border, same-day shoppers then faced a two- to three-hour wait for customs agents to process their goods. "At minimum, these people have to pay PST and GST on their goods," she said. "There may be some duties applicable if the goods are not made in North America." Border agents were already working with stretched resources before the dollar's historic climb and many are now working overtime to handle the current crush, said Ron Moran, president of the Customs Excise Union. "It's still relatively early as a phenomenon, but we're already hearing that they won't be able to hold that line indefinitely," Moran said.
Early stages of bargaining
The country's 10,000 customs and immigration offers have been without a contract since June 21 and are in the early stages of collective bargaining, but no job action is planned, he added. "If the union were to start exercising pressure, it would get disastrous pretty quickly, [but] we're not suggesting that we're at that stage," he said. On a relatively calm Tuesday afternoon at the Queenston-Lewiston border crossing near Niagara Falls, Ont., shoppers that passed through customs after a mere 30-minute border wait weren't all that impressed with the goods to be had south of the border. "There wasn't any really huge deals. There was some on video games, which I primarily came for. It was mostly toys and stuff for Christmas," said Gina Robinson, 38, who made the two-hour trip from her home in Aurora, Ont. "I probably wouldn't be in a huge hurry to come back because it's the whole headache with the border. We were panicking, looking at our watches thinking, 'What time are we leaving, what time are we leaving?' " How high would the dollar have to go to lure Robinson back to the malls in New York state?
Deal on turkey
"A buck-fifty. In my perfect world, yeah. Otherwise, no." All the bargain hunting amounted to little more than Thanksgiving turkey for another Ontario woman who made the trek. "I feel the prices were not that good, about the same as in Canada," said Pauline Rochon of Lowbanks, Ont. — about an hour's drive from the Queenston bridge. When asked if she managed to ferret out any deals, Rochon replied: "Only on turkey at 29 cents a pound." The loonie's strong performance has turned border traffic flow in Surrey, B.C., somewhat on its head, said Len Dasilva of the West Coast Duty Free shop. "The busiest use to be on a Sunday when U.S. traffic was heading back. It's switched to Friday and Saturday now," said Dasilva.
'Buying habits are different'
"We lost the U.S. traffic and made it up with Canadians somewhat, but the buying habits are different. Canadians tend not to spend as much per head as Americans." The same-day shopping phenomenon has also struck the Prairies, saddling border agents there with the same crush witnessed in Ontario and elsewhere. "We used to get the 48-hour exemption, the weekend traveller. But now we're seeing more and more same-day travellers," said Loretta Nyhus, Canadian Border Services Agency spokeswoman for the Prairie region. The limited facilities and staff to process those travellers "reduces our capacity to open up additional lanes because there's only so much capacity within the office." Anyone who's still eager to spend their loonies in the U.S. might want to do it on a weekday to avoid spending several hours in a refugee processing centre with busloads of shoppers, D'Amelio-Swyer said. "Anyone who's got the opportunity to plan a shopping trip on a weekday, that might be a better alternative because right now on weekdays we're not having this huge surge of buses coming back."

This says it all, even Santa goes to the USA to shop

Buyer Beware: U.S. lemons found on Canadian car lots

Last Updated: Tuesday, November 13, 2007 | 12:02 PM ET

CBC News

Hundreds of vehicles labelled lemons in the United States are turning up at Canadian dealerships where some unsuspecting customers are being offered defective cars, CBC News has learned.

In one instance, a Kia minivan that originally sold for $28,100 US in Florida was sold at auction to a Winnipeg dealer for $13,100 US after it was declared a lemon. It ended up on a Winnipeg car lot where it was recently found on sale for $24,980 and with no warnings about its history.

Unlike the U.S., Canada has no lemon laws despite attempts to establish them in British Columbia, Manitoba and Ontario.

Eric Schrepel, who bought the 2006 Kia minivan brand new from a Florida dealership, said the battery died four times in less than 18 months and no mechanic could solve the problem.

"There was some sort of short that they just couldn't locate in the car. Kia makes a very good car. But I think this one is just literally — it was just a lemon," Schrepel told CBC News.

The manufacturer followed the letter of the law in Florida and bought back the van. It later resold it to the Winnipeg dealer.

A salesman at the Winnipeg car lot would only say the van had been designated a lemon in Florida after being asked several times. Even then he guaranteed the van would perform properly.

While the definition of lemon varies by state, it most often means that despite several trips to the dealer's service department, a vehicle continues to have a serious problem.

Once a vehicle is declared a lemon, the manufacturer has to buy it back. But there's nothing to stop the manufacturer from reselling it.

While all 50 states have lemon laws, only 19 require the title of a car declared a lemon to carry a warning. When a dealer sells a lemon out-of-state, the lemon designation is often not carried over.

A CBC News investigation found that between May 1, 2006, and Nov. 5, 2007, 852 American lemons were imported into Canada, with more than 110 of those crossing the border since the Canadian dollar reached parity.

Have we topped out - Loonie loses almost three cents against U.S. dollar

Last Updated: Monday, November 12, 2007 | 4:47 PM ET

CBC News

The Canadian dollar continued to retreat Monday from the record highs that it reached last week against the U.S. dollar.

The loonie slipped 2.98 cents US to $1.0309 US in foreign exchange trading. There was no official close from the Bank of Canada as it was closed Monday for the Remembrance Day

The loonie has dropped more than 7 cents from its high of $1.1030 US that was reached on Nov. 7.

The Canadian dollar lost ground as the U.S. dollar found some footing against the euro and the U.K. pound.

The euro bought $1.4554 US, down more than a cent from the all-time high of $1.4752 reached Friday.

The British pound retreated to $2.0595 US from $2.0909 US. The pound has been trading recently at highs against the U.S. dollar not seen since the early 1980s.

Market watchers said the loonie is cooling after a rapid rise in recent months. The dollar just regained parity with the U.S. greenback in September.

"It's only natural when things start to overshoot and the pace of appreciation has been this fast to see corrections like this," said Mohammed Ali, vice-president at TD Securities in London.

Ali said a buildup in pressure for a December interest rate cut by the U.S. Federal Reserve will eventually help curb the loonie's recent slide.

3 cents UP, 3 cents down - what a day

Another volatile day for loonie

Last Updated: Thursday, November 8, 2007 | 5:18 PM ET

CBC News

The Canadian dollar continued to unwind from the record high it reached Wednesday morning, closing below $1.07 US in afternoon trading Thursday.

The loonie closed 0.91 cents lower at $1.0684 US.

Volatility was again the rule of the day — though not to the same extent as on Wednesday, when the dollar went through a three-cent swing. The swing on Thursday was about 1.75 cents.

Some analysts said profit-taking may have been behind the latest drop, but noted that the futures market still shows there are many who think the dollar will resume its climb.

Finance minister Jim Flaherty told reporters Thursday he was "concerned" by the dollar's recent appreciation, adding his voice to a growing chorus of political comment on the lofty loonie.

On Thursday, Quebec Premier Jean Charest asked Prime Minister Stephen Harper to convene a gathering of all the premiers to discuss the loonie.

Ontario Premier Dalton McGuinty met with Harper on Thursday. McGuinty said the province's manufacturing industry needs lower interest rates to cool off the dollar and said Harper "listened intently" during the private meeting.

The PM said earlier this week that the sharp appreciation of the dollar required "some reflection," but stopped short of saying the Bank of Canada should cut rates.

The dollar reached a modern-era high of $1.1030 US in early trading Wednesday before fading later in the day as oil prices fell back.

Oil prices retreated further to $96 US a barrel on Thursday, down 37 cents. That still leaves oil near historical highs.

The loonie has been heading steadily higher for much of the last five years as commodity prices surge and the U.S. dollar weakens against most of the world's major currencies.

Since the start of the year, the Canadian dollar has jumped 27 per cent in value against its U.S. counterpart.

Why the jump? China converts its $1.43 trillion in foreign exchange reserves from US into the euro and other strong currencies (Canadian).

Stocks Fall Sharply As Dollar Stumbles
Wednesday November 7, 1:34 pm ET By Tim Paradis, AP Business Writer
Wall Street Falls Sharply As Dollar Sinks to Fresh Lows Against Euro; Credit Concerns Remain

NEW YORK (AP) -- Wall Street plunged sharply and Treasurys jumped Wednesday after the dollar sank further amid speculation that China will seek to diversify some of its foreign currency stockpiles beyond the greenback. Further concerns about troubles in the credit markets sent the Dow Jones industrial average down more than 270 points.

