The federal government raised the limit for duty-free goods which can be brought back into Canada from the U.S. in its recent budget. The changes took effect Friday.
While many consumers are happy, this is not good news for Langley businesses. Many are already feeling the pinch from cross-border shopping, and the much higher exemptions take effect just as the summer travel season begins — a time when many people cross the border.
All levels of government need to take more responsibility for aiding and abetting cross-border shopping.
Ottawa didn’t have to bring in these much higher exemptions this year. You can now bring back $800 worth of goods after a 48-hour stay. There was no pressing demand for the change.
While these exemptions will hurt businesses in many parts of Canada, there is no place that will be more impacted than the South Fraser region, where 750,000 people are literally a 10 or 15-minute drive from the border. Nowhere else in Canada do so many people live so close to the U.S.
It is proof once again that Ottawa is badly out of touch with B.C.
However, the provincial and local governments also play a big part in driving shoppers out of the country. The ridiculous price of gas, hovering at close to $1.45 a litre despite the fact that oil prices have fallen by 20 per cent in the past few months, is due almost solely to high taxes.
TransLink charges 17 cents per litre on gas — yet its take from fuel tax is starting to fall because more and more people are going elsewhere to get gas.
Elsewhere is either to Abbotsford or Mission, or across the line. If they are going south to save money on gas, chances are they will do some shopping. They may even be tempted to do more regular shopping in the U.S., after making that first trip to save on gas.
The provincial government is about to boost the price of gas again. On July 1, the latest carbon tax takes effect, and will add another 1.1 cents to a litre of fuel. At that time, the carbon tax will be 6.67 cents per litre of gasoline, and slightly more for diesel fuel. We pay close to 50 cents a litre in tax on gas.
The Canadian Taxpayers Federation recently pointed out that fuel taxes alone take $1 billion out of the economy in Metro Vancouver alone.
All of this happens as incomes stagnate. The average B.C. income in 2010 was $46,379, almost $18,000 less than the average income in Alberta. Most people have seen little in the way of a wage boost since 2010, yet governments at all levels are digging deeper in our pockets. Property tax, Hydro and ICBC rates and medical premiums all keep climbing.
The imposition of the HST, at a time when incomes were stagnating, was another assault on wallets and drove even more people south.
It’s no wonder many people shop across the border. It’s one of the few ways left open to them to save money.
Unfortunately, it hurts working people here, as businesses close or reduce staff.
It’s high time all levels of government realized that high taxes are driving too many people across the border to shop.