Saturday, May 19, 2012

Cross Border Shoppers

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" I wonder if these folks ever have even the slightest of pangs of guilt .."
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It seems harmless and even fiscally prudent, to visit our local shops to find just the perfect “widget”, pick it up, feel it, maybe even try it on. Politely place it back on the shelf, thank the clerk for their assistance, and then head home to fire up a web browser and glee in the fact that you can find it 10%, 20% even 50% less by purchasing on-line. A job well done!.

I have many acquaintances, that revel in the joys of hopping in the car, some almost weekly, and cross the border to the United States.. Again, to save so much money for everything they purchase. From clothing to groceries, these folks are more than eager to present to those that will listen on the great savings that they reaped from their frequent visits. Again, how exciting that they could avoid paying the local rates, sales taxes for their purchases, and save so much money.

We are all lucky here in Canada, to enjoy many public safety nets. And I am confident that even these prudent on-line and cross border shopping fanatics are more than willing to enjoy the security of these social safety nets. In the unfortunate case of medical needs, our discount hunters, demand and expect the same attention as the rest of us crazy people who shop at our local retailers, and pay that crazy sales tax. Their children are expected to enjoy public schooling, protection of police, safety of transportation etc, even as their parents are shopping for back to school clothes, shoes, milk and turkeys in the savings Mecca of the United States.

But of course it is hard to support small privately owned retailers, because they continue to go out of business. I mean, how frustrating is it, when shopping for a pair of Skates, the store that you always go into to find the exact size and make, so you were sure when you order it on-line, you will get the right fit, how frustrating is it when they have gone out of business?? It is terrible when after getting a great deal on a musical instrument in Maine, USA, and you need adjustments made on it.. and the local store is no longer there.. Again.. Gone out of business.

God forbid, as you pack all of your LL Bean camping equipment, in the SUV that you bought at a Florida auction.. You discover that you need to replace a broken paddle for your Kayak that you bought on e-bay from a dealer in California. BUT you don’t have time to drive to the United States to get a new one. When you visit your local sports store, they no longer sell paddles because they cannot compete in that market any further. DAMN RETAILERS!!

BMO, very recently released a report on Cross Border Shopping. $21,000,000,000 was spent last year in cross border shopping. $21 BILLION!!! That is $21 Billion that is gone from our economy completely, no trickledown economics within our country, no taxes, no paying a retailer, that pays there employees, that buy products, that support retailers, that support manufactures... each and every step, taxes are paid to support our safety nets, our hospitals, our schools, our infrastructure.

An appeal from a locally owned
retail  shop  to support
 local business

So I wonder, for those that stand proudly in front of friends displaying all of their purchases.. chanting the mantra that we have all heard far too many times “I got this in the states and I only paid..$xx”. I wonder if these folks ever have even the slightest of pangs of guilt as they pass family owned businesses that have closed their doors, or as they wait in an emergency waiting room needing medical assistance. Maybe even the slighted pang of guilt.. I don’t know. 

What they can celebrate, that indeed in our fine country of Canada, you can have your cake and eat it too.. Even with a cake purchased in the US.

11 comments:

  1. So what you are saying is that, it makes perfect sense that our government raised the amount of $$ you can spend tax free in the states now too. What that 21 Billion number jump.

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  2. I am saying completely the opposite! And regardless of what the government allows Canadians to spend in the United States... It is a decision that we all can make, are we ok, with sucking our social systems dry and yet we refuse to support them by purchasing our consumables in the US? This is not a government policy issue. It is an issue with our personal spending choices, and the hypocracy that may exist as we expect government programs as we enjoy US shopping weekends.

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  3. mind if I send this to our local paper as a Letter to the Editor? I would have to use your name?

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    1. The Daily Townsman Cranbrook, BC

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  4. The Daily Townsman, Cranbrook, British Columbia

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    Replies
    1. send me your email address and I will email you any required contact info the paper requires

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  5. lindabirch@shaw.ca

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  6. Would like to take another side. I occasionally shop across the border and have no guilt about it(once a year perhaps). Recently I made a purchase at Ikea in the States, this would have cost me $1150 (before taxes) in Canada but instead cost me $630 (also before taxes). I would have been more than happy to pay any taxes. This was not a way for me to evade taxes or other social services.
    However, I do not understand the price discrepancy in such an example. I wouldn't care as much for a smaller difference in pricing, but that difference paid for a weekend away as well as other smaller purchases while there and I STILL had money left over from the difference.

    So furniture + trip + shoes + clothes (in the US) + gas vs. furniture (in Canada).
    Tough to feel bad about that equation.

    I don't believe economies of scale apply here since both Ikea stores should get their stuff from a single source/manufacturer.
    And the price difference is not all other taxes.

    So while I agree that mom and pop shops may not be able to compete, larger retailers should not have a problem getting very close in pricing to their US counter-parts.

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    1. I am certainly not an economics expert, far from it I confess.. but I am (or I hope) that the increased cost (even from the same global retailer) is justified. Major retailers work with set margins, mark-ups and cost plus models. So without the ability to see why Ikea (as one example) is so significantly higher in Canada is more likely a reflection of the higher costs of doing business in Canada. And less likely gouging the consumer. It might be worth considering why cost of operations is higher in Canada? Well, workforce wages (who are paying taxes), business taxes, taxes on construction, maintenance - everything. And all of those these items, taxes to be specific.. feed our social system. (Health, Education, Quality of life).
      I without question understand the fiscal temptation of huge discrepancies in pricing.. but following this temptation, will always result in money completely disappearing from our economy. $520 on your Ikea savings is tough to resist. But, $520 would buy you one band-aid with a hospital visit if we did not have free health care.

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