The adverse impact has been greatest on Canada's West Coast, which has the strongest economic ties to Asia and is the region most dependent on resource industries such as forestry and mining. While the rest of Canada looks toward reduced economic growth, the province of British Columbia is tipping into recession.
According to John de Wolf, president of CCG Consulting Group in Vancouver, in the early 1990s boom, 35% to 40% of the region's exports went to Asia--a much higher percentage than in the rest of Canada.
Now, de Wolf said, that figure has dropped to 22%, and the weakened economy is more dependent on its emerging high-tech industry, tourism, some specialty manufacturing and motion picture production.
The weakness of the loonie versus the greenback is a major draw for filmmakers shooting on location in Canada. Peter Mitchell, director of the British Columbia Film Commission, acknowledged that it is "the No. 1 factor driving the TV and film industry" in the province, which hosted more than 160 productions last year.
In Alberta, used primarily in the past for filming Westerns, the government this year converted part of an abandoned army base in Calgary into sound stages that are now being used by U.S. producers of three television movies and a cable television series.
Both sides of the Asia crisis are on display in Banff--Canada's oldest national park and the destination of more than 5 million visitors a year.
Greg McKnight, executive director of the Banff-Lake Louise Tourism Bureau, said that before the crash, Japan was the region's biggest overseas market and South Korea was the fastest-growing one. Now visits from both countries have tumbled.
"The Japanese were the largest per diem spenders by far in Canada," he said. "If there's one sector that has really been hurt by the Asian crisis, it's the high-end retailers, the furriers, jewelry stores, leather goods."
But the limp loonie has been a boon for the Canadian tourism industry. Travel to Canada has become such a bargain for non-Asians, that non-Asians have more than made up for the falloff in Asian visitors. The Canadian Tourism Commission reports that through May, overall visitation increased 4.9% from a similar period in 1997.
That's not to say Banff marketers have given up on Asia, according to McKnight. "We're assuming it's going to be down for three to five years," he said. "But we still have to be there, because when it does turn around, we want to be at the top of the mind."
Andrew Van Velzen in The Times' Toronto Bureau contributed to this report.
* YEN REBOUNDS: Japan's currency recovered from an eight-year low. D4
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Fall of the Loon
The Canadian dollar lost more ground to the U.S. dollar in July than any currency except the Japanese yen.
How many Canadian dollars it takes to buy a U.S. dollar (scale is inverted to show negative trend):
Wednesday: $1.52 Canadian dollars per U.S. dollar.
Source: Bloomberg News