According to global professional services firm Ernst & Young, there will be an expected 4% increase in back-to-school spending in Canada this year.
This is due, in part, to the lower Canadian dollar: the loonie closed at 75.87 cents USD last week, meaning that a U.S. dollar now costs about CDN $1.32 to buy. As a result, Canadian consumers will most likely be making their purchases closer to home.
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“We do expect fewer dollars to be spent cross-border,” says Daniel Baer, Canadian retail and consumer products sector leader for Ernst & Young. “And when we say that, (we are referring to) people who physically go cross-border, but also people who shop on U.S. sites.”
Recent universal child-care benefit payments from the federal government will also likely translate into an increase in spending, says Baer. However, he notes that inflation, higher housing costs and economic uncertainty may actually curb consumer spending.
