Duty-free shopping changes worry retailers
Canadians allowed 4 times more in purchases during 24-hour trip to U.S., starting Friday
CBC News
Posted: May 31, 2012 7:26 AM ET
Last Updated: May 31, 2012 3:30 PM ET
Cross-border shoppers will be able to buy more during trips to the U.S. but some retailers believe shoppers will remain at home to buy their goods. (Darryl Dyck/Canadian Press)
Canadians will be able to bring four times more duty-free purchases back from 24-hour trips to the United States, starting Friday, which has retailers in Ottawa worried.
The change means travelers returning from a 24-hour trip can spend $200 at the duty-free shop, four times the current $50 limit. For a 48-hour absence, shoppers can legally cross the border with $800 worth of goods, double the current limit.
The seven-day exemption was also bumped by $50 to $800.
These changes were made as part of the 2012 federal budget and they are expected to generate more traffic towards the cross-border shopping trend, which is already busy thanks to a strong Canadian dollar.
Canadians make more than 30 million overnight trips outside the country, the budget estimated.
Ottawa mall expanding
Ottawa retailers such as those at Bayshore Shopping Centre believe the trend will continue to be a tough challenge. The mall is currently undergoing a $200 million renovation and expansion.
"We're looking at an addition of 160,000 square feet, the addition of 30 new retail stores," said mall general manager Denis Pelletier, who is aware of the American competitors.
"If we're going to lose something to someone else, it won't be without a fight."
Pelletier expects to lose some shoppers after Friday's change but hopes it would not last long.
The price gap has been narrowed from 20 per cent in 2011 to 14 per cent now, he added. That success showed last November on Black Friday when many shoppers of electronics stayed in Canada.
More than a bargain
The executive director of the Ottawa Chamber of Commerce said she believes bargains do not drive shopping trend, but rather the total experience.
Online shopping, she added, is taking a bite out of the traditional shopping at malls.
"That's the way retail is going. It's an entertainment thing and the Americans are leading the way in that," Erin Kelly said.
"But we need to be leaders too, or fast followers, because retailers have to entertain and delight their customers and not make shopping a chore."
Share Tools
Latest Ottawa News Headlines
- Federal Court won't remove MPs over robocall allegations
- The Federal Court says it won't throw six MPs out of their seats over allegations of widespread vote suppression through automated robocalls in the 2011 federal election. But Judge Richard Mosley did find that fraud occurred in the election. more »
- Finding inspiration for the Sens
- Even Ottawa Senators team captain Daniel Alfredsson was not optimistic about the team's chances of taking the series, but former Olympian Elizabeth Manley still has faith. more »
- Orleans man dies from stabbing injuries
- An Ottawa man who was stabbed at his home in Orleans has died in hospital, according to his family. more »
- Alleged Ford crack video seller not responding to calls
- The journalist who broke the story alleging Toronto Mayor Rob Ford was recorded on video smoking crack cocaine says he may never be able to get his hands on the evidence. more »
Must Watch
Top News Headlines
- Toronto mayor fired chief of staff for telling him to 'go away and get help'
- CBC News has learned the details of what precipitated the firing of Mark Towhey as Toronto Mayor Rob Ford's chief of staff — and it was advice from Towhey that Ford needs to 'get help.' more »
- Federal Court won't remove MPs over robocall allegations
- The Federal Court says it won't throw six MPs out of their seats over allegations of widespread vote suppression through automated robocalls in the 2011 federal election. But Judge Richard Mosley did find that fraud occurred in the election. more »
- Alleged Ford crack video seller not responding to calls
- The journalist who broke the story alleging Toronto Mayor Rob Ford was recorded on video smoking crack cocaine says he may never be able to get his hands on the evidence. more »
- 3 injured in Washington state bridge collapse
- A Washington state bridge over a river collapsed Thursday evening, dumping two vehicles into the water and sparking a rescue effort by boats and divers who searched the chilly waterway north of Seattle. more »
Most Viewed/Commented
- Hutt changed story, said he flung hot water at wife accidentally
- Finding inspiration for the Sens
- The Ottawa Senators love their dogs
- Orleans man dies from stabbing injuries
- Fire destroys 100-year-old barn near Kemptville, Ont.
- Woman pleads for help after daughter kidnapped in Haiti
- 2 earthquakes felt in Ontario and Quebec
- Alleged Ford crack video seller not responding to calls
- Federal Court won't remove MPs over robocall allegations
