The Canadian dollar–nicknamed the “loonie,” for the waterfowl that adorns one side of the coin–has flapped to its lowest level since the 2009 recession.

As of this writing, the Canadian dollar trades at USD0.7708, near the low end of a ride that saw the currency march from roughly that mark in March 2009 up to more than USD1.06 in April 2011.

But that was before the oil-price plunge, which knocked the loonie off of its USD0.94 perch last June.

‘Modest Contraction’ May Already Be Over

Two moves by the Bank of Canada (BoC) have put further downward pressure on the currency so far this year: The first was the bank’s surprise quarter-point cut to its overnight lending rate in January.

The move was meant to provide “insurance,” as the BoC put it, as oil’s plunge reverberated across the country’s economy. The energy sector accounts for about 10% of Canada’s gross domestic product (GDP) and was responsible for about one-third of all business investment last year.

And if you read last week’s Maple Leaf Memo, you know BoC Governor Stephen Poloz turned in a repeat performance last Wednesday. Noting that real GDP “contracted modestly” in the first half of the year, the bank took its key lending rate down another quarter point, to 0.50%. The loonie shed more than one U.S. cent on the news.

There’s an ongoing debate as to whether Canada was in recession–technically defined as two consecutive quarters of negative GDP growth–over the past six months. The country’s economy has now contracted for four straight months, but we won’t have the final verdict until late August, when Statistics Canada (StatCan) releases second-quarter GDP figures.

But whether you prefer the term “recession” or the BoC’s “modest contraction,” the event may, in fact, already be over: The bank expects growth to resume in the second half, with a forecast that the economy will expand by 1.1% for the full year, down from its April estimate of 1.9% growth.

However, the BoC does see GDP growth accelerating to 2.6% in both 2016 and 2017, compared to its April projection of 2.5% and 2.0%, respectively.

According to the bank’s latest monetary policy report, a partial recovery in exports will help put the economy back on a growth track in the third quarter–something that has taken longer than the BoC expected, despite the favorable exchange rate–as well as “federal fiscal stimulus.”

That’s a reference to retroactive increases in Ottawa’s Universal Child Care Benefit (UCCB), under which families with children receive a monthly payment. As a result of the change, parents are getting lump-sum payouts of between CAD420 and CAD520 per child this week.

Economists expect half of that money to be spent, something Poloz says will result in “a noticeable bump in consumption spending in the third quarter.”

Move Below USD0.75 Possible: Economists

The key question now is how much further the loonie has to fall.

According to Andrew Pyle, senior wealth advisor and portfolio manager at ScotiaMcLeod, we likely haven’t seen the slide’s end.

“I think we have the potential to move below USD0.75, and there’s not a lot of support room between USD0.75 and USD0.70,” he told BNN.com on Friday.

Pyle’s downside risks for the currency include the possibility of lower oil prices if the U.S. Congress ratifies the Iranian nuclear deal and uncertainty among global investors about the upcoming Canadian federal election in October.

That contest remains a horserace: According to the latest poll, released Monday, the left-leaning New Democratic Party and Prime Minister Stephen Harper’s Conservatives are tied at 32% each, while the centrist Liberals sit in third at 25%.

CIBC Chief Economist Avery Shenfeld, for his part, sounded a more sanguine note, calling for a USD0.75 loonie by the end of the fourth quarter.

Tourism, U.S.-Focused Firms Benefit

That would be good news for the Canadian firms that directly benefit when the loonie swoops lower, including some of our Canadian Edge holdings.

Case in point, tourism operators, on whom the low loonie bestows a two-pronged benefit: more foreign visitors–particularly Americans–crossing the border to take advantage of their increased buying power and more Canadians staying home to avoid being pinched by the unfavorable exchange rate.

The effect is already being felt: Canadian spending on domestic tourism rose 1.0% in the first quarter compared to the previous quarter, according to StatCan, marking its biggest increase in a year. International visitors spent 0.3% more in the country during the period.

