Few Americans would have noticed Canada’s recent election (the show in Pakistan was a tough act to follow), but the country ended up radically (and I do mean radically) changed. In the map at the link above have a look at the blue dagger at the bottom. That’s Ontario’s “golden triangle,” and it just sent a whole lot of government members to Ottawa. This is the heart of the country’s auto industry, and borders on Detroit and Michigan.
Now Canada produces a lot of key commodities, including oil, uranium, potash and precious metals, which has sent the C$ “loonie” soaring above the US dollar. This makes parts manufactured in MI,OH,IN,… more expensive for repair shops here.
In fact, what happens to one of our cars after a fender-bender yields a picture in microcosm of much of the present world’s economy:
Collision Repair Magazine (5/9/’11): “The Loonie’s Rise”
… At the time of this writing, the Canadian dollar is worth over $1.03 USD, which is the highest it’s been in four years. And other than that brief flirt with parity in 2007, the dollar has not been on par with the greenback since the late 1970s. // Many OEM parts are manufactured in North America, with a big chunk of them being produced in the U.S. Historically, OEM parts have been priced higher in Canada than in the U.S., even factoring in exchange rate differences. // Compare this to aftermarket parts, which are typically produced overseas in low-cost manufacturing environments in countries such as Taiwan. The Taiwanese dollar as well as the Chinese yuan has been appreciating against the loonie, which could cause aftermarket parts to be more expensive in Canadian currency. Salvage parts, since they are sourced locally, really aren’t impacted by exchange rate fluctuations. // But don’t expect OEM prices to drop significantly even if the loonie shoots through the roof. As anyone who has been watching gas prices knows, prices are quick to jump up, but slow to come back down.