Good news for cross-border shoppers...

Duty-free exemption limits increase starting June 1st, meaning cross border shopping could see a notable upswing.

A new BMO Capital Markets special report on the change to duty-free limits on cross border shopping has been released.

According to BMO deputy chief economist Douglas Porter, “Canadians will flock to Maine, Michigan and Minnesota en masse, as well as the border states of New York, Washington and New Hampshire” in numbers not seen in years, thanks to the increase to the duty-free limits.

Travellers visiting south of the border for more than 24 hours will now be allowed to bring home $200 worth of merchandise duty-free, up from $50. Stays longer than 48 hours will now allow $800, whereas the previous limit was $400 for stays of a week and $750 for anything longer.

This has the potential to harm Canadian retailers in an big way, as the problem of higher prices in Canadian stores has long been an issue.

The report notes that “Our latest random sampling of a basket of goods finds that Canadian retail prices are roughly 14 per cent above U.S. levels, before taxes and adjusted for the exchange rate.”

This price difference has long given shopping across the border a big appeal, but has become even more prominent during the past four years when the slow economy has made every penny count to consumers.

Canadian consumers have taken issue with what is perceived to be unfair pricing for years, particularly since American retail chains started opening up here and charging more for the same products.

Retailers say they have very little control over pricing, as they face higher tariffs for finished goods and are charged more by suppliers.

The Retail Council of Canada has recently stepped in as manufacturers like Roots, Barrymore Furniture and Canada Goose have asked for help, fearing what these latest changes could mean for their stores.

A ‘buy Canadian campaign’ is said to be in the works, encouraging locals to shop at home. The council is also looking into introducing a bill that will offer financial incentives to people shopping in Canada, and to Canadian retailers. (I'd like to see how THAT'S supposed to work!!!)

I have been cross border shopping for 15 years and I have paid duty exactly TWICE. And I've never been under those previous limits. Both times was less than 24 hours and well over several hundred dollars. Most people have had the same experience here.

Maybe the limits are just more reflective of what was actually happening between consumer spending and actual time to process available to the border agents. Most people here cross over, and we still have a nice healthy economy. Lots of local shopping, which we all also partake in :)

The one thing I can say is that since I've been couponing, it's not quite as worthwhile to get groceries (unless I have coupons over there)...a lot of their grocery prices have risen to what I would pay here. However, gas, clothes, shoes, toiletries...crazy big differences.

OTC medicine is particularly disturbing...generic Naproxin iwas $3 for 60 tabs (try that with Aleve) and 2000 generic ibuprofrin was $8.

The toll prices are cheap. And there's no wasted gas, it literally takes 4 minutes to get there.

There is a real patriotic mentality in the States (Buy American!) which doesn't exist here in Canada, not at the national level anyway. I think as Canadians, we think we are being duped by retailers for paying more than we should for things (at least more than in the States). This especially holds true for big ticket items like cars....some of the cars are made in this country and it still costs more!

For years, book sellers charged us a lot more due to the exchange, but when we got closer to par, they sure didn't reprice to reflect that change! The American market is huge, and the laws of demand and supply are at play, but as Canadians, we should feel that we are getting value, or we will look for it elsewhere...it's just human nature.

Consumers are smart, they know where the deals are...if you live close to the border, I don't see a problem with shopping in the States. I think you DO have to think about the overall cost when you factor in the exchange, gas and other charges. And also whether you are getting the same quality of goods as you would at home (sometimes that is not the case).

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Originally Posted by iceblueraven

I have been cross border shopping for 15 years and I have paid duty exactly TWICE. And I've never been under those previous limits. Both times was less than 24 hours and well over several hundred dollars. Most people have had the same experience here.

Maybe the limits are just more reflective of what was actually happening between consumer spending and actual time to process available to the border agents. Most people here cross over, and we still have a nice healthy economy. Lots of local shopping, which we all also partake in :)

The one thing I can say is that since I've been couponing, it's not quite as worthwhile to get groceries (unless I have coupons over there)...a lot of their grocery prices have risen to what I would pay here. However, gas, clothes, shoes, toiletries...crazy big differences.

