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Windsor/Detroit bridge is a go!


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Guest American Woman

...it's like, "America sucks, but they have really low prices and more stuff to buy!!"

Apparently Canadian retailers are losing even more business to American retailers these days.

Retailers brace for more cross-border shopping pain

As much as 8 to 10 per cent of consumer spending on a raft of products is flowing to retailers outside the border, according to estimates in a report being released today by BMO Nesbitt Burns. That compares to Statistics Canada data that say 4 per cent of retail spending is shifting outside the country.

“The steady drain of Canadian shoppers heading south is weighing on retail sales in this country,” Douglas Porter, deputy chief economist at BMO, said in his study, titled “Cross-border shopping: here comes the flood.”

Mr. Wilkes said retailers are scrambling to lower their prices and differentiate their offerings from those across the border.

As Canadians are now able to bring more merchandise into Canada duty/tax-free, the problem (for Canadian merchants) will likely continue.

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...As Canadians are now able to bring more merchandise into Canada duty/tax-free, the problem (for Canadian merchants) will likely continue.

I guess so...based on the long lines backing up to get into Evil America. Easy folks, will that be cash or charge?!

This "south of the border" shopping concept is...ummm..foreign to me, and I have lived close to the Canadian or Mexican border for years.

http://www.ctv.ca/CTVNews/Canada/20120601/cross-border-shopping-duties-120601/

Edited by bush_cheney2004
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As Canadians are now able to bring more merchandise into Canada duty/tax-free, the problem (for Canadian merchants) will likely continue.

AW, my career was in business, selling electronic parts like resistors and semiconductors, with almost all of them imported into Canada from American suppliers. I have first hand experience with this problem and have been watching it happen for years

The market adjusted for electronic goods back in the 80's. It wasn't just Free Trade/NAFTA changes. It was a total restructuring of how goods were brought in and sold in Canada!

Long ago, when an American firm wanted to export into Canada, he rarely set up a direct pipeline. The Canadian market was considered a bit on the small side and with a lot of aggravating little peculiarities with duties and tariffs and shipping paperwork. It was also a pain to cross that border at so many points, from Maine to the Dakotas to Washington State.

So what they did was to make an agreement with a Canadian "rep" house, which would act as a representative for an American firm in Canada. These rep houses would usually represent a number of American manufacturers of associated kinds of products. They could then use their own sales force to push all of them to customers in Canada. Often the rep house would stock products at a Canadian warehouse. Now instead of just consolidating many smaller Canadian orders into bigger ones, which would be easier and more profitable for their American principal to process, they would only place large stocking orders from the US and they themselves supply all the Canadian end customers.

Of course, a rep house needs to make money itself and the way it was done was to add a markup of their own into the price. With electronic parts it was usually as much as 30% or more. This was added to the cost of a Canadian wholesaler, who would mark it up more to sell to a retailer and again to the end customer.

By the late 70's and early 80's this system for electronic parts began to totally breakdown. The world had changed. Volumes purchased by Canadian electronic manufacturers had increased dramatically. The markups in between had become so high that larger volume customers began to buy directly from American distributors, since their price from an Buffalo NY outlet was cheaper than a Canadian distributor's wholesale cost!

Of course, at that point, Canadian distributors began to drop many products where this was happening from their product line. Why carry a line that you couldn't sell for a profit?

So the "middle men" rep houses began to disappear. Canadian wholesalers were allowed to buy directly from the US factory the same as any American wholesaler. The extra markup disappeared and Canadian sources were just as price competitive as those in the USA. Rep houses became just local sales forces, where just as a factory in upper NY might contract a rep house in California to push their products and pay them a commission they would do the same in Vancouver, BC.

As I said, this adjustment happened in the early to mid 80's and is likely forgotten history to younger folks in that industry today. However, it is still very much alive in most other industries!

A tire store, even one of a national chain, usually cannot buy directly from the same factory source as an American tire store. He must buy from a "middle man", at a higher price. If he is unfortunate enough to be located in a border town, he CAN'T lower his price to compete with a store on the American side! It would be below his cost! A classic example is Wabasso sheets and linens sold in Windsor, Ontario. They are simply brutally uncompetitive compared to the same sheets sold in Detroit.

Worse yet for him, our greedy Canadian governments likely have a few taxes or user fees they have added onto his overhead, which of course must be reflected in his resale price.

