Cross-border shopping costs Canada 'over' $20B each year: report
They say 90 per cent of Canada’s population lives within 160 km of the U.S. border, so what’s that mean?
A steady stream of Canuck license plates heading south, in search of savings.
Certainly, cross-border shopping is the timeless affair generations of Canadians enjoy, though perhaps it costs our country much more than a couple runs to the outlets and a stop at Target.
According to new figures from the Bank of Montreal, cross-border shopping costs Canada more than $20 billion each year.
Yes, that’s billion with a “B,” and that’s the estimate of Doug Porter, BMO’s deputy chief economist.
*Bing: The best cross-border shopping destinations
By BMO’s count, the price gap between Canadian and U.S. goods has actually narrowed year-over-year, down to 14 per cent from 20 per cent last spring, but perhaps there’s reason to believe more Canadians than ever could soon be heading to shop in the States.
Already, there are more than 50 million visits to the U.S. each year by Canadians, but come June 1 new tax-exemption rules suggest that number could swell.
Next month, cross-border shoppers staying in the U.S. longer than 24 hours will be able to bring back $200 (up from $50) in goods tax-free, while the limit on visits longer than 48 hours rises to $800 (up from $400 to $750, depending on the length of the stay).
Porter notes that the above $20 billion figure is likely on the low side, in that it’s based on the amount Canadians actually declare at the border. What most shoppers declare, of course, is a fraction of what they’ve truly purchased.
Twenty billion sure sounds like a lot, but what’s a Canadian to do?
As we’ve covered in this space, national pride, in a strained economy, goes only as far as our wallets can bear. If Canada is to keep us shopping here, narrowing the cross-border price gap on goods from 20 per cent to 14 per cent is fine, but when the loonie is running years now near par with the greenback, 14 per cent is still too much.
By Jason Buckland, MSN Money
Posted by: SP | May 17, 2021 9:31:47 PM
Looks like it's time for Canadian retailers to cough up some money to help the US lunatic fringe build a Northern border to match their Mexican border. Can't keep a good gouging game going if the sheep are heading to other pastures to get fleeced.
Posted by: James | May 18, 2021 1:07:26 AM
It is not just the price of an article that is much cheaper in the U.S. the tax in the U.S. is much lower also.
Posted by: Richard | May 18, 2021 8:58:25 AM
The prices here in Canada can often be ridiculous as compared to our US neighbors. I do most of my grocery shopping there and end up saving on tons of items like breads, milk butter, cheese..etc. The taxes are very low and worth the trip each time. With coupons and in store memberships I always come back to Canada with more items then I would have had I done my shopping in my home town.
This would not be a problem for Canada if they would stop over taxing us on our purchases and lower some of the prices. Why does a bag of milk cost me almost 7.00 here where in the US I paid under 3?
Posted by: Mr. Negative | May 18, 2021 9:41:51 AM
I have never been to the states to shop, it doesn't make sense to me. Time isn't free these days and everything costs money. The less you do, the more you save. Thinking about the drive, traffic, crossing the border, and my time, doesn't seem worth it, to save a few bucks. (on items i don't really need) It is pretty much a day trip, plus if you don't bring lunch, now you are spending more.
I wonder how high gas prices will need to get, to make this trip not worth it? The prediction from some economists is that this type of behaviour will stop. Consumers will by locally again to contribute to their communities vs spending elsewhere.
It is funny that a lot of people complain about the wal marts and that there aren't any real shops around anymore, but we constantly are looking for cheaper prices, doesn't matter the real cost of our communities and neighborhoods.
Yet, we cry that all our jobs are going to China and other overseas countries.
All you can do is laugh sometimes!
Posted by: Love USA Prices | May 18, 2021 9:59:22 AM
I shop in USA every chance I get. The prices are so much lower. I just bought a Yakima roof basket for my Honda Element. Best price in Victoria $550 and the best price in Seattle $255. You can't tell me the Canadian retailer needs to charge me $300 more. Last year I saved alomost $500 on a bush guard. Well worth the trip and while I'm there I gas up and buy groceries.
Can't wait till June and the new rules on how much you can buy duty free starts.
Posted by: Dr. J. Lindon | May 18, 2021 8:26:04 PM
I live within 10 miles of the US. I do not shop there. To save $300, I have to spend about 2 hrs of my time to get across and return. At $275/ per hr salary, I waste more than I save, so I don't shop there.
Posted by: Bill | May 19, 2021 9:25:59 AM
I live on the boader 5 minutes from the crossing. We shop in the States twice a week. We go over first thing in the morning when ther are no line ups. The Canadian dollar is virtually even. When it is all said and done we get the equivalent of free gas for the cars. In real dollars we are saving $100 per week and have been doing this for years. Everything is cheaper over there. Live in Canada shop in the States. Oh!!! I almost forgot.......we bought both our cars in the States. Saved over $40K when compared to the same Canadian purchases. Thank God for Canada and the good old USA. Best of both worlds if you look for it!!!!!!!!!! Shop till you drop!!!
Posted by: Fort Eriean | May 21, 2021 8:46:21 PM
Thanks for that great post Dr Lindon! its wonderful to know that your $275/hr salary would actually force you into an hourly loss if you decided to cross border shop.
i'm wondering if your $20/hr secretary shops there? For her, its still probably money & time well spent... and in Canada or anywhere else for that matter, there will always be more people making a wage in that bracket, then yours.
Posted by: Christ1969 | May 25, 2021 4:04:48 PM
HOW CAN THEY LOSE WHEN I DIDN'T BUY?
How can they claim they "lose" sales when I would never had bought the products in Canada in the first place? They didn't lose a sale, the sale was never there.
You can't say you lose something when you never had it to begin with!