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Cross Border Shopping

With the faltering Canadian dollar now (as of January 7, 2009) at $0.82318 US dollars, the cross-border shopper experiences an eighteen percent loss in the amount of money they bring the moment they cross the Canadian-American border for shopping excursions. The shopping deals had better be jaw-dropping, mind-numbingly, absurdly high retail discounts in order to swallow the exchange rate and still provide a deal to the Canadian consumer. With a non-par exchange rate, 30% off of the American prices actually becomes more like 12 percent off for the Canadian cross-border shopper at these rates.

When factoring in the immediate loss of eighteen percent of the amount of money brought for shopping being lost to the currency exchange (and many stores will charge their own currency exchange rates, some offering more, some offering less than the current exchange rate), and with the retail sector choking with unsold inventory in Canadian stores, cross-border shopping in the US from Canada could wait for the Canadian dollar to rise at least 10 cents against the US dollar (at least $0.90 US dollars).

For the Canadian consumer, the only destination that would make sense for shopping across the border into the USA would be to shop at the manufacturers’ factory retail outlet superstores. Or, for the consumer to be going to an American city for some other reason than a shopping trip, and going to the stores simply to find different merchandise than is available in Canada.

There are many border crossings joining Canada and our American neighbours to the South, but not too many of them have an outlet shopping district within an hour or two’s drive from the border. When the Canadian dollar is more than 10% less than the American greenback, it is hard to find enough deals to warrant the shopping excursion to the States. And when the distance to the shopping districts is more than a couple of hundred Kilometres, the cost of the trip is added to the exchange rate loss, and the chances of making great deals becomes much less likely.

Personally, I live in Cornwall, Ontario, at the border with Massena, New York. About an hour’s drive South-West into the State of Ney York are Plattsburgh and Potsdam, both with minor retail outlets and a couple of malls each, other than the normal Wal-Mart Super Store and a spattering of local businesses. There are no retail outlet stores or manufacturers’ outlet stores to be found in these parts, so taking a trip over the Niagara Bridge into Niagara Falls, New York, would be a wise and financially strategic move for the shopping connoisseur. At the moment, only non border-fee free items are worth the shopping trip across the border into the good old U S of A.

From Eastern Quebec through to Western Ontario, even into the Prairies, there are not many American border cities for Canadian shoppers to seek out major savings when the US dollar is higher than our multi-coloured paper money, and our heavily-minted one and two dollar coins. We gave up on printed small bills years ago, and we just can’t thank the government enough for these heavy pockets full of huge dollar and two dollar coins!

No, dear readers, you must endure a drive through the most beautiful country this side of the Rockies to cross into Niagara Falls, New York, USA, from Niagara Falls, Ontario, Canada. Pretty ingenious and original names for two bordering cities that are not a part of each other. But the retail outlet stores within the Niagara Falls area are too plentiful to mention, from Barneys to Newman Brothers to Sachs and DKNY, Eddie Bauer and on and on. For the Canadian citizen who lives near the Niagara Falls border, and visitors who are staying in hotels in the city, the outlet malls arrange buses for travellers, at very reasonable rates ($6 return trip).

For the time being, and until the Canadian dollar climbs back to at least par with the US dollar (the Canadian dollar was worth US $1.11 just four months ago) there is really no lustre to cross border shopping into the USA for Canadians, or for others visiting Canada. However, the reverse is extremely prudent for our American neighbours. With the American dollar getting an extra 18 cents per Canadian dollar just for crossing the border, cross-border shopping in Canada from the US, at a Canadian border city Wal-Mart type of store, will make for sure-fire discounts and major savings over the same store on American soil.

Until the Canadian dollar comes to par, or close to par with the American dollar, there is really not much sense in cross-border shopping in the US from Canada, unless your favourite stores happen to be across the border in the States.

Happy shopping.