EBay CEO Sees 80% Cross Border Transaction Growth This Year

(TMCnews)

EBay, owner of e-commerce sites and PayPal payment services, announced that it doesn’t intend to compete in China’s domestic market and will instead focus on exports and cross border trades.

The company’s Chief Executive Donahoe said, “Over time, we will look for opportunities to partner or joint venture or work together with Chinese companies.” He went onto say, “We’ve, in essence, exited the domestic market.” Donahoe also said that cross-border transactions will rise over 80% to $4 billion this year.

Canadians Taking Advantage of Level Loonie

(Video: WIVB TV-Buffalo • Story: Montreal Gazette)



After nearly two years of being abused by the economy, can the Canadian consumer learn to love again?

With the dollar flirting with parity, and e-commerce making discounts more accessible, analysts say the answer is a resounding “yes.”

The real question is whether shoppers will commit to retailers at home or seek a cheap fling with their U.S neighbours.

“Given the combination of the currency returning to par, and the fact that Canadian consumer confidence has bounced back miraculously in the last year, I think we’ll see a real upswing in cross-border shopping,” says Douglas Porter, deputy chief economist with BMO Capital Markets.

“We’re already starting to see some response, both in the three-hour long lineups at the border this past weekend and in companies beginning to cut prices.” Read more here.

Tips on Crossing the U.S. Border Over the Holidays

(GHY International)

Plenty of Canadians will be crossing the land border into the U.S. this holiday season which prompted U.S. Customs and Border Protection to issue a press release offering some helpful pointers to make it a smoother process.

Here are their tips as listed in the CBP press release:

1) Travelers should familiarize themselves with the “Know Before You Go” section of the CBP website to avoid fines and penalties associated with the importation of prohibited items.

2) Travelers should prepare for the inspection process before arriving at the inspection booth. Individuals should have their approved travel documents available for the inspection and they should be prepared to declare all items acquired abroad.

3) Members of the traveling public should consult the CBP website site to monitor border wait times for various ports of entry. Information is updated hourly and is useful in planning trips and identifying periods of light use/short waits. During periods of heavy travel, border crossers may wish to consider alternative, less heavily traveled entry routes.

4) Travelers should plan to build extra time into their trips in the event they cross during periods of exceptionally heavy traffic.

5) Know the difference between goods for personal use vs. commercial use. For more details, visit www.cbp.gov/travel.

6) Do not attempt to bring fruits, meats, dairy/poultry products and firewood into the United States from Canada without first checking whether they are permitted.

7) Understand that CBP officers have the authority to conduct enforcement examinations without a warrant, ranging from a single luggage examination up to and possibly including a personal search. Even during the holiday travel season, international border crossers should continue to expect a thorough inspection process when they enter the U.S. from Canada.

For more information, please visit www.GetYouHome.gov or www.cbp.gov.

Canada-U.S. Price Gap Narrows

(Toronto Star)

BMO economist says strong loonie and consumer outcry helped close gap to 6.8% from 18% last year

Canadians are paying a little bit more than Americans for cars, cameras and drills. But we're paying a whole lot more for CDs, chainsaws and barbecues, a new report has found.

On average, Canadians are paying 6.8 per cent more than Americans for a select basket of items, down from 18 per cent a year ago.

“Given the wild swings we've had in the currency, I would say that's not a big gap at all,” said Doug Porter, deputy chief economist at BMO Capital Markets. Read more here.

Related: Canadian dollar at highest level in 10 months (Financial Post)

Canadian Border Sales Show Slight Decrease

(Andrew Pentol — DFNI Online)

Year-on-year sales at Canadian border stores registered a small decrease in the month of August, with sales falling in the Ontario and Prairies regions

Canada’s border store retailers recorded a slight decrease in trading results during August 2008, according to the Canadian Border Services Agency. Year-on-year sales decreased by 1.4% to C$19.1m ($15.6m) and regional sales decreases were also registered at Ontario and Prairies provinces.

The Frontier Duty Free Association (FDFA), which represents Canadian border store operators, attributed the decrease in sales to congestion at land border crossings with the US as a result of tighter security checks, confusion over identification requirements, high petrol prices, the effects of the global economic downturn in the US and the decline of traveller numbers from the US to Canada. Read more here.

Buying Winter Tires in U.S. Presents Slippery Questions

(Montreal Gazette – Anne Sutherland)

Tempted to buy your tires in the United States? The prices are lower in many cases but there are legalities to be observed. And where the tires you buy were made makes a big difference.

For purposes of comparison, we looked at new winter tires for a 2000 Nissan Maxima, a sedan.

Sears Automotive on Dorset St. in Burlington, Vt., quoted $99 U.S. apiece for Michelin X-Ice winter tires. Installation is extra, said Sears employee Joe Warner. “About 25% of our customers are Canadians because the prices there are so high,” Warner said.

Merson Automotive on St. Jacques St. in Notre Dame de Grâce quotes the same tires at $166.50 each, but that includes installation and balancing.

Now comes the tricky part: declaring your purchases at the border.

Under the North American Free Trade Agreement, tires made in Canada, the United States or Mexico are duty-free. (The Michelins in our comparison are manufactured in Canada and the U.S., so there is no duty to be paid.) Federal and provincial sales taxes, however, must be paid on tires bought in the U.S.

Duty must be paid on tires from other countries such as Japan or Chile. Customs duties vary with the goods you are buying and the country of origin, but expect to pay at least seven per cent.

If you take a day trip to the United States and buy four tires with a total bill of $400, you would spend about $28 in duty plus both taxes upon declaring your purchase.

