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There are a couple of possibilities for why cross-border shopping is less significant than it was in the day:

(I) The internet and cheap shipping. I shop a lot in the US, but never in person. I must be Amazon.com's best customers. And a lot of US retailers who don't have retail operations in Canada will ship their products free of charge to Canada. So why would I bother shopping in Buffalo.

(II) 9/11. Tighter border security and documentation requirements make it a lot less convenient to travel than it once was.

(III) Increased competition in Canada. In 1989 the big Canadian retailers were, what, Eatons, Woolsworth, Sears, Zellers, Kmart, byway, HBC, Simpsons? How many of those still exist? HBC, in a very modified form (apparently so did Woolsworth - in the form of Foot Locker). It wouldn't be surprising if the Canadian retail market were much more competitive now then it was 25 years ago.

Bob: Those are good reasons. No internet shopping in the early 1990s. If you have to go through the hassle of getting a passport to cross the border - which was not the case in the early 1990s - then you are going to visit for a longer trip rather than same day trips. The other big difference between then and now is that Walmart and Target are now in our market- retail has changed over two decades.

Yeah, target and walmart were the two big ones I had in mind.

But if you shop online and have goods shipped backed to you get hit with GST/HST and other taxes. Second for very big US retailers the US Corporate Tax system and lower Canadian corporate rates actually encourages them setup brick and mortar presence in Canada or Canadian specific websites. The later wasn't true 20 years ago.

Tim,

Yes, but the selection at US online retailers is much more extensive that Canadian ones (compare the inventory at amazon.com vs. amazon.ca, it's not even close), and they are often more competitively priced. True, you have to pay tax on the importation of goods at the border, although you'd pay them anyhow, but the CRA has not developed an effective means for taxing online purchases of intangible property (ebooks, music, video games). In theory there's a self-assessment obligation, but I suspect non-compliance is universal. Plus, some foreign retailers are not exactly scrupulous in their customs compliance procedures. I once ordered a suit from a Hong Kong company, who shipped it to me described as a $20 gift - to avoid duties and taxes on importation. It was a nice suit, but I didn't order from them again, but not everyone is as scrupulous as I am.

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