FORT KENT, Maine — Canadians are seeing less of a bang for their buck in the United States, and businesses in Maine border communities are feeling the effects of the drop in value of the Canadian dollar. As of Wednesday, it had fallen to its lowest point against the U.S. dollar in almost six years.
The Canadian dollar — nicknamed “loonie” because of the loon imprinted on its face — was worth 81 cents U.S. as of midday Wednesday, according to the online business website www.bloomberg.com.
“It absolutely has an impact on us,” said Kathy Roy, owner-manager of Fort Kent-based Paradis Shop ‘n Save, on Wednesday. “Our sales are less and less. Anytime this happens you are going to feel it on a border town.”
Cross-border shopping is commonplace in numerous communities along Maine’s boundary with New Brunswick, including in Fort Kent, which shares an international bridge with neighboring Clair, New Brunswick
Even with the dropping Canadian dollar, Roy did say that for now, higher prices in Canada are still pushing some Canadians to continue shopping in the U.S.
Milk, for example, is $4.29 per gallon at Paradis Shop ‘n Save. That same gallon would cost almost twice that across the border, Roy said.
On Wednesday afternoon, there were several cars with New Brunswick license plates in the Paradis Shop ‘n Save parking lot in Fort Kent.
“It’s still cheaper for me to come here,” Georgie Lausier, 85, of Baker Lake, New Brunswick, said as he walked out of the store with a gallon of milk. “But I look for bargains, and I only buy what’s on special here or in Canada.”
Lausier said he shops for on-sale grocery items in either Fort Kent or Madawaska twice per week and has no immediate plans to change his routine.
“But, if the [Canadian] dollar drops any more, I may have to think about it,” he said. “Now the prices have to be really good.”
The Paradis family also operates stores in Brewer and in the border communities of Madawaska and Calais.
Roy said she’s seen the biggest decrease in Canadian commerce at the Madawaska store, which she attributes to that facility’s proximity to the larger population base of Edmundston, New Brunswick, which has about 22,000 residents.
Roy said there is no single item that brings Canadian customers to the store.
“They come for pretty much all of our grocery items,” she said.
Roy estimated that one-third of the store’s business typically comes from Canadian customers. She said she could not put an exact figure on how many shoppers she has lost, but that it has been significant enough to notice. She said the family businesses have been tracking the Canadian dollar for the past several months.
“We have to watch it,” she said. “The Canadians are a big part of our business, and we are feeling that now.”
Canada is Maine’s largest international trading partner thanks to its proximity to the state and open market economy, according to the Maine International Trade Center. More than $1.3 million in goods were exported from Maine to Canada in 2013, representing 51 percent of Maine’s total worldwide exports, according to the center’s website.
Canada also is by far the largest source of foreign investment in the state, representing 55 percent of the foreign-owned companies in Maine, according to the center’s website.
Calls to the Maine International Trade Center’s Canadian desk were not immediately returned Wednesday.
According to Bloomberg, the Canadian dollar slid to its weakest level in almost six years on Wednesday after the Ottawa-based Bank of Canada made a surprise move cutting its key interest rate by 25 points to 0.75 percent.
Bank officials said the move was prompted largely by falling crude oil prices.
This is the first time the Bank of Canada has adjusted its overnight interest rates since September 2010, according to Bloomberg.
The Canadian dollar’s slide began several months ago against a strengthening U.S. dollar, and Roy said her store began seeing the effect almost immediately.
“We started seeing fewer of our Canadian customers,” she said. “Those sales started dropping three or four months ago.”
It’s the same at Roy Auto Parts in Fort Kent, where owner Louis Roy said on Wednesday that the falling Canadian dollar is affecting many businesses along the border as Canadians opt to shop closer to home.
“It does affect us big time. Most of the time if the exchange rate is at least close, most of the stuff is cheaper in the U.S., so they come shopping here,” Roy said. “Now I am definitely losing business.”
At NorState Federal Credit Union, Marketing Manager Denise Duperre said Wednesday that staffers were updating exchange rates several times per day as the Canadian dollar continues to fluctuate.
“We have to keep track of it on an hourly basis,” she said. “We are reminding our management and cashiers to refresh their [currency conversion] computers three or four times a day.”
Because of the still comparatively high prices for groceries and other items in Canada, Kathy Roy of the Paradis Shop ‘n Save said she is not yet overly concerned about losing too many Canadian clients or about her American customers traveling to Canada to shop.
“I know the groceries on the Canadian side are still more expensive,” she said. “And that will keep some of the Canadians coming here.”
“It’s still less money to come here — especially for the gas,” said Laurette Dube of Connors, New Brunswick, who was shopping for some milk, vegetables and meat on Wednesday at Paradis Shop ‘n Save.
Gasoline prices around Fort Kent were at $2.31 per gallon on Wednesday. Across the border in New Brunswick, the average price of gas in Edmundston was 88 cents per liter, according to www.NewBrunswickGasPrices.com. That is about $3.33 per gallon in Canadian dollars.
Dube said the falling loonie as yet is having no effect on her shopping habits yet.
“I still shop on both sides of the border,” she said. “There is just still so much here that is cheaper for us.”
State economist Amanda Rector said Wednesday that Canadian shoppers are an important part of the Maine economy.
“They are certainly important, particularly for regions of the state closest to Canada,” she said. “Canada and Maine have had a very close relationship for a very long time.”
Canadian license plates have been a common sight at the Bangor Mall for years, and according to mall manager James Gerety, the Canadians do have an effect on mall sales, though he said it is difficult to measure at this point with regard to the slipping loonie.
“We are coming off a really good holiday season,” Gerety said. “On the surface, it’s hard to say how the Canadian dollar played into that since we don’t single out the Canadian shoppers and ask why they are here or what they are buying.”
At the same time, Gerety said anytime the Canadian dollar slides, it can have a negative effect on the larger Bangor-area economy.
“Bangor is a service center and is not just for shopping,” he said. “The Canadians who come here enjoy the dining, lodging and other activities, [and] anytime their dollar slides, that is not a good thing.”
