Shoppers Head South for Upped Duty-Free Limits

Cross-border shopping | BCBusiness
Canadian retailers are losing more and more revenues to cross-border shopping, and the trend is only getting worse.

As expected, the laxer restrictions on what Canadians can bring back from the U.S. has sent back-to-school shoppers across the border in search of bargains.

Retailers may have seen it coming from miles away, but it’s still hitting their bottom lines hard.
 
On June 1, a new set of upped duty-free limits took effect and the increase in cross-border shopping is palpable.
 
More and more Canadians are making overnight trips across the border to hunt for bargains on everyday items, especially now that the back-to-school shopping season is in full swing. Statistics Canada released new numbers this week showing overnight travel to the U.S. surged 7.5 per cent in June alone, with the majority of those trips taken by car.
 
And it’s no surprise that for the same time period, Canadian retailers saw a 0.4 per cent decline in sales revenues.
 
Industry experts are calling it a “surprise decline,” but is the downward trend really all that shocking? A report from the Bank of Montreal back in May reported that even before the new set of duty limits took effect, cross-border shopping was costing Canada $20 billion a year.
 
With a strong loonie that’s staying relatively with the American greenback, it’s more likely that downward trends is here to stay for Canadian retailers.