Failure to declare purchases can lead to the seizing of merchandise and fines, according to the website of the Canadian Border Services Agency.

You must spend 24 hours in the United States to earn a goods exemption of $50. To qualify for a goods exemption of $400, you must be out of the country for 48 hours. Seven days and you can bring back $750 worth of goods.

Canadians Semi-Pumped Up to Hit the Road

(James Mennie — The Gazette)

High gasoline prices were supposed to force Canadians to change their travel habits, and statistics made public this week suggest we are spending less on fuel.

But at U.S. Customs and Border Protection, the impression is that while a road trip to the United States might cost Canadians more than last year, it's a price we're prepared to pay.

"There hasn't been any significant increase or decrease in the traffic that's been coming across the border," U.S. Customs spokesperson Ted Woo said. "Weekend traffic is busier and Mondays and Tuesdays it might lighten up.

"But whether it's a small (crossing) like Derby Line (in Vermont) or elsewhere, there's been no real change."

Woo's comments follow a report by Statistics Canada this week that shows even though the price of gasoline increased by 8.8 per cent from April to May, revenues from sales at the pump rose by only 2.4 per cent. That gap represents a nearly six-per-cent drop in the amount of fuel sold, some analysts have calculated.

That apparent frugality with fuel, however, might be manifested in the choices Canadians make about how to get to work, rather than where they vacation. Read the complete article.

‘Time’s Up’ For Parity Pricing, Retailers Told

(Canada.com/Canadian Press)

U.S. goods remain 18% more expensive one year after dollars reached parity: study

Last year, when the Canadian dollar was nearing parity with American currency, Canadian retailers said they couldn’t create cross-border price parity overnight, that it would take time to adjust.

Well, a report from BMO Capital Markets yesterday said “time’s up,” with the Canadian dollar averaging 98.8 cents U.S. in the past year, yet the price gap remaining “extraordinarily large.”

The report, written by Douglas Porter, deputy chief economist for BMO Capital Markets, noted that a price comparison using a basket of various goods a year ago showed an average price gap of 24 per cent between Canada and the U.S.

Mr. Porter said a new comparison using the same sample of 17 items showed a differential of 18 per cent, with U.S. goods being cheaper. Adjusted for a Canadian dollar trading slightly below parity, the difference worked out to 16 per cent.

Products sold in Canada that made the most progress in coming closer to U.S. retail costs included automobiles, books and magazines.

“Those were the ones that everyone was focusing in on, really bringing pressure to bear on the sellers there,” Mr. Porter said in an interview.

Mr. Porter said some of the items in which significant progress has not been made are hardware, power tools and clothing. Why? Mr. Porter said one reason is retailers of these goods haven’t had their feet held to the fire as much as auto and booksellers.

Another factor, he said, is that U.S. retailers, for competitive reasons, have kept their prices low despite a falling dollar. As well, Mr. Porter said Canadian consumers have not been cutting spending as much as their U.S. counterparts, and this supports higher prices north of the border.

“I do believe this is as much a U.S. story as a Canadian story,” he said.

But Mr. Porter said Canadians would be wise to demand as competitive pricing as possible from merchants, given the inflationary threats that exist. Read more.

Related: Cross-Border Gap Persists

Exchange Rate Bargains in the US

(Bloomberg News)

Lured by the cheap dollar, overseas travellers are slowly drifting back to the United States following a long exile that began after the Sept. 11, 2001, terrorist attacks. Overseas visits to the U.S. jumped 10 per cent in 2007, and the trend appears to have accelerated this year as foreigners hunt for bargains in New York, Boston and elsewhere.

Border Shipping Fees Spark Complaints

(Dana Flavelle — Toronto Star)

Sam Patterson thought he got a good deal when he ordered an MP3 player on the Internet for $160 (U.S.). But when the parcel arrived on his doorstep, the courier company said he owed another $80 (Canadian) in duties, taxes and customs brokerage fees.

“That’s half of what I paid for this thing. That’s ridiculous,” the 50-year-old Toronto film production employee says.

He refused to pay the charges and told the courier company to send the item back to the United States.

Like Patterson, more Canadians are cross-border shopping online now that the Canadian dollar is at par with the U.S. greenback, and a weak U.S. economy is driving retailers to offer big bargains south of the border.

But while some Canadian online shoppers say they’ve scored amazing deals, others say the experience left them cold.

Most of the complaints revolve around unexpected shipping charges for duties, taxes and customs brokerage fees, or wait times for delivery, a growing issue as Christmas Day approaches.

Duties can range from zero to more than 18 per cent, depending on the product and where it’s made, according to the Canada Border Services Agency, the federal agency responsible for assessing duties.

There’s no easy way for the average consumer to figure it out in advance, says Patterson, and few online retailers provide the information for you. “Most websites don’t say on the order page that there could be additional charges.”

The list of import duties listed on Industry Canada’s website is hundreds of pages long. The section governing just shoes, a popular online purchase, and other footwear is 15 pages long.

The federal goods and services tax, at 6 per cent, and provincial sales tax, in Ontario 8 per cent, and any excise tax is added on top of whatever duty is charged.

Then there’s the problem of clearing customs.

Do you pay a private courier service, like UPS Canada, a customs brokerage fee, which can run between $20 and $70, to expedite it for your? Or do you ship through the postal service, which charges a flat $5 fee, but may take longer to deliver? Or do you avoid the fees altogether by making a trip to the customs office in Mississauga?

Two of the biggest complaints about cross-border shipping involve unexpected costs and delivery delays, a growing concern with Christmas deadlines looming.

