They Like Us!  A Lot...

Well, retailers close to the U.S.-Canada border do like Canadians an awful lot.  They don't feel they're being invaded, not at all, when hordes of Canadians drive over the border for a day of shopping.  In fact, while most Americans view Canadians, their continental neighbours and largest trading partners with something quite close to indifference, it's a different story with the retail industry. 

Bearing in mind that this isn't entirely a new reality, but under the circumstances of low economic retail activity overall in the U.S., Canadians are more welcome than ever.

That is to say, Canadians making those countless trips for the exclusive purpose of shopping.  Filling up their gas tanks, moseying about in supermarkets, buying their weekly quota of milk, eggs, dairy products, chicken.  Canadian marketing boards aren't all that popular with Canadian consumers, although they are wildly popular with producers.  Saving a dollar here, a dollar there, is big with some Canadians, well worth the drive to come home with that feeling of shopper satisfaction.

And the traffic from Canada to the United States has been fiercer than ever before.  Canadians have been going stateside in record numbers thanks to a few new and very much appreciated items added to the allure of shopping there.  For one thing, new duty-free exemptions have kicked in nicely, permitting Canadians making overnight trips to declare $200-worth of purchased goods (up from the previous $50) free and clear.  And then, of course, the stronger Canadian dollar as well, at par with or slightly above the U.S. greenback.

"There was concern with the higher exemptions that it could prompt increased shopping trips into the U.S.  Certainly the recent data suggests that's what played out."  Paul Ferley, economist, RBC

Statistics Canada's most recently released report indicates overnight trips to the United States rose to 1.9-million, an increase of 7.5% from the month before.  Car travel is the most popular mode of transit, accounting for over 1.2-million trips.  Canadian retailers are somewhat less than thrilled, most particularly those operating close to the U.S.-Canada border. 

"There was a lot of attention in the media and elsewhere in respect to the increased border exemptions, so it's not surprising that there was increased activity at the border", commented David Wilkes, a senior vice-president at the Retail Council of Canada.  "Until we address the root causes we are going to continue to see consumers going to the U.S. seeking the best value for their dollar."

Let's see now, the most popular items are likely electronics, they're considerably less expensive in the U.S.  For most people it's an irritating puzzle that automobiles, electronics, clothing, household products, books, virtually most consumables, are less expensive in the U.S.  Not always, of course, but usually.  Consumers don't think of what's involved, they're just resentful that they have to pay more for all manner of consumer items than their American neighbours do.

There are many reasons why things are cheaper in the U.S.  Economies of scale, lower fixed costs, a larger domestic market, to begin with.  Then there's the reality of a larger un-unionized workforce, the fact that American workers earn less on average than Canadians do, and at the same time they work harder.

Does it really make all that much sense to make those cross-border shopping trips to save a few dollars?  To many people it just doesn't seem reasonable; they're the people who prefer to buy at home.  To many others the trip is an opportunity to get out, look around, have some fun, because shopping represents fun to quite a number of people.

They can always justify those cross-border shopping trips by reminding one another that our friends, the Americans, need all the help they can get to dig themselves out from under their financial doldrums, with the retail sector reporting poor sales in tandem with an unemployment rate that doesn't seem interested in budging. 

Besides which, the friendly glow that emanates from the welcome they get from U.S. retailers speaks for itself.

They've just got to remember when they pass through the border not to inform the U.S. border authority that they're bringing citrus fruits along with them.