America have always been able to boast that their dollar was stronger than their cousins in Canada. Canada has never been able to keep up with the rapid growth of the American economy and whilst they certainly aren’t doing badly, they have always been overshadowed by their next door neighbours. However, as people going on Canada holidays may have noticed recently, with the recession in full flow, Canadian money in closing the gap and their economy looks to be more stable than in the States.
This is largely due to two factors. Firstly, the borrowing habits in America have traditionally been a lot less stable that those in Canada. Without getting into the strict economics of the situation, Americans have borrowed more money from banks than Canadians. This led to outwardly impressive levels of economy growth, but in reality meant that America had a huge deficit when it came to the amount of money they actually had, and the amount they owed. The American dollar was severely hurt as a result.
Secondly, the GNP of America is heavily reliant on the oil and industry sectors. These are two sectors that have been hit heavily in the credit crisis and have left record numbers of Americans out of work and whole towns even struggling to make ends meet. Industry has been affected mainly because demand has dropped for things like cars and other machinery, and oil has suffered due to dwindling resources and the ability of counties in the Far East being able to flood the market with cheap oil.
This is good news of course for Canadians who are planning to go on American holidays, as they their money will go further than it has done for a long while. However, if you are an American thinking about visiting Canada, it’s probably best to stick to Alaska holidays for now.