How could closing the U.S.-Canada border for coronavirus impact Whatcom’s economy?
Whatcom County’s small-town businesses near the border are most likely to be the hardest hit when the U.S. and Canada close their mutual border to non-essential traffic during the coronavirus pandemic, according to Western Washington University research.
“The big box stores in Bellingham, such as Ross or Costco or Trader Joes, are going to feel the impact of the border closing,” WWU Border Policy Research Institute Associated Director Laurie Trautman told The Bellingham Herald. “But those stores are part of bigger corporations, and they should be able to weather this.
“My fear is for the small businesses in those towns close to the border — Blaine and Lynden and Sumas — that rely disproportionately on Canadian customers. I worry that they are going to be hit the hardest.”
President Donald Trump and Canadian Prime Minister Justin Trudeau said Wednesday, March 17, that travelers will no longer be able permitted to cross the border for recreation or tourism, but that essential travel and commercial trade between the two countries will continue.
Trudeau announced that the border, including the five points of entry from Whatcom County into British Columbia, would close at midnight Saturday, March 21, according to a CTV.com story.
Both countries are eager to maintain their vital economic relationship, the Associated Press reported, as Canada relies on the U.S. for 75% of its exports and about 18% of American exports go to Canada. CTV reported approximately $2.7 billion worth of goods cross border each day.
But once non-essential traffic is stopped, Trautman said it will begin having an immediate impact on Whatcom County’s economy.
“When combined with the reduced number of Whatcom residents that will be shopping, the impact on Whatcom County’s retail sector will be significant,” Trautman said.
Canadian economic impact
The Border Policy Research Institute gathers data from a number of different sources, even counting license plates in parking lots and surveying travelers at the border about the purpose of their trips, to quantify the border’s impact on the region.
The Border Policy Research Institute found that Canadians comprise approximately 75% of cross-border travelers depending on the exchange rate, according to information Trautman emailed to The Herald. In 2018, that would have represented approximately 10.5 million southbound Canadian travelers through the Blaine, Lynden, Sumas and Point Roberts points of entry.
Those Canadians represent a large portion of consumers in Whatcom County — anywhere from 2% to 46% of the weekend customer base Whatcom County retailers see, Trautman reported, adding that the average is about 17%.
And while many of those Canadians make it to Bellingham or further south to shop at big-box retailers, Trautman said a disproportionate share make quick trips across the border to hit gas stations and pick up mail-order purchases at smaller retailers in Blaine, Lynden and Sumas.
“That’s one of the things I’ve been worried about since I heard they were going to close the border, is how this is going to impact those smaller retailers close to the border,” Trautman told The Herald.
The border institute found that approximately 42% of Canadians cross the border on short, frequent trips to areas near the border in Blaine, Lynden and Sumas.
When cross-border traffic volumes were at their peak in 2014 due to the strength of the Canadian dollar, Trautman said Blaine had per capita online sales tax revenue that was $3,000 greater than the rate in the rest of Washington state.
“That gives you an indication of the economic impact of Canadians on these small communities, as well as the county,” Trautman said.
And with the border closing, that economic impact will disappear for an unknown length of time.
