[canabiz]

With the Canadian dollar going toe-to-toe against the US greenback these days, do you folks plan to buy anything in the States for some good savings compared to Canadian pricing?

We need to buy a set of new winter tires. I have been doing a bit of research and it seems the prices down south are much more attractive. There is the hassle of border crossing and travel but if we can pick up some other cheaper stuff along the way, a road trip is definitely in order.

 

[Maltese]

With 1 US dollar equalling 1.12 Canadian I'm not rushing to the US to buy anything. Things would have to be a lot cheaper to make it worthwhile to spend the gas and pay the duty.

 

[brad]

Even when the exchange rate isn't favourable, prices in the US are sometimes much cheaper for the same goods, and it can make sense to buy things there even considering the taxes at the border. I wouldn't make a special trip for it though; I usually combine my shopping with trips I'm taking for other reasons. I also order things online from the States when the price (including shipping and taxes) is cheaper than the price of that item in Canada, or if that item isn't available here (which happens a lot).

In my experience you don't usually pay duty unless you've been gone for less than a day and you're coming back with more than your allowed total of purchases (or if you bought liquor -- I learned that one the hard way...the $20 bottle of wine I bought ended up costing me $45). However, if you declare at the border you will have to at least pay GST and the provincial sales tax (unless your purchases are under the allotted amount. I usually look up the amount I'm allowed to bring back based on how long I've been out of Canada, and just make sure my purchases are under that amount. If you buy in a sales-tax-free state like New Hampshire, this can be a very good deal).

Because I'm a frequent border crosser and don't want to get in trouble, I always declare my purchases. Inspections happen less frequently on the Canadian side than on the US side, but they do happen. One time when we were coming back from a wedding in the US, the Canadian customs agent spent 45 minutes searching through our car, looking at the tags on every item of clothing in our bags and even the ones we were wearing, searching under the seats, etc., trying to find items we might have bought and not declared. I hate to think of what would have happened if we were trying to avoid paying taxes by not declaring things we'd bought; it's not worth the stress. I know plenty of people who do it all the time and don't get caught, but if you get caught once I think you'd regret it.

 

[canabiz]

CBC did a nice story about 2 years ago when the loonie was quite close to par (link below) on certain products and their price differences between us and our neighbor down south.

http://www.cbc.ca/news/background/consumers/price-drops.html

I don't know if the info is still valid as of now but I find it pretty intriguing the difference in prices for cars (I know FT has recently written about this topic on his blog), household products and clothing.

If anyone else has a more recent story on this very topic, please share.

 

[canadianbanks]

With 1 US dollar equalling 1.12 Canadian I'm not rushing to the US to buy anything. Things would have to be a lot cheaper to make it worthwhile to spend the gas and pay the duty.

Yes, they are cheaper and have been for many years.

 

[BillsPiling]

It's weird, they do have a lower cost of living even if the buck was lower. You can feed 3 people at a cheap resteraunt for 12 bux. You can't do that in Canada!

They also have the lowest wireless cell phone charges in the world (don't quote me on that but they've gotta be the closest).

Bottom line, shopping stateside can be a big savings if you know what your looking for, but don't forget to factor in your gas, time and duty at the border.

 

[high octane]

I work in the States often and work with Americans in Canada. They can't believe the extra fee's we pay everywhere (bank's, cell phones) and the cost of living (food, taxes)

In Canada it does cost a lot more to deliver goods, build telecom and road infrastructure etc per capita because we're rediculessly spread out. I'm sure there's also a safety buffer for the exchange rate, and then more just because they can

When I'm working in the States and have time to shop around, I find lots of deals. I wouldn't make a special trip to buy at US retail, because you can wait at home for a local sale and save the hassel, and support your economy

I'm sure stores next to border crossings know what's going on and take advantage of it rather than putting on sales.

So once you factor in all the hassel I doubt it's worth a special trip. Unless it's for something like a vehicle. I'm hoping to buy my next vehicle used down south that hasn't seen salt

 

[Max]

Most tax treaties seem to be set up to avoid double taxation.

1) Is there some way I can claim an exemption or refund of US state tax when making purchases I bring back to Canada? Complicated or not, I can't find anything on the internet about this.

2) When charged the duty when returning to Canada, I was charged on the amount including state tax. Shouldn't the Canadian duty be charged on the amount excluding state tax?

