As the Canadian dollar hovers near parity, many Canucks' thoughts turn to shopping in the United States. The allure is understandable - not only is the loonie's value rising as the U.S. economy remains unstable, but the stories of unheard of discounts a mere border crossing away is hard to resist. Whether you're Canadian or American, here's what you need to know about cross-border shopping.
In Pictures: 7 Currency Blunders You Could Cash In On

Before You Leave
To cross the border, you'll need a passport or an Enhanced Driver's License (EDL). Valid document substitutions and/or conditions that may prevent you from entering either Canada or the U.S. are listed on each country's respective border websites.

If you are traveling with valuable items, you may want to declare them as you leave your home country. If the item has a serial number, border services will provide you with form to list the items and identification numbers so you'll have proof you did not purchase them on your trip. Items without a serial number, like jewelry, may require an appraisal report a receipt and a signed dated photograph from a recognized jeweler or insurance agent. With that much hassle, it's really just better to leave your precious jewels at home. (To learn more about Canada and it's currency, see Canada's Commodity Currency: Oil And The Loonie.)

When to Go
In general, the worst times to cross the border are during holidays, long weekends and rush hour traffic. The Canadian Border Services Agency (CBSA) updates estimated wait times for crossing every hour on its website, as does the U.S. Customs and Border Protection website. Of course, this is only really helpful if you live relatively close to the border.

In terms of maximizing your dollar value, when the Canadian dollar is on par (or reaches parity) with the U.S. dollar, as it did on April 6, 2010, for the first time since July, 2008, it means that the loonie will buy more American product than it would if the Canadian dollar were lower in relation to the greenback. Conversely, when the U.S. dollar is higher in relation to the Canadian dollar, Americans might want to consider taking a trip north.

How to Pay
You might think that, once you've entered the new country, you'll automatically reap the savings – not so. If you pay using your credit card, the transaction does not occur immediately, so you may miss out on the low exchange on which you had carefully planned.

Debit transactions are processed instantly; your bank will likely charge fees for charging internationally. ATM machines will charge you a per-transaction fee that will vary machine to machine, but will likely be under $5. According to Kathleen Crislip of About.com, the real problems are the fees your own bank will charge you – up to 3% per transaction (including withdrawals).

Cash is your best option for these spending sprees, but there are downsides to carrying wads of cash. For one thing, if it is lost or stolen, you can't replace it. Also, flashing that much green could make you an easy target for theft. If you are hoping to maintain some control over how much you spend, carrying only a predetermined amount of cash could help keep you under budget – but you also may not realize how quickly you are going through it.

Paying Duty
Once the fun part is over and you're ready to take your new purchases home, you'll need to know the rules about what you can and can't bring back, and on what you'll owe duty. As a citizen, you have the right to bring back a set amount of items without paying any duties. The following charts from each country's respective border website help clarify the basics.

Canadian Citizens Reentering Canada
Period of Absence Personal Exemptions Notes
Less than 24 Hours CAN$0 N/A
24 Hours CAN$50 N/A
48 Hours CAN$400 Only ONE of the following items can be imported both duty-free and tax-free:
  • 1.5 litres (53 imperial ounces) of wine;
  • 1.14 litres (40 ounces) of liquor;
  • a total of 1.14 litres (40 ounces) of wine and liquor; or
  • 24 x 355 millilitre (12 ounce) cans or bottles (maximum of 8.5 litres) of beer or ale.

All of the following items can be imported both duty-free and tax-free:

  • 200 cigarettes;
  • 50 cigars or cigarillos;
  • 200 grams (7 ounces) of manufactured tobacco; and
  • 200 tobacco sticks.



Seven Days CAN$750 Same as 48-hour absence
Source – CBSA



American Citizens Reentering the U.S.
Period of Absence Personal Exemptions Notes
Less than 48 Hours

Up to 10 non-Cuban cigars, 150 milliliters (5.1 American fluid ounces ) of alcoholic beverages and 50 cigarettes.
More than 48 Hours

Up to 100 cigars, one liter (35.2 American fluid ounces) of alcoholic beverages (if you are older than 21 years of age) and one carton of 200 cigarettes may be included within your exemption.
Joint Declaration

Families who reside together and travel back together may combine their personal exemptions if they have been gone longer than 48 hours.
Source: U.S. Customs and Border Protection

Items of Note
It's important to remember that items not made in the U.S., Mexico or Canada will not be subject to the NAFTA agreement. Canada also has free trade agreements with Panama, Jordan, Columbia, Peru, Costa Rica and Israel, among other nations, so make sure you keep an eye on where your items are made, and check the Foreign Affairs and International Trade Canada website if you are unsure. If that cute t-shirt you bought is made in China, and you have exceeded your personal exemption, you will have to pay duty on it.

Keeping it Local
Shopping over the border can be a great experience, and it can save you a lot of cash. However, if it's a straight bargain you're after, make sure you factor in all of the charges before you head out. After paying sales tax on your items, you may have to pay tax again at the border. And there is the argument that buying local supports your home economy – but if Canadian retailers aren't willing to keep their prices in line with the dollar's value, it might just be worth it to take a little trip. (For more, check out Why Things Are Getting A Little Loonie.)

Get a rundown of the latest financial news in this week's Water Cooler Finance: Greece Attacks And Google Hacks.

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