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May 31, 2021

Duty-free limits on cross border shopping jump this weekend

And you thought the line-ups to get into the United States were too long the last time you went.

Despite the fact that prices are roughly 14% cheaper across the border, online shopping, lack of passports, border delays and the price of gas have kept many shoppers close to home.

But with the duty-free limits increasing this weekend, consumers will once again start looking south, predicts BMO Capital Markets.

Thanks largely to a weaker dollar, the price gap has dropped from the 20% price differential that BMO found last year, but higher duty-free thresholds could make up the difference.

Starting June 1, travellers visiting south of the border for more than 24 hours will now be allowed to bring home $200 worth of merchandise duty-free, up from $50. Stays longer than 48 hours will now produce an $800 window compared with the previous limit of $400 for stays of a week and $750 for anything longer.

“Canadians will flock to Maine, Michigan and Minnesota en masse, as well as the border states of New York, Washington and New Hampshire,” maintains BMO deputy chief economist Douglas Porter.

Grocers are particularly hard hit because staples like eggs, cheese and milk are often significantly cheaper in the U.S. because Canada takes a different approach to subsidizing farmers that artificially increases prices on those items, says Dave Wilkes, a spokesman for the Retail Council of Canada.

I'm not so sure that everyone is going to jump into their cars. But I don’t cross the border to shop very often and the new higher exemptions will only really matter on longer trips anyway.

What about you? Will higher exemptions mean a boost to your cross-border shopping?

By Gordon Powers, MSN Money






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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...