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Chamber Finds Canadian Traffic String Despite Unfavorable Exchange Rate

U.S. and Canadian flags
Flanker/Wikimedia Commons/Public Domain

The Plattsburgh North Country Chamber of Commerce has analyzed the volume of traffic traversing the U.S.-Canada border at Champlain to determine whether the exchange rate is having an impact on people traveling south.
The Canadian dollar is at $1.32 to the U.S. dollar.  The regional chamber obtained data on vehicle traffic passing through the border crossing at Champlain-Lacolle to determine if the exchange rate has been having a negative impact.
Chamber President Garry Douglas notes that there is a perception that when the rate reaches 25 percent and above, Canadians stop traveling south.   “We know being next to the border and our economy being so dominated by cross-border matters in so many ways that when the exchange rate shifts very strongly in the U.S. favor and makes things more costly for Canadians spending their dollars in the U.S. that it has an effect. However we think that there’s a lot of exaggeration of what that effect is.  The Canadian Border Service Agency they actually track Canadian residents returning. So that factors out Americans. And the number of Canadian visitors returning to Canada up 22 percent in January. They seem to be coming back in spite of the fact that while the exchange rate has improved some, it hasn’t improved dramatically yet.”
 
The Chamber just counted border vehicle traffic.  It did not determine whether travelers remained in the region, went to the airport or continued driving to other destinations.  “We’d like to have a study that actually over time periodically counts cars in the Target parking lot or cars downtown.  I think that’d actually be some very useful information.”
 
SUNY Plattsburgh Department of Economic and Finance Chair Colin Read is also co-owner of the Champlain Wine Company.   “Just from what I’m seeing as a downtown business person there does seem to be a little bit more of a dearth of Quebec visitors. Now I know it’s the winter months and that sort of thing but that’s not statistically significant. It’s just anecdotal.”
 
Douglas counters that whether Canadians stay or not, they have an impact on the region’s economy.   “We don’t have a way to track where their ultimate destination is.  But we know from experience that the great majority of crossings at Champlain, NY are coming in and out of the North Country, whether it’s on business, whether it’s visitors or skiers or shoppers or whatever the case may be. And so it has a profound impact on us.  And we know, frankly, even if they’re going down the road further, if they’re going to Albany or Lake George or someplace else they’re going to buy gas here.  They’re going to stop at the liquor store on the way home.  They’re going to spend money in this particular area as the gateway area no matter what.”
 
Read says there have been studies in the Buffalo and Vancouver border regions that do indicate a 30 to 50 percent reduction in Canadian spending when the Canadian dollar drops to around 67 cents U.S.  But he adds that the Plattsburgh area tends to fare better than comparable regions.  He has also found that the exchange rate is intertwined with oil prices.   “A couple months ago I did a column where I graphed the Canadian exchange rate versus the price of oil.  And the correlation is almost perfect. So Canada’s exchange rate is very much at the whim of oil prices.  Now we’ve seen a firming up of oil prices and a lot of economists expected this oil glut would last about 18 months to two years because that’s how long a well drilled in the shale of North Dakota will continue to pump without having to be re-drilled.  So I think we’re starting to see stabilization this year and next.  And we’re starting to see the Canadian dollar reflect that.  It’s up by almost ten cents compared to its low in the .67 range just a couple months ago.”
 
Plattsburgh-North Country Chamber officials were scheduled to travel to Gatineau, Quebec on Wednesday to meet with 27 Canadian companies seeking information on investment possibilities in the North Country.

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