SMEs looking to capitalize on strength of loonie: BMO report
Manufacturers could face difficulties as dollar remains firm
TORONTO—A new BMO survey by Leger Marketing suggests entrepreneurs will use the strong Canadian dollar to upgrade and expand their business.
“Parity with the U.S. dollar represents a significant opportunity for Canadian entrepreneurs to enhance their productivity by upgrading or refreshing their equipment,” says Cathy Pin, vice‑president, BMO Commercial Banking. “A strong Canadian dollar provides additional purchasing power when importing this equipment and purchasing supplies and inventory from the global market.”
The survey also revealed regional differences, including:
- Small business owners in British Columbia are significantly more likely to expand into the U.S. and Mexico than those in Ontario and Quebec (21 per cent versus nine per cent respectively).
- Compared to the national average, entrepreneurs in Manitoba and Saskatchewan are twice as likely to use the strong dollar to upgrade processes, equipment and machinery than those in Alberta.
- Small businesses in Quebec are the most likely to leverage the strong dollar to increase staff (26 per cent), followed by Ontario (24 per cent) and British Columbia (21 per cent).
But, the impact of the strong dollar varies depending on the sector, presenting both opportunities and challenges for Canadian businesses.
Utilities, broadcasters, sport teams and some retailers could benefit from a stronger currency, while manufacturing, tourism and some resource industries could face some difficulties as the loonie remains firm.