Making the first CAD 200 worth of purchases duty-free on same-day visits to the United States can bring down prices on the Canadian side of the border, an expert has told the Canadian Senate Committee on National Finance.
The Committee is tasked with finding out the reasons as to why prices are higher in Canada compared to the US.
Exempting Canadian citizens on their first CAD 200 worth of purchases when they return the same day would not hurt domestic retailers very much, Ambarish Chandra, Assistant Professor of Business Economics at the University of Toronto, said.
He argues that such an exemption would actually be a consumer-friendly way of easing the traffic across the border between the US and Canada, as it would force several outlets in Canada that are owned by American retail chains to cut down their prices.
He opines that it would not result in people flocking across the border to shop, but would only legitimize the shopping of smaller personal items from across the border.
At present, Canadians who make a trip to the US for less than 24 hours do not enjoy any duty exemption benefits. For those who stay for 24 hours, duty exemption is available up to purchase of CAD 50 worth of goods, and those visiting for 48 hours get duty exemption on CAD 400 worth of purchases.
On the other hand, US citizens returning home after a trip of up to 48 hours outside the country do not have to pay any duty on purchases up to US$ 200. Mr. Chandra is suggesting a similar exemption for Canadians visiting the other side of the border.
Fibre2fashion News Desk - India
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