So far all these middlemen, especially in consumer goods areas, have managed to keep their place in the loop but it has been getting harder and harder for them. Their American suppliers don't really care about their troubles. They will sell their products no matter what happens and besides, the Canadian market is usually not big enough to command their full attention. It tends to get taken for granted. After all, the entire Canadian market for most products is about the same size as that of California.

So as Canadians flock across the border to shop the pressure builds not just on our retailers, who as I said CAN'T lower their prices but also on those middle men! Some of these guys have never actually touched their products! They simply operate from a small office and handle the paperwork. Some of them claim to "value add" when all they are doing is slipping a sheet of paper with instructions in both English and French into the package.

The middle men try to let their retailers take the brunt of the problem but of course, that's just hiding their heads in the sand. Their retailers are going bankrupt and not ordering from them anymore!

Now Harper is making it even easier. I suspect this was done not just for the obvious one of pleasing voters but also as a blow against organized crime! Smuggling has always been a HUGE and lucrative business between our two countries. Lord knows there are dollar stores everywhere that will buy "hot" tooth paste, household goods and the like. There is a crooked path for almost everything to get resold, escaping all the extra costs in doing it through legal channels.

One extra cost for Canadian sellers that always ticked me off was that although NAFTA had eliminated the duties and tariffs on the electronic parts I sold, my government kept all the paperwork! I still had to spend the same amount of time on forms as before. That of course cost money too!

So here it is nearly 30 years after the re-structuring I saw in the electronics manufacturing supply industry. Things have caught up in the consumer goods market in the same fashion. All the talking heads keep talking as if Canadian resellers are to blame, showing that as usual they have no in-depth knowledge of how things actually work. After all, reporters are not hired from the world at large anymore. They all come from the same journalism schools and thus have a very limited knowledge of the world in general.

Things appear to be coming to a head. I predict that within a VERY few years we will see most if not all of those middlemen finally just disappear.

The cross-border phenomenon will just vanish as prices on both sides of the border will be virtually equal.

Edited by Wild Bill
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Again the A/T's don't know how to count. First, it was 1 billion to build the bridge now I see its 4.5 Bil amd probably ended up costing more. How many autos going over to get the money back at 4.50 a trip, not in our life time. Also, in the past builders have used the First Nation to do the building of bridges in North America because they aren't scared of heights, so I'm wondering if they will be included in building of this bridge?

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Again the A/T's don't know how to count. First, it was 1 billion to build the bridge now I see its 4.5 Bil amd probably ended up costing more. How many autos going over to get the money back at 4.50 a trip, not in our life time. Also, in the past builders have used the First Nation to do the building of bridges in North America because they aren't scared of heights, so I'm wondering if they will be included in building of this bridge?

Topaz, when you say we will never pay for the bridge from tolls in our lifetime, could you show us some math?

Also, as far as First Nations ironworkers, they were never operating as a First Nations company or guild! Companies building high rise stuff hired the best guys for the job. A lot of them were of First Nations stock, that's all. They were never considered natives. They were just guys who were very good at the job!

So of course they will be included in building the bridge! What are you suggesting? They only hire for such jobs according to race?

Business just doesn't care! It takes a special kind of person to work at such heights. It has worked out that many First Nations folks are good at it but nobody cares if the worker was Chinese or Martian!

Frankly, sometimes you make supposed connections that confuse the hell outta me! :P

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Guest American Woman

Topaz, when you say we will never pay for the bridge from tolls in our lifetime, could you show us some math?

I suppose that would depend on whose lifetime one is referring to.

According to the Windsor Star, it will take 40-50 years for Canada to recoup the $550 million being fronted for Michigan's share (at which time "the tolls will then be split evenly between Canada and Michigan") so it'll likely take some time to pay the bridge off.

In the meantime, it's generating income for Canadian businesses - and thus the Canadian government - since businesses will have an easier crossing. According to Harper, “This is the single most important piece of infrastructure our government will complete while I am prime minister.”

Also, as far as First Nations ironworkers, they were never operating as a First Nations company or guild! Companies building high rise stuff hired the best guys for the job. A lot of them were of First Nations stock, that's all. They were never considered natives. They were just guys who were very good at the job!

So of course they will be included in building the bridge! What are you suggesting? They only hire for such jobs according to race?

