With a weak American dollar and a subsequent high Canadian dollar in comparison, many Canadians are starting to wonder if they can’t find items that are cheaper in the States.
While it’s true that your dollar will go a bit further in the U.S. than you’re probably used to, and it’s nice to not have to do the conversion in your head while shopping in an outlet store in Freeport, Maine, a high dollar doesn’t necessarily make shopping in the States all that sexy.
Charles Cirtwill, acting president for the Atlantic Institute for Market Studies warns Canadian consumers not to get too excited over the favourable exchange rate.
“Don’t get caught up in a dollar that’s worth $1.02. Just because it’s worth $1.02, or $1.05 or even $1.10 here in a couple weeks, that doesn’t necessarily mean your getting the savings of a lifetime and it’s time to empty the bank account and run across the border,” he says. “You have to be an informed cautious consumer, just like you were last week.” When travelling to the U.S. you’re allowed a personal exemption (a value of goods that you can bring back without paying any duty or extra tax), which varies depending on how long your visit is. After 24 hours out of the country it’s $50, 48 hours will get you a $200 exemption, and staying a full week will give you $750 worth of goodies to bring back with you. Any amount spent on top of that will likely be subject to duty and Canadian taxes.
Unfortunately, there’s no easy two-second formula to follow to figure out if it’s worth it to buy something for a cheaper tag price in the U.S. when the value exceeds your exemption. Different goods are divided into many different categories with different duty rates.
If it’s a shopping spree you’re after, you’re best going for a weekend, staying at least 48 hours, and coming back with no more than $400 worth of items per person.
If it’s a bigger ticket item you are after like a car, kitchen appliance or piece of furniture, than think twice before hopping in the car and driving across the border. For example the duty and tax on a fridge will likely bring up the overall price of the fridge by about 20 per cent.
If you’ve seen a huge deal in an American ad and think you’d like to go down to buy it, figure out how much it will cost you at the border bringing it back before you leave.
And Cirtwill says that’s only one of many things you should consider.
“They have to factor in what their car gets in terms of gas mileage and what their time is worth to them.” Cirtwill says that consumers have to ask themselves “is it going to be a pain, and am I going to save enough money to justify the aggravation of crossing the border buying it and filling out the forms.” Critwill says he hasn’t seen any trends yet of Canadians consistently finding a certain good working out cheaper from the States. He recommends vacationing south of the border as the best way to take advantage of the strong Loonie.
“It’s better to go down there and consume things, hotels, meals, entertainment,” he says. So perhaps if your favourite band is on tour, you could be better off going to see them on their stop in Boston, whereas you would have usually gone to the Montreal show.
But there are deals out there, and it’s worth the hassle on some items, just make you’ve done the math before getting in the car, or giving your credit card number online.