As if keeping current with the state of negotiations over the North American free-trade agreement weren't enough, James Rumble also finds he needs to keep up with what's happening on currency exchanges.
He is chief financial officer of Intelex Technologies Inc., a Toronto-based company that provides software for companies to track their environmental, health and safety programs.
Intelex has penetrated into the U.S. health-care market. While it employs most of its 450 people in Toronto, it also has a 40-person office in Denver and does a "big chunk" of its business south of the border, Mr. Rumble says.
"We're going to add 100 people to our total work force in the next 12 months. If currency rates [between Canada and the United States] change suddenly, I have to think about how many people we're going to add and where," he says.
"When you're a high-growth business, you can't just keep pressing on the accelerator and taking your foot off just because FX [foreign exchange] fluctuates."
Even in calmer, more normal times for cross-border trade, companies like Intelex that do international business have to pay attention to changing exchange rates.
These are not exactly normal times, though – Canada, the United States and Mexico are set to resume talks to renegotiate NAFTA and the discussions so far have been anything but calm.
"We won't be pushed into accepting a bad NAFTA deal," Prime Minister Justin Trudeau told a Toronto audience in early November.
Nevertheless, controversies continue to swirl around U.S. demands for a deal that demands more American content in products such as automobiles, the end of the dispute resolution mechanism in the current agreement or the tearing down of Canadian price supports for farmers.
And there are also currency considerations to consider.
In November, the Canadian dollar has been hovering just below 80 cents U.S.
Currency exchange issues loom over NAFTA because a Canadian dollar that is somewhat lower than the U.S. dollar brings advantages to Canada. Labour costs are cheaper in Canada with an 80-cent dollar, for example.
Among other ideas, the United States has floated the concept of a "currency clause" to be included in a renegotiated agreement, which would prevent countries from "manipulating" currency exchange to gain an unfair advantage.
The proposed currency clause is considered by some analysts to be more of a warning shot to other U.S. trading partners, as neither Canada nor Mexico are considered to be currency manipulators. But even a relatively obscure demand can become an issue.
But a movement in the other direction can also cause problems.
"We have experienced a long period of a very low Canadian dollar which is unlikely to stay at this level," Mr. Rumble says.
"I need to think about what might happen to my business if the dollar were to suddenly shift to 90 cents." His advice is to "make sure you're not planning today's rates into your mid-term investment decisions."
Currency fluctuations affect various industries in different ways, Mr. Rumble says.
"In our case, we're a software business, so our major cost is people," he says. Manufacturers and other companies may be more sensitive to price changes in the costs of raw materials of finished goods.
"We have to think about what our organization will look like in 12 months to three years if the cost base changes dramatically," Mr. Rumble explains.
"The challenge is to not get too far ahead of ourselves."
Some companies that do cross-border business engage in foreign exchange hedging, putting funds into U.S. or other international currencies as well as Canadian dollars, so there is always an upside and a downside.
But not all businesses use hedging.
"That's not something we do. Hedging is not without cost, because you have to tie up money to do it," Mr. Rumble says.
Good management of currency issues depends more on making decisions that will still make good business sense if there is a sudden change in Canada-U.S. exchange rates, Mr. Rumble says.
In the case of Intelex, "We're okay because we're growing so fast right now that it would be okay for us to pull in a bit if the rates change. … If we had less growth, I'd worry about what I need to lower my costs."
The NAFTA negotiations "are not the first thing on my list right now," Mr. Rumble adds, but he is not betting on the outcome.
Based on the negotiations so far, "I'm a pessimist," he says.