Unease about the dollar dogged stock markets worldwide and in the U.S. comes a day after stocks continued their recent zigzagging to finish with sizable gains.
The 13-nation euro hit a fresh record against the dollar -- rising to $1.4729 -- before falling back. The dollar fell not only against the euro but in Asia following a report that a senior Chinese political figure said China should diversify its $1.43 trillion foreign exchange reserves into the euro and other strong currencies.

The euro's rally put it well above the $1.4554 the currency bought late Tuesday in New York. The previous record high, also set Tuesday, was $1.4571.
The swooning dollar for a time sent oil above $98 per barrel for the first time and also pushed gold higher.

"We've been seeing a bit of a tug of war," said Tim Swanson, chief investment officer at National City's Private Client Group, noting that investors have been grappling with concerns about spiking commodities and credit concerns but seeing reasonable growth in other parts of the economy.

In early afternoon trading, the Dow fell 275.48, or 2.02 percent, to 13,385.46. On Tuesday, the Dow gained about 117 points as some investors looked for bargains despite overhanging concerns about the banking industry's exposure to bad debt.

Broader stock indicators also pulled back Wednesday. The Standard & Poor's 500 index fell 32.92, or 2.17 percent, to 1,487.35 -- moving below the psychological benchmark of 1,500. The Nasdaq composite index fell 52.39, or 1.85 percent, to 2,772.79.

The Russell 2000 index of smaller companies fell 21.86, or 2.7 percent, to 779.91.
Government bonds jumped as the dollar sank and as investors transferred more money from stocks to fixed-income investments. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.33 percent from 4.37 percent late Tuesday.

Light, sweet crude fell $1.70 to $95 on the New York Mercantile Exchange but came off its high after the goverment reported inventories fell less than expected last week while refinery utilization remained flat.

December gold surged $10.00 to $833.40 an ounce on the Nymex.
Economic data arriving Wednesday appeared to offer some upbeat news, although investors remained concerned about the faltering dollar and rising prices for oil and gold. The Labor Department reported that worker productivity surged at an annual rate of 4.9 percent in the summer, the fastest pace in four years, while wage pressures eased.

Figures on U.S. wholesale inventories showed a greater-than-expected increase in September but that demand also held up.
"On one side we've got the forces of globalization and on the other side we've got woes from housing and largely related credit concerns," Swanson said. "As we see volatility on a day-by-day basis it's these two forces duking it out trying to see which ultimately will prevail.
"On days like today, it feels awful just like on days like yesterday it felt great," he said, referring to the market's gains Tuesday. "Once you step back from day to day gyrations and look at valuations you come away with a view that things are OK."

Still, he said a slumping dollar and rising oil are concerns. The economy could likely eventually absorb an "orderly decline" in the dollar and more modest moves in oil prices, he said. At present, though, there is concern that oil is acting as a "tax on U.S. consumers," by making them spend more on fuel than in other areas.

Beyond broader economic concerns, some corporate news didn't offer Wall Street much reason for cheering. General Motors Corp. reported a $39 billion loss for the third quarter due to an accounting shift. The company warned late Tuesday it would book a $38.6 billion noncash charge largely related to establishing a valuation allowance. A valuation allowance is taken when the future benefit of the deferred tax assets is less likely to be realized.
GM's loss came to $68.85 per share, compared with a loss of $147 million, or 26 cents per share, in the third quarter a year earlier. The stock fell $1.93, or 5.3 percent, to $34.23.
In other corporate news, Foster Wheeler Ltd. rose $8.53, or 6.3 percent, to $143.84 after the provider of engineering and construction services said growth abroad helped boost quarterly profits 70 percent.

Declining issues outnumbered advancers by nearly 7 to 1 on the New York Stock Exchange, where volume came to 881.4 million shares.
Overseas, Japan's Nikkei stock average closed down 0.94 percent. Britain's FTSE 100 fell 0.85 percent, Germany's DAX index fell 0.35 percent, and France's CAC-40 fell 0.46 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com

Given the speed of change, we could see a $1.15 US or $1.20 US [dollar].

Last Updated: Wednesday, November 7, 2007 11:46 AM ET
CBC News
The Canadian dollar continued its lofty flight as it topped $1.10 US on Wednesday, while the U.S. dollar continued to weaken on a signal from China that it might be selling off some of its huge U.S. dollar holdings.
Shortly after the start of trading in North America, the loonie was up more than 1.75 cents US at $1.1027 US. But by 11:45 a.m. ET, it had slipped back to $1.0892 US, still up 0.40 cents US from Tuesday's close.
The latest weakness in the U.S. dollar came after Chinese officals said they want to diversify their $1.43 trillion US of foreign exchange reserves away from the U.S. dollar.
'Given the speed of change, we could see a $1.15 US or $1.20 US [dollar].'—Derek Burleton, TD Bank senior economist
"We will favour stronger currencies over weaker ones, and will readjust accordingly,'' Xu Jian, a Chinese central bank vice director, told a conference in Beijing.
"This is the clarion call for all currency reserve managers around the world that the largest holder of U.S. dollars outside the country is seriously thinking of selling them for other currencies," said BMO foreign exchange strategist Andrew Busch.
The greenback fell to another record low of $1.4703 US against the euro, while the British pound hit $2.1051 US, a level not seen since since May 1981.
Higher oil prices also helped propel the Canadian dollar. The December futures contract for light sweet crude was up $0.87 US at $97.57 US per barrel at 10:20 a.m. ET.
Gold also shot higher Wednesday, gaining almost $22 US to hit $845.30 US an ounce before retreating to $838.40.
The latest advance of the loonie is sending economists back to the drawing board to redo their dollar forecasts. The currency has appreciated much faster than most observers had been expecting.
"I've given up guessing in the short run," TD Bank senior economist Derek Burleton told CBC News on Wednesday. "There's nothing, I don't think, that's going to keep the U.S. dollar from weakening further in the very near term. Given the speed of change, we could see a $1.15 US or $1.20 US [dollar]," he said.
The Canadian dollar regained parity with the U.S. greenback in September. The loonie has been setting new records since Oct. 31, when it topped its previous modern-day high of $1.0614 US, which dated back to August 1957.
Since the start of the year, the dollar has risen by about 24 cents US.

Loonie surpasses $1.10 US

Last Updated: Wednesday, November 7, 2007 8:38 AM ET
CBC News
The Canadian dollar continued its lofty flight as it passed $1.10 US on Wednesday while the U.S. dollar continued to weaken.
Shortly after the start of trading in North America, the loonie was up more than 1.75 cents at $1.1027 US.
The U.S. dollar continued to lose ground against other currencies. The greenback fell to another record low of $1.4703 US against the euro, while the British pound hit $2.1051 US, a level not seen since since May 1981.
Higher oil prices also helped propel the Canadian dollar. The December futures contract for light sweet crude was up $1.27 US at $97.97 US per barrel.
Gold also shot higher Wednesday, gaining almost $22 US to hit $845.30 US an ounce.
The latest of advance of the loonie will most likely send economists back to the drawing board to redo their forecasts for the dollar. The currency has appreciated much faster than many observers had been expecting.
The Canadian dollar regained parity with the U.S. greenback in September. The loonie has been setting new records since Oct. 31, when it surpassed its previous modern-day high of $1.0614, which dated back to August 1957.

Loonie hits $1.10 US mark in overseas trade

Last Updated: Wednesday, November 7, 2007 12:53 AM ET
The Canadian Press
The Canadian dollar broke through the $1.10 US mark in overseas trading early Wednesday.
Analysts say the high-flying loonie, which hit the 110.02 cents US mark, shows no sign of landing anytime soon.
The currency set a modern-era record last Friday when it rose to 1.07 cents US, the highest it's been since 1950.
Analysts say the latest surge is credited to an impressive run-up in the price of crude oil, which is now flirting with the $98 US a barrel mark Wednesday.
Analysts also point to surging gold prices and solid returns for other commodities, particularly wheat.
The weak American dollar is further boosting the loonie.

'Incredible' loonie tops $1.09 US

Doesn't surprise me.

