Canadian consumers are heading south for an overnight stay and shopping to take advantage of new cross-border allowances and the high dollar.
Cross-border trips in June, the first month the higher exemptions took effect, were up to levels not seen since 1972. Way back then, the dollar was also above par, and gas prices were also low. Taking a trip to the U.S. was a breeze.
It seems many are willing to spend the time in border line-ups and pay for the extra gas to save about 14 per cent on many items. They also want to have access to a wider variety in clothing and other consumables.
The downside is that local retailers are taking a hit, and when they do, they cut back on new hires and those much-hated taxes (which pay for health, education and other important programs) take a hit, as well.
Retailers in border communities like Surrey, Langley and Abbotsford are particularly hard-hit.
Canadians are understandably looking for bargains. But there may come a time when the lure of cheaper U.S. products will come back and haunt them.
A long-term decline in retail jobs and declining tax revenue can do some major damage to the B.C. economy. Tax shortfalls must be made up somewhere, so that means everyone (including cross-border shoppers) will pay more. With fewer jobs, it will be that much harder to pay those added taxes.
More likely though, as the U.S. economy rebounds as housing sales are cautiously expected to do, the loonie will eventually drop in value. This will greatly diminish the advantage of shopping down south.
—Tri-City News
(Black Press)