Poor exchange rate prompts county to slash equipment purchases

Canada’s limping dollar has convinced Lacombe County to dramatically cut its equipment purchases.

Canada’s limping dollar has convinced Lacombe County to dramatically cut its equipment purchases.

The county had planned to spend about $5.5 million ($3.8 million minus trade-ins) on new equipment, including five graders, for next year. That budget was trimmed to $681,000. Counting trade-in values on used equipment, the county expects to spend around $534,000.

Phil Lodermeier, county operations manager, said the poor exchange rate has driven up equipment costs by about 30 per cent over the past year. Most heavy equipment comes from U.S. manufacturers.

“We just don’t think we’re going to get value for money there,” Lodermeier said.

On top of that, the poor Alberta economy is driving down resale prices for the county’s used equipment.

It is hoped the Canadian dollar will recover next year, improving the economics for big purchasing. Even a 10 per cent improvement in the exchange rate with the U.S. dollar would be helpful, he said.

Lodermeier said there is risk to delaying equipment purchases. A year from now, most of the graders’ warranties will have expired and their resale value will drop further.

However, the graders are in good shape and county staff decided after careful number crunching that waiting out the economy for a year was the best option.

Council unanimously approved the new equipment purchasing plans.

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