Economists say run-up will end ... but when?

Last Updated: Tuesday, November 6, 2007 | 8:59 PM ET

The Canadian Press

The Canadian loonie broke through another psychological barrier Tuesday, rising above $1.09 US in after-hours trading and raising alarms that the rapid acceleration is both unsustainable and damaging to the economy.

With crude oil closing in on the increasingly inevitable $100 US a barrel era, and other commodities also showing stubborn strength, the Canadian currency had another day for the record books, adding on to Monday's previous all-time high close to finish regular trading Tuesday in Toronto at 108.52 cents US, up 1.34 cents.

"This is nothing short of incredible," said Douglas Porter, deputy chief economist with BMO Capital Markets. "I'd like to say we're nearing the end of the run, but I can't say that confidently."

In fact, the Canadian currency continued to head skyward in after-hours trading Tuesday, rising another 0.65 cent US to hit 109.17 cents US at about 5:15 p.m. ET — slightly more than an hour after trading officially ends in Toronto. It later slipped back to hover around $1.09 US in evening trading.

The currency has been breaking new ground since Friday when it rose above $1.07 US, the highest it's been since 1950 when the dollar was allowed to trade freely.

The latest surge was credited to an equally impressive run-up in the price of crude oil, up to above $96 US a barrel, and gold prices that surged by over $14 US an ounce, as well as solid returns for other commodities, particularly wheat.

However, there were growing concerns that the loonie's muscle was not only suspected of being at least artificially enhanced, but also likely to exert some pain to the Canadian economy.

Risks to economy increase

In a speech in New York, Bank of Canada senior deputy governor Paul Jenkins cautioned that despite firm commodity prices and strong domestic demand, "the magnitude of the [loonie's] recent appreciation appears to be stronger than historical experience would have suggested."

And given that the loonie's surge is even stronger than the bank anticipated only three weeks ago, he warned that the risks of damage to the Canadian economy has also increased.

"The combined effect of a weaker U.S. outlook and a higher assumed level for the Canadian dollar implies that net exports will exert a significant drag on the Canadian economy," he said.

Scotia Capital economist Karen Cordes said she also expects to see a decline in domestic retail sales as more and more Canadians are lured by low prices south of the border.

"Whatever the reasons or sources of the strength, the dollar has a huge implication for Canada and we're going to start feeling it soon," she said.

Exporters feel more heat

The sky-high loonie has already caused havoc with exporting sectors, particularly manufacturers and the forest industry that depend on selling products into the United States.

Last week, Canadian Auto Workers president Buzz Hargrove again called on Bank of Canada governor David Dodge to match the 75 basis point interest rate cuts in the U.S. as a way of reining in the loonie, which he said was affecting not only car exports, but also the entire auto parts sector.

Cordes also said she believes the bank should begin cutting rates early next year, though she doubted it would. A rate cut would make foreign investments into Canada less attractive, deflating demand for the Canadian currency.

U.S. analyst Dennis Gartman, who was among the first to predict the loonie's ascent past parity as far back as five years ago on the simple premise that Canada "has stuff the world wants," said the Canadian currency is now on such a roll that it may be difficult to reverse quickly.

"The Canadian dollar is like an aircraft carrier and you can't stop that on a dime, it's got a lot of momentum," said the author of the influential Gartman Letter out of Virginia Beach. "It'll stop when one of your major exporters closes shop and says he can't compete anymore."

But Gartman disagreed with critics of the high dollar, saying that in the long run a strong currency is good for Canada because it will force businesses to compete in the world despite the high currency.

Still, he said he is not "long" on the dollar and predicts any rise above $1.10 US will be unsustainable.

Oil hits another record above $97

Fears of dwindling stockpiles in the United States, a falling dollar and projections of strong demand push crude closer to $100.

NEW YORK -- Oil prices set another record high Tuesday, jumping over $2 on fears of dwindling supplies in the United States, projections for strong worldwide demand and a falling U.S. dollar.

A suicide bombing in Afghanistan that killed at least 35 people and a pipeline attack in Yemen also helped push prices higher.

Oil prices jumped above $96 Friday, another record, as traders bet on falling U.S. supply.

U.S. light crude for December delivery gained $2.72 to settle at $96.70 a barrel on the New York Mercantile Exchange, surpassing the previous closing high of $95.93 set Friday. Crude hit an intraday high of $97.07, surpassing the previous intraday record of $96.05, also set Friday.

Crude, already up more than $2 in morning trade, rose further after the Energy Information Administration issued a report showing worldwide demand unchanged, despite high prices.

EIA said the forecast for oil use growth worldwide in 2008 was unchanged at 1.5 million barrels per day. This was despite the fact prices have risen 20 percent.

The agency said world oil use would grow by 1.8 million barrels per day in the current quarter, slightly below previous estimates due to a drop in U.S. demand.

The world currently consumes about 85.6 million barrels of oil a day.

Total U.S. petroleum consumption is expected to increase by 0.5 percent in 2007 and 1 percent in 2008, despite the higher oil and petroleum product prices. Continued economic growth and forecasted colder average temperatures this winter than last winter could combine to push demand higher.

The rising demand's impact on prices was noted.

"Tight fundamentals continue to put upward pressure on oil prices," read the report. "Global oil markets will likely remain stretched, as world oil demand has continued to grow much faster than oil supply outside of the Organization of the Petroleum Exporting Countries."

EIA estimates oil prices in the fourth quarter to average $87 a barrel.

Crude got a boost earlier in the day on projections of another stockpile draw in the United States.

Analysts expect a 1.6 million barrel drop in domestic crude supplies when the government issues its weekly inventory report Wednesday.

Most of the decline is being blamed on an outage from Pemex, Mexico's national oil company. Mexico, after Canada, is the second largest source of imported U.S. oil.

The drop would follow last week's decline of more than 5 million barrels. It would also come while refineries are shutting down for planned maintenance - a time that should see rising supplies of oil as refineries turn less of it into gasoline.

Overseas, at least 35 people - including three children and six members of parliament - have been killed in a suicide bombing at a sugar factory in northern Afghanistan, the hospital chief in that province told CNN.

While Afghanistan doesn't produce much oil, violence in the Middle East always makes traders nervous. The fear is the conflict could spread to the broader region, which holds nearly two-thirds of the world's oil reserves.

An attack on an oil pipeline in Yemen also disrupted the shipment of 155,000 barrels of oil a day, the Associated Press reported.

The continuing weakness of the U.S. dollar, which hit $1.4556 against the euro earlier Tuesday, also contributed to climbing oil prices.

One analyst said oil will likely attempt to break $100 a barrel but actually doing so might be tough.

"We still feel that prices will ultimately advance to at least $98.50," Peter Beutel, an oil analyst at Cameron Hanover, wrote in a research note. "But there will be increasingly heavy long-term profit-taking as prices get closer to the magical three-digit level."

Crude prices have spiked more than 20 percent in the last three weeks. The jump is unusual because this time of year is known as a shoulder season - marked by slack demand - between the summer driving and winter heating months.

Crude is now at or near all-time highs, even adjusted for inflation. The last time oil was this high was the early 1980s, when it rose to $93 to $101 a barrel, depending on the inflation calculation used and the oil contract cited.

Fighting between Turkey and the Kurds in oil-rich northern Iraq, reports showing demand outpacing supply in the fourth quarter, a falling dollar and lots of speculative investing have all been cited as reasons for the runup.

Crude oil prices have surged nearly five-fold since trading below $20 a barrel in 2002. Analysts say surging global demand combined with limited new supply is the main underlying factor.

The surge in prices has also attracted lots of speculative investment money, further driving prices higher.

And the tight supply and demand situation magnifies the effect that geopolitical tensions have on prices, as there is less spare supply available globally to cover disruptions from places like Iran, Nigeria or Venezuela.

The falling U.S. dollar has also played a role, as oil worldwide is priced in dollars.

Oil-producing nations have less incentive to ramp up output if the buying power they receive per barrel is declining, and foreign consumers have less incentive to reduce demand if oil is, relatively, getting cheaper for them.

World News says that $120 per barrel is months away.

Yes, here I go again, to the USA

Yes, here I go again, to the USA for the 4th time in 2 months.

