This winter, while the rest of us are cursing the cold and shaking rock salt over icy steps, Susan Sebekos will be living it up in Florida.
At 55, it's her first time heading down to the Sunshine State as a Canadian snowbird, remaining in the United States for an extended period to avoid winter's chill. She and her husband plan to take a road trip from their Niagara region home in Ontario to Texas and Louisiana first before settling in Florida for at least a month. With their daughter grown, a house and dog sitter in place, and matching work-from-home jobs as a writer and an attorney, Ms. Sebekos is convinced they're ready to take the plunge.
"There's nothing keeping us here," she says.
Not unless you count the tumbling Canadian dollar. This past Tuesday, the dollar hit a fresh 11-year low, slipping to 74.33 cents (U.S.) in the afternoon before attempting a lacklustre rally to close at 74.50 cents. The last time the loonie looked that bad, the Montreal Expos were playing their final game against the Florida Marlins at Olympic Stadium in front of 30,000 gutted fans.
With predictions that the situation will only get worse before it gets better, Ms. Sebekos is likely in the minority as a snowbird first-timer this year. The weak dollar now means that annual winter getaway will cost about 25 per cent more. For some winter escapees, paying extra for essentials will mean making some tough choices and adjusting plans this year, explains Dan Noel, a certified financial planner and investment manager with Wyverstone Capital in Moncton.
"I have a client who instead of going down for five months is going to go for four. That's purely and directly related to the currency," he says.
For Canadians who already own property in the U.S. Sunbelt, their accommodation expenses are fixed, but many other related expenditures are not. Steve and Liz McQuaid (they've asked for pseudonyms, not wanting to advertise that their Southwestern Ontario home sits empty for months each year) are reminded of this when they pay their Florida condo fees each quarter.
"It takes more and more Canadian money to pay the U.S. fee," says Mr. McQuaid.
Don't forget home insurance, entertainment, golf green fees, restaurant meals and groceries. They go up, too. "You do have some fixed costs, but you have to spray for ants and pay for the upkeep of your property and taxes. Those are all in U.S. dollars," says Mr. Noel.
And then there are the frills. Paying for the grandchildren to come down for a trip to Disney World? According to the AllEars.net's ticket increase guide, that $75 (U.S.) single-day adult admission ticket for the Magic Kingdom in 2009 now costs $105 (U.S.). Factor in the Canadian exchange rate, and you're looking at approximately $141 now versus what would have been $71.50 in 2009.
Ms. McQuaid admits she will probably pull back this year on some of the activities she usually enjoys. Forget going out for dinner quite so often and shopping excursions with her American friends.
"I'll likely tell them to go without me this year," she says. "That's a shame because it's fun."
Canadians' hesitance to part with their dollar while away will have an impact on local economies in the U.S. South, particularly in regions such as Florida, Arizona, Texas and California where Canadian snowbirds tend to flock. The United States is already seeing a decline in the number of houses sold to international buyers. According to the 2015 Profile of Home Buying Activity of International Clients report, published by the U.S. National Association of Realtors, there has been a 10-per-cent decline in homes sold between 2014 and 2015. Seventy-five per cent of Realtors reported to the NAR that the strong U.S. dollar has had an impact on their sales numbers.
There's an upside to the housing story, too. Any Canadians savvy enough to have bought a home during the most recent U.S. financial crisis, between 2008 and 2011 when there was Canadian dollar parity coupled with rock-bottom prices, can now reap the rewards if they sell. The exchange rate alone gives a 25-per-cent return.
Just be aware of tax implications when selling, says Terry Ritchie, director of cross-border wealth services for Cardinal Point, a Canada-U.S. cross-border wealth management company in Calgary. If the proceeds of the property are worth more than $300,000, there's a 10-per-cent federal tax requirement. Selling in California or Hawaii? Expect to pay even more. Luckily, if paying that tax will mean losing money on the sale, you can file an Internal Revenue Service tax form, the 8288-B, and ask for a tax reduction. Even so, "It's an onerous process," he warns.
There are other ways to save money down south that aren't quite as extreme as selling that vacation home. Renting out the property to Americans who are paying with greenbacks when you're not using it helps mitigate currency fluctuations.
Snowbird renters can also rethink where they travel this year. While South Florida's rental and real estate market remains hot (read: pricey), other regions are more financially manageable. Ms. Sebekos plans to rent an ocean-side condo in Destin on the Florida Panhandle for just $1,800 a month as opposed to $2,400 for a landlocked condo in Boca Raton on the East Coast.
"I know it's not as warm, but it's still bright – and there's nothing to shovel," she says.
More good news: Gas prices have dropped so steeply in the United States that travel will cost a fraction of what it did a couple of years ago. The average price in Florida today is about $2.14 (U.S.) a gallon. In 2013, it cost $3.41. For Ms. Sebekos, who plans to drive her hybrid Ford Fusion that gets 150 miles a gallon, the cost will be pennies a day.
Ultimately, the weak Canadian dollar won't have a hugely negative impact on how snowbirds travel long-term, Mr. Noel predicts. After all, we've been here before and Canadians are used to currency exchange swings. Think of it as our own version of hedonic adaptation – humans' ability to adapt to different environments and quickly return to a stable level of satisfaction. Besides, for most snowbirds, heading south for months at a time is more of a lifestyle choice than a strictly logical financial move.
"You're going to see a slowdown of Canadian snowbirds for a season, then people are going to adjust and go down again," Mr. Noel says. "It's just the fear factor right now."