The fluctuating loonie may actually have little impact on most Canadian businesses, according to a new survey by the Bank of Montreal.
About half (54%) of business owners recently polled said changes in the dollar have no impact on them, while slightly more (55%) of those who head small businesses, described as firms with less than 50 employees, said that held true for them as well.
This contrasts with 27% who said their businesses benefit from a weak dollar and 18% who believed they were worse off when the loonie falters against the U.S. dollar.
Those polled, on average, expect the Canadian dollar to drop to 89 cents U.S. by the end of this year.
The Canadian dollar has been hovering around the 90-cent U.S. mark in the last few weeks after falling as low as 89 cents in March.
However, that is still below the currency's 2014 high of 93.99 cents U.S. on Jan. 3. The last time it reached parity with the U.S. dollar was in February 2013.
BMO chief economist Doug Porter says the valuation is on par with forecasts from the bank, which anticipates the loonie will drop to 87 cents U.S. by the end of this year and stay within the 85- to 86-cent range in 2015.
Generally speaking, he said producers tend to benefit and consumers tend to lose in that environment. Broadcasters, sports teams, utility companies and retailers tend to be potential losers from a lower loonie, while manufacturers, tourism and resource companies tend to win.
The survey found that those in Atlantic Canada (62%) and Alberta (55%) were the most likely to say a fluctuating dollar does not impact their business, while those in Saskatchewan and Manitoba (32%) and British Columbia (31%) reported that their companies would fare better amid a weaker dollar.
It also found that sentiment varied across sectors. Business and financial companies (76%) were the most likely to say they wouldn't be affected by a weak Canadian dollar, followed by 61% of energy companies and 57% of service sector companies.
Dan Kelly, head of the Canadian Federation for Independent Business, says many companies are used to dealing with currency swings, with many already factoring that into their business plans.
The telephone poll was conducted by Pollara with 502 Canadian business owners — including 476 small business owners and 26 larger businesses with 50 or more employees — between March 7 and March 24. The claimed margin of error was plus or minus 4.4 percentage points, 19 times out of 20.
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