Is cross-border shopping worthwhile?

October 5 2007 by Ellen Roseman

Douglas Porter, a Bank of Montreal economist, made waves last month by criticizing the high price of Canadian consumer products compared to identical products sold in the United States. He found a 24 per cent price gap on a basket of assorted goods.

In his report, The Price is Wrong, he said retail prices in Canada have responded to the loonie’s moonshot “with all the speed of a three-toed sloth on a hot summer’s day.” As a result, inflation is higher than it should be and interest rates could be even lower.

So, what can consumers do? How can we persuade companies to adjust more quickly to exchange-rate changes? Here’s my advice.

Check out the U.S.-Canadian price gap on products, such as books and greeting cards, where it’s clearly visible. Then, buy from companies that have lowered prices to reflect the soaring Canadian dollar. If you see a big gap, ask the manufacturer why it’s still there and when it’s coming down.

One of my readers wrote to Carlton Cards about what he thought was a hefty surcharge. The company replied that higher operating costs in Canada – and not the exchange rate – were behind the higher prices. That reader now makes his own cards using his computer. It’s only a folded piece of paper, he told me.

What about cross-border shopping? There’s been an increase in personal limits to $400 for 48 hours, up from $200 before. But you have to tell the truth about what you bought. Getting caught smuggling in U.S. merchandise above your limit can cost you plenty.

Don’t forget the long waits at border crossings and the higher gas prices. And since the last wave of cross-border shopping in the early 1990s, many big U.S. retailers have planted roots in Canada. Passports are now mandatory for airplane trips across borders and soon will be for road trips, as well.

Speaking of road trips, should you buy a U.S.-made car? I’m not sure it’s worthwhile.
Cross-border shopping for vehicles is not simple. You may have to get the car modified, inspected and certified to meet our safety standards – and pay Canadian sales taxes on top of the U.S. taxes paid. Don’t underestimate the paperwork needed to do it properly.
There’s good advice here on importing a car from the U.S. As well as the government guide, you can also look here for practical tips.

Finally, many people have complaints about customer service at Air Canada and find they get better deals from airlines across the border. Scott Pilkey, see below, got nowhere with his correspondence about Air Canada’s exorbitant change fees. Deb says that’s a problem she’s experienced only with Air Canada, not other carriers.

19 comments

  1. Jamie

    Oct 5 2007

    It’s interesting to see the substantial difference in price between Amazon.ca and Amazon.com (which ships only books and DVDs to Canada).

    Apparently, the interest from Canadians choosing the .com site was of interest to them too, as they’ve just substantially increased the shipping charge to Canada. It still often will work out cheaper to buy from their .com site.

    It’s too bad there are few US online retailers friendly to Canada. They either refuse to ship here at all or insist on using high brokerage fee couriers. I have saved a lot buying shipping supplies from Uline, compared to the prices at Canadian office suppliers.

  2. brad

    Oct 5 2007

    US retailers that have set up shop in Canada include LL Bean, which makes shopping for Canadians practically effortless: Canadian and provincial taxes are calculated and paid with your online order, so there’s no need to pay the postal or UPS delivery person, and returns are handled by a facility in Ontario so you don’t have to ship them across the border.

    The main issue is that with Canada having 1/10 the population of the United States, it’s just not cost-effective for many US retailers to facilitate shopping for Canadians. Have you ever compared what’s available from Amazon.com with what’s available from Amazon.ca? It’s amazing.

  3. Andrew Teasdale

    Oct 6 2007

    Tongue in cheek!

    The moral of the story is buy Canadian. That way you know you will not get short changed on the currency.

  4. Ellen Roseman

    Oct 18 2007

    On CBC’s noon-hour program, Ontario Today, host Rita Celli interviewed a bookstore owner in Ottawa who had decided to let customers pay U.S. prices on books if they wanted to. About two-thirds wanted to.

    There’s still a big gap between Canadian and U.S. prices printed on book covers — ranging from 15 to 40 per cent, said the owner of the store (Collected Works). Customers were unhappy paying a big premium when the Canadian dollar was at par with the U.S. dollar. So he agreed to give them a break.

    Later, she interviewed a self-published author, Jim Clemmer, who normally sold books for $19.95 (U.S.), $24.95 (Canadian). He’s now publishing out a new one and decided, after much soul-searching, to put one price on it, $19.95. This is the same price in Canada and the U.S., but there’s no reference to the currency on the book cover.

