Editorial: February 2015
I mentioned the price of oil last month and how nice it is for all of us to get a break at the pumps, even though it is not so nice for those of us attached to the industry that pumps the stuff out of the ground.
By Patrick Flannery
I mentioned the price of oil last month and how nice it is for all of us to get a break at the pumps, even though it is not so nice for those of us attached to the industry that pumps the stuff out of the ground. As is becoming more and more obvious, we are all attached to that industry through the stock market and the exchange rate. The last few weeks have seen a precipitous decline in the price of oil and with it triple digit losses on the TSX and a collapse in the value of our dollar to below 90 cents against the greenback.
Your fill-up may be less expensive, but the vehicle it is going into sure won’t be. Nor will the equipment it is towing, if it was made anywhere other than Canada. Time to sharpen your pencil on those ROI calculations. Your manufacturing customers who export to the U.S. may become peppier as they grab more sales, and your farmers trading on U.S. exchanges may have some spring in their step as they collect U.S. dollars, but all of them will be impacted by higher prices for their inputs and just about every other sector will only see a downside. A sustained devaluation of the Canadian dollar will take some time to percolate through to the retail market and affect homeowner behaviour, but the effect will come as sure as pump rentals follow the spring thaw.
Financial analysts around the country are now fairly unanimous in saying a depressed dollar is a bad thing for the Canadian economy as a whole, in marked contrast to the opinion in the ‘90s which held that a low dollar was good because of its tendency to help manufacturers. Honestly, I sometimes think these guys change their views more than fashion designers and with no more justification. In this case, I suspect they may be right as our economy becomes more about services and less about actually making things. If a weaker dollar means tighter margins, one way to react is to find more customers. We have some tips on page 36 for how you can use Facebook to reach out to a group that has at least half the influence over household buying decisions.
Once again, I encourage everyone to get out to your local show this season and meet the vendors who are showing their commitment to the Canadian rental market. In an atmosphere where buying American is becoming more difficult, this show season is a great time to find suppliers who will work with you to share or at least spread out the pain. After all, the dollar spread only hurts if it is passed along in the Canadian dollar price.
In closing, I’d like to express my personal sadness over our top news story this month, the passing of 36-year-old Dale Pardy, owner of Butler Scaffolding Sales and Rentals in Halifax, N.S. Dale and Sara were some of the first people I met in the great Atlantic Canada rental community, and I’ll always remember their warm welcome at the 2012 trade show. In our September 2012 profile on Butler, Dale described their service as “personable.” That hit the nail on the head, not only in regards to his store, but for Dale himself and his family. Dale’s leadership and generosity with his time made for a quick rise through the chairs in the CRA Atlantic local, culminating in his election as president, a position he occupied until his untimely death from cancer. In my opinion, the Atlantic rental industry owes this energetic young man a deep debt of gratitude for his role in invigorating and renewing the association and its trade show. I know rental people across the country will join me in offering our deepest condolences to Dale’s wonderful wife, Sara, and to his children, Emily and Timothy.