Canadian Retailers Suffer Increased Cross-Border Shopping

Renee Sylvestre-Williams

The summer means many long weekends and that means trips across the border to do a little shopping.

Thanks to a strong loonie and new increases in cross-border shopping allowances, Canadians are shop at American stores that aren't open (yet) in Canada. They're also crossing the border to take advantage of groceries, which despite the loonie, are still cheaper in the U.S.

The import tax on finished goods means that prices are still higher in Canada for the same item. That includes hockey equipment, footwear, linens and basic foodstuff like eggs, cheese and milk.

The Bank of Montreal's deputy chief economist said earlier this year that cross-border shopping is increasing and that is costing the economy money. He says the new rules plus other factors will "unleash a wave of Canadians cross-border shopping this summer in numbers not seen in two decades."

This has prompted the Retail Council of Canada and Chambers of Commerce along the border to ask the federal government to eliminate the import taxes on finished goods.

"The government's decision to increase duty exemptions on goods bought in the U.S. is salt in the wounds of retailers in border communities," said Diane J. Brisebois, RCC's President and CEO in a release. "They already face too many obstacles to competition, such as import duties, as high as 18 per cent on sports equipment. Now Canadians are being offered yet another incentive to cross border shop."

So with tax imports and increased border allowances, (up to $200 from $50 for a 24-hour visit), what are Canadians buying? According to a recent article from Global News, the five top things Canadians buy are:

Shoes - athletics, dress and children's shoes
Lawn mowers - gas and electric
Huggies - but only if you buy them in Canada at full price. The Global article says Huggies Little Movers costs approximately $5 more in Canada but you can often find coupons that can be layered upon sales.
Coffee makers especially the high-end machines
Magazines

The tariffs on these goods were originally set in place to protect Canadian goods but as we all know, many of these goods aren't manufactured in Canada.

"Many retailers in border communities are struggling just to stay in business," said Carolyn Bones, President of the Niagara Falls Chamber of Commerce in the release. "The federal government needs to act immediately to remove barriers to competition, so that Canadians want to shop and keep their tax dollars here in Canada."

Add a Comment

Sign in »

2 Comments

Filter by:

Lou

Do you think with the prices of everything going up and everyone dipping into our pockets that maybe some of us are trying to make our dollar stretch a little futher. Wages, pensions do not grow at the same rate as price increases.

June 30 2012 at 6:51 AM Report abuse Permalink rate up rate down Reply

janet2derek

maybe we shop south of the border because of more choice, cheaper prices, andso many goods and actual stores and restaurants not available in canada especially in stupid french quebec where they make everyone unwelcome with their stupid laws and rules.

June 20 2012 at 6:30 PM Report abuse Permalink rate up rate down Reply