Expats in Canada and the falling loonie

21 May 2019

Canadian expats and the falling loonie

A weak loonie affects all Canadians but expats are often hit the hardest. When the dollar drops, visiting family and friends overseas is more expensive, remittances are worth less and overseas comfort purchases are costly.

In a survey of 1,200 Canadian adults, 10% of respondents said the money they send back to their family is or will be worth less. With Canadian remitters sending CAD$5.2 billion in 2017, that’s a lot of lost purchasing power.

How much less are remittances worth?

Expats in Canada send the most money to the Philippines, India, the United States, China and Pakistan. On average, they send around CAD$2,855 annually, according to StatCan. So what would happen if the loonie fell by around CAD$0.05? We used a weaker exchange rate to find out.

Given the Australian dollar (AUD) was approximately US$0.05 weaker than the CAD at the time of analysis, we used it to calculate how a fall in the loonie might impact remittances sent from Canada.

If the loonie fell, expats sending money to the top 5 countries for remittances would lose roughly CAD$202.40 on average over the course of the year. But what does this mean in real terms for people on the receiving end?

Canada exchange rate remittances Image: Getty

Expats from the Philippines would lose about ₱7,332 due to the exchange rate. In practical terms, that’s just under a month of rent for a one-bedroom apartment outside the city centre, according to user-contributed data from Numbeo.

Indian expats would be even worse off. They’d lose the equivalent of one month of rent as well as all their basic utilities (like water and electricity) for the whole month. Chinese expats wouldn’t fair as badly, with around ¥972 lost – the cost of basic utilities for three months in their home country.

Closer to home, Canadians who send money south of the border would also be affected. Based on the average remittance, American expats would lose roughly US$144 over the course of the year due to the exchange rate. That’s roughly two months of public transport passes, at around US$70 a pop.

Americans being paid in CAD could expect to take home a smaller pay packet, while the cost of living stays the same. Conversely, for those paid in USD who are living in Canada, their pay might stretch a little further. Here’s hoping you’re working on the right side of the border!

What a weaker Canadian dollar means for remittances

CountryAmount received (using current CAD value as of 15 May, 2019)Amount received (if CAD fell by $0.05)Amount lost over a monthAmount lost over a year
Philippines (PHP)₱9,206₱8,595₱611₱7,332
India (INR)₹12,362₹11,539₹823₹9,876
United States (USD)US$176US$164US$12US$144
China (CNY)¥1,210¥1,129¥81¥972
Pakistan (PKR)₨24,912₨23,235₨1,677₨20,124

Visiting family and friends could get more expensive

For expats travelling home to visit their families, frequent trips could soon be out of reach. Overall, increased travel costs are the biggest concern for Canadians. Almost half (47%) of Canadian adults say travelling was, or will be, more expensive with a weak dollar. For some, this might mean less overseas holidays, but for expats it could mean less trips home to see their loved ones.

The increased price of overseas products was the second most commonly cited impact of a weak loonie, with 36% of consumers acknowledging they’d need to pay more for foreign goods. For expats, purchasing items they miss from their home country might not be as affordable as it once was.

Pensions and investments

For older expats who receive a pension from an overseas government body, the money they receive could be worth more – depending on where it’s from.

For example, if a British expat in Canada receives the full basic state pension from the British government (£129.20), they would currently receive around CAD$224 per week if they used the most cost-effective transfer provider. However, if the loonie fell by around 5 cents, they would receive CAD$240 – a difference of roughly CAD$16. Over the course of the year, this would add up to CAD$832.

For people with overseas investments, a falling loonie will likely have some kind of impact on their portfolio. However this is dependent on the type of investment held and the currency it is in. One respondent mentioned their overseas investment will lose money, while another said it will be worth more.

Other consequences

Other concerns mentioned include online shopping and the cost of education. One respondent said the money they spend online shopping with US businesses wouldn’t go as far as it used to. Another said they have stopped shopping in the States altogether. Time to shop local?

Just 3.17% said their overseas tuition is or will be more expensive. Those aged 18-24 were most likely to fall into this category, presumably because they’re more likely to currently be enrolled. According to our survey, 14.89% said overseas tuition will be more expensive, compared to 5.42% of 25-34 year olds and 6.76% of 35-44 year olds.

Is ignorance really bliss?

Worryingly, 2.3 million Canadians weren’t even aware they would be affected by a falling dollar. A further 16.33% said they have not or will not be impacted. Baby boomers are more likely to believe they’re full proof to any exchange rate changes, with 23.13% of people aged 55-64 saying they have not or will not be impacted.

Tips for sending money overseas

  1. Research, research, research

Research should always be your first port of call before you make a transfer. Learn the ins and outs about sending money overseas so you know what’s standard, and when you’re potentially wasting money on fees and other costs.

2. Watch the financial markets

It might seem tedious, but keeping an eye on the market can pay off in the long run. International politics and landmark decisions, like NAFTA or Brexit, can influence currency values. The exchange rates given by providers are dependent on the current exchange rate, so it’s best to monitor any changes and make a move when you’ll get the best bang for your buck.

3. Compare your options

With banks, FX brokers and dedicated transfer services all competing for your business, choosing a transfer provider might seem overwhelming. Choosing the right one for you will depend on a number of factors, like the amount you’re spending and the currency you’re transferring. Rates and fees will vary across the board, so it’s best to shop around to make sure you’re getting the best deal available.


This data is from a survey of 1,200 Canadian adults commissioned by finder.com and conducted by OnePoll in April 2019. Due to not having enough respondents, the North region (Nunavut, Northwest Territories, Yukon Territory) was not included.
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