So many consumers have complained about UPS Canada’s brokerage fees that they have sparked several class-action lawsuits.

In a statement of claim filed by Siskinds LLP in the Ontario Superior Court of Justice last February, the plaintiffs say they weren’t warned in advance there would be extra fees and that the fees charged are excessive.

UPS Canada says it is defending itself against the claim. Its brokerage fees cover the cost of expediting the parcels through Canada Customs, the courier service explains.

“Importing goods into Canada requires the payment of duties and taxes. These fees include PST, GST, duties and other taxes on goods (e.g. excise tax),” UPS Canada said in an email. “UPS Customs Brokerage rates and provides payment to Canada Customs for these fees to expedite clearance at the border on behalf of its importers,” UPS says. “UPS provides a charge for this service.”

The rates for those services are based on the value of the parcels and are outlined on its website, the company also says. They range from a low of zero for parcels worth less than $20 to a high of $69 for items worth more than $1,600.

The Canada Border Services Agency, which is responsible for enforcing the Customs Act, says customs brokerage fees are unregulated and have nothing to do with how the government levies it charges.

Agency spokesperson Patrizia Giolti agrees the fees private courier services charge can vary widely.

“It’s best to shop around.” On the other hand, shipping through the postal system can mean longer waits, she says.

The Consumers Association of Canada says it continues to receive complaints from customers who say their parcels are taking four to six weeks to be delivered.

The problem began as the Canadian dollar reached par with its U.S. counterpart, the association says.

Canada Post spokesperson François Legault says it has worked closely with the border services agency to process additional volumes. Asked about Christmas delivery deadlines, he recommends ordering as soon as possible.

Canadians Expected to Flow to U.S. Border in Search of ‘Black Friday’ Bargains

(Canadian Press)

The lure of Black Friday, America's epic once-a-year buffet of deep discounts and doorcrasher sales, is expected to attract a swarm of Canadian bargain hunters to border crossings this weekend, hungry to spend their pumped-up loonies.

They'll rush to the pivotal U.S. Thanksgiving weekend holiday sales despite countless warnings that the journey could be more of a hassle than an adventure.

But with some careful preparation, inexperienced cross-border shoppers can dodge an otherwise disastrous trip and emerge with a few good deals, according to shopping veterans and border security representatives.

Solid estimates on the number of Canadians expected to visit the U.S. on the weekend aren't available but cross-border trips have been surging in recent months.

A report from Statistics Canada showed that same-day car trips by Canadians to the United States in the month of September rose to their highest level in six years, surpassing two million, or about 70,000 per day.

Cross-border trips have increased this year by 15 per cent, said Wendy Evans, head of retail consultancy Evans and Co. Consultants Inc., and U.S. stores could see 20 to 25 per cent more Black Friday visitors from Canada this year than last.

"It's going to be pretty incredible," said Evans.

The pandemonium generally starts on Black Friday, the day widely regarded as an unofficial kickoff to the holiday shopping season. It's an ironic take on Black Tuesday - the wildly hectic start of the 1929 stock market crash, when panicked stock markets spiralled into the red.

Unlike the crash that started the Great Depression, Black Friday's pandemonium is a boon to company earnings, helping retailers boost profit and get "in the black."

Several stores are scheduled to open at midnight on Friday morning while nearly all major retail outlets will open before sunrise.

With the loonie perched above parity for the first time since 1976, border points are likely to be chaotic, particularly in populous Ontario, threatening to turn jolly jaunt to the mall into wretched holiday disaster.

"Border service is trying to supplement some of the shortfalls by calling in staff on overtime but how much of that is going to have an actual effect all hinges on volume," said Rob Moran, president of the Canadian Customs Excise Union.

"The volumes have become impossible to predict and the staffing levels were already what could be defined as bare bones before the dollar started doing what it was doing."

The cheapest ways to travel stateside for a weekend of shopping are by car or chartered bus. Some avid shoppers prefer the latter to avoid the sometimes stressful driving experience.

Many Canadian bus operators will make scheduled stops at popular malls and outlets hand picked by the passengers in advance. Whichever method travellers choose, they run the risk of getting stuck in inevitable holdups at the border.

In recent weeks, stories have emerged about massive slowdowns that have left chartered buses and even emergency vehicles waiting while customs officers flip through documents and receipts.

"We've had two consecutive weekends with bad situations all on the Niagara part of the border," said Lorna Hundt, managing director of Great Canadian Holidays & Coaches, which offers both bus rentals and guided shopping trips.

But "we've had coaches going over Gananoque, Ont., Sarnia, Ont., and Detroit (border crossings) that have been absolutely fine, no delays at all."

Hundt said that two recent trips left buses idling at the Niagara border for up to five and a half hours as customs agents kept the passengers waiting.

Some delays appear intentional, perhaps to deter Canadians from shopping in the United States, said Hundt.

"We believe there was some kind of a statement, if you will, with them causing extraordinarily long delays, which were very unnecessary," she said.

Moran insists customs officers are simply trying to do their jobs.

"There have been some very considerable seizures that have been conducted on those buses," he said.

"We're talking about important quantities of drugs and handguns. I guess some people are figuring that this is a good time to take advantage of the fact that there's a lot of volume and it's a good way to enter the country inconspicuously."

So far, border slowdowns haven't softened demand.

This weekend, Great Canadian Holidays has 23 buses scheduled to pull into key shopping hubs located in various U.S. states south of Ontario. Numerous other Canadian charter bus companies are sending out portions of their fleets as well.

