The rising Canadian dollar has placed serious difficulties on many Canadian software companies. With $1 Canadian currently worth $1.0242 US, it's getting harder for software vendors to make a profit.
For the past few years Canadian software makers have enjoyed a competitive advantage over their US rivals due to the lower Canadian dollar. Canadian software producers generally pay their highest costs such as rent and salaries in Canadian dollars. They sell their software usually to American customers who pay in US dollars. This has enabled Canadian software publishers to earn an extra 10 percent or so in revenues when converting their US dollar revenues into Canadian dollars.
In some cases this currency conversion advantage has led Canadian firms to become ineffecient. When a firm has a competitive advantage due to circumstances beyond it's own control then it becomes easy to rely too heavily on this advantage and lose competitive edge.
With the Canadian dollar believed to continue it's rise by many financial planners and economists this can only force Canadian software publishers to increase their efficiency in order to compete in world markets or risk losing market share to their American counterparts.
