Canadian dollar almost at parity with US, will pass it soon

[Tingkai]

Originally posted by notyoueither
I'm buying 100 bucks worth of stuff. I'm going to have to pay $106 at the check out, and I'm being made very aware that government has costs.

Yes, the government costs money to run, you see that everytime you pay income tax. It's listed right there on your salary slip, assuming you have one.

And how often do you buy exactly $100 worth of stuff.

More likely you buy a couple of things at prices like $51.49. You then do a rough rounding up and you get a total like $210. Now what's 6% of that, or 13% if you're living in most provinces.

You and I can figure it out quickly, but many people will have to take time to calculate it and may not get it right in the end.

[notyoueither]

Originally posted by Tingkai


Yes, the government costs money to run, you see that everytime you pay income tax. It's listed right there on your salary slip, assuming you have one.

The point that you have ignored being that some people ignore the particulars and focus on the sum or the net.

And how often do you buy exactly $100 worth of stuff.

More likely you buy a couple of things at prices like $51.49. You then do a rough rounding up and you get a total like $210. Now what's 6% of that, or 13% if you're living in most provinces.

You and I can figure it out quickly, but many people will have to take time to calculate it and may not get it right in the end.

Sure. I guess we're both assuming some people are idiots.

The difference is in what we want to provoke them with and what we want them to be thinking about the next time they cast a ballot.

[Tingkai]

Originally posted by notyoueither
The point that you have ignored being that some people ignore the particulars and focus on the sum or the net.

The point you overlook is that if they did that with their pay slip, they could just as likely focus on the sum of their bill.

You also ignore the point that it doesn't make a difference if they do notice that they paid 21 cents in GST on a purchase. And it wouldn't make a difference to most Canadians if the GST was raised or lowered by 1 per cent.

If the GST was included in the price, the only thing that would change is that life would be more convenient for most Canadians.

[Wezil]

Spoken like a true socialist.

[Flubber]

Originally posted by Tingkai

More likely you buy a couple of things at prices like $51.49. You then do a rough rounding up and you get a total like $210. Now what's 6% of that, or 13% if you're living in most provinces.

I don't know about you but I find it dead easy to calculate 6% of stuff

On 210 ?? Well thats 2 100s at 6 bucks each and then 10 bucks-- oh my how will I deal with the decimal?

Just joshing with you-- but I was never that upset to have to do a little calculation. Consider it government's part in forcing people to dust off such difficult skills as percentages

[Flubber]

Originally posted by Tingkai

You also ignore the point that it doesn't make a difference if they do notice that they paid 21 cents in GST on a purchase. And it wouldn't make a difference to most Canadians if the GST was raised or lowered by 1 per cent.

I agree it doesn't make a real huge difference in my life. But then again dropping income tax 2% doesn't make a big difference either. It does not eman that I do not like it and support it

Originally posted by Tingkai



If the GST was included in the price, the only thing that would change is that life would be more convenient for most Canadians.

Marginal gain in convenience only. You could probably bring a much larger gain in convenience if you did something like eliminate the penny

[Flubber]

Where does it end??

Loonie reaches 47-year high
Canadian dollar hits $1.05 US
Dina O'Meara, Calgary Herald
Published: Tuesday, October 30, 2007


The Canadian dollar soared Monday to heights unvisited since 1960, briefly surpassing $1.05 on the back of record-setting oil prices and increased appetite for Canadian resources.

The loonie rose one per cent Monday to $1.0499 against the U.S. greenback as Mexico shut in 600,000 barrels of oil on storm concerns. Crude oil futures shot up to $93.80 a barrel before closing at $93.53 in New York. Also on Monday, gold closed up $5.10 at a whopping $792.60 US an ounce.

As long as those commodity prices stay high, expect the loonie to continue rising, economists forecast.

"Ever since it reached par, it's hard to say where the ceiling on the Canadian dollar is going to be," Todd Hirsch, ATB Financial senior economist said.

"There's nothing really inherently weak in the Canadian economy," Hirsch noted. "With all of our provincial and federal governments running fiscal balances, we're in very good shape."

Canada declared a $8.68-billion surplus during the first five months of the year, just about when the dollar started its steep climb up. The loonie, which gained 22 per cent in the past 10 months, reached parity with the U.S dollar for the first time in three decades by mid-September.

The gains were made as crude oil prices ran up 70 per cent over the year, hitting its latest high Monday when PEMEX, the state-owned Mexican corporation, shut in a fifth of its production as foul weather pounded the Gulf of Mexico.

