I received the following anonymous comment through the 2SIDESOF49 website and felt that it, and my comments are worth sharing with all.
“I have read some of your blog. Just for your information, part of the reason why you are getting a cheaper price on goods coming across the border is you are not paying applicable duties. Most crossings do not collect the duty on personal importations that is being charged to commercial importors. So they have to recoup the duty in the prices they charge. Granted it doesn’t always make up the difference but on clothing for example it would be close to 18%.”
The writer is partially correct; if the items are however made in Canada, U.S. or Mexico (NAFTA) they are Duty Free and the only charge would be for HST at 13% in Ontario, which of course would be claimed by the importer and offset against collections. If the items were made elsewhere then there would be Duties at 17.52% Plus the HST. As I have said you have to shop smart when in the U.S. just as you would at home. Remember why our government originally imposed duties, to protect local manufacturing. The fact of the matter is that there are very few Canadian manufactures of most of the day-to-day goods and even food that we shop for. And those Canadian manufacturers that are left charge Canadians more for their goods than our U.S. neighbors – test it out, buy a package of Halls, a Canadian book or magazine at walmart in both countries, and for the coop de gras how about a Dodge Grand Caravan that’s $8,000. more in Windsor where it’s made than in Detroit!
And you said it doesn’t hurt the Canadian retailer. Think again. We just had a grocery store close because of cross border shopping and lost 90 jobs. That means 90 less people who can afford houses or pay taxes on our side. In a town of 3500 that is hard. That means the rest will eventually have to pay more or lose services. Like patching holes in the road instead of replacing.
I commented on two specific newspaper articles; one that said cross-border shopping was up and the other that said Canadian retail sales were up as well. If both were “up” then, how can one be directly related to the other? I hate seeing anyone loose their jobs or businesses closing for any reason. If this grocery store had to close its doors solely from the impact of cross-border shopping I would be very surprised. In June of this year Sobeys confirmed it would be closing about 50 under-performing stores, about 60 per cent of them in Western Canada, and cutting jobs, the reason? Cross-border shopping – nope – “Perry Caicco, retail analyst at CIBC World Markets, said that Sobeys‘ planned pullback is “refreshing” in the tightening field. Rapid growth of grocery retail space “has crimped the Canadian market, and Sobeys has been the first to acknowledge that.” Also check out the latest Stats Can numbers… “Higher prices for fresh or frozen beef led the increase in meat prices between January and May 2014. Consumers paid 10.0% more for beef in the first five months of 2014, compared with a 2.3% increase over the same period of 2013. Similarly, prices for fresh or frozen pork advanced 12.2% from January to May 2014, while a 0.5% increase was recorded in the first five months of 2013. In addition to meat, higher prices for vegetables and fruit contributed to the rise in price inflation for food purchased from stores from January to May 2014. Consumers paid 5.3% more for fresh vegetables in the first five months of 2014. http://www.statcan.gc.ca/daily-quotidien/140620/dq140620c-eng.htm
Maybe the locals finally said no! They were not going to spend $20.00/lb on a steak for the BBQ any longer. If they can get it for $7.99/lb in the U.S. then good for them. I don’t even want to mention the $5.50 jug of milk – pretty sad when you can buy 12 liters of coke on sale cheaper than a jug of milk in Canada.
So when we go the walmart on the U.S. side and realize that the clerk gets $7.50 an hour it helps explain why the product is cheaper. Or the chinese kid who gets $1.50 and hour to make the junk, that crosses the ocean in huge ships that pollute the oceans and that lose huge containers while crossing…. just because you saved 30% on some useless plastic christmas tree ornament don’t be fooled that someone, somewhere is not paying the price for your great deal. Cheers.
True that the U.S. retailer can get away with paying $7.50 an hour when the Canadian retailer has to pay $10.50 an hour however when I go to Walmart, Home Depot, Lowe’s and most of the other major retailers in Buffalo or other cities I don’t have any problem finding the item I want, someone to help me or shortage of open cash registers to check me out. In my book 20 people at $7.50 vs 3 people at $10.50 is a much better shopping experience that just adds to the savings and value.
You can calculate the approximate Duties and Taxes on an item at http://www.ezbordercrossing.com/the-inspection-experience/clearing-customs/canadian-duties/
I enjoy receiving comments and suggestion on this Blog, my website and in person when giving my talks. I started this Blog to draw attention to the disparity in consumer prices in Canada and the US. Both for my US friends who kept telling me we had free healthcare and for my Canadian friends who didn’t realize how badly we were being hit. Neither I nor The Retail Council of Canada, CBC Marketplace or others have had any effect on Canadian retail prices. They continue to rise much higher than the inflation rate and I personally see no end in sight.
So for the fellow who said that he could not afford to put his kids in hockey if he didn’t go across the border to shop every couple of months, the mother who saved $3K on her daughters wedding dress to my friends who enjoy a $3.00 cigar on the golf course from time to time I wrote The Canadian Cross-Border Shopping Guide. If you are going to be a cross-border shopper be the best one that you can be!