Canada´s Soaring Dollar Sets Up Snags for travel Industry

Can´t afford a vacation in Paris, where the dollar is worth just 78 cents against the euro? Or London, where the pound is so strong a dollar buys barely half of what it would in the United States?

For those wanting a cheaper, closer foreign destination, Montreal and Toronto have always been attractive alternatives. But even Canada is no longer the bargain it used to be for Americans.

In the past two years, the Canadian dollar has strengthened 25 percent against its U.S. counterpart, soaring to a value of 91.1 cents on May 9.

That´s the highest it has been since 1978, when Jimmy Carter was president, Dallas made its TV debut and the world´s first test-tube baby was born in Britain.

The strength of the loonie –nicknamed after Canada´s national bird- is terrific for Canadians who winter in Florida, purchase vacation homes in the states or simply drive across the border to U.S. stores where the Canadian greenback buys a lot more shoes and clothing than it once did.

But it´s not so good for Americans or the Canadian tourism industry. Some experts think the two currencies could even hit parity by the end of the year, wiping out any financial advantage Canadian cities and resorts have in luring visitors from south of the border.

The strong loonie is causing concerns in Canada´s tourism industry, which also suffered after the Sept. 11 attacks when tightened security caused huge tie-ups at the border. As the loonie rose against the dollar between March 2005 and March 2006, travel from the United States to Canada dropped more than 10 percent.