Canadian retailers that are already losing business to the U.S. may start seeing even more commerce draining south of the 49th parallel, now that Canadians are allowed to spend more without paying duty during overnight trips to the U.S.
Duty-free spending limits were raised in the last federal budget but only went into effect on Friday.
Canadians used to have to declare any purchases over $50 during an overnight trip to the U.S. They can now bring back $200 worth of U.S. goods before duties kick in.
Canadians spending more than two days in the U.S. were previously allowed $400 worth of duty-free purchases. That has now been raised to $800, giving Lower Mainlanders more incentive to spend weekends in Washington state.
However, there is no change to same-day trips, which means Canadians zipping across the border for a few hours to buy gas, groceries and other goods will still have to pay duty on their purchases.
Americans are entitled to a same-day $200 duty free allowance, according to crossbordershopping.ca. Canadians don't enjoy that kind of break on same-day shopping.
Last week the Retail Council of Canada (RCC) and four border-community chambers of commerce asked the federal government to eliminate import tariffs on finished goods, to enable Canadian retailers to offer more competitive prices and reduce cross-border shopping.
Diane Brisebois, RCC's president and CEO, said last week, "The government's decision to increase duty exemptions on goods bought in the U.S. is salt in the wounds of retailers in border communities."