I live on the border and frequently cross for shopping, and for anything over $100, it seems that I am being double taxed.

Can anyone help with some links or information about this?

p.s. One tip commonly used is to set up a PO Box in the US to receive online purchases and cross the border to pick it up. A lot of times, this will save a fortune in shipping costs (although you have to factor in tolls for border crossing and gas to pick it up), but this should also avoid any customs charges being automatically applied to your order when bought online, and if you have an order around $100, you probably won't pay any tax at all.

 

[brad]

Most tax treaties seem to be set up to avoid double taxation.

That's true for income tax, but I don't know if it's true for sales tax.

1) Is there some way I can claim an exemption or refund of US state tax when making purchases I bring back to Canada? Complicated or not, I can't find anything on the internet about this.

I don't think you can, but I do agree that the Canadian taxes at the border should be levied on the item price alone, not the item price plus the US sales tax.

About 11 years ago I ordered a wooden flute from a flutemaker in England who had a 10-year waiting list. The flute was finally ready last year, and I had heard so many horror stories about musical instruments disappearing in Canadian Customs when shipped to Canada from other countries that I had the flute shipped to a friend in the States instead. The US post office charged him $400 in US taxes, which I reimbursed him for. Then when I crossed the border back to Canada with the flute, I had to pay $650 in federal and provincial sales taxes. I was told there was no way to be reimbursed for the US taxes, but at least they didn't make me pay Canadian sales tax on the US taxes I paid.

Anyway, that turned out to be one very expensive flute (but it was well worth the wait and the money).

 

[canabiz]

I am looking for a fall/winter jacket and found one that I like in a catalogue of a major outdoor gear retailer. The jacket retails for $89.99 USD online while the same jacket is selling for $179.99 CAD at the local shop. Mind you, we have not factored in the exchange rate and duty but this is pretty mind-boggling.

 

[DAvid]

$89.95 Price
$10.00 UPS shipping (if you can get it that cheap)
$25.00 UPS Brokerage
$15.00 exchange costs
$02.50 Credit card fee for currency exchange
$12.00 GST & PST
======
154.45

$30.00 savings

Being able to try it on or return it -- priceless!

 

[canabiz]

$89.95 Price
$10.00 UPS shipping (if you can get it that cheap)
$25.00 UPS Brokerage
$15.00 exchange costs
$02.50 Credit card fee for currency exchange
$12.00 GST & PST
======
154.45

$30.00 savings

Being able to try it on or return it -- priceless!

Dave, I already tried on the jacket at the local store and there is no way I'd pay $200 for it ($179.00 + PST and GST) when comparable items are available for less.

If I have the jacket shipped to an UPS store in a border town Stateside then the shipping cost is negligible and I don't have to pay the UPS Brokerage fee (if it even applies).

I am all about supporting the local economy and jobs but we have choices as consumers. To splurge without doing your due diligence is no longer acceptable in this day and age. I saw a men's jacket at a local Banana Republic store today that retails for $160.00 pre-tax. I happen to glance at the label and it was made in Vietnam. Having immigrated to Canada from said country, i can tell you that jacket didn't cost more than $20 CAD to make back there. The beauty of capitalism.

 

[high octane]

$89.95 Price
$10.00 UPS shipping (if you can get it that cheap)
$25.00 UPS Brokerage
$15.00 exchange costs
$02.50 Credit card fee for currency exchange
$12.00 GST & PST
======
154.45

Whenever I made the mistake of shipping standard UPS, their absurd brokerage fee ruined the deal (it can be more than the price of the product). I've even seen a few stores warn Canadians about this, but most are clueless since it's after the fact

I find USPS airmail the best deal if possible (don't know why, but it's even cheaper than ground it seems to bypass taxes or something)

Depending on the item I will use USPS ground or Fed Ex. UPS expedited is actually includes the brokerage fee so it's actually faster and cheaper, but I boycott them anyways for this practice

 

[DAvid]

Dave, I already tried on the jacket at the local store...

Have you considered that your behaviour contributes to the higher cost of the product in Canada? If everyone were to do the same, the price at the Canadian retailer would rise to infinity (all expenses of maintaining stock, but no revenue), while the on-line retailer with far less expensive space gets to move his cost closer to the actual cost of production.

