US and Canadian Trading and Dollar Economics


The United States of America and Canada are immediate neighbors and huge trading partners. The two countries have excellent relationships with many facets, and economics is one of them. One of the more interesting economic factors with any two trading nations is the relative value of their currency. Fortunes have been made and lost over just this factor alone, though to most people the adjustments in valuations change slowly and only directly effect them in minor ways. Those who live in border towns are most acutely aware of the fact that previously the Canadian dollar (nicknamed the Loonie) was worth a significantly lower amount than the US dollar. Now they are at near parity and have been so for several years.

These changes in valuations between the US and Canadian dollars will influence which side of the border people will go to for making their purchases. For example Canada has higher sin taxes on tobacco products, so a drive south for them can yield great savings. About five years ago there was an opposite effect when citizens of the US realized that prescription pharmaceuticals were much cheaper to buy in Canada, and those who needed them rushed to the north to purchase them. This was due to legislative differences between the countries, namely the discount inducing requirements of the Canadian socialized medicine system which is unlikely to ever materialize in the United States.

There are several important differences in the way the two countries legislate over business. Financial investment, and their associated tax systems is another such area. A discerning investor will take advantage in using the best aspects of each system. It’s another example of how trade will continue between these linked economies.

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