Since Canadian Edge started 10 years ago, we’ve been the beneficiaries of a sizable tailwind from appreciation in the Canadian dollar. But with the Canadian dollar weakening for the foreseeable future, it’s time to think about how to bolster our portfolios against a falling loonie.

But also consider that a lower loonie isn’t all bad. Cheaper Canadian goods on the international market should help the Canadian economy find growth in new areas while we await the next commodities boom.

In fact, David Rosenberg, chief economist for Canadian wealth manager Gluskin Sheff + Associates, says that third-quarter gross domestic product (GDP) shows that the loonie is already doing some heavy lifting for the economy. He notes that exports contributed nearly a full point, or roughly one-third, of the quarter’s GDP growth, and that net exports have contributed to growth in seven of the past eight quarters. While a resurgent U.S. economy is a big part of this story, a lower exchange rate has also been helpful.

Even so, the Canadian economy is still in a transitional period. In the interim, as Rosenberg observes, the best way to hedge against weakness in the Canadian dollar is to buy companies that feed into the U.S.

But before we take a look at a couple picks from the Portfolios that profit from this theme, let’s review where the loonie has been and where economists think it’s headed.

At the inception of Canadian Edge in July 2004, the loonie traded near USD0.75. Soon thereafter, the global commodities boom took the currency as high as USD1.09 in late 2007, before the Great Recession briefly took the exchange rate back to where it had been several years earlier.

The Canadian dollar renewed its ascent following the downturn, peaking at USD1.06 in mid 2011, and then began a slow decline that accelerated in mid 2013 once the U.S. Federal Reserve announced it was considering when to curtail its extraordinary stimulus.

More recently, the sell-off in crude oil has pushed the loonie to a new cycle low, near where it trades presently, just below USD0.88.

According to Bloomberg’s survey of economists, the Canadian dollar is expected to average around USD0.87 for the next two years, before rising to USD0.90 thereafter.

To put these forecasts in perspective, the loonie has traded at an average level just below USD0.93 over the 10-plus years during which we’ve been publishing.

So which Portfolio names derive a big part of their revenue from the U.S.?

Of course, many of our resource sector plays do, but until commodities prices find a floor, we’ll assume that investors looking to hedge against a falling Canadian dollar are hoping for names that operate in other industries.

To that end, Conservative Portfolio Holding Student Transportation Inc. (TSX: STB, NSDQ: STB) earned nearly 85% of its income in the U.S. during fiscal 2014 (ended June 30). This small-cap school bus operator is a recession-resistant play with a solid history of substantial payouts.

Student Transportation’s strategy has been growth-through-acquisition in what remains a highly fragmented industry.

Given the expense of maintaining a massive fleet of school buses, the company is starting to transition to a model where it operates and manages school bus fleets, but school districts incur the costs of fuel and ownership of the buses themselves.

With a yield of 7.7%, Student Transportation is a buy below USD7.

Aggressive Portfolio Holding Magna International Inc. (TSX: MG, NYSE: MGA) has been on an absolute tear, with its shares up nearly 40% over the trailing year.

During the third quarter, the geographically diversified auto parts manufacturer earned 26.4% of its revenue from the U.S., up almost two percentage points from a year ago.

Magna is a buy below USD110.