How Can a Low Canadian Dollar be both Good and Bad

Question 1

A low Canadian dollar has both advantages and disadvantages:

Good effects

Answer 1

1. Boosts Exports – Canadian goods and services become cheaper for foreign buyers, making exports more competitive.
2. Encourages Tourism – Foreign visitors find Canada more affordable, increasing tourism revenue.
3. Supports Domestic Businesses - Canadians may buy more locally made products since imported goods become more expensive.

Overall, a low Canadian dollar benefits exporters and tourism but makes imports and foreign travel more expensive for Canadians.

Question 2

A low Canadian dollar has both advantages and disadvantages:

Bad effects

Answer 2

1. Higher Import Costs – Imported goods, including food, electronics, and fuel, become more expensive for Canadians.
2. Increased Travel Costs – Canadians traveling abroad face higher costs due to weaker purchasing power.
3. Inflation Risks – Higher prices for imports can contribute to rising inflation, making everyday expenses more costly.

Overall, a low Canadian dollar benefits exporters and tourism but makes imports and foreign travel more expensive for Canadians.