One bus driver at a competing charter company said that he has noticed a surge in groups of middle-aged women who organize trips to the United States for shopping sprees and are willing to gamble on slow border processing.

Reports of the slowdowns concern Cynthia Legaspi, a resident of Scarborough, Ont. who crosses the border every few weeks to visit relatives and squeeze in a little shopping.

This weekend she will make an overnight trip to Pennsylvania with her family, solely to scour retail outlets. The state is one of the most popular destinations for Canadian shoppers because it doesn't charge tax on clothing.

"We pass by the prime outlets just along the freeway," Legaspi said. "Most of the goods that you buy there are not sold here. Even if the brands are the same, some of the items are not."

Canadian border regulations say that shoppers on an overnight trip are only exempt from taxes on total purchases below $50. But Legaspi said she usually hasn't had to pay any extra tax, though she's shown border guards receipts that are clearly over the limit.

"We're showing them the receipts because they ask us what we do there," she said. "But they don't look at it because the line is so long already."

With an unusually large number of Canadians expected to be returning laden with big purchases and having spent over the limit, customs officials are likely to be paying closer attention.

For a day trip of less than 24 hours Canadians are technically not exempt from any amount of goods. It's only after a day that the $50 limit kicks in. Then, limits increase to $200 for a 48-hour stay and $750 for a week.

Ontario border crossings tend to be the busiest, with a few in Quebec coming close, said Moran.

"During peak periods, like this upcoming weekend, Fort Erie, Niagara Falls, Windsor and (Saint Bernard de) Lacolle would be certainly on the list of ports you should expect to have longer delays than the rest of the country," he said.

"The way the geography's laid out in Ontario, with the Great Lakes and everything, it's not like there's a lot of options."

Moran also suggested that shoppers prepare their receipts before reaching the border to help speed up the administrative process. He also suggests avoiding a return to Canada around the end of the afternoon, because wait times are always longer when everyone rushes home at the same time.

Self-proclaimed shopaholic Monique Creary scours Internet message boards for the latest news on cross-border shopping and monitors websites that log the latest deals. But for the first time, the Toronto-area resident will brave Black Friday's massive lineups in hopes of cashing in on the best bargains.

Here are some tips Creary says Canadian shoppers should remember when visiting the United States:

-Scan the Sales: Several websites have prepared a database of deals ahead of Black Friday. Creary uses www.blackfriday.info because it offers a detailed list of items, right down to specific DVD titles at specific stores.

-Create a Plan: The most successful shoppers treat the adventure like a well-mapped out mission. Jot down the approximate cost of items at home then compare them to the same items in the U.S.

-Respect the Border: While the border might've been lax 10 years ago, the climate has changed since post-Sept. 11 security was beefed up and the higher loonie sent Canadians rushing to the border.

"Be as honest as possible. Custom officers aren't stupid. If you say that you spent $50 on a day trip, but really spent $300, have several shopping bags with you and are wearing brand new clothes and shoes, chances are that they're going to see right through you."

-Recognize the Penalties: It you choose to lie about your declarations, be aware you could be slapped with fines and have your name flagged in the system, which could mean harder questioning at the border in the future.

"It's not worth the hassle of being blacklisted - records of infractions are kept for six years - or stopped on future visits just because you wanted to avoid paying the $42 tax on $300 worth of U.S. goods."

Canadians Bought 25,000 Cars in U.S. in October

(Canadian Press)

A soaring loonie pushed the number of cars Canadians purchased south of the border in October to nearly 25,000 – an increase of more than 100 per cent over the same month last year.

"We have been seeing a steady increase throughout 2007 and it really reflects the fact that the Canadian dollar has been appreciating against the U.S. greenback, making it more attractive for Canadians to go down into the U.S. and pick up a vehicle," said Carlos Gomes, senior economist with Scotia Economics.

According to Transport Canada, 24,873 cars were imported from the United States in October, more than double the number of cars – 12,289 – imported in the same month last year.

Simultaneously, the number of new car sales in Canada has declined from 158,394 in August to 121,000 in October.

Some experts say the number of Canadians who are holding off making purchases hoping to see lower vehicle prices here in Canada has added to that decline, which has prompted warnings that a steady rise of the loonie is hurting the economy.

However, that argument does not seem to stop tens of thousands of Canadians who cross the U.S. border every week looking for bargains.

And savings can be nowhere more significant than when purchasing a car. Many motorists who have purchased a car south of the border say they've saved in some cases up to $20,000.

But not all car bargain hunters have been able to take their newly bought wheels for a drive.

A new regulation by Transport Canada that requires that all vehicles be equipped with an electronic immobilization system means about a thousand cars without the anti-theft device purchased by Canadians in the U.S. may never be licensed.

While Transport Canada says the new regulation is here to stay, it admits some of those cars may have been purchased between Sept. 1, when the new regulation came into effect, and the time when the agency posted it on its website.

"There was a delay before the website was updated," Patrick Charette, a spokesman for Transport Canada admitted in an interview with The Canadian Press.

"I know that people clicked on the website and the car wasn't listed as not admissible. They bought the car and by the time they came back they said `Oops, now it's listed as not admissible."

The confusion arises from the fact that not all cars and models can be equipped with the anti-theft device.

To avoid having those cars held at the border, Transport Canada has authorized Canada Border Service Agency agents to allow owners to drive their cars home with a form clearly marked "not admissible."

"There's no guarantee that this car will ever be admissible and will ever be allowed to stay in Canada with plate and license," said Charette.

However, he said authorities were working to find a temporary solution.

