Tuesday, January 13, 2009

Some interesting features of recent US/Canada cross-border shopping

Prior to 2001, same day auto trips between the US and Canada moved in lockstep with the US dollar/Canadian dollar exchange rate. This is not terribly surprising; Canadians are famously quick to snap up exchange-rate-induced bargains. If the Canadian dollar rose in value, we'd quickly dash across the border to stock up on cheap US goods before the prices adjusted.

As Statistics Canada showed in a December 2007 report, that pattern has since broken down. If anything, same-day auto trips now look to be almost entirely independent of the exchange rate.

Why?

There are several suspects. Crossing the border is more of a hassle than it used to be, and online cross-border shopping is as easy as typing '.com' instead of '.ca' after the name of a South American river.

Here's something else to add spice to the discussion: according to the CBC, in 2007 the perception at the border was that automobile-fueled cross-border shopping was booming. According to Statistics Canada, it was not.

Was the perceived boom due to a confusion of anecdotes with data? Was there a sharp increase in unreported trips? Food for thought.

1 comment:

US Waivers Pardon said...

I will say that the border issues between Canada and the USA have escalated badly. They don't appear to be returning to any sense of normalcy yet, and it's been over a year.

US Waiver Form Canada