With the Canadian dollar flirting with parity with the U.S. dollar yet again, Canadians can't help but consider shopping stateside to score some great discounts. (Use coupons strategically to score big savings on everyday purchases. Check out Coupon Shopping: Clip Your Way To Savings.)
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Keep in mind that there are limits you have to adhere to when crossing back over into Canada. Always declare what you've purchased, and the rule of thumb is: the longer you stay in the U.S., the more you are allowed to bring back without having any duties or taxes levied.
|Time Spent in the U.S.
||Amount You Can Bring Back
|Week or more||$750 CAD|
|48 hours or more||$400 CAD|
|More than 24 hours, less than 48||$50 CAD|
|Less than 24 hours||$0 CAD|
If anything you buy is made in Canada, the U.S. or Mexico, NAFTA (North American Free Trade Agreement) exempts you from paying duties, but you'll have to pay taxes when you cross back over if you go over your allowed limits or are only in the U.S. for less than 24 hours.
Finally, let's not forget to also factor those deep sales that happen in the States, especially on Black Friday and those low sales taxes charged in some American states, with the average sales tax hovering around 5.5%.
With the above in mind, there are certain categories of goods and services that are usually cheaper in the U.S. than in Canada, even without equal currency values, sales tax savings or major sales:
The printed word tends to be cheaper in the U.S. by around 25%, partly because suggested retail prices are usually printed on the book itself, and retailers are not likely to want to reprice their books based on currency fluctuations. If you don't want to head over to the States every time you want to buy a book, buying your books online will probably score you a better deal than going to your local bookstore.
A vice to be sure, but many Canadians might find more of a financial incentive to quit or cut back on this habit than their American counterparts. Why? Because cigarettes are almost double the price in Canada than in the States. A 25-pack of cigarettes costs around $12 in Canada, but a 20-pack of cigarettes in the United States is only around $5.
To be fair, cigarettes are taxed heavily in Canada, with the cost of cigarettes boasting taxes of 63 to 79% compared to New Yorkers, for example, who only pay 38%. That means around $7.50 to $9.50 of that $12 cost of a 25-pack of cigarettes in Canada is going just to taxes. If you live in Ontario, don't forget that added tax of $5 per carton that was enacted to deter smoking.
The duty to ship tires across the border is only around 4 to 7%, but tires in Canada cost over 40% more than the price of their American counterparts. What gives? Even tires made in Canada can be found for less in the U.S., even if you can see the factory right outside of your door. The solution? Buy your locally made tires online and have them shipped from the States right back across the border. (Shopping from the comfort of your couch has major benefits - and some unpleasant side effects. Read Shopping Online: Convenience, Bargains And A Few Scams.)
There are rules and regulations of what you can and cannot bring over the border, and you will have to declare any foodstuff purchased in the U.S. With that in mind, even grocery shopping in the States can be cheaper than in Canadian supermarkets.
- Meat is a one-third less expensive
- Dairy is around 50% less expensive
- Fresh fruits and vegetables can be up to 20% less expensive
- Junk and convenience foods are one-third less expensive
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Unsurprisingly, gas is also cheaper in the United States by about 25 to 40%. Don't be fooled by that gallon-to-liter conversion, just multiply what Canadians pay per liter by 3.78, to get the American equivalent.
So if gas is $1.10 per liter in Canada, it should be $4.16 per gallon in the United States. But are Americans paying those prices? No.
Average gas prices hover around the $2.53 to $3.11 per gallon range, which translates into 67 to 82 cents per liter, prices that haven't been seen across the Great White North for quite some time. (Gas prices are influenced by more than supply and demand. Find out what determines the price you pay at the pump. See What Determines Gas Prices?)
The Bottom Line
This is just a comparison between Canada and the United States. For many people visiting Canada, the prices in their home country tends to be a lot more expensive, and they consider Canada to be a haven of great deals. As a Canadian, you can save a lot by spending stateside, but don't forget to factor in the extra costs of lodging, travel, food and taxes/duties.