Cross-border bargain hunters get boost in budget

Canadian shoppers looking for cross-border bargains will soon be able to bring more goods back from America, tax free.

Changes proposed by government would allow more goods to be bought tax free in U.S.

Canadian shoppers looking for cross-border bargains will soon be able to bring more goods back from America, tax free.

People who travel outside of Canada for 24 to 48 hours will be able to return with $200 of tax-exempt goods. The previous limit was $50.

Those who stay in the U.S. longer than 48 hours can bring back $800, up from $400. The rules for same-day trips of less than 24 hours have not changed; travellers cannot bring back anything duty-free.

The same rules apply for Canadians who travel abroad.


Would bigger tax exemptions encourage you to shop across the border? Have your say.

The changes were part of the federal budget Finance Minister Jim Flaherty unveiled Thursday.

"It's probably better, in our view, to harmonize with the Americans, which we're doing. And that way, making it a more realistic assessment of what the purchases are," Flaherty said Friday. "So, we did that, and I'm not terribly concerned about the cross- border shopping because we haven't changed the 24-hour rule."

If the budget passes, the changes would come into effect June 1 of this year.

Concern over impact

The NDP's international trade critic, Brian Masse (Windsor West), has mixed reaction to the changes.

"On the surface, it sounds good for consumers," Masse said. "It's going to be good for individuals going over the border but retailers are suffering. We could see a loss of retailers in border communities."

Retail Council of Canada president Diane Brisebois echoed those concerns, saying the changes could pose problems for some stores.

"Certainly I can tell you in speaking to retailers who have locations close to the Canada-U.S. border, this is always very challenging because we don't really have a level playing field in Canada," she said.

Retail prices are higher north of the border because retailers have to pay duties on imported merchandise, Brisebois said, and she wants Ottawa to cut those duties.

I'm not terribly concerned with the cross-border shopping.

In Surrey, B.C., store owner Alaina Cloke said she's worried that loosening cross-border shopping rules will make it harder for her business to compete with American retailers.

"It's just really frustrating as a business owner – I  was really surprised to hear about it, and really disappointed," she said.

Ayad Saddy, owner of a casual-wear store in Windsor, Ont., said cross-border shopping has been "devastating" to many businesses in the city's core, and called his own retail company part of a "dying breed."

Cross-border savings

In November 2011, Melissa Morang, the marketing and sponsorship director at Great Lakes Crossing Outlets in Auburn Hills, Mich., estimated that Canadians occupied 85 per cent of the hotel rooms on the mall's property during the U.S. Thanksgiving Weekend. 

CBC News in Windsor recently saved $12 on six common grocery items purchased in Michigan. The basket of goods came to $71.37 Cdn in the States and $83.63 Cdn in Windsor when the Canadian dollar was trading on par with the U.S. dollar.

Gas also proved cheaper in the States. A 40-litre fill-up netted $10 Cdn in savings.

Almost $500 million US of trade that passes daily along the Ambassador Bridge between Windsor, Ont., and Detroit, the busiest border crossing in North America.

Joe Comartin, the NDP MP from Windsor-Tecumseh, said the new changes could ease the flow of traffic across international crossings.

"It's forecast to speed up the traffic at the border," Comartin said. "The clogging of the border will be helped by some degree."

That also depends partly on how proposed cuts to the Canada Border Services Agency are implemented.

'CBSA gutted'

The CBSA faces a $143.4-million cut to its current $3-billion budget.

The government said the agency "will streamline internal services and low-performing processes."

Masse is critical of the proposed cuts.

"The CBSA has been gutted," he said.

He worries about future staffing levels and national security if the budget passes, which is likely, given the Conservative majority government.

"The result is going to be longer wait times or less service or closure of other ports," Masse said.