I think I have an addiction. It's called the "Canadian Dollar and what it's worth in the USA" addiction. Great deals everywhere, even at the car dealerships. You just have to arm wrestle the for a while. My buddy just saved about $15,000.00 off the cost of a new Honda Pilot. Great deal at about $29,500.00. Compare that to the price in Canada. Nuts. But, don't try and force this on people, not everyone likes to know.

And for everyone else, I was screwed today at the door by Canada Post. Nailed $37.00 duties and taxes for my $98.00 pair of Joe Rocket pants. Little did I know, there are places in Maine I could have had them shipped to and picked them up for NOTHING compared to $37.00. Another lesson learned. My boots are coming next week as a gift valued at $60.00. That means, NO DUTIES and NO TAXES.

Have a great trip all,

Savin in Maine

Loonie tops $1.08 US in overseas trading

Last Updated: Tuesday, November 6, 2007 7:48 AM ET
The Canadian Press
The high-flying loonie has cleared another symbolic milestone — topping the $1.08 US mark in early-morning overseas trading Tuesday.
Just after 6 a.m. ET, the Canadian dollar traded briefly at 108.007 cents US, before dropping back below the benchmark $1.08 figure.
On Monday, it closed up 14 basis points at 107.18 cents US. That close broke through the previous 50-year-old high that was reached on Friday.
A key factor in the Canadian dollar's rise is the price of oil. It was trading Tuesday above the $95 US a barrel mark.
Traders expect further declines in U.S. crude oil stocks and that's fuelling concerns that supplies may be inadequate going into the Northern Hemisphere winter.
Analysts think some traders and investors will try to push oil prices to the psychologically important $100-per-barrel level this week.

"Thank you for contributing to the U.S. economy..."

Uh oh...

CBC News

Freedom, as in 'feel free to wait'.

Loonie higher in record territory

Globe and Mail Update

November 5, 2007 at 5:48 PM EST

The unflappable Canadian dollar brushed aside falling oil prices and pushed higher into record territory Monday, with a new forecast calling for it to reach $1.12 (U.S.) in the coming months.

Surging commodity prices helped the loonie hit a major milestone last week, when it topped the Bank of Canada's previous official record high of $1.0614 set on Aug. 20, 1957. A number of economists and currency strategists revised their forecasts after last week's move, and although many say the currency is now above its suggested fair value, they agree that conditions seem ripe for further gains.

“The Canadian dollar is well positioned to extend current gains to peak at around $1.12 over the next two quarters,” Bank of Nova Scotia projected in a report Monday.

The loonie is being supported by a variety of factors, Scotiabank said, including a persistent weakness in the U.S. currency, speculative buying, strong commodity prices – particularly for crude oil – and the prospect of lower U.S. interest rates at a time when the Bank of Canada is expected to stand pat.

Canadian dollar continues to hover in record high territory, holding steady above $1.07 (U.S.). (CP)

Royal Bank of Canada raised its forecast for the Canadian currency on Friday, saying it will appreciate to around $1.08 before declining below parity with the U.S. dollar in the second half of next year.

The Canadian dollar has outperformed all other major currencies this year, rising 25 per cent against the greenback in 2007 and 5 per cent in the past month alone. It climbed even further Monday, finishing the session at $1.0718, up a smidgen from $1.0704 on Friday.

Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said everyone is talking about how much higher the loonie can go, and how quickly it can get there. “Having now broken above $1.07, the currency is in uncharted territory and still has the wind at its back,” he said.

The dollar initially weakened Monday as crude oil prices eased below $94 a barrel. Increased risk-aversion also gripped markets after Citigroup Inc. warned of billions more in loan losses and the resignation of its chief executive officer Charles Prince fuelled fears of further fallout from the subprime lending debacle.

Despite oil's decline Monday, commodity prices are still at record highs and the U.S. dollar shows no signs of breaking out of its funk.

“All that can be said on that front is that the currency has been on a one-way trip north for five years, and the two big drivers – strong commodities and a weak U.S. dollar – are still very much in place,” Mr. Porter said. He noted that currency markets have a tendency to overshoot – “sometimes for years on end and sometimes wildly so” – to levels above those that seem reasonable by any traditional economic measures.

Mr. Porter expects the Canadian dollar will reach $1.10 early next year, before pulling back to the 90- to 95-cent range.

Loonie shows mettle

After a record-setting day Friday, the Canadian dollar appears set for further gains into previously unexplored territory while credit worries to hamper stocks
By MALCOLM MORRISON The Canadian Press
Sun. Nov 4 - 6:05 AM

Federal Finance Minister Jim Flaherty discusses dollar parity as he speaks to the Rotary Club on Toronto on Friday. (Frank Gunn / The Canadian Press)

TORONTO — The loonie is cleared to takeoff to even higher levels after the Canadian dollar had an amazing run last week, blowing through 50-year-old highs against the U.S. currency on the usual suspects — a lower greenback, higher oil prices and in particular a blow out jobs report for October.

The Canadian dollar shot up as much as two cents US Friday after Statistics Canada announced that the Canadian economy created 63,000 jobs in October, much higher than the consensus of 12,000.

The employment increase dropped the official jobless rate to a 33-year low of 5.8 per cent, from 5.9 per cent in September.

"The direct response of the currency to the labour market report is not that unusual but what is unusual of course was the starting point for the currency — it’s already had an unprecedented rise in the last two months, never mind the last five years," said Doug Porter, deputy chief economist at BMO Nesbitt Burns.

"It’s gone from incredible strength to incredible strength."

The dollar ultimately ended Friday’s session up to a record high of cents US, well past the high of 106.14 cents US set in August, 1957.

The latest surge in the dollar coupled with further evidence of a strong economy makes it increasingly difficult for the Bank of Canada to use lower interest rates to cool demand for the currency.

"Overall the Canadian economy is on quite a roll here, the labour market is tight, and wage pressures are starting to creep up so it would be fairly difficult for the Bank of Canada to cut rates any time soon," said Craig Wright, chief economist at the Royal Bank.

"A fundamental move higher in the currency is fine, when you get into the speculative side of it, which I think we’re into to some degree now, then there may be some scope for the bank to offset some of that with a move but that’s probably a story for next year rather than this year."

Meanwhile, stock markets look set for a down week after the U.S. Federal Reserve last Wednesday cut interest rates by a quarter point to help mitigate damage from the contracting U.S. housing sector and keep the credit crisis from spreading into the broader economy.

Initially, the cut sent markets surging close to record levels but by the end of the week the mood turned more negative, despite the strong October jobs data, as worries resurfaced about credit conditions and the strength of financial companies.

Stocks have had a tremendous runup since the Fed cut interest rates a half point in September and investors hoped the worst of the credit troubles were behind the market.

However, at week’s end an analyst downgraded U.S. banking giant Citigroup to sector underperformer from sector performer, citing potential worries about its dividend payments.

And the Wall Street Journal reported that brokerage giant Merrill Lynch has engaged in deals with hedge funds to delay when it had to record losses on risky mortgage-backed securities.

It also said the Securities and Exchange Commission has started a probe looking at how Wall Street is valuing mortgage securities.

"It seems like credit market concerns, which really erupted in the summer and seemed to have faded, have never really gone away for the U.S. markets and they certainly have returned to the fore in recent days," added Porter.

The malaise also spread to the financial sector on the TSX, despite the fact that Canadian banks’ exposure to troubled U.S. mortgages is minimal.

"I think the broader concern of the credit turmoil we’re still living through for the economy is that it can squeeze the credit availability either directly or indirectly and I think that’s the concern for economic growth and more specifically for the financial services sector generally," he said.

Also weighing on investors was the message from the Fed last week that it’s done with this cycle of rate cuts since the economic data available so far indicates the damage from the housing sector is being contained.

"The standard view has been on Wall Street and elsewhere that the housing market is just so weak that there’s a real risk that it spills over to the rest of the economy," said Porter.

"But so far, evidence of a serious spillover is pretty hard to find."

Overall the Canadian economy is on quite a roll here, the labour market is tight, and wage pressures are starting to creep up so it would be fairly difficult for the Bank of Canada to cut rates any time soon. ... that’s probably a story for next year rather than this year.’
CRAIG WRIGHTchief economist, Royal Bank

Loonie closes above $1.07 US on strong job growth

Last Updated: Friday, November 2, 2007 | 8:41 AM ET

CBC News

The Canadian dollar gained almost two full cents against the U.S. greenback Friday following the release of a surprisingly strong jobs report in Canada.

