For Canadian shoppers, United States is a big deal
By Jason Cato
Published: Tuesday, December 18, 2012, 12:01 a.m.
Updated: Tuesday, December 18, 2012
Mike and Deedi McKernan trek from suburban Toronto to Pittsburgh twice a year for business trips.
Each time, they stop at Grove City Premium Outlets in Mercer County, a necessity to save on Christmas gifts for their 10 children.
“It's high quality and good prices,” said Mike McKernan, 60, of Mississauga, Ontario. “And we get 40 percent savings, on average, at least. Last year, it was 50 percent.”
Canadians are shopping in the United States in record numbers, according to the Canadian government. The number of people making overnight trips in June climbed 7.5 percent from the year before, to 1.9 million — the most since 1972, according to Statistics Canada, the country's national statistical agency.
A number of factors contributed to the increase. Canadian and U.S. dollars are on almost equal footing and border security, beefed up after 9/11, has relaxed a bit.
Marilyn Glassford, who owns Lakeshore Tours & Travel in Bowmanville, Ontario, points out another reason: the opportunity to save money.
“Everybody I know talks about doing their shopping in the U.S., and it makes sense. You can't afford to shop here,” she said.
Canadians pay a 13 percent sales tax in addition to paying about 13 percent more on average for comparable products than do Americans, a Bank of Montreal report this year found.
For example, magazines cost $6.49 in Canadian dollars, compared with $5.49 in the United States, the report found. Blu-ray movies in Canada cost $21.69, compared with $19.98 here, and running shoes cost $145.99 in Canada, compared with $105.99 here.
In June, the Canadian government raised duty-free exemption limits from $50 to $200 per person for U.S. stays of 24 hours and from $400 to $800 for stays of 48 hours. It did so in order to modernize purchase rules and to ease congestion at border crossings into Canada, government officials said, though business leaders opposed the idea.
An ‘easy sell'
“(Canadians) are definitely a target market for us,” said Emily Beck, director of tourism development for VisitErie. “Shopping is the biggest expenditure a tourist will do, other than hotels. And these people focus exclusively on shopping, especially.”
Glassford said half of her business involves shopping trips to the United States. Lakeshore booked nearly 25 such trips in 2012, many to outlets and malls in Erie and Grove City.
“That is our biggest shopping tour,” said Glassford, calling the tax-free clothing and shoes in Pennsylvania an “easy sell.”
“It seems like every woman on the planet knows that,” she said.
Toni Bianchi does. She made her first U.S. shopping trip with her husband, Domenic, the weekend of Dec. 8 as part of a charter bus tour organized by the Toronto Social Group. The trip started at Erie's Millcreek Mall on Saturday and included an overnight stay at the Comfort Suites in Edinboro. It ended on Sunday at the Grove City outlets.
“No taxes,” said Bianchi, 45, of Maple, Ontario. “That's a big thing for us.”
Her husband scored a $200 leather jacket for $37, as well as Christmas gifts for their three children.
“There's more selection down here, varieties of stores we don't have,” he said.
Big business for buses
The Canadian tour bus industry is so prevalent that VisitErie is a member of the Ontario Motor Coach Association, Beck said. “Everybody in Ontario knows about Erie shopping. We've lived with this for such a long time.”
Hundreds of tour buses packed with Canadian shoppers stop in Erie and Grove City year-round, although the busiest months are October and November, trip organizers said.
Some specifically advertise Erie and Grove City tours; others include them as stops on the way to Washington or New York City.
The reach of Canadian shoppers extends to Tanger Outlet Center in North Strabane, Washington County.
“It's definitely a growing market for us,” said Tanger General Manager Jodi Dagme.
None of the Pennsylvania cities quantifies the Canadian impact on the local economy, but Canadians spent $3.8 billion in the United States in the third quarter of this year, according to Statistics Canada. The Bank of Montreal report conservatively estimated cross-border shopping annually drains $20 billion from the Canadian economy.
That figure could grow, said Doug Porter, the bank's deputy chief economist and author of the report, “Cross-Border Shopping: Here Comes the Flood.”
Tour operators such as Glassford are counting on that. She scheduled as many bus trips to the United States in 2013 as her company had this year.
“Our business is amazing,” Glassford said. “It's growing every year.”
The McKernans, who don't travel here by bus, said they plan to continue shopping in Grove City. Last year, they spent about $1,500, and they spent at least $1,200 this year during their most recent stop, Mike McKernan said.
“The people are very friendly,” he said, “and the prices are great.”
Jason Cato is a staff writer for Trib Total Media. He can be reached at 412-320-7936 or email@example.com.
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Wait, aren't these the same retailers complaining about people using online sites to purchase items outside of PA to save on the sales tax? Shouldn't these retailers be collecting taxes and sending them to Canada, just like they want people on egay or amazon to do? Yeah, its fine to sell tax free items, when its you making the profit, but heaven forbid you let someone else do it.