The Canadian Dollar: Weak or an Opportunity?

If you’ve been grocery shopping, booking a U.S. vacation, or even ordering something online lately, you’ve probably noticed: the Canadian dollar doesn’t go as far as it used to. The loonie has been sliding against the U.S. dollar, and while that hits hard in daily life, it isn’t all bad news. A weaker Canadian dollar brings drawbacks, yes—but also opportunities, if you know where to look.

Why the Dollar Is Down

Several forces are working against the loonie right now:

• Lower Canadian interest rates compared to the U.S. mean international investors see more return elsewhere. That makes our dollar less attractive (Bank of Canada).

  
  

• Trade headwinds, especially tariffs, cut into Canadian exports—GDP shrank in Q2 2025 as exports dropped more than 7% (Reuters).

  
  

• Market jitters: Political uncertainty and global volatility have undermined investor confidence. In 2024, the loonie fell nearly 8% against the U.S. dollar (Financial Times).

  
  

The Drawbacks: Where You Really Feel It

This isn’t abstract economics, here’s what it means day-to-day:

• Groceries & household items: That “why is everything more expensive?” feeling at Costco or Canadian Tire is partly the weak dollar. Imported goods like electronics, vehicles, and even produce (think winter strawberries) cost more when the loonie drops (EBC).

  
  

• Travel: A family trip to Disneyland that cost $6,000 CAD a few years ago might run closer to $7,500 CAD today—without doing anything differently. Flights, hotels, meals, park passes—all take more Canadian dollars to cover the same U.S. bill.

  
  

• Business costs: Small manufacturers importing parts or machinery face higher bills. For example, a Kamloops cabinet maker ordering specialized hinges from the U.S. now pays 10–15% more than last year for the same shipment (Fraser Institute).

  
  

• Productivity & wages: When companies spend more on imports, there’s less left for wage growth and investment in new technology—slowing competitiveness over time.

  
  

Where the Opportunities Lie

Even so, a weak dollar isn’t all doom and gloom. There are upsides:

• Exporters benefit: Canadian lumber, canola, beef, and oil become cheaper for U.S. and overseas buyers. That supports jobs in agriculture, mining, and energy (RBC).

  
  

• U.S. investments gain: Canadians holding U.S. stocks benefit from the stronger U.S. dollar—those assets are worth more once converted back to CAD. Someone who invested $50,000 CAD into U.S. equities a year ago may now see closer to $55,000 CAD, thanks to exchange rate gains alone (Morningstar).

  
  

• Tourism at home: While Canadians may think twice about U.S. trips, international visitors see Canada as a discount destination—supporting local economies in places like Banff, Whistler, and Prince Edward Island (Sallyport).

  
  

• A natural cushion in recessions: Economists note that a weak dollar helps Canada avoid deeper downturns, since it keeps our exports competitive even when domestic demand softens (Russell Investments).

  
  

Where Things Stand Now

As of early September 2025, the loonie is hovering around 1.38 per U.S. dollar. Stronger U.S. Treasury yields and expectations of a Bank of Canada rate cut are adding pressure (Reuters).

Still, July’s trade deficit narrowed as exports ticked up, showing that the weaker dollar may already be helping Canadian goods abroad (Reuters).

What You Can Do

• Balance your investments: Don’t keep everything in Canadian dollars. Adding U.S. or international exposure can offset a weak loonie.

  
  

• Think ahead for U.S. spending: If you know you’ll travel or send a child to school in the U.S., consider buying U.S. dollars gradually, instead of converting all at once at an unfavorable rate.

  
  

• Look at exporters: Adding exposure to Canadian companies that benefit from a weak dollar (like energy or agriculture) can be a way to ride the wave instead of being crushed by it.

  
  

• Be mindful of timing on big purchases: If you’re thinking about a U.S.-made car or major appliance, timing and financing strategies can make a meaningful difference.

  
  

• Stay long-term focused: The dollar has always moved in cycles. Trying to predict the exact bottom or top is almost impossible, but positioning yourself thoughtfully helps you benefit no matter what direction it goes next.

  
  

The Bottom Line

A weak Canadian dollar hurts at the checkout line and in your travel plans—it would be dishonest to pretend otherwise. But it’s not entirely bad news. Exporters thrive, U.S. investments gain, and our tourism industry gets a boost.

The loonie’s slide is a reminder: your financial plan needs to be flexible enough to handle both the drawbacks and the opportunities of currency swings.