With the Canadian dollar reaching parity, the lead story in Sunday’s Ottawa Citizen is that many Canadians are crossing the border in search of discounts in clothing, books and electronics. One couple featured in the story mentioned that they spent $120 and estimated that they saved $60 by shopping at Target. It is questionable how much they really saved after accounting for the three hour round trip from Ottawa to Watertown in New York state, customs duties (if any) and New York sales tax (almost 8%).

Just out of curiosity, I wanted to see how much you could really save by driving to the US, by comparing prices on popular electronics goods on Best Buy’s online store in Canada and the United States. I am ignoring the cost and time in driving to the U.S., any local sales taxes but adding a 5% customs duty as most electronics gadgets are manufactured in Asia. Also, I’ll assume that 1 CAD = 1 USD and there is no cost in exchanging the currency. These assumptions may not be accurate depending on where you live, so your total savings (if any) could be much less.

Here’s how prices in U.S. compare to those in Canada:

  1. Sharp Aquos 52″ LCD (LC52D64U): 11% more.
  2. Samsung 40″ LCD (LNT4071): 2% less.
  3. XBox 360 Halo 3 Special Edition: 7% less.
  4. Sony PlayStation 3, 60 GB: 5% less.
  5. Apple 80 GB iPod Classic Video: 6% less.
  6. Apple 8 GB iPod Nano: 5% less.
  7. Nikon D40x Digital SLR Camera with lens: 9% less.
  8. Canon PowerShot Digital ELPH (SD850IS): 15% less.
  9. Canon MiniDV Camcorder (ZR800): 11% less.
  10. Sony DVD Camcorder (HDR-UX7): 3% less.

Based on a very unscientific sample set, it seems to me that not much savings can be had in buying electronics south of the border. While gadgets are, in general, lower priced they are not significantly cheaper.

This article has 30 comments

  1. Hi CC,

    I did just do some cross border shopping (on Saturday) and I wanted to share the story. About a month ago, I was looking for a flatware chest to give as a wedding gift. After shopping around here in Ottawa, my wife and I decided on a Reed and Barton chest (the classic model) and we were going to purchase it for $399CDN. Of course, I came home before buying it and did a little research online. I found out that the same chest was $199US south of the border. The next day I called a few places in the States that carried the Reed and Barton brand and I found a place willing to sell it to us for $162.50US. This weekend, I went down and purchased two chests. The total came to $348.78US. The duty on the chests was $45.54CDN. In total, I got 2 chests for the price of one, and saved myself the taxes.

  2. I agree with you on the savings cross border, usually it’s not worth the trouble unless it’s a big price item, OR something that’s not obtainable here, aka iPhone

    I know people who have brought back 8GB iPhones from Buffalo, even with 8.75% NY Tax, 14% Tax at custom, you can still profit a bit, plus to say “I own an iPhone” (I am able to say it as of today, YEAH)

    Second item worth the drive, will be cars, especially luxury cars. For example, new 2008 Benz C-class starts at $32000 USD in US, compared to $41000 CAD in Canada. I will definitely consider buying my next car in US.

    Note: spread is not as big on cheaper car, such as 2008 Ford Escape ($18000 USD vs $23000 CAD during employee sale)

  3. Canadian Capitalist

    Hi Philip: That’s huge savings and definitely worth the drive. I am a bit surprised that you didn’t get charged the sales tax. Even if you were, the savings are still huge.

  4. I did get charged sales tax…actually 3 levels. When I bought the items in NY, I was charged the NY State tax. When I crossed the border, Customs determined the value of my goods (in CDN dollars) and charged me GST and PST on that amount. There were no other duties on the flatware boxes since they were manufactured in the US and were exempt goods (I’m not sure that’s the right term) under the Canada-US free trade agreement.
    I did have a typo in my first post, the cost was as follows:
    161.50/each = $323.00
    NY State tax = $ 25.84
    Total cost (US)$348.84
    When I went to Customs, they gave the items a Value for Duty of $325.29. I was charged $19.52 GST and $26.02 PST for a total of $45.54.
    I still came out well ahead.
    Granted, this is all because Reed and Barton set different MSRP rates on their products in Canada and in the US.

    I think you talked about researching goods before you purchase them. In this case, I couldn’t see myself paying $400 for a wood box to hold spoons. I decided to put off the purchase and look around for the best price. One neat thing was that the Reed and Barton site had all the amounts in Canadian and US prices. They clearly show the discrepancy in pricing ($199US vs $399CDN) for the same chest. When I called Reed and Barton, they were willing to sell me the chest over the phone for the $199US price, minus 15%, plus shipping. I still would’ve ended up ahead (monetarily) ordering it directly from Reed and Barton. It seems odd to me that they would do that to their Canadian retailers.