When a vendor applies a "bait & switch" to a customer, everyone howls about how unfairly they are being treated, but when the customer plays a similar game, by using the retailer without any intention of a purchase, that's considered O.K?

 

[DAvid]

I find USPS airmail the best deal if possible (don't know why, but it's even cheaper than ground it seems to bypass taxes or something)

But some vendors in the US will NOT ship USPS. Picking stuff up on the other side of the border is great for those who live near by. That excludes a lot of folk in Canada, though.

 

[canabiz]

Have you considered that your behaviour contributes to the higher cost of the product in Canada? If everyone were to do the same, the price at the Canadian retailer would rise to infinity (all expenses of maintaining stock, but no revenue), while the on-line retailer with far less expensive space gets to move his cost closer to the actual cost of production.

When a vendor applies a "bait & switch" to a customer, everyone howls about how unfairly they are being treated, but when the customer plays a similar game, by using the retailer without any intention of a purchase, that's considered O.K?

I do not consider that to be the case, that is simply your prerogative. This is analogous to people who test drive their favorite cars here in Canada and end up going Stateside to buy them for significantly less. Do you also see a problem with that ? At the end of the day, I have to look out for my little family's finances and I am willing to do everything within legal and reasonable means to keep things in perspective.

The local retailer is fully aware of the existence of the online site. As a matter of fact, i found out about the price discrepancy through a catalogue that I picked up at the local store. I pointed out the difference to the sales clerk and she told me the price in the catalogue is in USD and that is before duty. Fair enough. Does it mean I HAVE to buy at the local shop? I am sure both you and I know the answer Dave.

If people continue to go with the flow and not to think outside the box then that is their choice.

 

[brad]

Speaking of online, I do wish more Canadian retailers sold things online. The range of choices here is far smaller than in the States -- just compare Amazon.com with Amazon.ca, for example. I have yet to find a good Canadian online bike shop that allows you to order parts and bicycling equipment online, and apart from MEC I don't know of any good outdoor apparel/equipment shops that sell online within Canada. Same goes for gardening stores -- in the States i used to buy from Gardener's Supply; I've never found anything like that here. Lee Valley is good for tools, but even their selection is fairly limited compared with what you can find from online stores in the States. I guess it all boils down to the size of the market, which of course is much smaller here.

I rarely have time to shop at a real store -- I don't have a single weekend free between now and November and I rarely have time to go out shopping during the week, so online ordering is pretty much my only option.

 

[faq]

I'd like to support local retail as long as the difference is not outrageous -- recently I bought a 200 USD cargo box from the a dealership in US , I did asked for local dealership first and was quoted 404 CAD for the EXACT same item . Even adding the exchage rate/duty/state tax the difference is around 35% (either way I need to pay GST/PST) .

If we all pay MSRP price I am sure it will take care local retail/employee/manufacture CEO and his/her dog very well -- but they need to be competitve at the first place

 

[high octane]

^^ Exactly

I would be happy to buy locally and I would pay more for that convenience if it wasn't such a rip off

I imagine a store in Canada prefers to sell 1 jacket at 100% markup that 2 at 50% (less stocking, less shipping, same profit). For competition to work, more people have to seek out the best deal

 

[Agape]

I recently returned from a holiday in the States. Using hotwire, I was able to get a hotel for 46 USD a night with continental breakfasts and free wireless, compared to $100+ a night offered anywhere else for the same hotel.

My wife and I put off a lot of purchases in Canada because we knew how much we'd save in the States. If you are going for a vacation of 48 hours or more in the states you can purchase quite a bit. Additionally the cost of gas is a joke compared to what we are paying in Canada. Food is also cheaper, portions large (although you need to watch that one closely).

This past trip we both spent up to our limit and came away supplied with items that are definitely cheaper than Canadian items, such as ink, some automotive parts, and clothing. Hitting an outlet mall also had enormous savings as compared to shopping at a mall in Canada. Right now in the States it seems as though the stores are also trying to ensure that consumerism stays strong.

One other note, on a recent business trip to Texas I was able to watch a new movie theatre release for 4 USD. In Canada I'd be looking at 9-10 bucks.

It's hard to support you're local economy, when the concept of local economy has passed long ago with the advent of Walmart, Home Depot, IKEA, Sportschek, etc.