Exchange Rates: Beware of Assumptions

Filed in archive Doing Business In USA on June 14, 2007

If you do a lot of business with customers in the U.S. you might be feeling the pinch due to the Canadian dollars rise against the U.S. dollar.

I do a lot of business with clients in the U.S. and back in 2000 I remember getting 1.57 CDN for each U.S, dollar. Today it is just $1.04 or $1.05.

Big difference. Failing to re-examine changes in the assumptions behind your business can result in bankruptcy:

A high Canadian dollar and new passport rules are driving away American clients, says the owner of an eastern Ontario woodworking school that recently went bankrupt.

Since January, new rules have required U.S. citizens to carry passports when they fly to and from Canada. Those rules have been lifted for the summer while the U.S. tries to catch up on a backlog of Passport Applications.

"On any given week, you'd have basically three full-time employees, a couple of the guest teachers, and then up to 14 students," he said. "Even though Rosewood was only here for a short period of time, it's done a lot for the town." Via CBC