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If you are one of the approximately 700,000 Americans who lives in Canada, prices could soon be on the up
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Sending money from Canada to United States will be more costly, as the exchange rate weakens
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Lock in a rate with a money transfer provider and you can guard against future exchange rate fluctuations for large money transfers
Consumers will be the biggest losers, if the NAFTA cannot be renegotiated with the US, as economists indicate that failure to enter into an agreement will see prices rise as a result. Import duties will add pricing pressures, which will be passed on to the consumer. On top of this, there are concerns over tax reforms planned in USA, which will see corporation tax being cut to levels on a par with Canada. Businesses are warning that the impact of these two economic factors are likely to shift investment away from Canada and into the US instead. Over the years businesses operating in Canada have seen an increase in corporate tax, and increases in the minimum wage, which have made it more expensive to operate in Canada.
Uncertainty pervades in the wake of US tax reforms and NAFTA, but expectations are for periods of unsteady economic growth and a weakening exchange rate. Canada’s Chamber of Commerce president, Perrin Beatty, is calling for reforms in Canada to ensure that the country remains competitive, and an attractive investment opportunity, for all businesses.
If you are living, studying or working in Canada temporarily and sending money over the border, you’ll find that you’ll receive fewer US dollars on exchange. Relying on your bank to send international money transfers may seem convenient but it is likely to prove more costly than transferring with a money transfer provider. Many of these international money transfer providers have first rate mobile apps to make sending money abroad quick and easy. Some even integrate with social media platforms such as Facebook Messenger and What’s App if you want the flexibility to transfer easily while on the go. Sending money internationally through your bank can be expensive, not only due to the associated costs with the transactions, but also on account of the exchange rate you receive. Many banks charge a minimum $5 transaction fee on each transfer, even if you make regular transfers. Dissect the rate, and banks usually offer 4% (at best) away from the interbank rate. If you look at the many established money transfer providers, they offer rates that are closer to 0.5% to 1.5%. These differences mount up on larger or regular transactions. Many of these currency exchange brokers have forward contracts, which enable you to fix a rate in the future, over a time period of 2 days to 2 years. This will come in handy if you have a large money transfer to make and are concerned about rates moving out of your favour. You can use our comparison tool to find the most cost effective money transfer providers when exchanging Canadian dollars into US dollars.
