Is Cross Border Shopping Unpatriotic ?

[bush_cheney2004]

One of the unwritten Charter rights is the custom and preference for "cross border" shopping, with Canadians making millions of trips each year to buy good and services at lower, often much lower prices in the United States. However, Canadians are suppose to declare and pay taxes above a certain limit, but this is not always happening in practice:

Canada's border guards routinely waive taxes and duties on goods bought by travellers in the U.S., says a briefing note for the prime minister.

The acknowledgment supports the suspicions of retailers that the Canada Border Services Agency is too lenient with cross-border shoppers, costing the economy millions of dollars in domestic sales.

The briefing note was prepared last June 25, when a Canadian dollar was worth 95 cents American, and the Harper government was concerned about a so-called Canada-U.S. price-gap that may have been encouraging cross-border shopping.

http://www.cbc.ca/news/canada/customs-officers-admit-to-waiving-duties-for-cross-border-shoppers-1.2583512

The loss of retail trade support at the local level and lost tax revenue has some Canadians accusing their countrymen of being unpatriotic, some going so far as to call them "parasites" on Canadian health care and other social programs.

How do you feel about cross border shoppers ? Are they parasites worthy of such scorn, or just smart consumers making a run for the border to save some money ? What if anything should be done about the lost sales and tax revenue ?

[TimG]

How do you feel about cross border shoppers ? Are they parasites worthy of such scorn, or just smart consumers making a run for the border to save some money ? What if anything should be done about the lost sales and tax revenue ?

Cross border shoppers that pay the required taxes are good for the economy because they pressure domestic retailers to demand lower prices from their suppliers (Canada is often of screwed by the odious "country pricing" practice where multinationals charge different prices for the same product in different countries).

Shoppers that evade the taxes are freeloaders.

[Bonam]

Cross border shoppers are indeed good for the economy, as they are pretty much the only factor that prevents the price disparity from being even higher than it is. If Canadian retailers didn't have to worry about people comparing their prices with US retailer prices, they'd be charging even way more than they already do.

[eyeball]

Is Cross Border Shopping Unpatriotic?

Shopping trumps virtue.

What if anything should be done about the lost sales and tax revenue ?

Border guards should be paid according to piece work. They're the real parasites it would seem.

Edited March 24, 2014 by eyeball

[Boges]

Why should Canadians be forced to pay excessive amounts for the same product?

The last few times I've been across the border to shop I haven't seen extreme savings except for alcohol.

I admitted to the border agent I bought a case of beer and a few other items last time I crossed (also a tank of gas). The beer was less than half the price so I would have happily paid the duty. He let me go, it probably wasn't worth the trouble. Even though he looked in my trunk.

You really have to be prepared to buy big ticket items or buying stuff in bulk to see a savings across the border. Especially with the price of the dollar now. You also have to include the commute and the fact that you have to pay a $4 toll to get back into the country.

Edited March 24, 2014 by Boges

[bush_cheney2004]

Why should Canadians be forced to pay excessive amounts for the same product?

I don't think Canadian's are forced to buy the same products. For instance, a litre of lacteal fluid extracted from the female of the bovine species is not the same in both countries, and is subject to a different tax and subsidy scheme. In general, I don't understand why Canadians would think that identical products should cost the same as in the U.S., when their very identity is rabidly based on not being like America.

...You really have to be prepared to buy big ticket items or buying stuff in bulk to see a savings across the border. Especially with the price of the dollar now. You also have to include the commute and the fact that you have to pay a $4 toll to get back into the country.

Sure...proper planning and measurement would yield the most cross border gain. I wonder if people buy perishables and store them in iced coolers because of the long ride home and potential two hour wait at the border.

Anyway, I am more interested in this strong backlash from fellow Canadians against cross border shoppers as "parasites" and "leeches" on free health care, lower crime rates, gun laws, etc. Is their any peer pressure to prove that duty and taxes are being paid, or is not paying just part of the savings calculus ?

[Boges]

Who would drive an hour plus for Milk? Or even meat. Again some might if they're sufficiently buying in bulk. I would only buy non-perishables myself.

I think people in border towns make frequent trips across the border for staples, which could be one of the reasons why many border towns are bleepholes.

The big reason for the price differential is simple, Minimum wage laws. The people at the Aeropostale in Niagara Falls, New York makes a lot less than an employee in Toronto.

That being said, I've talked to retailers in boarder towns and their livelihoods are often linked to Canadians coming across the boarder.

Edited March 24, 2014 by Boges

[bush_cheney2004]

Who would drive an hour plus for Milk? Or even meat. Again some might if they're sufficiently buying in bulk. I would only buy non-perishables myself.

I agree, but apparently there are people who do load up on milk and other perishables. I guess they have to buy ice too....no problem...ice is cheaper in the USA. The psychology seems to be more along the lines of resentment for higher Canadian prices, and the perceived unfairness of it all, over any "deal" across the border. Just knowing how much lower the prices are is sufficient motivation to "stick it" to Canadian retailers.

That being said, I've talked to retailers in boarder towns and their livelihoods are often linked to Canadians coming across the boarder.