"We want to make sure that we can get a balance between our safety approach and the situation obviously consumers are facing," Charette said.

But experts are looking for a long-term solution, which would be same vehicle standards in the U.S. and Canada.

"Most of the cars that we produce here in Canada are sent to the United States, so it would make sense that we would have a uniform standard . . . so that when you are assembling a vehicle you don't have to be putting in certain technical requirements for the Canadian markets as opposed to the U.S.," said Gomes.

"You would be able to produce the same vehicle for both markets."

Judge Rolls Out Fines for Car Scam at Border

(Jamie Hall — Edmonton Journal)

An Edmonton man who lied to Canada Customs in an attempt to save $1,400 in import fees for a $47,000 luxury vintage car he purchased in the U.S. will wind up paying more than $12,000 in fines and taxes.

James David Bodman, 55, pleaded guilty in Calgary provincial court Friday to violating the Customs Act, making false statements.

In April, Bodman drove a 1962 Rolls Royce Silver Cloud through the 24-hour border crossing at Coutts, south of Lethbridge. He declared $20,700 US for the vehicle – for which he would have been charged about $1,400 Cdn in import duties and taxes – when he had actually paid $47,000 US.

“He was trying to save a buck,” said Canada Border Services Agency spokeswoman Lisa White, “and now he has a criminal record.” Bodman, who works in construction, was fined $1,860 in provincial court after entering the guilty plea.

He is also required to pay import duties and taxes to reflect the value of the vehicle, roughly $3,000.

In addition, Bodman had to pay $7,700 in civil penalties to retrieve his vehicle, which was seized at the border in April.

Bodman’s Edmonton lawyer, Alex Pringle, told the court his client received some bad advice before heading to the U.S. to pick up the vehicle and was “very embarrassed” by the incident.

Bodman declined comment when reached Friday by phone at his Edmonton home.

White said the case is a cautionary tale for Albertans, an increasing number of whom are purchasing personal vehicles in the U.S. and driving them back to Canada.

Despite the recent surge in the Canadian dollar, cars can be substantially less expensive to buy in the U.S.

The border crossing in Coutts, for instance, which is a main Alberta portal that operates 24 hours a day, sees an average of 65 such vehicles a day.

Some have been purchased on EBay, others through dealerships or private transactions.

“This is a really hot topic now,” said White, “and people need to know before they go pick up their car what the rules and regulations are.

“They need to be truthful about declaring the real value of their vehicles because if they don’t, they will be caught.

Loonie Gets No Respect in Some American Stores

(Tamara King — Canadian Press)

Armed with the strongest dollar in three decades, Canadian shoppers are flocking south of the border in search of the best bargains on everything from clothes to books to booze.

But a Canadian consumer group has a warning: watch which currency you’re plunking down for deals in the United States.

Bruce Cran, president of the Ottawa-based Consumers’ Association of Canada, says that since the two currencies hit parity, he’s been getting calls and e-mails from across the country about U.S. merchants whose exchange rates are all over the map.

In Bellingham, Wash., one store recently offered a rate of only 75 cents on the Canadian dollar. At another shop in Buffalo, N.Y., a Canadian dollar was worth just 60 cents, Cran said.

“It’s morally reprehensible, but an informed consumer shouldn’t even shop there,” Cran said.

During the Thanksgiving weekend in Fargo, N.D., sporting goods retailer Scheels was among those taking Canadian money at par. Others, like Target, were close, giving 93 cents for a Canadian dollar. But at Gordmans, a discount clothing store chain, a loonie was only worth 75 cents — the exchange rate last in effect in August 2004, according to the Bank of Canada’s website.

“I think I would’ve turned around on my heels,” said Jeanette Shewchuk, a Manitoban who spent part of the Thanksgiving weekend searching for bargains in North Dakota. “It should reflect the markets. It’s not fair.” Unfortunately, Cran says, there’s not much stopping retailers from charging whatever rate they like. “It is buyer beware.”

Cran’s advice: change your money at a Canadian bank before you cross the border.

That’s exactly what Adrienne Ross of Vernon, B.C., did for a shopping weekend in Seattle. She picked up her American funds before making the seven-hour drive south. “I usually don’t do it, because I don’t like having that much cash on me,” said Ross, 27.

This time, she decided to get American currency for a few reasons. Ross didn’t want to pay the fee charged by credit card companies to convert currencies, and she wanted to avoid a repeat of past experiences with stores flatly refusing to accept Canadian money.

Local business groups are noticing that, too. David Martin, the head of the Fargo-Moorhead Chamber of Commerce, sounded apologetic about some businesses in his city — about a two-hour drive from the Canada-U.S. border — that have trouble with Canadian cash.

Martin pointed out that some retailers, especially smaller ones, aren’t equipped to handle other currencies. Still, through its website and newsletters, the chamber encourages local businesses to accept Canadian money at the bank’s exchange rate.

“The more we’re willing and able to do that, the more business we’re going to have, the more Canadian shoppers we’re going to have,” said Martin.

Canadians Take Loonie For a Ride

(Allison Lampert — CanWest News/Montreal Gazette)

Some U.S. car dealers roll out welcome mat for bargain-hunting Canucks — some don’t
Brian McBride was looking forward to this Thanksgiving weekend, and he’s not even Canadian.

McBride, whose family owns the Bill McBride car dealership in Plattsburgh, N.Y., about 100 kilometres south of Montreal, was expecting big business over the three-day holiday. There are the Americans, celebrating Columbus Day, and an expected influx of customers from Quebec.