The loonie closed the trading day at $1.0704 US, up 1.92 cents from Thursday. It went as high as $1.0730 US during the day, according to Bank of Canada data.

It's now at its highest level against the U.S dollar since the Canadian currency was allowed to float in 1950.

'We would not be surprised at all to see [the dollar] back at parity within a few weeks.'—Gavin Graham, Guardian Group of Funds

The Canadian economy added 63,000 jobs in October, pushing the jobless rate down 0.1 of a percentage point to 5.8 per cent — a 33-year low.

U.S. job growth was also much stronger than expected in October, adding 166,000 jobs when about 80,000 additions had been expected.

A weakening U.S. dollar, a cut in U.S. interest rates, economic concerns south of the border, strong oil prices and a healthy Canadian economy have all combined to push the loonie sharply higher.

The loonie hit parity with the U.S. dollar on Sept. 20 — a first in 30 years. Earlier this week, the Canadian dollar surpassed its previous post-war high of $1.0614 US, set in August 1957.

So far this year, the dollar has gained 24 per cent against the U.S. greenback, making it the best performer among the 16 most actively traded currencies, Bloomberg reported.

$1.10 US coming?

The speed of the dollar's ascent has forced economists to repeatedly revise their forecasts of just how high the loonie might fly. Many now see $1.10 US as a realistic near-term target.

"Crude oil could surely push the loonie up to $1.10 US in the near term, but not on a sustainable basis," TD Bank economist Pascal Gauthier wrote in a report Friday.

Gavin Graham, chief investment officer at Guardian Group of Funds, agreed that the loonie won't stay at these heights, especially after Friday's huge gain.

"We would not be surprised at all to see it back at parity within a few weeks, because what [a two-cent rise in one day] means is everybody and their grandmother is now long the Canadian dollar and short the U.S. dollar, and that only ends one way: with a big reversal," he told CBC News.

Speaking to reporters in Halifax, Prime Minister Stephen Harper said he doesn't comment on the value of the dollar.

"That is the responsibility of the Bank of Canada," he said.

Harper added the government has a lot of confidence in Canada's economy, but acknowledged the high dollar presents it with "some difficulties as well as some advantages."

'No quick fix': Flaherty

Some critics have urged the federal government to signal the Bank of Canada to lower interest rates to bring down the soaring dollar and ease the pressure on exporters.

But Finance Minister Jim Flaherty told a business group in Toronto it would be "a mistake for anyone to think there is a quick fix to this." He also declined to comment on central bank policy.

Sears Canada and Rexall Drug Stores on Friday joined a growing list of retailers lowering prices to reflect the high dollar. "Canadians expect us to give them lower prices in light of the dollar's value, and we are working to meet these expectations," said Sears Canada CEO Dene Rogers in a statement.

Wal-Mart, Zellers, the Bay and Indigo Books and Music have also slashed prices recently. Some car companies have lowered sticker prices or boosted incentives to keep customers from crossing the border.

Loonie closes in on $1.06 US

The Canadian dollar surged to a 50-year high against the U.S. greenback Wednesday after the U.S. Federal Reserve cut interest rates again, oil prices surged and the Canadian economy showed steady growth.

At the close of trading, the loonie was up 0.93 of a cent to $1.0585 US and traded as high as $1.0593 US.

The Canadian dollar has not been that high since Aug. 21, 1957, according to Bank of Canada data.

That's the same day the loonie reached its post-war high of $1.0614 US.

The loonie reached parity with the U.S. dollar on Sept. 20 and has just kept climbing in the six weeks since.

It's risen by 23 per cent against the U.S. dollar since the start of the year.

The loonie's rise was, in part, simply due to another drop in the worldwide value of the U.S. dollar.

Wednesday afternoon's Federal Reserve rate cut helped to drive down the U.S. dollar against most major currencies.

Also giving some support to the loonie Wednesday were rising oil prices, a relatively good August economic report for Canada, and the promise of $60 billion in tax cuts over the next five years outlined in Tuesday's economic statement.

Oil hits new record high

Canada's dollar is regarded as a commodity-driven currency that is closely tied to the fluctuations in the price of oil. Following the release of the latest U.S. oil inventory figures Wednesday that showed an unexpected fall in supplies, light sweet crude for December delivery surged more than $4 US to hit a record $94.45 US a barrel.

Earlier Wednesday, Statistics Canada reported that the Canadian economy grew by 0.2 per cent in August, surpassing the 0.1 per growth that had been projected by economists.

Market watchers also said the corporate and personal tax cuts contained in Tuesday's economic statement were stimulative and therefore loonie-positive.

FAQs: Cross-border shopping

Considering a cross-border shopping trip but unsure of what you'll save once you figure in duty, taxes, and credit card fees? Here are some answers to common questions from personal exemptions to bringing back artwork to calculating duty charges.

When is the best time to plan my trip?

It's difficult to predict when there will be a backlog of cars waiting to cross the border. If you live close to the border, you can gauge traffic flow by checking the Canada Border Services Agency's website which updates wait times at least once an hour. Other border offices also have webcams showing traffic waits. Make sure you have your identification ready to make crossing into the U.S. as fast as possible. Anecdotally, some people say if you're travelling on the weekend, aim to be at the border in the early morning — about 7 a.m. — to avoid lineups. Traffic at some border checkpoints also tends to be heavy on long weekends.

What's the best way to pay for my purchases in the U.S.?

Many consumers use their credit cards for ease, but buyer beware: a 2.5 per cent fee for out-of-country purchases is applied to credit cards from TD Canada Trust, RBC, Scotiabank, Bank of Montreal and CIBC. If you plan on spending a lot in the U.S. you may want to consider applying for a U.S. credit card or open up a U.S. banking account.

How much can I bring back with me?

The longer your trip, the more you can bring back. If you are going for a week or more, your exemption is $750 Cdn. You can bring back 1.5 litres of wine or 1.14 litres of liquor or 1.14 litres of wine and liquor, or 24 cans or bottles of beer. You may also bring back 200 cigarettes, 50 cigars or cigarillos, 200 grams of manufactured tobacco and 200 tobacco sticks. You can include tobacco and alcoholic beverages for a partial exemption and you can ship some of your items home before you cross the border. Be aware though the day you left for your trip is not counted as part of the week's seven-day calculation.

If you are away for more than 48 hours, you can bring back $400 worth of goods, 1.5 litres of wine or 1.14 litres of liquor or 1.14 litres of wine and liquor, or 24 cans or bottles of beer. You may also bring back 200 cigarettes, 50 cigars or cigarillos, 200 grams of manufactured tobacco and 200 tobacco sticks.

If you are going for more than 24 hours but less than 48 hours, you can bring back $50 Cdn worth of goods without paying duties. You must have the goods with you when you cross the border and you can't include tobacco or alcohol in the exemption.

If you go for less than 24 hours, you do not qualify for any exemption and must pay duties on all of your purchases.

I spent more than my exemption – can I combine my purchases with another person?

You cannot combine your personal exemptions with someone else's. You may make claims on behalf of your children if the goods purchased will be for their use.

What penalties will I face if I don't declare all of my purchases?

If you are caught lying, your purchases may be confiscated and you may have to pay a fine ranging from 25 to 80 per cent to get the goods back. You may also face prosecution and border authorities have the right to seize the car in which you're travelling and issue a fine for its return.

Border agents will seize undeclared tobacco and alcohol permanently.

If you're caught not declaring goods, you will be entered into the Canada Border Services Agency computer system and you may face scrutiny crossing the border on future trips for up to six years. You can appeal seizures within 90 days of the incident.

I want to bring my camera with me on my trip – how can I flag it so customs agents won't suspect it's a new purchase upon my return?

If you have something valuable you want to bring with you on your trip, ask a customs agent for a Y38 form. For goods without serial numbers, CBSA agents will give you a sticker to mark the product.

The CBSA warns that jewelry is often difficult to identify and therefore include on the Y38 form. You may want to consult a jeweller or insurance agent for an appraisal report. Carry a signed and dated photograph of your jewelry or certification documents to prove that you purchased the items in Canada.

What is the NAFTA exemption?

