I am Canadian. Our company is based in Canada. We offer invoicing services to small businesses and home based businesses. Business is good and we are growing fast.
We believe in simplicity. We decided to charge our clients in one currency. If you are going to work internationally with one currency (we have users in 120 countries) the currency you choose is US dollars and I don’t know anyone who would argue that. As a Canadian this raises a number of issues.
1. Oligopoly in banking: Canada has 5 major banks. That’s not much competition. The banks collude to do things that are good for them, not so much for Canadians. For example, to transfer USD funds from our US accounts into our CDN dollar accounts the banks charge us about 1% of the transaction. This is bullshit (pardon my French). For a while now, we have used Custom House to exchange our funds (I have an old friend there named Chris Day. Great service. Call him or me if you need to exchange currency). Custom House takes about 0.1% of the transactions – more reasonable.
2. The Canadian dollar is powerful: Over the past three years, we have seen the Canadian dollar rise from about $0.65 to about $0.90 … we used to get 1.4 CDN for each USD. Now we get about 1.13. This is not as bad for us as I imagine it is for many other Canadian companies because we can pay (and do) some of our major expenses in USD, which isolates us from the change in currency volatility, but as a Canadian business person who collects internationally, it’s a drag to lose the bump we used to get with a weaker dollar.
So, why the rant? I remember when I was in grade four and I started to watch the Dow Jones index. In fact, I tracked stocks for my Dad (remember New York Seltzer? We did great on that one =)) . Back then, I wanted the Canadian dollar to equal the USD. It was a point of principle. Goes to show you should be careful what you wish for…
Anyhow…I know the high value of the Canadian currency is something on the mind David Dodge (governor of the Bank of Canada). I read a piece in the Globe on it last week. Thought I would share my thoughts because I think it is an interesting issue in web services for many companies (and will continue to be) because location does not matter much with web services and therefore you don’t necessarily collect in your own dollar.
P.S. We are releasing a sneak peak of our new company name and logo and website tomorrow. I’ll post something here so be sure to read tomorrow.