Loonie likely to stay weak, slowing Canadian shopping in NNY

WATERTOWN — Jeremy S. Askins, manager of J.C. Penney in Salmon Run Mall, said he’s noticed Canadians are making fewer cross-border trips this year to his store.

“It looks like they’re coming mostly on Friday and Saturday and leaving on Sunday,” he said. “A year ago, they were coming down more frequently or staying longer.”

Canadian consumers have a good reason to avoid crossing the border to shop here: the weakening Canadian dollar, known as the loonie.

The loonie has hovered around 80 cents U.S. since January, and Canadian banking experts don’t expect it to rebound anytime soon, according to Gary S. DeYoung, executive director of the 1000 Islands International Tourism Council.

After closing at about 83 cents U.S. on Friday, the Canadian dollar dropped in value to about 82 cents U.S. as of Wednesday. Experts have blamed the recent decline on falling oil prices, Mr. DeYoung said, and some of them have gloomily predicted the loonie could fall this summer to 75 cents U.S.

“Canada has a resource-based economy,” he said, “and less demand for oil tends to put downward pressure on the Canadian dollar.”

TIGHTER MARGINS

Mr. Askins said shoppers are still able to find bargains at J.C. Penney with the loonie at roughly 80 cents U.S., but he said they aren’t saving as much as they did a year ago, when the currency was valued at about 90 cents U.S.

In turn, he said, it’s become harder for them to justify making frequent shopping trips to Northern New York.

“A shirt here might be 20 to 40 percent less than in Canada, but the margins are getting tighter because of where the exchange rate is,” he said, adding that he believes retailers and hotels across Jefferson County have taken a hit this year because of the trend. “I think everybody hopes to see” the loonie rebound.”

Diane A. Cade, an employee at Around the World in Salmon Run Mall, said Canadians have told her that retailers in their country are offering better deals so people aren’t tempted to do cross-border shopping. She said the store — which sells an eclectic selection of international chocolates and gifts — drew about 50 percent of its sales from Canadian shoppers last year; that figure has dropped to about 30 percent this year.

“This year, the Canadian exchange rate has really killed shopping in Watertown,” Ms. Cade said, adding that she regularly talks with Canadians here about their shopping habits. “They tell me Canadian retailers are offering better deals because they’re getting tired of shoppers coming here for lower prices. Canada is doing everything in its power to keep them from coming this way.”

She added that she believes Canadians also are being more choosy about taking trips here, coming only when they know they’re going to save a lot on merchandise.

“Unless it’s a super buy, they’re not shopping here,” she said.

FEWER BRIDGE CROSSINGS

Mr. DeYoung said he expects passenger crossings at the north country’s international bridges to be down this year from 2014, largely because of the weaker loonie.

Compared with April 2014, the number of passenger crossings in April at the Thousand Islands International Bridge on Wellesley Island fell by 2,275, or 1.8 percent, from 126,148 to 123,873, according to the Public Border Operators Association. Over the same period, crossings at the Ogdensburg-Prescott International Bridge fell by 9,948, or 18.5 percent, from 53,818 to 43,870.

At the Seaway International Bridge in Massena, crossings climbed slightly — by 1,066, or 0.6 percent, from 180,120 to 181,186.

At the Thousand Islands Bridge, “I would have expected a larger drop than we’ve seen this year,” Mr. DeYoung said, adding that there could be a sharp decline in Canadian crossings if the loonie dips below 80 cents U.S. “If we go to 75 cents, a lot of the Canadian habit of going over to the U.S. is going to be lost. But I think there’s still a lot of value for Canadians to be had when it’s at 80 cents.”

The sharp decline in April passenger crossings at the Ogdensburg bridge could be largely a result of Canadians making fewer day trips to grocery stores and gas stations, Mr. DeYoung said.

“Short trips now aren’t as easy for Canadians to decide on,” he said.

Crossings at the Massena bridge don’t fluctuate as much as at other international bridges in the region, Mr. DeYoung said. That’s because the bridge consistently draws a large volume of passenger traffic from the population of the Akwesasne territory, he said, which is located on both sides of the St. Lawrence River.

By Ted Booker, Times Staff Writer