Will The Flathead Feel The Effects Of The Declining Canadian Dollar?
Canadians like to shop, recreate and do business in Northwest Montana.
The Associated press estimates over 900,000 Canadians visit Montana annually. That's why the Flathead Valley is paying close attention to the sagging value of the Canadian dollar. Last year an American dollar cost $1.10 Canadian. Now that same U.S. dollar costs $1.25 and was as high as $1.31 recently. Kalispell Chamber of Commerce President, Joe Unterreiner, says there's a lot at stake.
"The Alberta market, which is Calgary and Lethbridge together is about a million-and a-half person market within a 5-hour drive of Kalispell and the Flathead valley."
Unterreiner says Canadians were critically important to the Flathead as it struggled during the depths of America's own recession.
"As that exchange rate turned, they became a major part of our visitor economy; great buyers of retail goods, vacationers, second-home buyers and really great support for our regional economy here through the recession."
That includes Whitefish Mountain Resort.
"Definitely," says Riley Polumbus, the resort's PR manager. "Canadian guests can be somewhere between 20 and 23 percent (of out client base) during the ski season, so it's a big part of our business for sure."
Polumbus says it’s too early to tell if the exchange will keep Canadians away. Bookings don’t appear to be done so far. She says Canadian ski resorts are notoriously expensive.
"We're still a good value to them. We have a pretty competitive rate for our lift tickets as well as some good lodging deals, plus they do some other shopping while they're down here. We're in a good spot."
Greg Eisinger owns Kalispell's Eisinger Motors which sells General Motors and Honda products. He says Canadians aren't allowed to purchase new vehicles in the states due to different marketing agreements and exchange rate fluctuations. They can, however, purchase used vehicles.
"Used cars are different. We can sell used cars to Canadians and when the exchange rate fluctuates, those sales come up and down with the exchange rate," Eisinger said.
As the value of the loonie drops, Eisinger says, "of course there isn't much interest in the Canadians trying to buy used cars down here."
Real Estate Agent Dale Crosby Newman characterizes the Flathead's current real estate market as strong and stable. But, Newman says Canadians were very interested in Flathead Valley real estate during the recession years.
"They called us Tijuana, like Mexico to the U.S., and they were purchasing pretty steadily through the recession," according to Newman.
But that's tapered off
"Especially with the drop in the Canadian dollar, the loonie, we'll see how that plays out over the coming months. I don't really think it's going to affect our overall sales over the coming year, but I think that segment of the market will drop off a bit."
Newman suspects the rebound in America's economy will help make up for the potential drop in Canadian real estate sales.
Large retailers are notoriously guarded about sales trends. The Kalispell Chamber of Commerce’s Joe Unterreiner says small businesses sometimes don't track that information at all. He says that makes it hard to tell how retailers in general are being impacted by a weaker Canadian dollar. For now, Unterreiner is staying upbeat about Canada's current financial woes.
"As we're talking with Canadians we see that Kalispell and the Flathead Valley are still a huge draw. There are some things that despite the exchange rate are still much more affordable here in the United States. I think we may see it moderate, but I don't think we're going to see it totally go away, but it's very much on the minds of our retailers and our tourism and hospitality sector."
As of Tuesday, the Canadian dollar was worth .82 cents in U.S. currency.