Not since November 25, 1976 has the buck been a buck, the Canadian dollar caught the US dollar (taking advantage of the US dollar slide in recent months) just before 8 am on Thursday morning, reaching par and then ebbing and flowing at that level for most of the morning.
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The Canadian dollar has continued a remarkable run of the last year, which has seen it gain 16 per cent on the US dollar and money managers and bank officials suggest that when all is said and done by the end of the year the Canadian dollar could be pegged at anywhere from 1.04 to 1.07.
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The Canadian economy is seen to be in much stronger shape than its American counterpart, which is suffering a malaise in the financial sector as the sub prime mortgage crisis causes concern for house sales and mortgage financing. In addition the staggering cost of the Iraq war is picking away at investor confidence and the world's money changers are beginning to look for new havens for their investments, giving some thought to leaving behind the once dominant currency on the world scene.
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As the Canadian dollar reached par today, the Euro once again increased in value against the US dollar as well, giving some financial observers reason to suggest it may soon replace the US dollar as the world's desired monetary unit.
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For Canadians, while it brings good news for those that plan on vacations in the States or enjoy buying consumer items from American stores and websites, the stronger dollar will have an impact on some economies across the country.
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The forestry and tourism industries will be affected as the cost of Canadian exports rise, as does the price of travelling to the country for a vacation or weekend get away. Depending on where the dollar settles next year, that could change the local tourist scene with potentially fewer visitors from the US crossing the border into Canada.
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One would also suspect that locally, the pulp mill saga will gain yet another chapter as the price of producing pulp would be even more expensive should there ever be a plan presented to reopen the now mothballed operation.
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There has been precious little said of late, about the plans of China Paper to reopen the mill, and many locally have all but given up on that ever coming to pass. Now in an era of a strong Canadian dollar and turmoil in the BC forest industries, it would seem that if any plans exist to reopen Watson Island, they are probably buried deep on some bureaucrats desk back in the People's Republic.
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Even the new container port could be affected by a decline in the US dollar and any troubles in that economy, imports of goods from Asia could be affected if the American public has less buying power on the world stage. A slow down of shipments of goods into the US, could impact on plans for expansion to the local terminal.
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While the Canadian dollar surges based mainly on the strength of our raw resources and the decline of the US economy, Canadians probably should hope that it doesn't rise too high, too fast.
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The Canadian economy is still one that depends heavily on a US market, if they continue to struggle and their dollar has less and less buying power, there could be a blow back effect on the Canadian economy and jobs.
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While it looks good to see our dollar strong and is giving the nation a reason to wave the flag a bit today, keeping an eye on the financial state of our neighbour might be a wise idea. When the neighbours get a cold, we tend to suffer the same symptoms and could have more to lose than they do.
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On the plus side, very soon the cost of cold medicine could be cheaper on our side of the border.
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