Raising duty-free limits costly

Shoppers will benefit at expense of businesses near border

TORONTO – Canadian bargain hunters and communities within easy reach of the U.S. border are beginning a new chapter in their relationship with U.S. retailers with new rules on duty-free shopping that went into effect Friday.

The changes — previously announced in this year’s federal budget — put increased pressure on Canadian retailers and other businesses that have long watched their customers lured stateside by their rivals’ relatively low prices.

In most cases, the increases to the duty-free levels are substantial.

Cross-border shoppers who could only declare $50 of purchased goods after an overnight trip are now able to bring $200 worth of merchandise back home.

For people on a jaunt of between two and seven days, the limit has doubled to $800 from $400 while the limit for visits of more than a week increases to $800 from $750.

Travel for less than 24 hours still has no personal exemptions.

“We’re responding to the realities of travel,” Natural Resources Minister Joe Oliver said Friday during a news conference at the Billy Bishop Toronto City Airport, which handles regional airline traffic.

“We want to make the travel experience less bureaucratic and less time-consuming.”

Oliver said the government estimates the changes will save Canadians about $13 million this year, which will increase to $17 million annually in 2013.

Stephen Fine, founder of online shopping resource crossbordershopping.ca, said would-be bargain hunter are keen to take advantage of the new limits.

Shoppers had begun mobilizing to press the government into changing the personal exemption rules, he said, adding the 24-hour dutyfree limit was a frequent bone of contention.

Fine said the government’s new regulations have addressed those grievances, but have failed to eliminate the main source of inconvenience, the lack of exemptions for 24-hour trips.

Those rules are a sharp contrast to Americans who are entitled to $200 worth of exemptions when crossing the border from Canada.

“There’s been a lot of disappointment about that from our audience because the majority of cross-border shoppers are same-day shoppers,” Fine said.

The lack of a same-day exemption, he said, will almost offset the impact of the other rule changes on crossborder traffic.

Matt Davison, spokesman for the Peace Bridge Authority that oversees the crossing from Fort Erie, Ont. into Buffalo, N.Y., said traffic is expected to remain steady despite the higher limits: “Weekends are always busy times anyway. We don’t expect to see anything out of the ordinary.”

Marq Smith, owner of motorcycle shop Western PowerSports in Langley, B.C., said he’s already lost thousands of dollars’ worth of business to cross-border shopping over the years.

Raising the duty-free limits, he said, is a perfect way to take money away from Canadian business owners.

“We don’t get the tax income as a country or a province. That’s why I don’t understand what the government is doing,” Smith said.

“Why would they take money out of their pockets, which of course is our pockets, by enhancing the ability to bring goods across the border?”