Despite alarms being raised by the manufacturing sector over a drop in profit margins as the gap between currencies narrowed, the decline has barely registered on the gross domestic product, and Canadian businesses for the most part have adapted, said Danielle Smith, Alberta director of the Canadian Federation of Independent Business.

While agriculture and manufacturing have suffered, slightly more than half of CFIB members polled for a quarterly survey said they didn't have a preference for a strong or weak dollar.

"But we also have 21 per cent of our members who said they would prefer to see a higher Canadian dollar," Smith said, from Edmonton.

Companies either importing American goods for resale in Canada, or companies importing machinery and other goods for their own are doing well. The number was slightly up from 20 per cent in June.

The bulk of the 1,657 respondents, or 52 per cent, polled in September said they had no preference where the dollar went, compared with 49 per cent during the second quarter.

At the same time, commodity prices smashed through record after record, the U.S. economy suffered hit after hit, most recently dropping on the subprime credit crunch.

"The high loonie reflects what housing reflects, and that is Canadians are becoming richer than people in the U.S.," Jeff Rubin, senior economist with CIBC World Markets, said from Toronto.

"The move from parity to whatever is overkill at this point," Rubin said.

Frank Atkins, a University of Calgary economics professor, doesn't expect the dollar to drop as sharply as it has risen, but he does expect it to hit a cruising altitude between 95 cents and $1

It's got to come back, it's got to back off," he said.

"Now whether it's going to back off really suddenly or if it's just going to back off and drift back down, you just can't say."

Economists don't expect any downward pressure to come from the Bank of Canada, either.

The central agency has a history of following the U.S. Federal Reserve's lead, but has given no indication it will when the Fed announces an expected cut in prime borrowing costs Thursday.

In June, the central bank suggested it would bump up its key lending rate to dampen an inflationary economy, but has kept its prime interest rate unchanged at 4.5 per cent this year.

"They're happy to stay on the sidelines because the high Canadian dollar has done all the dirty work for the bank," Hirsch said. "That's taken the head off inflation and is acting as a dampener."

The Canadian Dollar History

March 29, 1960, was the last time the Canadian dollar hit $1.05 US.

Here are some other facts from that period.

- Canadian prime minister: John Diefenbaker

- U.S. president: Dwight Eisenhower

- Average weekly wage in Canada in 1960: $75.83

- Average crude oil price in 1960: $2.97 US a barrel

- Gold was traded on Toronto Stock Exchange between $33.10 and $33.40 an ounce

- Average gasoline price in Toronto in 1960: 8.7 cents a litre

- Stanley Cup champions in 1960: Montreal Canadiens

Sources: Statistics Canada, Ontario Ministry of Energy

[Spec]

I dont mind it, ebay is my best friend for Christmas shopping.

And we have a record low 5.39% unemployement rate right now.

Spec.

[Wezil]

...and a tax cut coming this afternoon.

[Flubber]

Originally posted by Spec
I dont mind it, ebay is my best friend for Christmas shopping.

And we have a record low 5.39% unemployement rate right now.

Spec.

I don't mind it either except the wives now want to fly to Seattle to go shopping and "save money"-- I shudder to think how much they would have to spend to do that once you factor in airfare and hotels

and the real fun thing is that we can quietly note our currency superiority while recalling the mockery from some Americans on these very boards when our dollar was worth 65cents.

This actually might be starting to be a good time to pick up some US real estate --

[Flubber]

Originally posted by Wezil
...and a tax cut coming this afternoon.

Are you expecting anything other than the GST cut?? there are rumors about a 1% personal tax cut but I wasn't sure if that was expected quite yet

[Spec]

@Flubber

Yea, that always made me laugh...The more you buy, the more you save!



Spec.

[Spec]

Originally posted by Flubber
Are you expecting anything other than the GST cut?? there are rumors about a 1% personal tax cut but I wasn't sure if that was expected quite yet

I'd rather like if they payed our debt than they decrease our tax payments for the moment.

Spec.

[Wezil]

The 1% GST is a given I think. Anything else (like reversing the 1/2 point income tax increase the conservatives gave us) would be bonus.

Spec - They are doing both. Debt payments have been made for a few years now (even under Martin).

[Flubber]

Originally posted by Spec


I'd rather like if they payed our debt than they decrease our tax payments for the moment.

Spec.

I think that what Harper has said is that conceptually they will use the surplus to pay down the debt and then give back the interest savings on the debt as a tax break



I actually like the concept. The lion share goes to debt reduction butthen Canadians benefit from the reduced debt.


And while I like debt reduction, the reality is that the debt beast is in pretty good control. Even if it stays the same size it becomes a smaller proportion of a growing economy every year