    The other point I have to make was that I was going to be close to the States anyway and the store I picked the items up was only a 7 minute drive from the border. I left my hotel at 3pm on Saturday, drove across the border (into the States), stopped at the store, came back over the bridge (and paid a $2.75CDN toll), went through Customs, and was back in my hotel room by 4:45pm. If I wasn’t so close, I would’ve had Reed and Barton ship it directly to me as the savings wouldn’t be worth the 6 hour drive (round trip) from my home.

    I did read the article you mentioned and it seemed some of the savings were a stretch…the prices weren’t compared to anything concrete and were based on what the couple thought they would’ve saved (no comparison shopping was actually done). The writer used the couples quote to determine the savings without backing up their claims. Regardless, in the story the couple agreed their time was worth $10/hr (the savings they had / the number of hours they spent to attain the savings). They were married with no kids (one on the way). I can’t say I would drive that far for that value ($10/hr) but I have kids and my time with them is worth a little more.

  5. I read an article last week (don’t have the link) and they mentioned that because electronics are so competitive in Canada that the exchange rate changes should get reflected in the prices right away whereas other types of goods (like the all important flatware chest category) might have prices that are out of date.

    Point is that there probably are deals to be had – just not in electronics.

    Mike

  6. I have saved a ton of money buying from the US while purchasing audio/video equipment. Most of the connectors, wires, and in wall speakers were almost half the price I would have paid at my local specialty audio store for the exact same product. My personal estimate was a $2000 savings on my purchases over the last few months, and that includes paying import duties. I was able to shop around for products using the internet.

    You really have to know exactly what you want before you buy it from the US because returns are a real pain. The risk in my opinion are worth the rewards. A dollar saved is a dollar fifty earned.

  7. Anyone else tired of paying 19.99 CDN for a book that has been listed for $14.99 US?

  8. bestselling books on amazon.com are about 20% cheaper then amazon.ca or chapters.ca.

    and how about saving 9 grand on a $30K car

  9. If you’re going to the States for a longer journey, it makes sense to do some shopping because you’ll have a larger “allowance” of goods you can bring home duty-free. We drove to Vermont for a day this summer to buy a few things that we couldn’t find here, and we happened to find a good bottle of wine while we were there. That ended up being a very expensive bottle when we crossed the border and paid duty and taxes. It was a very different story a few weeks later when we spent a week in the States on vacation; we came back with over $250 in purchased goods, including another bottle of wine, and didn’t have to pay a cent at the border even though we declared everything.

    Many people simply don’t declare stuff at the border, but that’s risky. I’ve only had my car searched once coming back into Canada but it was a remarkably thorough search; the agent looked at the labels on all our clothes (including the ones we were wearing), searched under the seats, glove compartment, spare tire well, etc., and if I had hidden anything it surely would have been found.

  10. Three years ago I found the wedding dress I wanted at a shop in Windsor, ON for $1,600 CDN. Seemed rather expensive to me. I got the model name, called around to about 10 stores in Michigan and purchased the same dress for $700 US.

    The kind European lady in her little shop agreed to write up a receipt for me for $350. 🙂

    A few weeks ago, I bought a low flow toilet at Lowe’s for $33, seat included. The cheapest I could find in Windsor was $80 (no seat, wax ring or bolts).

    The price difference between countries for the same product may not be that extreme, but the options (more brands, more stores) make the research (and likely, purchase) worth it imo.

  11. CC. Every single one of your examples is something electronic which is probably manufactured in Asia and shipped to North America. I wouldn’t expect there to be much difference in prices in those goods, so I am surprised at one of your items posting an 11% savings.

    For me, my own personal “candy store” as one might call it, comes from sporting goods retailers, musical instruments and booze. Although National Sports in Canada has dramatically increased their selection and inventory to acceptable levels, it used to always be the case when I went shopping that I simply couldn’t find what I was looking for in the Canadian retailers (football and baseball equipment), so it was more a matter of selection for me. I’m not a professional musician, so I can’t write off the cost of musical instruments on my taxes – but in the USA, I’ve noticed that most high quality US-made acoustic guitars, just for example, are usually about 20% less than at a retailer in Canada. Booze just speaks for itself – most of the $$$ we pay for booze in Canada is taxes – depending upon what you buy, it can easily be 50% of the price in the USA.

  12. Also, I buy a case of beer (Canadian brands brewed in Canada) at the duty-free every few weeks for $18US after work. