Published October 17, 2017 • 6 Min Read
For Canadians who live within an easy drive of the United States, it’s hard to resist the allure of crossing the border to shop.
Recent gains in the value of the Canadian dollar against its U.S. counterpart make the idea even more tempting. If you’re feeling the urge to head south of the border for a bit of retail therapy, here are a few ways to make the most of your trip.
Plan Ahead for Your Trip
Before you leave home, check the wait times at the border crossings nearest to you on the Canada Border Services Agency website. On the way down, have your passenger keep tabs on the CBSA’s mobile app, and be prepared to change your point of entry on the fly.
Especially around statutory holidays, avoid peak travel times, such as late Friday before a long weekend or late Monday on the way home. If you have to travel on a long weekend, the best advice is to get to the border either early (before 7 a.m.) or late (after 8 p.m.)
Consider Getting a Nexus Card
The most aggravating thing about crossing the border is, well, crossing the border. But imagine if there was a way to skip that long lineup of cars and get to your destination sooner.
There is one — apply for a Nexus card. A joint program of Canada Border Services and U.S. Customs and Border Protection, it allows low-risk, pre-approved travellers expedited access across the border. But note: every person travelling with you must have a Nexus to use the designated lanes.
You will have to fill out a long online application and meet with a border services officer to get fingerprinted and have a retina scan before being approved, which can take a couple of months. But for $50 for a five-year card, the savings in time and stress at the border are more than worth it.
As a bonus, your Nexus card will also let you use a special (meaning shorter) line at airport security checkpoints at most major Canadian and U.S. airports, no matter where you are flying.
Know Your Personal Allowances
Before you plan your trip across the border, make sure you know the dollar value of goods you can bring home.
There is no personal exemption for day trips — you’ll have to be in the U.S. for at least 24 hours to be able to claim a $200 Canadian tax-free and duty-free allowance that can’t include any tobacco or alcohol. After 48 hours, you can claim purchases worth up to $800 Canadian, including specified amounts of alcohol and tobacco.
Always declare your purchases, even if you think they don’t qualify for an exemption. At worst, you might have to pay some sales tax and duty, but those costs pale in comparison to the penalties you’ll pay if agents find goods you haven’t declared.
Understand What’s Duty-Free
Even if you’ve exceeded your personal allowance, you might not have to pay duty on some cross-border purchases.
Thanks to the North American Free Trade Agreement (NAFTA for short), no duty is payable on most products imported for personal use that are clearly marked as being made in Canada, the United States or Mexico. Products from Chile and Costa Rica might also be duty-free because Canada has separate free-trade agreements with those countries.
Also, if you were away for 48 hours or more, you can bring back goods that exceed your personal exemption, up to a value of $300, and pay a special duty of seven per cent if the products come from a long list of “most favoured nations.” You will, however, have to pay Canadian taxes on all purchases that exceed your personal exemption.
To estimate the duty and taxes on specific purchases, use the estimator on the Canada Border Services Agency website.
Apply for a U.S.-Based Credit Card
If you’re a frequent visitor to the United States, you might want to apply for a U.S.-based credit card. Unlike a Canadian-based U.S. dollar credit card, a U.S.-based card is not charged a foreign transaction fee (usually up to 2.5 per cent) on purchases made in the States. That can really add up if you are a regular cross-border shopper.
If you’re a frequent visitor to the United States, you might want to apply for a U.S.-based credit card.
A U.S.-based card can also make it less problematic to return items bought in the States, since you won’t take a financial hit if the value of the Canadian dollar dips after you make your purchase.
You can apply for a U.S.-based credit card through a Canadian bank. Check for a card that offer rewards programs or travel insurances so that you can benefit even more.
Open a U.S.-Based Bank Account
The ideal partner for a U.S.-based credit card is a U.S.-based savings or chequing (or as our neighbours say, checking) account. If you have both, you could pay off your credit card (or any American retail store cards) in U.S. funds from your bank account, without incurring currency exchange fees.
If you often shop south of the border or you’re a snowbird who spends a couple of months every year in the States, you can regularly deposit money to your U.S. based account when the exchange rate is favorable. That way, you won’t have to worry about a steep drop in the value of the Canadian dollar against the American greenback between visits — you’ll already have U.S. funds in your account to pay your bills.
Watch for Canadian-Friendly Deals
Look for special offers from U.S. businesses, even when the Canadian dollar is lagging behind the value of the American greenback. Retailers, hotels and restaurants close to the border that rely on Canadian customers often offer special deals, such as discounts or “Canadian dollar at par” promotions, to keep their northern customers happy.
Check websites of malls close to the border, or include them in your Twitter feed, to keep tabs on special offers for Canadian shoppers, which often happen after the loonie takes a dive against the U.S. dollar. You can do the same for hotels and restaurants, and some hotels will send special offers to you via email if you sign up for their loyalty program.
You’ll also want to pay attention to when U.S. stores hold big sales, often right after U.S. holidays (such as American Thanksgiving), in January and in late summer (mid-July through late August). Check for coupons and deals on websites aimed at cross-border shoppers, such as Crossbordershopping.ca.
If you are in the market for a big-ticket item, it pays to check out Canadian prices before you head south. Sometimes, a deal that looks great won’t be so attractive once you factor in the exchange rate and any taxes or duty you might have to pay at the border.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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