Business just doesn't care! It takes a special kind of person to work at such heights. It has worked out that many First Nations folks are good at it but nobody cares if the worker was Chinese or Martian!Frankly, sometimes you make supposed connections that confuse the hell outta me! :P

I did a double take on that, too. :D Did a little research - seems as if the 'stereotype/myth' (which I'd never heard of!) originated when Native Americans were the most likely to risk such dangerous work because they needed the job/money, and they presented sort of a false bravado/macho attitude about it, and they were good at it - so they sought more such work - and the 'stereotype/myth' was born. Apparently it's not true that Native Americans aren't afraid of heights any more - or less - than the next person.

-----------------

edited to add:

AW, my career was in business, selling electronic parts like resistors and semiconductors, with almost all of them imported into Canada from American suppliers. I have first hand experience with this problem and have been watching it happen for years [...]

The cross-border phenomenon will just vanish as prices on both sides of the border will be virtually equal.

I meant to comment on this earlier post, too - it was an interesting read! - Thank you for taking the time to post/share. :)

Edited by American Woman
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...Long ago, when an American firm wanted to export into Canada, he rarely set up a direct pipeline. The Canadian market was considered a bit on the small side and with a lot of aggravating little peculiarities with duties and tariffs and shipping paperwork. It was also a pain to cross that border at so many points, from Maine to the Dakotas to Washington State.

Good read, especially this point. My previous client wanted to ship product and sell post production services in Canada but it requires jumping through many hoops, and to make matters more complicated, we had to front a distribution office in Winnipeg just to ship items into Quebec (seems that some resent products coming from the U.S.A). Years earlier at a different firm, shipping hich tech vapor deposition or sputtering products into Canada via NAFTA was a paperwork nightmare. Even private eBay sales to Canadians results in more red tape and extra fees, unless we declare fraudulently. "Little peculiarities" is a kind way to describe this complicated, non-value added mess.

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The reason I mentioned that was I saw a documentary on the bridges in New York and they said they used the FN people because of the heights. Now, if that's not true than that's not my mistake and I also know times have changed since then. Ok, I went search and I'm adding the following http://www.aboriginalironworkers.ca/tradition

Edited by Topaz
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Good read, especially this point. My previous client wanted to ship product and sell post production services in Canada but it requires jumping through many hoops, and to make matters more complicated, we had to front a distribution office in Winnipeg just to ship items into Quebec (seems that some resent products coming from the U.S.A). Years earlier at a different firm, shipping hich tech vapor deposition or sputtering products into Canada via NAFTA was a paperwork nightmare. Even private eBay sales to Canadians results in more red tape and extra fees, unless we declare fraudulently. "Little peculiarities" is a kind way to describe this complicated, non-value added mess.

You've discovered for yourself how shipping paperwork can be a PITA, BC!

As you likely remember, I build/fix guitar amps for a living. I had an instance to turn this PITA into a positive.

Nowadays we are seeing lots of little "boutique" guitar amp makers springing up. Perhaps its a reaction to all the standardized Chinese stuff. Even the classic big names like Fender are all made in China now.

Anyhow, because they are a bit different and have some "snob appeal" they are carving out a bit of a market niche. The major chains of music stores have started carrying them. Unfortunately, often they take them on without considering how to give warranty support.

A fellow rang my door with a brand new boutique amp from an American manufacturer. It had a warranty problem but the manufacturer, being a "little guy", never knew about the ins and outs about shipping across the border. In the States, if a customer had a warranty problem he had him ship it back to him, cheaply by UPS. He didn't think to check if UPS from Canada was also cheap and of course, it isn't!

To his credit, he wanted to honour his warranty and keep his customer happy but the customer was already pissed at paying a couple of grand for a brand new amp with a problem! He certainly didn't want to have to ship it back to the States. Canada Customs tends to be a bit simple and often confuses a repair situation with a brand new sale, charging fees each way that can take months to get refunded!

The customer was hoping I would look at his amp and be able to fix it cheaper than all the aggravation. I took the amp in and called the manufacturer.

As I said, he was an honourable guy and he explained that the problem was actually a wiring error from some poor assembler help he had had. When I learned what was involved I knew that I could easily have the amp in perfect shape for much less than an hour's labour.

So I suggested to the gentleman that I would be glad to take care of his problem for my standard minimum fee of $60 for an hour's time. He asked me if I had a PayPal account and two minutes after I hung up he had paid me, trusting that I would look out for his interests! This was a far cheaper solution for him! That afternoon his customer had his amplifier back and was not just satisfied but impressed!