I'm sure that is the case, as micro-economies often thrive across border towns. Americans use to go on shopping sprees to Mexico...less so now.

The most strident comments are from Canadians who insist that cross border shoppers should make a one-way trip, and never come back.

[Boges]

I think many make a day of cross-border shopping. It's more for the entertainment/leisure of it than it is to actually save money. It's like buying a Scotch at the Duty Free. It's a frill at the end of a trip.

I won't go the the US just to shop. When I have gone, I would spend the night in Niagara Falls then go to the States the next day just to visit Walmart and the Outlet mall, I may not buy a lot but it's something to do.

Edited March 24, 2014 by Boges

[bush_cheney2004]

...I won't go the the US just to shop. When I have gone, I would spend the night in Niagara Falls then go to the States the next day just to visit Walmart and the Outlet mall, I may not buy a lot but it's something to do.

So some of these trips also are for pure entertainment value ? Are there more or varied things to do in American border towns ? I've been to the border areas for Buffalo/Niagara Falls, Detroit, International Falls, and Bellingham, and the entertainment draw is not obvious unless one is buying drugs. I could see maybe a "let's go cruising in the U.S." jaunt might appeal to the younger crowd, perhaps Americans do the same in Canada.

[hitops]

I agree, but apparently there are people who do load up on milk and other perishables. I guess they have to buy ice too....no problem...ice is cheaper in the USA. The psychology seems to be more along the lines of resentment for higher Canadian prices, and the perceived unfairness of it all, over any "deal" across the border. Just knowing how much lower the prices are is sufficient motivation to "stick it" to Canadian retailers.

Oh no question that is a factor. But honestly I think the routine waiving of fees (I've had almost $800 waived in potential duties a few years ago) comes down to a more common, boring and simple explanation; It's just a big headache for border guards to pull you over, check your stuff and receipts, and do all the paperwork required. They're own incentive is to do less work, not more.

Also what do you think the cost is, to go through all that rigmarole? Both the direct costs of doing it, and indirect of making crossing the border slow and annoying for Canadians? I would think you would have to recoup at least $200 - 300 in duties from a given event to break even.

Edited March 24, 2014 by hitops

[Boges]

So some of these trips also are for pure entertainment value ? Are there more or varied things to do in American border towns ? I've been to the border areas for Buffalo/Niagara Falls, Detroit, International Falls, and Bellingham, and the entertainment draw is not obvious unless one is buying drugs. I could see maybe a "let's go cruising in the U.S." jaunt might appeal to the younger crowd, perhaps Americans do the same in Canada.

Niagara Falls New York is a pit, except for the shopping.

Niagara Falls, Ontario OTOH is a bit of a getaway for people in the Toronto area. Lots of nice hotels, dining, casinos, wineries, There's plenty to do there and then you can cross the border to shop.

[bush_cheney2004]

Oh no question that is a factor. But honestly I think the routine waiving of fees (I've had almost $800 waived in potential duties a few years ago) comes down to a more common, boring and simple explanation; It's just a big headache for border guards to pull you over, check your stuff and receipts, and do all the paperwork required. They're own incentive is to do less work, not more.

OK...then one would think that some enterprising business persons would seize upon this opportunity to shop and deliver from the U.S. with all duties paid. Some kind of brokered arrangement to skip all that travel for a few gallons of milk.

I guess the obvious question is how much drop off in cross border shopping would there be if the CBSA insisted on collecting taxes and duties from all vehicles, regardless of the impact on border wait times. I think this is the threat from Canadian retailers who want the U.S. shopping to stop.

[Boges]

The Feds recently raised the limit on what you can bring back duty free. It's a few hundred dollars now for one day.

The big issue is Alcohol and Tobacco. If I lived in a border town I'd cross the border to load up on alcohol frequently.

[bush_cheney2004]

The Feds recently raised the limit on what you can bring back duty free. It's a few hundred dollars now for one day.

The big issue is Alcohol and Tobacco. If I lived in a border town I'd cross the border to load up on alcohol frequently.

Yes, that's what has the Canadian retailers hopping mad. The booze and cigarettes thing is a special case because of crazy high taxes. Some of these people are just buying a twelve pack of beer ! Seriously ??

[Boges]

Yes, that's what has the Canadian retailers hopping mad. The booze and cigarettes thing is a special case because of crazy high taxes. Some of these people are just buying a twelve pack of beer ! Seriously ??

I recently bought 30 Cans of Canadian Beer for $20 in the State. 24 bottles of the same beer go for $35-40 in Ontario. I'd be happy to pay duty on that type of discount.

Liqour sales is a provincial thing while the border is a federal responsibility so I doubt they care about the taxes going to people who don't pay their salaries.

Tobacco is a bit different because many smokers buy off an Indian Reserve for huge discount. I started a thread recently about Health Canada's ban on Nicotine E-Cigarettes. You can get them on Mall Kioks in the states. If I was a smoker I'd have no quams about smuggling in nicotine for E-cigs.

I just heard on the radio that same day trips have no exemptions on Duty. But it would be a waste of time to make someone pay duty on less than $200 in retail products.