That’s a plus for Whistler Blackcomb Holdings Inc. (TSX: WB, OTC: WSBHF), operator of the Whistler-Blackcomb resort, North America’s largest ski area and host of the 2010 Winter Olympics.

The resort struggled through a dry winter last year, and the possibility of another El Niño–or a warming of the waters of the Pacific Ocean–has heightened fears of another warm winter on Canada’s west coast.

But that hasn’t changed Raymond James analyst Theoni Pilarinos’ view of the stock. In a note to clients quoted in the Financial Post on July 14, she gave WB an outperform rating and a CAD22 price target, thanks to the lower loonie and higher U.S. consumer sentiment. Whistler’s shares currently trade around CAD20.48.

“We carried out our usual channel checks, which have indicated that the booking season has gotten off to a good start,” Pilarinos wrote. “Most destination visitors–particularly longer-haul guests–book six-plus months in advance, and December and January are ahead of pace vs. last year.”

Whistler Blackcomb Holdings is a buy below USD16/CAD21.

Beyond tourism, Canadian firms that do significant business south of the border also benefit from a weak loonie.

A good example is Canadian National Railway (TSX: CNR, NYSE: CNI). In its latest earnings report, released Monday night, CN said it earned CAD886 million, or CAD1.10 a share, in the second quarter. On a constant-currency basis, that total would have been CAD64 million, or CAD0.08 a share, lower. We have more on the company’s latest earnings release below. CN is a buy below USD62/CAD80.

Elsewhere, Toronto-Dominion Bank (TSX: TD, NYSE: TD), Canada’s second-biggest bank by market cap, is the most U.S.-focused of the country’s Big Six banks, with more branches south of the border than at home (1,330 vs. 1,150). About 23% of TD’s net income was in U.S. dollars in its latest quarter. TD is a buy below USD43/CAD55.

The Dividend Champions: Portfolio Update

By Deon Vernooy

Earnings season is in full swing, and we are keeping a close eye on the progress of the Dividend Champions.

Earlier this week, Canadian National Railway Co. (TSX: CNR, NYSE:CNI) announced results for the second quarter of the 2015 financial year.

As always, the main focus is on the dividend announcement, as it reflects the collective insight of members of the board of directors about the performance and prospects of the business.

Canadian National did not disappoint: The declared dividend was 25% higher than the same quarter a year ago, despite what could otherwise be described as a fairly tough quarter for the business.

The company also continues to buy back its own shares, spending CAD404 million during the quarter to repurchase 5.3 million shares.

Based on the current authorization, another 11.7 million shares may be bought before Oct. 23, 2015.

The share purchases over the past year effectively reduced the share count by 1%, which to a limited extent supports the profit and dividends per share.

Key points from the results included unchanged revenues compared to a year ago, with a 3% decline in car loadings and a 4% uplift in pricing.

Improved revenues were recorded from the forest products, automotive and intermodal divisions, countered by weaker results from coal, metals and grain shipments.

Operating costs were lower by 5%, helped by a 32% decline in fuel costs and a 3% decline in labor expenses, as the company took rapid action to reduce costs. As a result, the key operating ratio (operating costs as a portion of revenue–lower is better), declined to 56.4%.

Bottom-line profit per share increased by 12%, somewhat better than expected by analysts. Management also confirmed that profits are on track to grow by double digits for full-year 2015.

Given the strength of the balance sheet, considerable cash flow and low payout ratio, we expect the dividend to continue to increase at a faster rate than profit growth for the next few years.

Investors seemed satisfied by these results, with the share price higher by 2% the day after the announcement and now up by 11% since the recent low in late June.

We alerted investors to the opportunity on June 19, when we increased our allocation to the stock in the Dividend Champions Portfolio. Hopefully, you managed to buy some shares in this high-quality business at the lower levels.

CN is a buy below USD62/CAD80.