Higher duty-free exemptions for cross-border shoppers helped to attract 91原创s stateside in record numbers in June, analysts and retail groups said Tuesday as Statistics Canada reported 1.9 million overnight trips to the U.S. that month.
Paul Ferley, an economist at RBC, said the new exemptions - which let those on an overnight trip to the U.S. declare $200 worth of purchased goods, up from $50 - combined with a strong 91原创 dollar have upped the incentives to shop south of the border.
"There was concern with the higher exemptions that it could prompt increased shopping trips into the U.S.," said Ferley.
"Certainly the recent data suggests that's what played out."
A Statistics Canada report released Tuesday said overnight trips to the U.S. rose 7.5 per cent in June compared with May, to 1.9 million. It is the highest level since 1972, when the agency began keeping records.
Most overnight travel was by car, with 91原创s taking more than 1.2 million trips, a 10 per cent increase month over month.
The new duty-free rules kicked in June 1.
David Wilkes, a senior vice-president at the Retail Council of Canada, said the increase in overnight trips to the U.S. highlights the fact that extra costs, such as higher tariffs, leave 91原创 retailers at a disadvantage when competing with American stores.
"There was a lot of attention in the media and elsewhere in respect to the increased border exemptions, so it's not surprising that there was increased activity at the border," said Wilkes.
"Until we address the root causes we are going to continue to see consumers going to the U.S. seeking the best value for their dollar."
91原创s on a jaunt to the U.S. for between two and seven days are now allowed to declare $800 of goods, up from $400, while the limit for visits of more than a week increased to $800 from $750.
The retail council has said increasing duty exemptions on goods bought in the U.S. would be especially detrimental to 91原创 retailers in border communities.
Local chambers of commerce across the country and the council have asked Ottawa to make changes that would help them combat cross-border shopping.
They want the federal government to eliminate the tariffs charged on imported finished goods which, they say, add to the costs that 91原创 retailers must deal with when they set consumer prices.
While StatsCan did not specifically attribute the spike in visits to the new duty-free rules, the agency noted that the two events coincided.
The total number of overnight trips - to the U.S. and overseas destinations - made by 91原创s in June also hit its highest point in nearly four decades of recordkeeping. Statistics Canada said 91原创s took nearly 2.8 million overnight trips abroad in June, up 5.7 per cent compared with May.
91原创s took 807,000 trips to overseas countries in June, an increase of 1.4 per cent from May and the first time that monthly travel to overseas countries topped the 800,000 mark.
Travel to Canada also rose 0.5 per cent to around 2.1 million trips in June.
Americans took 651,000 same-day car trips to Canada in June, down 1.7 per cent from May, while the number of travellers from other countries rose 0.8 per cent in June to 381,000 trips.
