Canadians descend on state Dollar parity has more northern neighbors spending in U.S.

BLAINE - In the spirit of '76 - 1976, that is - Canadians are swarming into Washington state to take advantage of the newly regained parity of the Canadian and U.S. dollars.

With the rising value of the loonie, a nickname based on the bird on the Canadian $1 coin, 50 percent more cars were recorded at the Peace Arch crossing at this border town last month than in August 2006, according to figures from the U.S. Bureau of Customs and Border Protection. The crossing at the northern end of Interstate 5 is the third-busiest on the U.S.-Canadian border.

U.S. businesses from retailers to real estate firms are benefiting.

"Being equal gives them the last reason they needed to spend more time and more loonies here in the U.S.," said Mike Kent, who sells houses in nearby Birch Bay and Semiahmoo for Windermere Real Estate. "It's not just because you can get good spending power, it's the lure of being in a different country. You feel as if you've truly gotten away."

Bethany Lyons, manager at Target at the Bellis Fair shopping mall just north of Bellingham, about a half-hour drive south of the border, said she expects more Canadian shoppers in the wake of the loonie achieving virtual parity with the greenback on Thursday for the first time since November 1976.

Canadians account for about half of the store's customers, rising as high as 75 percent on Canadian holiday weekends, Lyons said.

Last month, many business operators in Port Angeles, across the Strait of Juan de Fuca from Victoria, British Columbia, began posting maple leaf signs in their windows to show they would take Canadian currency at par, a slight discount at that time.

Ryan Burles, vice president of Black Ball Transport Inc., said more Canadians were buying tickets on the company's car and passenger ferry MV Coho, which operates between Port Angeles and Victoria, but added there had been no decline in U.S. travelers yet.

"Older people especially seem to plan ahead for travel, and this is usually the best month for weather," Burles said.

Olympic National Park Ranger Jon Preston got a big show of hands Thursday morning when he asked whether there were any Canadians at the visitor center in Port Angeles.

One of the visitors, Vaughan McIntyre from Regina, Saskatchewan, said he visited the United States even when the Canadian dollar was trading near 60 cents against the U.S. dollar five years, "but now I visit more."

He said he often pays the equivalent of $4.50 U.S. a gallon for gasoline at home, about 50 percent more than at the pump in Washington state.

"Things are ridiculously cheap here by our standards," McIntyre said. "There's all kinds of examples of how the cost of living is so much higher."

McIntyre hasn't seen more Canadian license plates in the United States than he did three years ago, but he has seen far fewer U.S. license plates in Canada.

"Americans aren't coming north," he said. "I also visit Nova Scotia, and a hotel owner there said he doesn't see any Americans."

At Whistler Blackcomb ski resort, north of Vancouver, senior marketing vice president Stuart Rempel said winter bookings by U.S. customers are 19 percent higher than last year, compared with a 100 increase in bookings from within Canada and a gain of 32 percent in international bookings overall.

Another effect of the dollar parity is rising prices for oil, copper, iron and other Canadian exports, said Paul Storer, an economics professor at Western Washington University in Bellingham.

Port Angeles City Council member Grant Munro, a logging company and retired Rayonier timber executive, said the stronger Canadian currency is helping the U.S. forest products industry compete with Canadian imports.

"They are hurting, but on this side that's good for us," Munro said. "The Canadian lumber industry had a great run a few years ago, but it's over. It's not just lumber, it's also paper, pulp and plywood."

The Canadian dollar is unlikely to rise much higher, however, and probably won't be as close to the U.S. dollar for more than five to 10 years because Canada's economy is insufficiently competitive in the long run to sustain such a high value, Storer said.

Nor should Northwest businesses expect the kind of gains they recorded in the early 1990s, the last time the Canadian dollar was worth more than 90 U.S. cents, said Luther "Hart" Hodges, director of Western Washington University's Center for Economics and Business Research.

The number of people entering the United States at the two border crossings in Blaine fell from more than 13 million in 1991 to 5.7 million people last year, Customs figures show.

"The role of the Canadian dollar is less significant than it used to be," Hodges said.

He noted that Canadian shoppers also have more choices at home than in the past, including many U.S. chains that have opened outlets there, and face tougher security checks and longer waiting times at he border, partly because of construction to prepare for the Winter Olympics in Vancouver, British Columbia, in 2010.