Hit to the pocket

By Brian Arkinstall

Classes have started for the winter, and with the trauma of paying thousands of dollars for tuition, fees and books, the average student may not have noticed that they are also paying more for food and beverages on campus.

Over the Christmas break some food service outlets raised prices for some of their products, mainly baked goods, coffee and tea. Cookies and coffee at Company’s Coming increased five cents, and baked products at The Cookie Nook increased 5-10 per cent. Aston Wong at The Cookie Nook cited the exchange rate and increased labour costs as reasons for the price increases.

“The distributor said there shouldn’t be any more increases for a couple of months,” said Wong.

The way the exchange rate affects prices is quite simple. When the Canadian dollar falls in value against a foreign currency, each unit of that currency costs more to purchase in Canadian funds. Imports are usually purchased in the currency of the exporting country. When the loonie is devalued versus a foreign currency, it costs more to purchase the imports in Canadian funds, even if the price of the product being imported remains constant in the exporting country. An example of this is the major devaluation of the loonie against the us dollar since 1996.

“The problem with the Canadian dollar, the reason it is quote ‘low,’ is because it takes so many to buy an American dollar,” explained U of C Professor of Economics Wil Holden. “The Canadian dollar is actually quite strong against most other foreign currencies.”

Holden agreed that the effect can be more severe because the us is Canada’s largest trading partner.

The news isn’t all bad. Several other food services have held the line on prices.
“Last year we had some fluctuations in salad prices because of El Nino, but prices have been constant this year,” said Cam Hallet at Favours. “The same can be said for our neighbours Primo and Taco Time because they are a part of University Food Services too.”

Barry Noiles at Max Café agrees that food providers have been under pressure to raise prices.

“Prices have increased everywhere over the past three years,” said Noiles. “Our price increase in September was the first in three years. We held the line as long as we could because we are owned by the SU. We have things on our menu that you can’t find anywhere else for that price.”

There is good news for those of you who are already feeling the pinch. Several of the businesses in MacEwan Student Centre are seeking help for the winter semester, including The Cookie Nook, the Delhi Deli, and Favours.

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