Cross-border spending by Canadians in the United States rose substantially between 2006 and 2012, from an estimated $4.7 billion to $8 billion, according to the results of a study released today by Statistics Canada.
With the exception of 2009, cross-border shopping has risen annually, but even with the increases, it represents between 1 and 2 per cent of total Canadian retail sales, according to the study.
The study analyzed data from a range of survey and administrative data sources. The upper estimate for spending in the U.S. was pegged at $10.8 billion in 2012.
The good news is retail trade in Canada also rose during the same period, increasing every year from 2006 to 2012, except in 2009, when there was a 2.9 per cent decline, according to the release. Despite that, annual sales rose from $389 billion in 2006 to $468 billion in 2012.
About three-quarters of Canadians live within 160 km of the Canada–US border.
Cross-border shopping estimates include same-day trips; spending on overnight trips; postal and courier imports; and motor vehicle imports.
In 2012, Canadians made almost 56 million visits to the United States, up 38 per cent from 2006, according to the report.
It also found that the annual amount brought back to Canada from same-day trips grew from $370 million in 2006 to $844 million in 2012. The annual total from overnight trips doubled from $1.8 billion in 2006 to $3.6 billion in 2012.
The value of goods imported into Canada from abroad by post and courier were included. The value of these goods was estimated at $3.1 billion in 2012, up 12.7 per cent from a year earlier and 50 per cent higher than in 2006.
Motor vehicle imports totalled $426 million in 2006 and then more than doubled to over $1 billion in both 2007 and 2008. By 2012, they had declined to a level almost identical to that in 2006, according to the report.
In 2012, overnight trips and goods delivered from abroad by post and courier accounted for most of the cross-border shopping total, at 45.3 per cent and 38.9 per cent respectively.
Same-day trips accounted for 10.5 per cent and motor vehicle imports made up the rest, at 5.3 per cent.
“Several factors can contribute to the growth in cross-border shopping. Among them is the relative strength of the Canadian dollar over the study period, as well as price differentials, changes in retailer landscape, duty-free limits, tax changes and economic conditions,” the study concluded.
The value of the loonie – the biggest factor affecting cross-border shopping, according to economists – hit a multi-year low in January, slipping to $92.56 cents against the greenback. As of this morning, the loonie was at $89.5 cents U.S.