Canada’s higher duty free allowances aren’t really all that high

Crossing the border for Black Friday? Prepare to wait.

There has been occasional moaning and groaning about the impact on retailers of the new duty free allowances for Canadians returning from the U.S. since they went into effect June 1.

Those new allowances allow Canadians to claim a $200 duty free exemption after being away for at least 24 hours, and $800 after being away for at least 48 hours. No exemption applies to Canadians who have been out of the country for less than 24 hours.

The old exemptions were $50 and $400, respectively.

“I don’t know what our government is thinking,” said one small business owner in Sarnia, Ont., a border town separated from neighbouring Port Huron, Mich. by the 800-metre (half-mile) wide St. Clair River.

It was “salt in the wounds of retailers in border communities,” Retail Council of Canada president Diane Brisebois said.

Rumblings about the effect of the higher duty free allowances on the Canadian retail industry have increased again as Black Friday nears — a U.S. Thanksgiving retail blowout now being imitated by Canadian retailers, eager to stop Canadians from going across to nearby U.S. cities to take advantage of the bargains.

But are the new duty free allowances all that generous? As the chart below shows, Canada still has no duty free allowance for trips of less than 24 hours, while the U.S. has a $200 allowance, and Norway (the land of high prices) has a $523 Cdn. allowance.

It’s only when it comes to trips of more than 48 hours that Canadian duty free allowances start to look generous — though our $800 allowance is still smaller than Australia’s $931 Cdn. or Norway’s $1,046 Cdn.

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About theviewfromseven
A lone wolf and a bit of a contrarian who sometimes has something to share.

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