For McBride and other U.S. auto dealers near the northern border, business has been soaring over the last few months, right along with the loonie, which closed Friday at $1.018 US.

In September, when the loonie hit par with the dollar for the first time since 1976, McBride’s sales of new Subarus nearly doubled compared with the same month last year.

Canadians eager to save $10,000 and more on higher-end U.S. cars accounted for a third of those sales.

“The response has been very, very good,” McBride said. “It’s progressively mushrooming.”

The strong loonie is coming at an ideal time for dealers like McBride.

In the U.S., already-weak auto sales are predicted to decline in 2008 to a decade-low level, due to slowing employment growth, the housing market and high energy costs, a report this week by Scotia Bank economist Carlos Gomes said.

But car manufacturers such as General Motors, BMW and Porsche are penalizing U.S. dealers who sell new models to Canadians.

For example, they may refuse to supply dealers with top-of-the-line, high-margin models. In other cases, they may decline to reimburse dealers who incur costs for customer incentives. Other makers, including Honda, won’t honour warranties on U.S. imports.

Even Subaru, which permits these sales, is now making it tougher for Canadians to get their 2008 U.S. car warranties honoured in Canada.

As a result, said McBride, “We’re anticipating future growth, but we don’t expect this to continue forever.”

In 2007, Canadians are expected to import about 150,000 U.S cars, up from 112,800 last year. Scotia Bank’s Gomes estimates 1.65 million vehicles will be purchased this year in Canada, up from 1.61 million in 2006.

Auto manufacturers said cars are priced based on local-market factors, including operating costs, that tend to be higher in Canada. Gomes noted that companies have had trouble adjusting their prices to the value of the loonie, which ascended from 85 cents to the U.S. dollar in March to parity in September.

Still, manufacturers of luxury cars — the market with the most pronounced gap on prices between Canada and the U.S. — are trying to discourage cross-border shopping.

Then there’s the process of importing the car, which obliges the owner to pass through three government bodies: Canada’s Registrar of Imported Vehicles, the U.S. Customs and Border Protection and the Canada Border Services Agency.

New cars don’t have to be registered in the U.S., but they must be brought to an American customs office at least 72 hours before export.

For Ashlee Lynn Wismach, the time invested to import her Audi TT coupe, when she moved from California back to Montreal last year, would make her think twice about buying a car in the U.S. — unless she could get a really good deal. “It’s a headache,” she said.

“That’s why people hire a broker to do it. If it was a matter of saving $500 I wouldn’t do it. If it’s a question of saving, say $5,000, I would do it.”

Indeed, the prospect of saving thousands of dollars on a U.S. car makes the hassles worth it, some Canadians say. In Shelburne, Vt., John DuBruhl said inquiries from Canadians account for about half the calls received at his family’s luxury-auto dealership.

But DuBruhl’s dealership won’t sell new Mercedes, BMW and Porsche cars to Canadians, because of potential repercussions from the manufacturers.

He can sell used cars.

“Please, put it in the headline — we can’t sell to Canadians,” his receptionist tells a reporter.

“They’re killing me with calls.”

Tariff-ic Savings

(Thane Burnett — Winnipeg Sun)

We’re getting more bang for our buck – but good luck figuring out our confounding customs duties

Golly — everyone in the family wants something different.

You’re looking for an Andy Warhol painting for the den.

Your spouse can’t decide whether to get a great deal on a microwave oven or just spring for an entire $1.5-billion nuclear reactor.

And those darn kids. Neat freak Billy hopes to pick up a few hundred brooms while dreamer Sally thinks she’s finally saved enough for her own dirigible — because who doesn’t want their own lighter-than-air balloon?

It’s Thanksgiving weekend, and the Canadian tradition is to ditch Grandma again at someone else’s house for dry turkey and head off to old Uncle Sam’s for the real feast. And with our majestic loonie staring the bald eagle square in its single good eye — our dollar soaring to 31-year highs — it’s perhaps the proudest time to leave your money in another country.

But gosh — those most recent “Departmental Consolidation of the Customs Tariff 2007” reports are harder to follow than British darts on the sports network.

Most Canadians don’t realize there are scores of items that are entirely duty-free coming back into Canada — including almost anything made in the U.S. or Mexico. It means all you pay if you pick up, say, a helicopter — as long as it’s not over 2,000 kg — is just the Canadian sales tax coming back home.

But while Sally gets her dirigible free of any cross-border tariff, uptight Billy will pay 6.5% on his brooms. If he wants toothbrushes to wash that bad taste away, it’s another half a percent, son.

The rules of what’s allowed free between the U.S. and Canada (most downhill skis) and what’s not (most cross-country skis) have always taken the mind of a lawyer to figure out.

DEEP POCKETS
And sometimes, even that wasn’t enough. Heading into the U.S. by steamship in August 1897, wealthy Canadian lawyer and cabinet minister’s son Stewart Tupper was caught getting off the boat with his deep pockets filled with four silver candlesticks and silver salt shakers.

As a New York Times piece of the era explained: “Mr. Tupper was plainly embarrassed, and when he made a trip down into still another pocket, the crowd around stood on tip-toe expecting to see a diamond necklace come forth. It was, however, a handsome silver spoon in a morocco case.”

A diamond ring, a silver watch and several jubilee medals later, and poor Mr. Tupper was hit with a $30.32 duty.

“This staggered him, but he paid it and refilled his pockets,” the Times reported in the day.