Many goods made in Canada, the U.S. and Mexico are subject only to the GST and applicable sales taxes. That means you can bring them back without paying duty, even if you're only across the border for a few hours.

The list includes books, cellphones, cordless telephone sets, video games, antiques, most types of original art, picks for climbing or mountaineering, one-handed pruners and shears (including poultry shears), juice extractors, hair-removing appliances, hair dryers, electric irons, microwave ovens, bread makers, indoor smokeless barbecues, and CD players.

The complete list is available here.

If I buy a sweater from a U.S. outlet but it was made in China does it qualify for the NAFTA exemption?

No. Clothes must be made in Canada, the U.S. or Mexico to qualify for the NAFTA exemption. If you exceed your personal limit, you will have to pay duty of 18 per cent in addition to provincial and federal sales taxes.

How is duty calculated?

Duty rates vary according to the item and may vary according to materials used. For example, sandals made solely of rubber have a different tariff rate from sandals made of plastic.

What items do I have to declare?

You must declare the following items if you are bringing them back across the border:

• Meat products.
• Dairy products.
• Plants, trees, cut flowers.
• Wood products.
• Fruits and vegetables.
• Pets, animals.
• Feathers and down.
• Seeds and nuts.
• Baby formula.

If you're planning on stocking up on groceries, you must abide by certain limits of 24 eggs, 20 kg of dairy products not worth more than $20 in value, 3 kg of margarine or butter substitutes, 20 kg of meat products, a maximum of one whole turkey or 10 kg of turkey products, maximum of 10 kg of chicken, maximum of 5 kg of edible meats, meat products from cattle, sheep, goat, bison, buffalo and a maximum of 250 g of caviar.

What other goods face special restrictions?

If you're buying a piece of artwork or an antique you should first contact the Department of Canadian Heritage as certain goods deemed cultural objects may require export permits.

Similarly if you plan to buy a firearm or a weapon, you should contact Canada Firearms Centre for authorization. Explosives, ammunition and fireworks must also receive clearance first from Natural Resources Canada.

Before bringing a car into Canada you must contact Transport Canada's Registrar of Imported Vehicles first to ensure it meets import and Canadian standards.

And finally, if you plan on buying a second-hand mattress you must get a certificate showing that it has been cleaned and fumigated.

Loonie hits 47-year high above $1.05 US

Last Updated: Monday, October 29, 2007 | 4:34 PM ET

CBC News

The Canadian dollar's upward charge continued unabated Monday, as it topped $1.05 US to reach its highest level since March 1960.

The loonie was quoted at $1.0501 US in mid-afternoon trading, up more than a full cent from Friday's close.

It later slipped back to close at $1.0496, up 1.03 cents US.

That leaves the Canadian dollar a little more than one cent away from its postwar high of $1.0614 US, set in August 1957.

Rising oil prices and the likelihood of an imminent interest rate cut in the U.S. were giving the loonie more support on Monday.

Crude oil futures topped a record $93 US a barrel in New York trading as an approaching storm prompted Mexico to shut about a fifth of its oil production.

Rising commodity prices tend to boost the value of Canada's currency, as Canada is a net exporter of oil and many other commodities. Gold prices were also surging Monday, up another $4.80 to $792.30 US an ounce — a new 28-year high.

The U.S. dollar fell to a record low against the euro on Monday. On Wednesday, the U.S. Federal Reserve is widely expected to cut its key overnight lending rate by a quarter of a percentage point to 4.50 per cent.

That would equal the Bank of Canada's overnight lending rate and would erase the interest rate differential between Canada and the U.S.

The speed of the loonie's recent rise has been astonishing — up about 10 cents US just since the start of September.

Since the start of the year, the Canadian dollar has appreciated by 22 per cent. Its rise since the 62-cent US depths of early 2002 has been almost 70 per cent.

Nfld. couple claims discrimination by U.S. car dealers

Associated Press

October 20, 2007 at 11:19 AM EDT

BANGOR, Maine — A Canadian couple says they were turned down dozens of times when they tried to buy a new car in the United States and are challenging what they regard as illegal discrimination.

Rhonda Chancey and Allan Coombs, a married couple from Paradise, Nfld., claim that more than 80 New England dealerships, including 61 in Maine, refused their business.

Ms. Chancey and Mr. Coombs filed a discrimination complaint with the Maine Human Rights Commission and plan to sue five car companies.

Similar complaints are planned in New Hampshire and Massachusetts, according to the couple's lawyer, Stephanie Jazlowiecki of Topsham.

Ms. Jazlowiecki said General Motors, Ford, Chrysler, Jeep and Dodge were seeking to maximize profits by not allowing Canadians to take advantage of their strong dollar and buy new cars in the United States, where prices are much lower.

"The dealerships' uniform denial of sales of new vehicles to Canadian citizens is a blatant pattern and practice of nation of origin discrimination," Jazlowiecki told the Bangor Daily News. "Individual dealerships claim they are not allowed or that it is illegal to sell to Canadians. But this would appear to be a patent violation of state and federal anti-discrimination laws, as well as federal anti-competition statutes," she said.

Automakers impose the same rule on Canadian dealerships, barring U.S. residents from buying vehicles when the dollar is particularly strong, Jazlowiecki said. Ms. Chancey and Mr. Coombs visited most of the dealerships and e-mailed some of them in the last two months, Ms. Jazlowiecki said.

In many cases, sales staff only became aware of the manufacturer's rule against selling to Canadians when they tried to go forward with a transaction, the lawyer said. She said dealers were permitted to sell the couple a used vehicle. Savings can be significant. A $40,000 Cadillac Escalade in the United States now fetches about $80,000 in Canada, Ms. Jazlowiecki said.

Last month, consumer advocacy groups in Canada filed a class-action lawsuit in Ontario Superior Court seeking $2-billion in general damages and $100-million in punitive damages from General Motors, Honda, Chrysler and Nissan for allegedly fixing car prices 25 per cent to 35 per cent higher in Canada than in the United States.

Ms. Jazlowiecki said her clients' case could also warrant class-action status. She said she has "been getting calls left and right" from Canadians who also have tried unsuccessfully to purchase cars in the U.S.

Ms. Chancey and Mr. Coombs finally did buy a car, a 2008 Pontiac Torrent. A relative in New Hampshire purchased it for them at a local dealership and then sold it to the couple. Even though they had to pay transfer tax and sales tax twice, the vehicle was still cheaper than it would have been in Canada, Ms. Jazlowiecki said.

Loonie briefly nudges above $1.04 US

Last Updated: Friday, October 26, 2007 | 10:29 AM ET

CBC News

The Canadian dollar kept gaining ground Friday while the U.S. continued to slump to new lows.

The loonie opened the day at $1.0401 US, before pulling back to trade at $1.0386 - up 0.33 a cent from Thursday's close. The loonie has not been in its current range since mid-1974.

So far this year, the loonie has gained almost 20 cents against the U.S. dollar.

The Canadian dollar's postwar high was $1.0614 US, set back on Aug. 21, 1957, prior to the government allowing the dollar to float against the U.S. greenback.

As part of its continued weakness, the U.S. dollar earlier reached a new record low Friday against the euro before regaining some ground.

Economists see the U.S. Federal Reserve moving to cut interest rates next week to boost the economy. The Fed made a surprise cut of one-half of a percentage point in September, but some economists said that has not been enough to stimulate demand in the U.S.

Soaring oil prices were also contributing to the loonie's rise. The price of light, sweet crude oil for December delivery rose $1.40 to settle at $91.86 US per barrel on the New York Mercantile Exchange. Earlier in the day, the price of crude pushed above $92 US.

The rising loonie: Where are the price drops?

Last Updated October 23, 2007 from

CBC News

As the Canadian dollar surged past parity with the U.S. dollar this fall, retail prices on this side of the border remained — for the most part — stubbornly stuck at levels above those south of the border.

But as consumer pressure for lower prices grew, there were a few signs that some prices could be coming down.

Days before federal Finance Minister Jim Flaherty was to meet with members of the Retail Council of Canada to talk about the problems with prices, Wal-Mart and Zellers announced they would cut prices on some goods to reflect the rise of the loonie.

We asked our readers to send us their stories of price-cutting retailers. We've received well over 200 responses. But very few of them mentioned price drops.

