The Economy and The Canadian Dollar
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Find out what the low Canadian dollar means for local businesses in various industries. To listen to this webinar go to http://www.welchllp.com/media-library/
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The Economy and The Canadian Dollar
- 1. welchllp.com THE ECONOMY AND THE CANADIAN DOLLAR
- 2. GROUND RULES Questions • Attendees are in listen-only mode • This webinar is being recorded for future on-demand playback • Your participation represents acknowledgement that we are recording • Tweet questions & comments to: #WelchExpert Windows Mac Tablet
- 3. welchllp.com William Chin, MBA Portfolio Manager & Chief Technical Analyst Caldwell Investment Management wchin@caldwellinvestment.com Micheal Burch, CPA, CA, CFP Managing Partner Welch LLP mburch@welchllp.com @WelchLLP PRESENTERS Peter Cleveland, BBA, CFE, CIRP, FCA CEO Cleveland Leadership Group peter@clgroup.ca www.clevelandleadershipgroup.com Pierre Cleroux, MBA Chief Economist Business Development Bank of Canada pierre.cleroux@bdc.ca
- 4. WHAT WE’LL COVER welchllp.com • Where are we and how did we get here? • How long will it last? • How do we compare to other currencies? • Things to consider • Winners and losers • US buyers • Alleviating the pain of the impact • Planning opportunities
- 5. welchllp.com HOW DID WE GET HERE? - Where are we? - What caused the rapid decline? • Federal reserve raising rates • Lower commodity prices • Slowing Canadian economy
- 6. • Gradual decline • Increased importing welchllp.com THE ROAD AHEAD
- 7. welchllp.com HOW DO WE MEASURE UP? • The developed world • Emerging currencies
- 8. welchllp.com THINGS TO CONSIDER • Price elasticity of demand • Products without competitors
- 9. • Automotive industry • Food industry welchllp.com LOSERS
- 10. • Tourism industry - Americans vs. Canadians - Accommodations - Canadian airports • Technology industry • Film industry welchllp.com WINNERS
- 11. • Two sides to the story • Cross-border companies • Cash flow • Fluctuation welchllp.com US BUYERS
- 12. welchllp.com ALLEVIATING THE PAIN • Managing foreign currencies
- 13. welchllp.com PLANNING OPPORTUNITIES • Hedging programs • New relationships • Sell in USD • Vendors ₋ Switch ₋ Change currency • Independent experts • Evaluate income statement • “What if’s”
- 14. welchllp.com William Chin, MBA Portfolio Manager & Chief Technical Analyst Caldwell Investment Management wchin@caldwellinvestment.com Micheal Burch, CPA, CA, CFP Managing Partner Welch LLP mburch@welchllp.com @WelchLLP Q&A Peter Cleveland, BBA, CFE, CIRP, FCA CEO Cleveland Leadership Group peter@clgroup.ca www.clevelandleadershipgroup.com Pierre Cleroux, MBA Chief Economist Business Development Bank of Canada pierre.cleroux@bdc.ca
Editor's Notes
- Micheal Burch, CPA, CA, CFP, Managing Partner of Welch LLP since 2006, is responsible for the direction and operations of Welch LLP. Micheal provides specialty service support in all areas of strategy and he has extensive experience in taxation, financial and estate planning and cross-border consulting. William Chin, MBA - Portfolio Manager & Chief Technical Analyst With 35 years of international investment experience, William Chin is an expert in the areas of portfolio management, currency risk and treasury management. William began his career in the currency market and progressed to the role of treasury manager for a large international bank. He was registered as a Portfolio Manager with the Ontario Securities Commission in 1999 and was managing high net worth client portfolios on a discretionary basis prior to joining Caldwell. Peter Cleveland, CEO of Cleveland Leadership Group Inc., brings 37 years of excellence in client service. He has demonstrated the ability to build an organization by setting the strategic direction and cascading that direction throughout a culture to create sustained, positive change. Through strong leadership, financial and interpersonal skills, he strengthens organizations, whether for-profit or not-for-profit. His leadership style is one of setting direction; then aligning all daily reporting, measurements and agendas around that direction; while mentoring people to achieve it. Pierre Cleroux , MBA was appointed Vice President, Research and Chief Economist at BDC in 2012. He is responsible for providing economic analyses and advice to the Senior Management Team, while helping interpret economic trends and their impact on businesses. His responsibilities also include all marketing and industry research activities. He has more than 25 years of experience as an economist, mainly in the public sector. Before joining BDC, he worked for the government of Saudi Arabia as Vice President, Business Analysis in the National Industry Clusters Development Program. Prior to that, Mr. Cléroux was the Quebec Assistant Deputy Minister for Economic Development, Innovation and Export Trade, responsible for the implementation of economic policies and programs to support small and medium-sized businesses and encourage entrepreneurship.
- William Starts
- Roughly the same as other currencies in the developed world Emerging currencies are significantly worse
- How price elastic is their demand? Is it a luxury or a necessity? If there are no competitors, are there other products that will emerge and rise up to benefit from the low dollar? Ex: If Ketchup gets really expensive will people buy it anyways, or will mustard suddenly see a spike in sales
- Peter Starts Anyone who buys in US and sells in CAD Consumers who buy import cars from local dealers Time to buy is now because they still have fall inventory Food: most manufactured comes from the US, so they buy in US but sell in CAD
- Anyone who sells in US but manufactures in Canada with Canadian resources Tourism Canadians: stay home, US: come here CAD Airports: more flying in Accommodations (hotels) High tech Film
- Anyone who sells in US but manufactures in Canada with Canadian resources Tourism Canadians: stay home, US: come here CAD Airports: more flying in Accommodations (hotels) High tech Film
- - 67% of businesses are affected - Only 17% have taken steps to absorb the impact
- Hedging program in place New relationships: Starting something new in the US Sell in US dollars Vendors Switching vendors Ask to change currencies Independent experts Cut income statement Test “what ifs” for pricing
- Questions: Should I start quoting in USD to my existing customers to protect myself from exchange risks? Is there one policy idea that would have a big impact on the economy if it were achieved by the next government? Should I wait to invest in US stocks until the dollar is stronger? How long do you think it will be until the dollar gets stronger?