Customs tariffs and duties — into the U.S. and into Canada — still confound. A Canada Border Services Agency spokesman recalled to Sun Media that the nuclear reactor your spouse wants to buy in America is entirely tariff-free. But, in fact, changes to the provisions clearly point out nuclear reactors carry an 8% tariff. It’s the machinery for isotopic separation and non-irradiated fuel elements which you can bring back for free. As long as they’re from the U.S. or another preferred trading country.

Better to just settle for a satellite, which carries a lesser 6.5% tariff. Or a hang glider, which, along with cellphones and video games and lots of stuff made out of plastic, you can bring in by the truckload with no tariff.

Carol Osmond, senior policy adviser for I.E. Canada, the Canadian Association of Importers and Exporters, said she understands why consumers would be confused about what — beyond the usual personal exemptions of $50 for a 24-hour trip or $400 for a 48-hour stay — we’re allowed to freely bring (after Canadian taxes) back home.

“There are hundreds of thousands of pages,” she said of the tariff provisions.

USED CARS POPULAR
But she said there are fewer than there once were. She added, however: “Will some go away completely? Maybe not.”

If you’re searching for a quick guide to what are the most popular items to bring back across the border for free, you’d have better luck walking on glass — which, by the way, can be brought back without a border charge. Canadian officials say while they’re seeing more used cars being brought north, it seems impossible for them to break down what we’re carrying back home. They simply suggest Canadians first check items by calling their help-line at 1-800-461-9999. Because there’s little chance of you making sense of it on your own.

If your family brings artist paintbrushes back into Canada — and you’ve used up your personal exemptions — prepare to pay a 7% tariff. But if you make it all the way into New York’s Lower East Side, to the trendy and chic Woodward Gallery — home to modern masters like Pablo Picasso — they’ve set aside a 1964 Andy Warhol painting of Jackie O. It’s yours for just under $3 million.

“It would be a very good weekend to come,” owner Kristine Woodward said.

And while those paintbrushes will get you stopped for an extra fee at the border, the almost-$3-million Warhol will not. It’s tariff-free. But sadly, there doesn’t appear to be a large discount for travelling so far.

U.S.-Bound Shoppers Slow Border Traffic

(CBC News)

While many Canadians are staying home for Thanksgiving weekend, others are more interested in cross-border shopping trips — and the extra traffic in some locations has meant longer wait times to enter the United States.

The longest delays on Saturday of any border crossing in Canada were at Emerson, Man. The estimated wait time for a vehicle trying to reach an inspection booth before entering North Dakota was 3½ hours at its peak, according to the Canada Border Services Agency.

That’s probably because more Canadians appear to be taking advantage of their new buying power south of the border, an agency spokeswoman said.

Canada’s currency closed the week at just under 1.02 US, gaining against the U.S. dollar in foreign exchange trading Friday on news of strong Canadian job growth in September.

The loonie rose more than a cent and a half to reach a new 31-year closing high of $1.0185 US, the biggest one-day gain against the U.S. currency since June 1, 1970 — when the Canadian dollar was permitted to float.

By the afternoon, wait times had dropped to about an hour at Emerson, across the border from Pembina, N.D., said Loretta Nyhus of the Canadian Border Services Agency in Winnipeg. She said people in the Manitoba community were probably making more same-day visits because of the proximity to U.S. shopping centres.

Other Saturday morning wait times for U.S.-bound vehicle traffic: Three hours at the Pacific Highway crossing, linking Surrey, B.C., to Blaine, Wa.; Two hours, 30 minutes at Cornwall, Ont., to Rooseveltown, N.Y.; Two hours, 30 minutes at St-Bernard-de-Lacolle, Que., to Champlain, N.Y. ; One hour, 45 minutes at the Blue Water Bridge crossing, linking Sarnia, Ont., to Port Huron, Mich.; and, One hour at the tunnel linking Windsor, Ont., to Detroit.

Nyhus said extra border staff will be working this holiday weekend at places like Emerson to handle the increase in traffic.

“What goes in one direction has to come back,” she said. “And we expect long lineups for people returning to Canada Saturday night, Sunday and into Monday.”

Most border officials were reporting minimal or no delays crossing into Canada from the U.S.

Wait-Times Skyrocket at Border Crossings

(CTV News/Canadian Press)

As the Canadian dollar continues to enjoy parity with its U.S. counterpart, hordes of bargain-hungry Canadians are heading south, leaving some with agonizing border wait times at entry points into the United States.

On Saturday, wait times for domestic travelers at the Pacific Highway and Douglas crossings in Surrey, B.C. were as high as 3½ hours according to the Canadian Border Services Agency.

The St-Bernard-de-Lacolle crossing in Lacolle, Que., the Emerson, Man. entry point and the Queenston-Lewiston Bridge in Queenston, Ont., also reported wait times of more than two hours.

The long lines represent a dramatic increase for service standards at border primary inspection booths. Canadian Border Services reports usual processing of travellers takes 20 minutes on most weekends and holidays and a mere 10 minutes during weekdays.

Meanwhile, the majority of border officials are reporting minimal or no delays crossing into Canada from the U.S. as Americans decide to stay at home.

As the U.S. greenback takes a beating amid recession fears and a credit crunch, tourism to U.S. cities near the border has surged and the American retail sector reports significant gains as a result.

“When the exchange rate began getting closer to par we saw an increase in Canadian clients ... and they’re coming throughout the year, instead of just off-season,” Steve Gendall, owner of the Maple Leaf Motel in nearby North Conway, told the Canadian Press earlier this week.

The loonie closed Friday’s trading day in Toronto up 1.59 cents to US$1.0185, prompting long-weekend shoppers to head south to get more bang for their buck.