Dil Joseph was pleasantly surprised when he went to a local bookstore and found the magazine GQ priced lower for sale in Canada than in the United States.

Other lower prices included:

Product	CDN price	U.S. price
8GB Apple iPod nano	BestBuy.ca $193	BestBuy.com $199
Comics	Same as U.S. listed price at Carry-on Comics, Waterloo, Ont.
Comics	Same as U.S. listed price, Silver Snail Comics, Toronto

With prices resisting the downward pressure, it's not surprising we heard many tales of cross-border shopping trips.

"I wish this could be about a price drop! Yesterday, Oct. 22, the cost of crossing the bridge from Lewiston, N.Y., to Queenston, Ont., was $3.00 US or $3.50 Cdn, collected on the Canadian side," Ed Long wrote.

We were inundated with examples of significant price differences.

Product	CDN price	U.S. price
LEGO Mindstorms NXT	$350	$250
Michaels Arts and Crafts - Halloween sign	$13.49	$7.99
Puma running shoes	$119	$70
Bowflex Ultimate 2	$3,099	$2,299
Canon Pixma mp610 all in one printer	$300 (Best Buy)	$170 (Circuit City)
Arc'Teryx Theta AR jacket	$650	$450
Hidden Hitch trailer hitch (made in Canada)	$259	$139
Panasonic Shaver ES8043	$179.99	$79.99
UGG brand shoes	$225	$130
Weber S-320 gas bbq	$1,049	$869
Graco stroller-car seat combo	$299.99	$162
2008 Nissan Pathfinder SE	$52,900	$36,900

Dave Weisgerber from Edmonton tells us that some people are using the price discrepancy to turn a profit.

"I can't speak to who is actually dropping prices, but I know several people going south and buying Harley Davidsons. They bring them back by trailer and sell them privately in Canada. Average profit per bike after expenses is about two to four thousand dollars."

We'll give the final word on prices to D.B. from Winnipeg:

"Beans! Nothing explains the cross-border pricing problem better than Old El Paso Refried Beans. At a major grocer in Winnipeg, the price of a 14-ounce can is $3.49. In the U.S. a 28-ounce can of Old El Paso Refried Beans is $1.29 — but it was on sale for 99 cents. Per ounce, the Canadian price is more than SEVEN times the price in the U.S.A.!"

Canadian retailers should lower prices 'as soon as possible': Flaherty

Hmmmmmmmmmmmmmmmmm......
I wonder why he would say that?
Can you say "Christmas shopping"??????

See below from CBC:

Last Updated: Tuesday, October 23, 2007 | 10:31 AM ET

CBC News

Federal Finance Minister Jim Flaherty urged Canadian retailers to lower their prices in wake of the strong loonie, but placed some of the responsibility on consumers to seek better deals.

"There is power to shopping around," Flaherty said following a meeting with wholesalers and retailers about the price gap between Canadian and U.S. prices on some products.

"Consumers also have a responsibility. If they don't think they are getting a fair deal, they should compare prices and shop around."

Flaherty said his message to retailers was clear — that with the Canadian dollar at par with the U.S. dollar, distributors, wholesalers and retailers should reduce their prices for Canadian consumers "as soon as possible."

"There should not be large discrepancies between similar products just because they're being sold on different sides of [the] border," Flaherty said.

Flaherty said he understood the reasons provided by retailers for the price discrepancies. He said retailers told him there are lag times with respect to inventory that was priced before the dollar reached par and they also said Canadian retailers face additional expenses, including higher freight costs and translation costs.

He said the dollar has been on an upward trajectory for a while, and businesses have had time to adjust.

Critics have urged Flaherty to re-evaluate high tariffs retailers must absorb, saying sticker prices won't reflect the strength of the loonie without active government intervention.

Won't intervene

But he reiterated the government would not intervene.

"As minister of finance I can only encourage the retail industry to let the market work. And if the market works, prices should go down."

Liberal industry critic Scott Brison, who met with retailers on Tuesday, said Flaherty's criticism of retailers is unfounded and noted that suppliers must shoulder some of the blame for the price difference.

"I have a list in front of me of some of the manufacturers providing goods to Canadian retailers, and in some cases the prices are 90 per cent higher than what they're charging U.S. retailers," he said.

Brison called on Flaherty to review high tariffs retailers have to absorb, noting that while some larger operations can afford to lower their prices, smaller companies cannot.

"[Flaherty] is blaming mom and pop retailers for what is a much more complex issue," he said.

Canadian Auto Workers president Buzz Hargrove said Tuesday that North American automakers are expecting to bow to consumer pressure and lower prices, though he said the Big Three — General Motors, Ford and Chrysler — can't afford deep cuts.

"Unfortunately, I don't think the automakers have an alternative, given the publicity and given the pressures that are out there," he said.

"Remember, BMW is one of the most successful, high-profit manufacturers in the world, whereas … Ford lost $12 billion last year. That's a substantive difference in the argument, but I do believe they'll still be forced to lower their prices."

Retailers cite size, duties as reasons for price gap

Derek Nighbor, national affairs vice-president of the Retail Council of Canada, which represents 40,000 retailers, said retailers called for the meeting in part to educate the minister about the complexity of pricing structures in Canada.

Prices have failed to drop, he said, in part because of high duties the retailers must absorb. Nighbor also notes that Canada's size means it has less purchasing power than the United States.

"As far as the global economy goes, we're pretty small players still. Even some of our largest retailers in Canada couldn't compete with the size of a regional retailer in California, for example. So it's an issue of scale," he said.

Canadian shoppers find deals

Many Canadian consumers have complained that Canadian prices are about 20 per cent higher than in the U.S. In a CBCnews.ca forum, many shoppers said they have found significant savings by travelling south of the border for a range of items including GPS navigation systems, car seats, cars and books.

"The Canadian market has not been price competitive with the U.S. since 2003," Bob Kay of Midland said in the forum.

"I just bought my first American (but Japanese) car brand new and am really enjoying driving it, especially after knowing everyone else paid $45,000 while I paid $33,000 for the exact same thing!"

The Retail Council of Canada says high duties and complex pricing structures account for the pricing gap between Canada and the U.S.
(CBC)

Nighbor acknowledges the price gap but says a grim economic forecast has helped keep U.S. prices artificially low.

"U.S. retailers have been slashing prices and bleeding margins just to hang on to any degree of market share because of all the economic issues and the fear that they're heading into a recession," he said.

Anna Wallner, host and producer of the show The Shopping Bags, said the deepest discounts can be found in border towns. She strongly encouraged shoppers staying north of the border to negotiate prices.

"It's always OK to ask for a discount, and now more than ever it's important to wear your smart negotiating hat," she said.

Last week, two of Canada's biggest retailers — Wal-Mart and Zellers — announced they were dropping prices on some goods to reflect the loonie's rise. In September, Porsche announced they were lowering their prices in Canada by an average of about eight per cent on its 2008 models to better reflect the loonie's strength.

Manufacturers keeping Canadian prices high: say retailers

Last Updated: Monday, October 22, 2007 | 2:02 PM ET

CBC News

Retailers scheduled to meet with Federal Finance Minister Jim Flaherty on Tuesday say the minister's consumer "crusade" to bring Canadian and American prices in line is misdirected.

Diane Brisebois, president of the Retail Council of Canada, which represents 40,000 stores, said Monday her group called for the meeting to explain how prices are set.

"Although we appreciate that the minister wants to get involved, his so-called crusade is misdirected," Brisebois said, noting Flaherty should put pressure on the manufacturers to lower prices in Canada.

The Consumers Council of Canada is urging consumers to continue to keep pressuring retailers to lower their prices.
(CBC)

Brisebois said manufacturers are continuing to mark up prices in Canada by 20 to 50 per cent, and therefore retailers have little savings to pass on to the customer.

"The minister needs to put pressure on that community as he has done to retail," she said.

"He's not talked about the publishing industry; he's talked about booksellers. Well booksellers don't set the price. The publishing industry, the magazine industry, the car manufacturing industry — those are not retailers. Retailers are given a certain price, they have a markup and they sell the merchandise."

The loonie hit $1.0207 US in trading Monday morning. But recent price comparisons have shown identical items are often priced more than 20 per cent higher in Canada than in the U.S.

