How is the falling Canadian dollar affecting the Saskatchewan economy?

This winter, the Canadian dollar reached its lowest level since the pandemic. Currently, the Canadian dollar is worth 69 US cents, a level that may seem alarming, but the results are rather mixed for the province’s industries. Exporting industries benefit, while importers have to pay more.

The last time the Canadian dollar was around 70 US cents was five years ago, at the start of the COVID-19 pandemic.

Charles St-Arnaud, chief economist at Alberta Central Bank, says that successive cuts in the Bank of Canada’s key rate, as well as those planned for 2025, also affect the exchange rate.

However, what explains the new drop in the exchange rate is the strength of the US dollar, not the weakness of the Canadian dollar.

The US dollar has appreciated against the majority of currencies in 2024, and Canada is in the middle of the pack.

Some advantaged industries

Sectors like Saskatchewan mining manage to take advantage of this situation.

The president of Sask MiningPam Schwann, explains that exports of minerals, potash and uranium are doing better than ever, with American buyers taking the opportunity to buy at a lower price.

Same observation from the government of Saskatchewan, which estimates that this drop in the dollar also benefits non-renewable resource industries, such as oil, natural gas, and even the forestry industry, which export the majority of their production. to the United States.

“Both sides of the coin”

Although some agricultural producers benefit from the drop in the Canadian dollar for their exports, the agricultural industry overall is suffering negative effects.

The vice-president of the Agricultural Producers Association of Saskatchewan (APAS), Chris Procyk, points out that certain products, such as canola, are sold in the United States, which can have a positive effect.

However, overall, the agricultural industry is largely losing out, particularly due to rising prices of imported fertilizers, chemicals and equipment on which it depends.

The mining and agricultural industries also have more difficulty recruiting workers, as they struggle to compete with U.S. wages due to the exchange rate.

Need more concrete support

Chris Procyk, the l’AFTERis asking for concrete assistance from the Saskatchewan government to ensure a certain financial security, particularly in the current context of political instability in Ottawa.

We need our government to step up and help us.

Unfortunately, there is little the provinces can do, according to economist Charles St-Arnaud. And, in the case of the implementation of American customs tariffs of 25% by the Trump administration, the level of the Canadian dollar would also have to be lowered by 25% to remain competitive in terms of exports.

Contacted by -, the Saskatchewan government recognized, Tuesday, in a statement the importance of diversifying [son] economy and support sectors that depend on American imports.