Best-ever Canadian exchange rate still not luring US tourists
Ingonish, Nova Scotia — The T-shirted tourist leaned against the fender of his New Jersey-licensed car, eating an ice cream cone in the misty Canadian evening. He was obviously pleased.
''We've been getting 20, sometimes 25, all the way,'' he said.
The subject: the highest exchange rate on record between Canada and the United States.
This summer, ''The American dollar is buying at least 25 cents extra in Canada,'' says Allan Martel, acting director of US marketing for the Canadian government Office of Tourism in Ottawa.
This is bad news for those parts of the hard-hit Canadian economy that purchase US goods and services. But the northern nation's single largest economic sector - tourism, whose 100,000 businesses employ one in every nine working Canadians - stands to benefit from the difference.
Or at least it should. But the news, say Canadian officials, has yet to sink in south of the border.
The US is expected to supply 40 million of Canada's 42 million tourists this summer. But tourism in May and June, says Mr. Martel, was down between 15 and 20 percent. Following a strong period from January to April, the decline has put Canada about 10 percent behind its goal for the first six months of 1982.
Part of the reason, says Mitch Vlad of the Boston branch of the Office of Tourism, is poor weather. But he adds that ''people are doing a tremendous amount of shopping around'' this year.
With the economies of both countries faltering, there are fewer dollars available for vacations. Those who do take vacations wait longer to make their plans. They are also traveling closer to home.
In eastern Canada, this has helped the so-called ''rubber-tire traffic'' of motorists - like the man from New Jersey. But even though such traffic accounts for 85 percent of eastern Canada's tourism, package-tour visitors tend to spend more per day.
And many of them have not been booking ahead - or, if they did, says Mr. Martel, they have sometimes canceled and gone instead to the World's Fair in Knoxville.
Reservations for one of the most popular resort areas - the Banff National Park region of Alberta - were off by 17 percent for the first six months of the year.
But the picture may be improving. W. Allan Wilbur of the Automobile Association of America notes that orders by member clubs for AAA tour books and sheet maps for Canada are slightly higher than they were in the first half of 1981.
Bookings across Canada for July and August look much better, says Mr. Martel. ''We may come out about even,'' he says, which is not bad in a declining economy.
But he adds, ''I think we have some advertising to do.'' Recent surveys have found that most Americans thought the Canadian exchange rate was in the 10 to 15 percent range - if they thought of it at all.
After years of see-sawing, with Americans sometimes paying Canadians as much as 10 cents on the dollar, the rate has recently exploded.
At the beginning of the year, a US dollar was worth $1.19 in Canada. By the end of June, it was up to $1.29 - although it has since fallen to about $1.26.
The exchange rate, however, is not the only factor affecting travelers. In an article in the April issue of Adventure Travel magazine, economist Jon Mason of New York's Chemical Bank calculated what he called an ''expense index'' for various foreign destinations.
By his calculations, Canada's higher prices and its rate of inflation nearly offset any gains on the exchange rate. His figures (which Chemical Bank economists agree have not changed significantly since the article was published) show that $100 worth of tourist goods and services bought in the US would cost only $99 in Canada.
And while that is a far cry from France - where the same $100 of US goods and services would cost $125.80 - it does not mean that Canada is a particular bargain, however advantageous the exchange rate.
But the exchange rate remains the most visible economic sign. And since the typical US citizen waits about eight years between visits to Canada, many still assume that the rate works against them.
The man from New Jersey knows otherwise. Even the rain that obscured the rugged grandeur of the Cape Breton Highlands National Park could not dampen his pleasure.
''When we came up to Canada in 1974,'' he recalls, ''we were paying 10 percent.''