Shipping costs, inventory stock factor into pricing

Retailers have defended their prices, saying the price difference is linked to high shipping costs and inventory acquired before the dollar hit parity. Last week, two of Canada's biggest retailers — Wal-Mart and Zellers — announced they were dropping prices on some goods to reflect the loonie's rise.

'Consumers keep those voices heard.'—Eleanor Friedland, Consumers Council of Canada

Eleanor Friedland, vice-president of the Consumers Council of Canada, said Tuesday consumers should continue to push for lower prices, and she urged retailers to respond.

"Sometimes for good public relations the retailer is doing it, they may call it a sale, or a special day or what have you, but they are doing it," she said. "Consumers keep those voices heard."

Friedland also noted that prices will only fall if manufacturers act first.

"I'd like to see Mr. Flaherty take a very strong hand, but I understand the retailers' argument," she said Monday.

"I want to see Mr. Flaherty speaking to the manufacturers and pushing them. Once he does that, you'll see it come pushing through, and I think it will be across the board."

Canadians say U.S. car dealers refused to sell

By The Associated Press
Sun. Oct 21 - 5:35 AM

BANGOR, Maine — A Canadian couple who say they were turned down dozens of times when they tried to buy a new car in the United States are challenging what they regard as illegal discrimination.

Rhonda Chancey and Allan Coombs, a married couple from Paradise, Nfld., claim that more than 80 New England dealerships, including 61 in Maine, refused their business.

Chancey and Coombs filed a discrimination complaint with the Maine Human Rights Commission and plan to sue five car companies. Similar complaints are planned in New Hampshire and Massachusetts, according to the couple’s lawyer, Stephanie Jazlowiecki of Topsham.

Jazlowiecki said General Motors, Ford, Chrysler, Jeep and Dodge were seeking to maximize profits by not allowing Canadians to take advantage of their strong dollar and buy new cars in the U.S. where prices are much lower.

"The dealerships’ uniform denial of sales of new vehicles to Canadian citizens is a blatant pattern and practice of nation of origin discrimination," Jazlowiecki told the Bangor Daily News.

"Individual dealerships claim they are not allowed or that it is illegal to sell to Canadians. But this would appear to be a patent violation of state and federal anti-discrimination laws, as well as federal anti-competition statutes," she said.

The same rules are imposed on Canadian dealerships, barring U.S. residents from buying vehicles when the dollar is particularly strong, Jazlowiecki said.

Chancey and Coombs visited most of the dealerships and e-mailed some of them in the last two months, Jaz-lowiecki said.

In many cases, sales staff only became aware of the manufacturer’s rule against selling to Canadians when they tried to go forward with a transaction, the lawyer said.

She said dealers were permitted to sell the couple a used vehicle.

Savings can be significant. A $40,000 Cadillac Escalade in the United States now fetches about $80,000 in Canada, Jazlowiecki said.

Last month, consumer advocacy groups in Canada filed a class-action lawsuit in Ontario Superior Court seeking $2 billion in general damages and $100 million in punitive damages from General Motors, Honda, Chrysler and Nissan for allegedly fixing car prices 25 per cent to 35 per cent higher in Canada than in the United States.

Jazlowiecki said her clients’ case could also warrant class-action status.

She said she has "been getting calls left and right" from Canadians who also have tried unsuccessfully to purchase cars in the U.S.

What can I bring back to Canada?

Here are the HARD CORE WORDS from CBSA.

After each absence of 24 hours or more

You can claim up to CAN$50 worth of goods without paying any duties. This is your personal exemption. You must have the goods with you when you arrive and you cannot include tobacco products or alcoholic beverages in this exemption. If the goods you bring in are worth more than CAN$50 in total, you cannot claim this exemption. Instead you have to pay full duties on all goods you bring in.

After each absence of 48 hours or more

You can claim up to CAN$400 worth of goods without paying any duties. You must have the goods with you when you arrive. Although you can include some tobacco products and alcoholic beverages, a partial exemption may apply to cigarettes, tobacco products or manufactured tobacco. See the section called "Alcohol and tobacco" for more details.

After each absence of 7 days or more

You can claim up to CAN$750 worth of goods without paying any duties. Although you can include some tobacco products and alcoholic beverages, a partial exemption may apply to cigarettes, tobacco products or manufactured tobacco. See the section called "Alcohol and tobacco" for more details. With the exception of tobacco products and alcoholic beverages, you do not need to have the goods with you when you arrive.

To calculate the number of days you have been absent, do not include the date you left Canada but include the date you returned. Dates matter, not times. For example, we consider you to have been absent seven days if you left Friday the 7th and returned Friday the 14th.

Who is eligible for these exemptions?

You are eligible for a personal exemption if you are one of the following:

• a Canadian resident returning from a trip outside Canada;
• a former resident of Canada returning to live in this country; or
• a temporary resident of Canada returning from a trip outside Canada.

Even young children and infants are entitled to a personal exemption. As a parent or guardian, you can make a declaration to the CBSA for a child as long as the goods you are declaring are for the child's use.

Exchange rates...

Maybe you've heard, the Canadian dollar is above par against the US dollar.

6 month graph of Canadian dollar against US dollar

So anything priced in US dollars is now cheaper for Canadians.

But many prices in Canada that should be dropping are not dropping as fast as we consumers would like.

This blog is here to help you.

Shop in the USA and SAVE on everything

Don't wait; go now. We have the most powerful dollar ever and you can save yourself lots of money by shopping in the US for everything from underwear to Cars, trucks, electronics, you name it. But wait, what about companies like Bombardier. Here's an article recently posted by the Canadian Press:


So much for buying a cheaper Ski-Doo
Bombardier tells U.S. retailers not to sell to Canucks looking for deals
By The Canadian Press
Wed. Oct 17 - 4:47 AM

GRAND FORKS, N.D. — A snowmobile dealer south of the border says he’s been ordered by Quebec-based Bombardier Recreational Products Inc. to stop selling snow machines, ATVs and watercraft to Canadians who are looking to take advantage of the rising value of the loonie.

Ron Thompson, owner of Gateway Sports in Grand Forks, N.D., says he’s been told by Bombardier to increase a surcharge for Canadian buyers and ultimately to stop selling to Canucks at all.

Bombardier Recreational manufacturers the popular Ski-Doo and Sea-Doo vehicles.

"Canadians want to buy a Canadian product but I’m not allowed to sell it to them," Thompson said. "I had more than 35 calls from Canadians last week and another 10 calls this week."

He said he had to turn those inquiries away.

Thompson said Canadians can save several thousands of dollars on the purchase of a snow machine in the United States. The Renegade X 800 model sells for $10,000 at his shop, but would go for $13,000 to $14,000 in Winnipeg.

Thompson said Bombardier’s standard policy had been for its dealers to impose a 7.5 per cent surcharge on all sales to Canadians. Two weeks ago, Bombardier expanded that to say 7.5 per cent or $1,250 — whichever was higher. Last week, the company raised the rate again to $3,000. And earlier this week, Thompson said, a Bombardier representative told him not to sell to Canadians at all.

"They said it’s to protect the Canadian dealers but when the Canadian dollar (was at 70 cents) and Americans were going north to make their purchases, nobody was protecting my interests."

Thompson also said Bombardier will void the warranty on any craft purchased by a Canadian in the United States — even if the purchase was initially made by an American — and has threatened to cancel agreements with dealers who sell to Canadians.

"I’m paying $5,000 a month interest on the inventory I have but I’m not allowed to sell to Canadians who are trying to save some money," Thompson said. "It’s just not right."

Bombardier spokesman Pierre Pichette, vice-president of communications and public affairs, said the firm has always assigned geographic boundaries to its dealerships andfinancial penalties to enforce them.

Pichette said dealers are not allowed to sell to citizens of another country. The policy is based on market analysis and ensures that dealers not only sell but also can service Bombardier products.

Pichette said the penalty was increased in the last two weeks to prevent American border dealers from buckling to pressure from Canadian customers.

"We’ve had to make adjustments (to the penalty) for today," said Pichette, who added the company policy also applies to Canadian dealers, who are not allowed to sell to Americans.

’They said it’s to protect the Canadian dealers but when the Canadian dollar (was at 70 cents) and Americans were going north to make their purchases, nobody was protecting my interests.’

Ron Thompson North Dakota Bombardier dealer