Cross-border Shopping & it's local impacts

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Have you made the trip down to Washington State to do some cross-border shopping recently?  Maybe you’re one of the thousands with a Nexus pass in order to make your copious visits to the States that much quicker?  With the strong and holding Canadian dollar and recent rise in duty free allowances comes long wait times at the border and U.S. parking lots full of B.C. license plates. Apparently, it also comes with stores full of “crazy” and “rude” Canadians resulting in annoyed and frustrated local American residents. 

At the Costco in Bellingham it has gotten to the point where the locals have been up in arms over the Canadians clearing out their stock of dairy goods and creating long wait times. There is even a Facebook-page protesting and demanding for American-only hours. This seems quite contrary to what I hear from local residents when traveling around the world when it comes to the common courtesy given by our American counterparts. I will save that for another post at another time.

Although these are the headlines that make the press, there are a lot more important factors that affect close border cities like Vancouver that fail to draw as much attention.

Times are tight for middle-class income families and when this happens the bottom lines get very narrow and often factors outside the personal bank balance don’t weigh too heavily. We understandably want the most for our hard earned money.

Quick stats to shed some light on this trend:

  • The majority of cross-border shoppers are same-day shoppers – trips of less than 24 hours make up about half of all visits to the U.S.
  • Canadians made a record 1.9 million overnight trips to the U.S. in June 2012
  • There are already over 50 million visits to the U.S. by Canadians annually and that number is poised to continue growing

With these enormous number of visitors come staggering economic impacts. Even at a very conservative estimate of a five per cent loss, we are talking over $20 billion a year in revenue lost to U.S. based rival retailers, stated Deputy Chief Economist Douglas Porter.

It’s easy to underestimate the impact you are making, especially when it comes to purchasing simple products like eggs, which are not given a whole lot of consideration. The province of B.C. alone is losing more than $3 million each year on this single small product. Small product, big problem. Or how about milk or gasoline, two other very highly sought after products while in the U.S. and for good reason. B.C. shoppers can get away with bringing home nearly 32 litres of milk per person and at a price point of around $0.55 per litre those are some big savings to be had. 

I have spoken to many residents who live close to the highway and actually purchase all of their gas there when making the weekly trip down. “Why not?” they say. You’re looking at about $0.40 – $0.45 per liter in savings – that can really add up. No wonder they’re not only filling their vehicles, they’re filling half a dozen Gerry cans too.

This particular cross-border purchase of gasoline is linked to a very sensitive and hot topic in the city of Vancouver. With the projected rise of transit costs and cutting of more and more routes, people are up in arms. No one can understand why. The majority of these complaints come from those who depend on transit for their day-to-day living. Meanwhile, their vehicle-driving counterparts and neighbours cannot understand why we pay so much in fuel charges, so they say, “screw it, I’m going to the States.” Much to the dismay of Translink – who is always the guilty party and target of these sorts of attacks. They predict a loss of over $144 million in tax revenue generated by fuel purchases that would go towards Vancouver’s transit system over the next 2 years, citing cross-border fuel purchasing as a very large contributing factor. This is a problem because as fuel costs go up so do the demand and cost for transit options, making it harder and harder for them to fulfill the needs.

So what is one to do?

Although it’s hard to argue against the fact that the same pair of Nikes that cost $90 here are only $44 there, which seems like a no brainer, there has to be some consideration given to the bigger picture. Vancouver has had a good number of organizations trying to promote and encourage residents to buy local and think of the sustainability issues at play.

How about Get Local who promotes eating local food and buying directly from the farmers themselves. This movement has definitely picked up some momentum and the increase of interest in the Vancouver Farmers Markets is a great sign. At these markets, ample vendors offer some masterful foods that just cannot be found or matched in the big bulk stores.

Vancity’s new Good Money Mob is creating positive local impact through highlighting and promoting local businesses and incentivize people to shop there. And it’s almost time to start thinking about that joyous occasion of Christmas shopping where various campaigns really started to increase their awareness compared to last season with helpful local shopping guides.

At the end of the day, there are of course arguments to be made from both sides of the issue with no distinct right or wrong answer. It’s a personal view. Do you look at the whole picture of future generations and well-being of the city or do you care about number one and your bank balance? It’s true we have only so many dollars in our pockets that need to be spent wisely, hence the enormous success of stores like Costco and Wal-Mart, but ethically we need to review the pros of buying locally and supporting our neighbours. Do you know anyone who supports the buy-local mentality and principles? Ask them to share why they feel that way or the differences they see through their purchasing decisions. In most cases, you are buying a higher quality and fresher product when purchasing locally – more importantly you are supporting residents who contribute back into this same local economy as you do. If you want the city you live in to be a better place, you need to take pride in supporting those that also call this place home.

Thoughts? – Would love to hear your stance and experience on this cross-border shopping trend.

Image: Yah Global

 

 

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Greg Ryder 

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