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Struggling Canadian dollar: What it means for travellers and businesses

Published July 26, 2026 at 8:32 AM UTC

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The Canadian dollar has dropped to its lowest level in years, stirring unease among travellers planning trips abroad and local businesses that depend on imported goods. The loonie has fallen more than 5% against the US dollar since the start of the year, now trading near 72 US cents. The slide is largely tied to the Bank of Canada's decision to cut interest rates ahead of the US Federal Reserve, making Canadian assets less attractive to investors. Lower commodity prices, especially for oil, have added to the pressure. For travellers, every dollar buys less in the US and other dollar-pegged destinations, driving up costs for flights, hotels, and shopping. Small businesses that import raw materials or finished products face higher expenses, squeezing profit margins. Some are passing costs to consumers, while others absorb the hit. Exporters, however, may benefit as Canadian goods become cheaper abroad. The Bank of Canada has signalled it may hold rates steady for now, but the outlook remains uncertain. Analysts say the dollar could stay weak until the economy shows clearer signs of recovery or interest rate differentials narrow.