Newspaper article The Canadian Press

Higher Duty-Free Exemptions Luring Canadian Shoppers Stateside: Analysts

Newspaper article The Canadian Press

Higher Duty-Free Exemptions Luring Canadian Shoppers Stateside: Analysts

Article excerpt

Overnight trips to U.S. hit record: StatsCan

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Higher duty-free exemptions for cross-border shoppers helped attract Canadians stateside in record numbers in June, analysts and retail groups said Tuesday as Statistics Canada reported 1.9 million overnight trips to the U.S. that month.

Paul Ferley, an economist at RBC, said the new exemptions -- which let those on an overnight trip to the U.S. declare $200 worth of purchased goods, up from $50 -- combined with a strong Canadian dollar have upped the incentives to shop south of the border.

"There was concern with the higher exemptions that it could prompt increased shopping trips into the U.S.," said Ferley.

"Certainly the recent data suggests that's what played out."

A Statistics Canada report released Tuesday says overnight trips to the U.S. rose 7.5 per cent in June compared to May, to 1.9 million. That's the highest level since 1972, when the agency began keeping records on such cross-border jaunts.

Most overnight travel was by car, with Canadians taking more than 1.2 million trips -- a 10 per cent increase month over month.

The new duty-free rules kicked in June 1.

David Wilkes, a senior vice president at the Retail Council of Canada, said the increase in overnight trips to the U.S. highlights the fact that extra costs, such as higher tariffs, leave Canadian retailers at a disadvantage when competing with American stores.

"There was a lot of attention in the media and elsewhere in respect to the increased border exemptions, so it's not surprising that there was increased activity at the border," said Wilkes.

"Until we address the root causes we are going to continue to see consumers going to the U.S. seeking the best value for their dollar."

Canadians on a jaunt to the U.S. for two and seven days are now allowed to declare $800 of goods, up from $400, while the limit for visits of more than a week increased to $800 from $750. …

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