While Whatcom County residents have noted the impact of Canadian shoppers in recent years, traffic numbers indicate 2011 was the first year of significant change.
Last year 14.2 million people traveled southbound across Whatcom County's five border crossings, a 19.9 percent increase compared to 2010, according to data collected by Western Washington University's Center for Economics and Business Research. That's the highest one-year total since 2000, when 14.8 million people traveled southbound into Whatcom County.
Last year's total is still only about half of what was seen in 1990, however, when 27.9 million people crossed into Whatcom County.
While the strong Canadian dollar is one factor for the jump in traffic last year, it's not the only one, said Ken Oplinger, president of the Bellingham/Whatcom Chamber of Commerce & Industry. He noted that in 2007 and 2008, when the Canadian dollar was approaching parity with the U.S. dollar, there was no discernable traffic increase at the border. Between 2002 and 2010, southbound border traffic remained consistent during Canadian dollar fluctuations, ranging from 9.8 million to 11.8 million annually during that period.
"Parity is probably the baseline factor for good crossing numbers, but what has caused the larger increases are the other issues like harmonization (referring to the Harmonized Sales Tax in British Columbia, a controversial new system that raised the sales tax on some items), merchandising and store differences and the amount of duty-free purchases Canadians can make," Oplinger said in an email.
Hart Hodges, director at the Center for Economics and Business Research, agreed that there seems to be a significant shift that's been influenced beyond the strong Canadian dollar. Along with what Oplinger noted, Hodges added that getting some of the major border construction projects out of the way may have helped.
With more Canadians traveling into Whatcom County, Hodges said he expects Canadian retailers to try to respond to this shift by making changes either in pricing, inventory or customer service, if that's an issue. He said current Canadian prices for retail goods make sense when the Canadian dollar is in the 85-cent range.
"So either the exchange rate has to change a little or prices have to change a little - otherwise border crossings will stay high," Hodges said in an e-mail.
Changing prices in Canada won't be easy, said Oplinger, who said packing and distribution costs are higher in Canada on a per-item basis than in the U.S. Also, a number of products have heavy taxes or fees to protect certain industries.
"The federal government in Ottawa is unlikely to make changes to these, given the relatively small number of Canadians that live on the border in most places except the Vancouver/Whatcom area," Oplinger said.
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