Canadian border guards waive duty fees at peak times

DAVE GALLAGHERAugust 7, 2013 

Traffic lines up northbound and southbound at the Peace Arch border crossing in the middle of Labor Day weekend in 2007.

THE BELLINGHAM HERALD

It turns out Canadian shoppers can sometimes get even better-than-expected savings by shopping in the U.S. if they time it right at the border crossing.

In-depth articles published earlier this month in the Vancouver Sun and other Canadian newspapers indicate that for the past 13 years, the Canada Border Services Agency has told officers to let travelers through the border without charging duty taxes at peak border times to avoid long lineups. Those peak border times include the long holiday weekends, which can be a popular time for shoppers taking a day trip into Whatcom County to shop.

Currently the duty-free cap for Canadian shoppers is $200 after being away from Canada 24 hours and $800 after 48 hours.

According to the Vancouver Sun article, the Canadian federal government is also spending millions of dollars in additional overtime pay during the peak periods, potentially creating a situation where money is being spent on overtime with less duty tax revenue coming in by letting people through without paying. The information about overtime pay was obtained by Postmedia News, which publishes several newspapers in Canada.

Hart Hodges, director of Western Washington University's Center for Economic and Business Research, said he isn't surprised about travelers not paying duty during some peak times, but is surprised if this indicates an official policy by the agency. He notes that having people pay duty at the border can be time consuming, which makes it a challenge if the border line is already backed up.

Don Alper agreed, saying he wasn't aware of an official policy to waive duty fees.

"I know they pay attention to line-ups and probably have some kind of protocol for increasing throughput, whether by opening lanes (or) shortening the interviews," said Alper, director of the Border Policy Research Institute at Western, in an email.

Southbound traffic into Whatcom County has steadily risen in recent years, partly due to the strong Canadian dollar, which enables those shoppers to have more buying power in the U.S. According to data collected by CEBR, about 6.2 million passengers traveled south into Whatcom County through the five border crossings in the first five months of 2013. That's up 6.4 percent compared to the same period in 2012.

The rise in travelers into Whatcom County appears to be having an impact on retail growth. Retail sales in Whatcom County stores have consistently grown faster than the state average in recent years and a variety of large retailers - including Sports Authority, WinCo, Sears Hometown and Carpet Liquidators - have either opened or plan to open stores in this market in 2013.

"There are a variety of stores that have decided Whatcom County is bigger in a retail sense than it's demographic and income data would suggest," Hodges said in an email.

Reach Business Editor Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Read his Business Blog at bellinghamherald.com/business-blog or follow him on Twitter at @bhamheraldbiz.

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