OTC medicine is particularly disturbing...generic Naproxin iwas $3 for 60 tabs (try that with Aleve) and 2000 generic ibuprofrin was $8.

The toll prices are cheap. And there's no wasted gas, it literally takes 4 minutes to get there.

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Count yourself lucky that you have managed to circumvent the system. Imo, it is not worth the risk of getting caught and being subjected to increased inspection every single time I crossed the border. Regardless of the risk, I wouldn't fail to declare anyway because it's an ethics issue as far as I'm concerned.

I do consider myself lucky, but it has nothing to do with the border :)

We do declare everything. Hand them receipts every time. There is no circumvention of anything.

We cross several times a year and have only ever paid twice - we declare everything , I calculate all receipts before we get to the agent and I attach a sticky with the GROCERY TOTAL and OTHER TOTAL so they know what is what when we hand over the receipts - only 2 times we did pay was when our purchases were over 700 for the OTHER stuff (clothes electronics etc) I really thing it depends who you get, what mood there in. Both times that we were charged taxes we crossed at the Peace Bridge - other bridges we get a "Welcome Home" and and were on our way.
We go to the USA often bc they sell MUCH more gluten free foods then we do here in Canada.

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Originally Posted by iceblueraven

I have been cross border shopping for 15 years and I have paid duty exactly TWICE. And I've never been under those previous limits. Both times was less than 24 hours and well over several hundred dollars.

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Originally Posted by iceblueraven

We do declare everything. Hand them receipts every time. There is no circumvention of anything.

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So what you are saying is, that for over fifteen years, your customs guards have been negligent in charging duties? I find that hard to believe.

To be truthful, it hadn't occurred to me to ask the Canadian agents why they aren't charging me duty. When they look at the receipts, I trust that they know what to charge duty on and what not to. Sometimes it's a lot of groceries on the receipts, sometimes it's not.

As the other poster mentioned, it is not an unusual occurrence, and I was simply sharing my experience. It would seem your experience has been different, and I can understand why that would be frustrating.

^Thanks for not taking my comments as an attack on you...I'm just puzzled how it all worked out. Perhaps certain border crossings scrutinize more than others...

I haven't had any bad experiences through customs because there is always five of us and we stay for almost a month, usually. I have read on other forums about people not declaring and then they belly-ache about being searched every time they go across the border.

I must concur that my experiences align with iceblueraven. We cross the border about once every 6 weeks to get a variety of items in the States. I add up my receipts, clip them together and provide an accurate total to the border guard. I believe if that total is below a certain threshold (and in my experience, that threshold is not the proper limits), they let you go. For the time it takes for the paperwork and the manpower for them to collect the duty I don't think it's worth it. In addition, of friends who have had to pay duties, they have in reality actually just been charged the 13% HST. With that said, we generally do not buy a lot of clothing, and never buy big-ticket items or alcohol/cigarettes, and our total spending is usually under $200. I use coupons and flyer match ups like at home to pay at least 30-50% less than even their sale pricing (and sometimes their regular prices are better than our sales).

Not only do I generally get very good deals, but I have a better selection of things like low-salt foods, medicines, shoes/clothing. Certain products really are bargains. I need a special kind of eye drops at are OTC and they cost $17 at SDM. With a sale and a coupon, I pay no more than $3 for them in the States.

We too have crossed the border at least 6 times in the past 3 years, and have never once paid duty. We stay less than 24 hours, and our total is usually less than $200. Shopping in the U.S. saves us hundreds, as clothes and shoes are MUCH cheaper!

I always stay 48 hrs and always stay under my limit! My husband travels a lot to the states for work so we can't afford to be blacked balled:(

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Originally Posted by Abby5

I always stay 48 hrs and always stay under my limit! My husband travels a lot to the states for work so we can't afford to be blacked balled:(

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But going over your limit is perfectly OK & legal. You just have to be honest and declare everything, and be prepared to pay if they ask you to. Where people run into issues or are "black balled" is when lying on their purchases & stuff.

