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Canadian dollars (loonies) fall through the air in a photo illustration.

JONATHAN HAYWARD/The Canadian Press

Most small businesses have no plan to deal with the impact of a falling loonie on their bottom line and are instead taking ad hoc steps like reducing costs or altering prices, according to a poll by the Canadian Imperial Bank of Commerce

A poll of 500 businesses by CIBC found that 65 per cent had no plan to deal with a lower Canadian dollar even though more than one-third were worried about the impact of a lower currency.

"We've had such a consistently strong dollar over the last seven or eight years that ... people started to run their business in way that they forgot about that impact," said Shelley Swanlund, vice-president of business banking and head of small business at CIBC.

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"As they (now) see that impact quarter over quarter, they're starting to have a realization of the implications."

Importers are the most likely business owners to be concerned (86 per cent) given the higher costs they're faced with if the loonie drops relative to the U.S. dollar, while 53 per cent of manufacturing companies and 44 per cent of wholesale and retail businesses were also worried.

Companies that have taken steps to deal with the impact of the loonie's decline have generally opted to reduce spending, alter pricing and source new or alternative clients or suppliers. But while those may be natural reactions to dealing with a change in cash flow, Swanlund said, they aren't likely to be sustainable in the long run.

Instead of short-term solutions, CIBC recommends small businesses put in place a plan to manage currency fluctuations and monitor that plan on an ongoing basis. That could involve holding US dollar accounts and having access to capital to address fluctuations in cash flow.

They should also build flexibility into their business model to be able to absorb changes to the loonie or other unexpected expenses by having access to an emergency reserve fund, whether it's accumulated savings or a line of credit.

"There are so many ways they can protect themselves from fluctuation if they actually have a currency plan that recognizes that the dollar will move up and down, within a certain variance," she said.

"They're actually simple things, but they do take some time for the business owners to sit down and go through the impact to their business."

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On regional basis, business owners in Manitoba and Saskatchewan were the most worried, while those in Atlantic Canada were the most unprepared.

The Canadian dollar has been trending upward of late after trading below 89 cents US in late March, closing at 91.56 cents US on Tuesday. However that is still well below its 2014 high of 93.99 cents US on Jan. 3, while the currency hasn't seen parity with the U.S. dollar since February 2013.

The poll was conducted online by Leger from Feb. 12 to 19, among a representative sample of English– and French-speaking business owners or decision-makers in Canadian companies with 500 employees or less.

The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

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