Edited March 24, 2014 by Boges

[bush_cheney2004]

I recently bought 30 Cans of Canadian Beer for $20 in the State. 24 bottles of the same beer go for $35-40 in Ontario. I'd be happy to pay duty on that type of discount.

I just don't see the advantage of saving $15 - $20 unless you can buy in bulk, given the drive, taxes, and wait times, even with a Nexus card.

Seems kind of...desperate.

[Boges]

I just don't see the advantage of saving $15 - $20 unless you can buy in bulk, given the drive, taxes, and wait times, even with a Nexus card.

Seems kind of...desperate.

I was in the area for other reasons. Sure I'm not going to drive to the US for the specific purpose of buying beer. But if I'm going to be close to the border anyway, why not?

You also cross for the huge discount in gasoline.

Wait times can usually be avoided on the Rainbow bridge depending on what time of day you go.

[The_Squid]

Cross border shoppers are indeed good for the economy, as they are pretty much the only factor that prevents the price disparity from being even higher than it is. If Canadian retailers didn't have to worry about people comparing their prices with US retailer prices, they'd be charging even way more than they already do.

I would want a cite for this... because the cross border shopping traffic is probably small enough to have no impact on retailers in Canada, except for maybe some that are right on the border.

[Boges]

I would want a cite for this... because the cross border shopping traffic is probably small enough to have no impact on retailers in Canada, except for maybe some that are right on the border.

Then why would they be bitching about it?

[The_Squid]

I just don't see the advantage of saving $15 - $20 unless you can buy in bulk, given the drive, taxes, and wait times, even with a Nexus card.

Seems kind of...desperate.

I think the people that do it on a regular basis haven't really done the math... and consider waiting at the border to be no cost to them because they have nothing better to do with their lives than sit at the bordr for 3 hours...

Then there are the very few who live right on the border and it is a 5 minute jaunt for them to save a few bucks.

Or maybe they walk across and go to the 7-11 for smokes... Here is Canada on the one road and USA across the small ditch.

https://www.google.ca/maps/@49.002353,-122.483149,3a,70.5y,259.38h,76.91t/data=!3m4!1e1!3m2!1sIIhMpXQRR-Wx8c6LDok5zw!2e0

Imagine the outrage if this google street view got into Republican Congress members' hands! "Where is the wall????"

Then why would they be bitching about it?

Because they are right on the border? Or they are greedy? Or think it is a slippery slope and millions will pour over every day soon? I don't know... why not provide a cite that can shed some light on it.

Edited March 24, 2014 by The_Squid

[hitops]

OK...then one would think that some enterprising business persons would seize upon this opportunity to shop and deliver from the U.S. with all duties paid. Some kind of brokered arrangement to skip all that travel for a few gallons of milk.

Well no because:

1) That would now become crossing for commercial purposes, which has different rules

2) Even if it wasn't, the scale of the operation needed to make it profitable, would also necessarily make the amount of goods moved large enough that it would be well worth it for CBSA guards to spend the time charging those duties.

I guess the obvious question is how much drop off in cross border shopping would there be if the CBSA insisted on collecting taxes and duties from all vehicles, regardless of the impact on border wait times. I think this is the threat from Canadian retailers who want the U.S. shopping to stop.

For sure, people would then have to factor the costs of an annoying and time-consuming border stop into the overall value of the trip. If they did what you said, cross-border vacationing overall would significantly decline regardless of shopping. If I know that to visit say, Seattle, will result in a 40 minute grilling and vehicle search even if I buy nothing, I may just go less often.

Edited March 24, 2014 by hitops

[Boges]

Because they are right on the border? Or they are greedy? Or think it is a slippery slope and millions will pour over every day soon? I don't know... why not provide a cite that can shed some light on it.

Retailers are greedy? I think so, with the prices they sometimes charge.

If you've ever seen the parking lot of the Outlet mall in Niagara Falls, New York. It's mostly Ontario plates. The duty border guards collect wouldn't be an issue if a sizable amount of people didn't cross the border to shop.

But here's a cite for you.

http://www.cbc.ca/news/business/cross-border-shopping-a-20b-economic-drain-1.1300236

[bush_cheney2004]

I was in the area for other reasons. Sure I'm not going to drive to the US for the specific purpose of buying beer. But if I'm going to be close to the border anyway, why not?

You also cross for the huge discount in gasoline.

OK....lots of people are also employed across the border and would be there anyway. Obviously the vice products would drive certain behaviours above and beyond a gallon of milk. Do you have to declare the fuel purchase...say with a pickup that has dual tanks ?

[Boges]

OK....lots of people are also employed across the border and would be there anyway. Obviously the vice products would drive certain behaviours above and beyond a gallon of milk. Do you have to declare the fuel purchase...say with a pickup that has dual tanks ?

I've never declared a fuel purchase. I guess you'd have to if you have a truck full of gasoline that's not in your tank.

I think you're being caught up with food, alcohol and tobacco. Those are where the greatest discounts can be found but most people who cross-border shop, I'd reckon, do it to buy cheap designer clothing and shoes.