Canadian retailers have recently been concerned that the Canada Border Services Agency has been too lenient with cross-border shoppers in the wake of the increase in duty free limits in 2012. While it is true that cross-border trips have grown substantially over the last decade, I’m not sure they should be that concerned.
Despite any lamentations from Canadian retailers, cross-border shopping today is a much smaller problem than it was during the early 1990s particularly if measured by same-day auto trips and certainly on a per capita basis given population growth. Same day auto trips did surge after 2009 but they appear to have leveled off over the last two years.
Where there might be some concern is with one or more night auto trips. These have been on an upward trend since the dollar began appreciating in 2002 and they are almost where they were in 1991. As well, given that they have continued to climb over the last few years while same day trips stalled could mean longer trips are being subsituted for shorter ones - given the new exemptions were not extended to same trip trips. However, it is difficult to blame all the growth on longer auto trips on cross-border shopping given that longer trips are also done as part of a vacation rather than simply to shop.
Given that the Canadian economy has fared reasonably well over the last few years, it should not be a surprise that Canadians are taking more vacations in the United States. After all, one can argue that a road trip to the United States is a logical and convenient tourism experience for Canadians (90 percent of whom live within 100km of the border) making a visit the U.S. a long-standing part of the Canadian cultural experience.
v37426 Canada; United States dollar, noon spot rate, average
v129490 Canada; Canadian travellers returning from United States by automobile, total
v129491 Canada; Canadian travellers returning from United States by automobile, same day