Canadian overnight travel to the U.S. rose to its highest first-quarter level since 1993, according to a report released by Statistics Canada in late August.

Canadians took about 3.7 million trips into the U.S., an increase of 4.8 per cent from the same time period in 2006.

In total, Canadians spent about $3.1 billion in the U.S. during the first quarter — an increase of five per cent.

“We expect it will be a double-digit increase for 2007 ... with the dollar reaching parity,” Chris Ryall, Canadian representative for the New Hampshire Division of Travel and Tourism Development, told CP.

“Having the loonie on par with the U.S. dollar really helps increase the spending,” he said. “It definitely attracts people to stay longer and spend more.”

Americans made fewer than 1.8 million overnight trips to Canada by air and car between January and March. The numbers represent a decline of 6.3 per cent from 2006, marking the eighth consecutive year-over-year quarterly decline.

Pitfalls in Shopping for Car Deals in U.S.

(Derrick Penner – CanWest News/Vancouver Sun)

Canadian Gerry Pyke is being stymied in his efforts to engage in a bit of freelance “free trade” by buying a new Toyota Tacoma pickup truck in Washington state and saving himself, in his estimation, about $6,000.

It’s not because there is a ban on purchasing and importing autos from the United States - with the Canadian dollar hitting par with U.S. currency, the number of Canadians car shopping across the border is skyrocketing.

The roadblock is Toyota’s regional distribution agreements, which forbid dealers in one region from selling to customers who are going to register their cars in another dealer’s territory.

That policy doesn’t sit well with Pyke, of Delta, B.C.. He said that Toyota enjoys the benefits of the North American Free Trade Agreement, which allows it to manufacture cars in Canada and the U.S. and ship them across the border in either direction without tariffs, “while not giving us the benefits of an equalizing dollar.”

It may be “unfair,” as Pyke puts it - but it’s not unique to Toyota.

Manufacturers can’t stop Canadians from buying used cars and importing them. But several manufacturers ban dealers from selling to customers who plan on registering their vehicles in Canada, preventing Canadians from taking advantage of lower list prices in the U.S..

Glen Ringdal, CEO of the New Car Dealers Association of B.C., said while cross-border sales may look attractive in price, they aren’t always easy to pursue, and come with their own pitfalls.

For new sales, he said, Canadians who buy in the U.S. often run into problems getting warranties honoured. Also, if they run into difficulties that require going back to the dealer, “they have a long way to go to see him.”

When buyers import cars, he said, they also have to spend money making modifications to ensure they comply with Canadian vehicle safety laws.

Along with Toyota, both GM and Acura refuse to let new cars sold in the U.S. cross the border into Canada. But Canadians should have no problems buying Fords, Subarus or Nissans for import.

At Skagit Subaru in Burlington, Wash., Canadian sales “have been a lot more active recently,” according to Joe Thurmond, the dealership’s sales manager. “We’ve seen a few (Canadians) each week.”

Randy Carlton, sales manager at Lynwood Acura, said he sees a lot of Canadians too, but directs their attention to the used-car side of his lot. Selling new vehicles across the border has always been a violation of his dealership’s sales agreement.

“We didn’t realize it until it was brought to our attention,” Carlton said.

The cross-border market is growing as the value of the Canadian dollar remains high against U.S. dollar. Canadians bought a record 112,826 cars in the U.S. during 2006, according to the North American Automobile Trade Association, and the trend is still on the upswing.

However, brokers in the business of importing vehicles for Canadians report that the manufacturers are getting more strict about clamping down on sales to Canadians.

“It is getting harder for people to buy new (cars to import),” Randal Reid, owner of Kelowna-based PNT Registered Importers Inc. “The manufacturers are stepping up to the program a little more, making sure there’s not a carte blanche influx (of cars into Canada).”

Reid said for Canadians, finding an American dealer can be hit or miss, and depends on whether they find a “friendly dealer.” He added that his company used to work with a friendly Toyota dealer in Montana until a while ago, when Toyota stepped in and stopped the practice.

Toyota U.S.A. spokesman Xavier Dominicis said the border ban has been a long-standing company policy.

“This isn’t a Canada-specific directive,” Dominicis said. “This is the way our distributorships work throughout the world.”

“The purpose... is the efficiency of allocation of product. Each distributorship has its own territory that it services, and you have to maintain the integrity of the territory, or distributorship.”

Toyota Canada spokeswoman Nicole Grant added that on pricing, “in the long run, it’s always our goal to be as competitive as we can in the marketplace.”

She added that often “unseen differences” between components in Canadian and U.S. models will influence some of the difference in price.

GM Canada spokeswoman Patty Faith said GM doesn’t encourage people to buy vehicles in the U.S. and take them north. GM won’t honour a vehicle’s warranty for six months after it crosses the border.

“We price to the Canadian marketplace,” she added.

While GM does monitor the exchange rate, “it’s not something we would look at in determining prices. Exchange rates are volatile. They go up and down on a regular basis. You wouldn’t have seen prices change the other way when the Canadian dollar was low.”

NAATA president Brian Osler said that, generally, manufacturers will tell their dealers in the U.S. not to sell new cars to Canadians.

There is a way for Canadian buyers to get around that rule. Osler said that there are brokers, or independent auto dealers, with operations based in the U.S. that will buy new cars from American dealers. Those cars are registered in the U.S., Osler said, effectively making them used cars that the broker or dealer can pass on to a Canadian buyer.

But Ringdal said many states “don’t have anywhere near the used-vehicle history reporting that we have here,” which can cause buyers difficulties.