Exchange Rate Management

According to the Environmental Assessment project timeline,
Container ship designed for ice. credit Journal of Commerce

the feasibility for the project took place in the 3rd quarter 2006. As stated by the Bank of Canada the Canadian dollar was trading at $0.8965 CDN or $1.1154 USD. During that phase of the project the prospect of gaining an 11.54% discount on a project that would eventually cost upwards of $350 Million that could be a possible difference of more than $40 Million dollars.

By the time that construction was to start in the 3rd Quarter of 2008, the Canadian Dollar was still weak sitting at $0.9426 CDN or $1.0609 USD, but it was gaining ground. Shortly following the 3rd Quarter, the recession took its effects on the CDN dollar.

On October 26th the CDN dollar dropped to $0.7794 CDN or $1.2831 USD. Although this would have been an ideal time, the US markets froze up, and banks weren’t lending money. Some banks even went bankrupt.

Although Maher Melford may not employ mathematicians or economists, managing the exchange rate within the company would come in the form of monitoring the current conditions in the borrowing market. The company could then decide if 'now' would be a good time to borrow, repay or consolidate its current outstanding loans. The organization could also decide with whom to partner to achieve optimum value, preserve profits or make investment decisions.

Intermodal connection of container from ship to ground trucking. (Credit World Shipping Org)
Today the CDN dollar is strong, hampering the construction of the project. With the CDN dollar high, our products cost more to other countries, and a decline in exports usually follows a high dollar. But the recession still looming in some countries. Canada has a strong chance to compete globally in today’s market by finding new trading partners and the Maher Melford Terminals would bring in products from India and Asia directly to Nova Scotia.

Bank of Canada FX look up -
Environmental Assessment page 5. -