    Also, I’ve had a long correspondence with a reader about the higher price of Toyota cars built in Canada. He tried to buy the Toyota model he wanted in Buffalo, but the dealers there are not allowed to sell to Canadians. This is a company order.

    Phil Edmonston, author of the Lemon-Aid car guides, has filed a complaint with the Competition Bureau in Ottawa. He’s been told it’s likely that an investigation of Toyota Canada’s pricing practices will be launched.

  5. Christopher Denes

    Oct 18 2007

    I am concerned about the blind eye that is being turned by Canadian retailers concerning the rise of the Loonie.

    I have found that book retailers Coles and Toys R Us (I suspect others) are still selling their wares at the Canadian price (even when books are priced in both Canadian and a lower American price). With 20 years of retailing experience, I can assure book buyers that books are a guaranteed sale (ie the retailer only pays for what is sold). This being said, book retailers should have no difficulty in arranging a lower price through their distributors to reflect the more competitive Canadian dollar and pass that savings on to their consumers.

    I hope that some light will shine on this concern so that Canadian consumers can benefit and not be gouged due to our strong Canadian currency.

    Christopher Denes

  6. SD

    Nov 15 2007

    Air Canada is an awlful company. I refuse to ever fly with them again. Yes, they over price but secondly, their customer service stinks. I had an experience whereby they actually spilled jet fuel oil on my suit case. They refused to replace my suit case instead they attempted to clean it. The smell was still in the suitcase and all my best clothes. After MONTHs of long letters and trying to get a hold of them, (which was impossible because they don’t have real people on phones).. I got NOTHING for replacement.

    Another time, my boyfriend had a terrible experience. His ski jacket, boots and helmet were lost on the plane and were never found. He received 150 dollars Cdn for what was well worth over 800 dollars.

    Air Canada is a terrible airline, I refuse to ever use them again.

    In terms of the rising Cdn dollar. As Canadians, we can see how this is effecting us… look at the forest industry! 80% of the employees in the forest industry have been or will be laid off due to the fact that 80% of the lumber is no longer being sold to the US. This is effecting a LARGE amount of people in BC and Alberta! Especially in Northern communities. In my opinion, cross boarder shopping is worth while so that Canadian companies can realize that they will need to cut their costs. Think of it this way: The only companies really hurting in Canada at the moment are the ones that export their goods to the USA. Companies in the USA are still making money off their sales. Think of how much Canadian companies are actually making off of the Canadian consumer! I have no problems with Canadians buying cheaper goods in the USA… maybe that will eventually make the dollar par and import and export will be even.

  7. Jeff Irvine

    Nov 23 2007

    Try shopping at http://www.cross-bordershopping.com wide selection of online retailers in one location and parking is free! Most retailers ship to Canada. A package forwarding service is available on the site if you choose a retailer that does not normally ship north. Costs about $20 to join but it is money well spent when you consider the savings and the service is reliable.

  8. Josamp

    Dec 7 2007

    For a good price comparison, check out the following report. There are direct flights to popular destinations like Orlando, New York, Boston and more. With a little patience, you can find cheap flights and good deals from Buffalo.

    http://borderdeals.ca/2007/11/10/flying-to-the-us-consider-a-border-airport/

  9. ReemymnLivy

    Jan 15 2009

    Good day, guys and girls!

    It’s my first time I am here.

    So I’d like to know if one of you or your friends was fired because of a financial crisis?

  10. Terry rogers

    Dec 12 2010

    The reason we pay more for everything in kanada is to fund our “FREE” medical system. High taxes, wages, overhead, all form componenets that fund our medical system.

    You can’t have it both ways.

  11. Syed Kamal

    Oct 20 2011

    I have returned to Canada (Alberta) after working in the US for about 13 years.

    A month after my return, I still have not recovered from sticker shock of food and housing prices, two essentials. Food prices are substantially higher and housing is out of this world.

    I did buy a used car in Houston and did not have much difficulty getting through customs, but had the vehicle registered in Texas. (Did not know about temporary permit).

    Visit all the relevant sites: Transport Canada, Customs Canada and Environment Canada. At first you will be scared, but read every site several times.

    The way they phrase everything is meant to scare and dissuade you. One part even says to have the car washed throughly including underbody.

    I say yeah, how about washing the inside of the car and disinfecting the occupants at port of entry!

    If you see unfair hurdles in the way of importation of goods (across a free trade zone), complain but to the US dept of commerce. They might have better clout in getting the system fixed.