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Grand Forks becoming less of a good deal for Canadians: Northern neighbors still shopping in ND, but their currency buys less

GRAND FORKS — Chuck Tanner was doing a bit of dashboard accounting in the parking lot of the Target store in Grand forks Tuesday afternoon.

The Winnipeg, Manitoba, resident was shopping with his wife, and calculating how much they could spend without hitting the duty-free limit when traveling back to Canada.

That’s one of several economic factors Canadians keep track of when shopping in Grand Forks. Another that Tanner watches, as do local tourism and business officials, is the exchange rate.

The Canadian dollar has slowly weakened against its American counterpart over the past year, fueling concern about the exchange rate’s effect on the Grand Forks economy.

In March 2013, the Canadian dollar had roughly the same value as the American dollar. Local business leaders say the closer the two currencies are to each other, the better for driving tourism and retail traffic.

But in the 12 months since, the Canadian dollar’s value has slowly dropped. As of Monday, one Canadian dollar was worth 90.48 cents, according to the Bank of Canada. That figure represents the lowest the exchange rate has been on that date since 2009 when a Canadian dollar would net 78.63 cents.

Barry Wilfahrt, president and CEO of the Grand Forks-East Grand Forks Chamber of Commerce, said while there’s still decent Canadian traffic, he’s already talked to retail businesses that have been affected by the drop.

He said some businesses in town rely on Canadian customers for 25 percent to almost 50 percent of their sales.

“That is a number that we certainly watch as a community,” Wilfahrt said of the exchange rate. “If it would go down to 80 cents, that would have a major impact on our community.”

Tanner said the exchange rate hasn’t become low enough yet to prevent him from shopping here. But, he added, that could change if the trend continues.

Potential effects

Despite the decrease, the local Target hasn’t noticed an effect on sales, said executive team leader Robert Haskins. He said Canadian shoppers typically pay in cash and Target’s cash payments have stayed high on the weekends, an indication of healthy Canadian traffic.

“I don’t think it’s that drastic of a change yet for them,” he said. “We’re still doing the same amount of sales we did about three or four months ago.”

Grand Forks City Council President Hal Gershman said he’s concerned about city sales tax collections. However, collections were up 17.1 percent in the first two months of 2014 compared to the same time period last year, according to a city memo. In fact, February represented the third-highest sales tax collection in city history, not adjusted for inflation.

But Grand Forks’ collections for March are down by about 21 percent according to Ralph Kingsbury’s website,, though it’s unclear what effect the exchange rate may have on that figure.

Julie Rygg, executive director of the Greater Grand Forks Convention and Visitors Bureau, said during a recent Alerus Center Commission meeting that tourism hasn’t been significantly affected by the exchange rate, despite a drop in hotel occupancy rates last year.

The drop — from 71.5 percent in 2012 to 64.9 percent in 2013 — occurred because of more hotels being built, she said.

Tanner said despite their occasional trips to the U.S., they buy almost everything in Canada. Still, Canadian traffic can be important for some businesses here.

“I know when my father started (Happy Harry’s Bottle Shops), a big part of his business was Canadian travelers,” Gershman said. “It’s been a factor for many years here.”

Gershman added that Grand Forks has become more of a regional shopping center for American visitors over the years as well.

“So that I think has helped defray some of the effects,” he said.

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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