More small businesses hurt by low loonie: CIBC

Only 19% reported a benefit from the lower dollar, 44% no impact.

November 5, 2015   by CANADIAN PRESS

The loonie weighing in at about 75 cents.

The loonie weighing in at about 75 cents.

TORONTO — Exporters may be happy about the low loonie, but the average small business, well, not so much, according to a new survey released by CIBC. In fact, the bank says far more small businesses report being hurt than helped by the lower currency.

It says 37% of small business owners who responded to the survey reported that the decline in the value of the loonie versus the US greenback had hurt their business.

A prior CIBC poll revealed that 65% of small business owners haven’t taken any steps to protect their business from currency fluctuations.

That compares with just 19% who reported seeing a benefit from the lower dollar and 44 per cent who said it had little or no impact.

The dollar has slipped from a high of US$1.04 in September 2012 to about 75 cents at present.

The online survey was conduct Sept. 23 to Sept. 25 among 751 randomly selected Angus Reid Forum panellists who are small business owners.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Click here for pdf: Managing your foreign exchange exposure.

© 2015 The Canadian Press

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1 Comment » for More small businesses hurt by low loonie: CIBC
  1. Deniz Yazici, P.Eng. says:

    It’s very true, small businesses are being hurt by a low dollar due to the following:
    * Raw materials are priced in U.S. Dollars (USD)
    * Capital machinery, equipment and repair parts are priced in USD
    * Software is priced in USD including annual subscriptions for operating the software – i.e. AutoCAD
    * Almost all wholesale goods including standard consumer and industrial goods are priced in USD
    * A slow economy with increased and fierce competition forcing clients to squeeze every dollar from their suppliers – i.e. a race to the bottom for all of us so that the top dog can make another billion off our backs

    Only the largest multinationals based out of the US are not feeling this pinch. Canada, if we have not forgotten, was a branch plant economy – with lots of local small suppliers feeding into these large plants owned by the multinationals. Brian Mulroney and Michael Wilson upset this balance with the free trade agreement removing an incentive to keep the plants in Canada. As the plants closed and went south, the suppliers started to run out of customers so now they started to close their plants affecting smaller sub-suppliers. Just look at Toronto – east end: Colgate closed their plant resulting in a smaller base for the Paperboard industries plant on Commissioners street. Once Procter & Gamble (Hamilton) and Lever Brothers closed up, there was no more demand for cardboard boxes for soaps and detergents resulting in the closure of that plant. Furthermore, the closure of Lever’s reduced demand for fatty acids so now Emery Oleochemicals in Etobicoke was forced to close their doors. We have a weak federal government which seems to pander to large multinational interests. We need a national industrial policy just like in Germany to kick start manufacturing and technology in this country. Germany is booming even though their costs are higher than in Canada. Our fed’s put all of their faith in resources and totally neglected the manufacturing base. All of this oil should, must be converted, in my opinion, to value added goods in Canada before being shipped south! They must create an environment that fosters innovation and technical creativity so that todays small companies can become tomorrows world leaders! So much technology has left this country with the plant closures that it’s just disheartening.

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