Maybe I should hope for things to STAY screwed up! :P

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To his credit, he wanted to honour his warranty and keep his customer happy but the customer was already pissed at paying a couple of grand for a brand new amp with a problem! He certainly didn't want to have to ship it back to the States. Canada Customs tends to be a bit simple and often confuses a repair situation with a brand new sale, charging fees each way that can take months to get refunded!

....Maybe I should hope for things to STAY screwed up! :P

Yes...you should, as this is a perfect example of the red tape that Americans encounter when trying to ship into Canada. One quickly learns that the value of the item, shipping vendor, and destination causes some kind of Canadian red tape machine to go into high gear. It is maddening, not just because of the extra cost and aggravation, but the long delays even if willing to pay all the ridiculous extra fees and duty.

This even happens for Canada Post, for reasons I do not understand. It is easier for me to just refund a customer's money and tell him/her to keep the item than try to get it repatriated. Canadians want lots of stuff they see at American auction/sales sites but can't get in Canada for whatever reasons. Then the headaches begin....

I just gave up, refusing to ship into Canada and/or fraudulently declare lower values. It is easier for me to ship expensive items into Italy or Denmark!

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Guest American Woman

Again the A/T's don't know how to count. First, it was 1 billion to build the bridge now I see its 4.5 Bil amd probably ended up costing more.

To clarify, it is 1 billion to build the bridge: Total cost $3.5 billion. $1 billion for the bridge and the rest for road approaches, expropriation and customs plazas.

It's still not a sure thing, though, as there could still be some obstacles preventing it from happening. It could end up requiring voter approval in Michigan; the owner of the Ambassador bridge has launched a petition for a state-wide referendum. Also, he owns part of the land in Michigan that is needed for the connecting roadways, and since he's expected to bring law suits in both Michigan and Canada to block the project, I can't see him parting with the land. Perhaps he would be forced by the government to sell, which is the only way I see him giving up his land for the project. link

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Why are you against the new crossing?

Because it infringes on existing private enterprise and benefits Canada far more than the USA. The American side already connects to highway infrastructure, something that Ontario/Windsor could/should have done years ago without the need for a new "bridge to nowhere".

It is also an unwelcomed exercise in foreign influence over local and state politics, something that would not be tolerated well in Canada.

Edited by bush_cheney2004
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Guest American Woman

Because it infringes on existing private enterprise and benefits Canada far more than the USA.

It definitely benefits Canada more than it does the U.S., which is why Canada is putting more into it. I think it's worthy of noting that it was Harper and a Governor, not Harper and Obama, sealing the deal.

The American side already connects to highway infrastructure, something that Ontario/Windsor could/should have done years ago without the need for a new "bridge to nowhere".

Yes, the bridge does link to highway infrastructure on our side, which is why Canada is more desperate for the bridge than the U.S. is; it's basically been a Michigan-Canada issue, not a U.S.-Canada issue.

It is also an unwelcomed exercise in foreign influence over local and state politics, something that would not be tolerated well in Canada.

I don't think that aspect of it is being tolerated well in the Michigan legislature, either.

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It definitely benefits Canada more than it does the U.S., which is why Canada is putting more into it. I think it's worthy of noting that it was Harper and a Governor, not Harper and Obama, sealing the deal.

I have crossed that bridge only on a few occasions while traveling to upstate New York, but then as now, the prevailing traffic congestion seems to be headed to the American side, from a nation with 10% of the population!

It is obvious who wants this new bridge the most.

Yes, the bridge does link to highway infrastructure on our side, which is why Canada is more desperate for the bridge than the U.S. is; it's basically been a Michigan-Canada issue, not a U.S.-Canada issue.

It seems that Michigan has made significant infrastructure improvements to that corridor in the past five years without the need for a Canadian loan. Meanwhile, the traffic going north still spills in a local arterial road nightmare, clogged by traffic control lights.

I don't think that aspect of it is being tolerated well in the Michigan legislature, either.

Nor should it be....the people of Michigan kicked Ontario's trash back across the border too! ;)

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Guest American Woman

Well, at least the people of Michigan can take confort in the fact that they used to be good for something. :)

Even if that were true, it's more than one can say about you. <_<

Edited by American Woman
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