We go to the States at least every other month, and are sometimes over our limit. We declare everything, and only twice did we have to pay taxes. All the agents are perfectly nice to us, event on these instances where we went inside to pay.

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Originally Posted by rewok

But going over your limit is perfectly OK & legal. You just have to be honest and declare everything, and be prepared to pay if they ask you to. Where people run into issues or are "black balled" is when lying on their purchases & stuff.

We go to the States at least every other month, and are sometimes over our limit. We declare everything, and only twice did we have to pay taxes. All the agents are perfectly nice to us, event on these instances where we went inside to pay.

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My dh would just die with even the thought of paying duty !!!
$400 x 4 people is a lot of money to spend in a weekend for us!!! Lol:)

I had heard about the limits changing; however, I don't think it'll affect how much I personally spend over there. What's in my budget to spend is in my budget to spend and that's not gonna change just because they're increasing what I can bring across. LOL. I guess it might make a difference for those who live further away from the border-- that is, under the current limits, it isn't worth it for them to cross because they don't save as much once you factor in gas and time and such...ergo, new and higher limits could make cross border shopping more feasible.

I go across 1X month or so with DH and the kids. We make an afternoon outing of it and go for supper and do some shopping. We are never away for more than 5 hours at a time and there have been plenty of times when we'd exceeded the limit. But never in an obscene kind of way. We may be $100 or $200 over the limit or something like that. Like other posters, we always declare everything. I hand the customs people my pile of receipts so it's all there for them to see. I think we've only been charged duty once and that was because DH brought back an 18pk of beer and I think you can bring back 12 cans (not 18) when you've been away less than 24 hours.

I buy fewer groceries and cleaning products over there than I might otherwise simply because as another poster pointed out, I can do just as well or better over here using my coupons. Perhaps if I had access to US coupons, the story might be different, but I don't, so it isn't.

I tend to buy a lot of clothes over there. Even with combining sales and coupons here, I gotta be honest-- Canadian retailers simply can't complete. Then again, what "Canadian" retailers are left? heck! Evenour own Tim Horton's franchise is American owned, is it not??

As for patriotism? Off the top of my head, I can think of one buy local slogan.

(Feel free to sing along, fellow Ontarians....)

"Good things groooooow, in Ontarioooooo!" That's the 25+ year old Foodland Ontario tune reminding us to buy local produce.

And those of you in the 35+ age group may remember the "Buy Canadian" campaign, (circa 1982) when buy canadian tv commercials and newspaper ads urged you to buy Canadian products and every pair of snowmobile boots I had was stuck with a red and white label that said "Made in Canada."

So we did have a "Buy Canadian" campaign...it just didn't last much longer than a year or two.

Never really did this, but I am Glad to hear about the increase !

Eh? What about international? Not that I'm planning to buy more than $400.

I agree, they don't care much about groceries. They are more concern with stuff with resale value, such as handbags and wallets. It's to protect the local businesses.

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Originally Posted by Abby5

My dh would just die with even the thought of paying duty !!!
$400 x 4 people is a lot of money to spend in a weekend for us!!! Lol:)

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You're right, it is! However, now you can stay 24h and bring 200$x4 (no alcohol however).

I must admit, between DH & I (400$ x2), we did go over a few times... :redface: Most of these however are planned shopping/package pick-up trips, so we often order many things on the Internet beforehand, some of which are pricey: ATV tires, home reno stuff, kitchen stuff.

FYI, when staying under 24h, the official exemption is 0$, nada, zilch! In real life, border guards will often let slide a certain amount. I don't know if that will change with the more generous 24h exemption.

Happy June 1. New duty limits take effect today :-) Here's a great site for US-based printable coupons for your next trip:
http://hip2save.com/