Not sure if I got my point through the first time. Its been 10 years since I took International Trade and I've forgotten 99% of it.
But it seems to me that World Currencies are all connected. Just because the exchange rate between US and Canada has increased in favor of Canada, it doesn't mean that the cost of Canadian goods that are purchased from the US must go down. For stuff like produce that are grown in the US, then yes, we can buy more oranges and stuff like that. But most aquarium related stuff like lamps, heaters, pumps, even livestock aren't produced in the US. Most of them are produced in places like Malaysia, Philippines, China, various European countries, Mexico, S. America, etc, etc. The Canadian dollar has not increased against those currencies. Meanwhile, the US dollar has decreased against those currencies. This means that US prices have no choice but to go up or risk losing profits.
Let's take an easy example. Consider a light bulb that is made in Germany. Check out the exchange in the last 2 years.
http://finance.yahoo.com/currency/co...EUR&amt=1&t=2y
Let's assume that a single 250W AB 10K bulb costs $50 Euros to buy from manufacturer in Germany in Dec 2002. It costs the US wholesaler $50 US to buy that bulb based on the exchange rate in Dec 2002. The wholesaler marks it up 50% and sells it at $75US for a gross profit of $25 (50%).
Today, the exchange rate between US/Euro is 0.76. Today, the US wholesaler buys the same $50 Euro bulb and pays $65US to buy it based on today's exchange rate. He sells the bulb for $75 for a gross profit of $10US. Now, factor in costs of operation, and he's probably losing money on the bulb. The only way for the US wholesaler to make money is to increase the price to $97.50US in order to maintain a gross profit of 50%.
Here's the exchange rate between Canada and the US for the last 2 years.
http://finance.yahoo.com/currency/co...CAD&amt=1&t=2y
2 years ago, that $75US bulb costs a Canadian store $120CAD to buy at the US wholesaler. Today, that same bulb (assuming the US wholesaler raises its price to maintain gross margin %) will soon cost the Canadian store $117CAD.
In conclusion, the Canadian store pays about the same price for the bulb even though the Canadian currency rose 30% over US currency. The assumption of course is that the US wholesaler maintains its pricing using a gross markup percentage based on cost of the good. It wouldn't make sense for them not to. When I worked in retail, we always marked up our products based on the cost of the good. I don't see why the US wholesaler wouldn't do the same.
In the short term, yes, Canadians will get a great deal buying goods from the US, until (and that's a given) the US wholesaler raise their prices, which will raise the prices of the US retail stores as well.