Number of Canadian shoppers in US expected to rise with increase in duty-free limits

Posted June 30, 2012, at 5:23 a.m.

DOVER, N.H. — Cross-border shopping may be at an all-time high this Fourth of July with new regulations that increase duty-free limits for Canadian shoppers visiting the United States.

In June, the duty-free limits were increased from $50 to $200 on visits to the states of more than 24 hours and from $400 to $800 on trips lasting longer than 48 hours, according to a statement from Harris/Decima, a survey company based in Ottawa. Additionally, it states, four out of 10

Canadians report they will be likely to purchase more duty-free goods under the new rules.

Tai Freligh of the New Hampshire Division of Travel and Tourism said Canadians are the Granite State’s No. 1 international visitors and that they enjoy multiple benefits of visiting here with lower gas prices and no sales taxes, making the visit a highly attractive one.

He also explained that since much of Canada is landlocked, making the trip to destinations like beaches and lakes in the state aren’t as daunting as the sometimes six hour drives many embark on at home.

“If they don’t have oceans or a lake then they’re willing to make the drive,” he said.

In a report issued by Douglas Porter, deputy chief economist for Bank of Montreal subsidiary BMO Capital Markets, Porter wrote that Canadians will “flock to Maine, Michigan and Minnesota en masse, as well as the border states of New York, Washington and New Hampshire.”

Nancy Kyle, president and CEO of the Retail Merchants Association of New Hampshire said the state will see a positive impact from the duty-free increase. With almost equal exchange rates and rapidly falling gas prices, she said the impact will be noticeable.

“The duty-free amounts being higher for Canadians is going to be huge and impact New Hampshire retailers,” she said, but explained that since there is no sales tax in the state, which is how other states can track spending habits, it is unknown just how much of an impact Canadian shoppers will make.

She explained that in Canada, shoppers are subject to about a 25 percent tax when they spend.

Nationally, Canadian shoppers accounted for more than $20 billion in retail sales under the former duty-free limits, according to the Harris/Decima statement.

“The potential number of Canadians traveling to the U.S. this summer is over 4 million,” says Harris/Decima Vice President Patricia Thacker. “With 54 percent likely to purchase more under the new duty-free limits, that’s over 2 million Canadians spending more in the U.S. this summer alone.”

Kyle said border towns in New Hampshire saw an increase in retail revenue the first weekend the limits were increased, so it is expected the holiday will follow suit.

The Harris Decima report supports that stating that one-quarter of Canadians taking vacation this summer are planning a trip to the U.S., and two-thirds of those travelers are planning to shop on their U.S. vacation.

“Intensity to spend is also stronger, with three in 10 indicating that they are very likely to spend more under the new rules,” it states.

In Hampton, Canadian visitors are a huge and valued part of the summer population, according to John Kane communications director for the Hampton Beach Village District.

“We try to make our Canadian visitors feel welcome and at home here,” he said. “They’re our cousins.”

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(c)2012 the Foster’s Daily Democrat (Dover, N.H.)

Visit the Foster’s Daily Democrat (Dover, N.H.) at www.fosters.com

Distributed by MCT Information Services

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