The recent changes to the amounts of duty free goods allowed to be brought back to the country by individuals after 48 hours abroad are a pet peeve of Canadian Choppers owner Daryl Letkeman.
“It’s a big problem,” he said of the changes which now allow up to $800 of merchandise after a 48 hour period.
“An individual can bring motorcycle parts and accessories across the border at no charge, where all my merchandise has duty paid.”
Letkeman said that most everything is made offshore now, so duties apply to most of the products he stocks. The odd American made item will still require the payment of HST.
Aaron Beauchamp of Napa Auto Parts in Keremeos has similar issues with cross border shoppers and the new legislation.
Beauchamp said that his company is constantly asking why there is a 15 to 30 per cent difference in the cost of parts at the wholesale level between the two nations.
He cited as an example, the case of a Canadian manufacturer of quads, who sell their product in the U.S. at a retail price that is $2,000 less than in Canada – and instruct their dealers not to sell quads to Canadians in order to protect the price differential.
“People should realize that when they buy in the U.S., they often end up with no warranty protection, and if the part fails or is not the right one, they are forced to return it to the place of purchase,” he said. “When you purchase locally, you’ll have a locally honoured parts and shop warranty.”
Beauchamp also spoke of a personal experience he had with the Canadian manufacturer of fuel tanks.
“They quoted my cost for a tank at $400,” Beauchamp explained, “ but I was able to buy one in Atlanta, Georgia, and have it delivered to Montana, where I picked it up, for $195.
The manufacturer told me that because the population in Canada is so small, compared to U.S. markets, they couldn’t give Canadian purchasers the high volume discounts that were available to American purchasers.”
Beauchamp also felt that high taxes, levies and environmental fees were also a deteriment to Canadian businesses ability to compete with cross border competition.
Jake MacDonald of Keremeos Building Supplies hasn’t noticed cross border shopping’s impact much since the dollar reached parity over the last couple of years.
“It was never that bad for us,” he said. “In fact, I have a few customers who come across the border to buy here.
There’s always going to be cross border shopping, especially when you look at the price differential for gas, groceries and liquor – any items that our government taxes the hell out of us on.”
MacDonald related the story of a Canadian resident who bought a house package out of Washington, at a price he thought was very competitive. Upon receiving the house package, the resident discovered between $27,000 and $40,000 worth of discrepancies; the package was missing form lumber and upper floor joists, and contained poorer quality materials overall.
“American suppliers have different ideas of what a ‘complete package’ is, “ MacDonald said. “It’s a completely different universe down there.”
“Cross border shopping does hurt us,” Shannon Forner of Valu Plus Foods told the Review.
“The issue with us concerns the regulatory bodies in Canada that maintain high prices for things like dairy products,” she said. “The CFIG (Canadian Federation of Independent Grocers) lobby on our behalf for changes to the legislation. We’re patiently waiting.”
Shannon noted that border proximity played a big part in attracting cross border shoppers – but at the same time, so did Penticton’s proximity.
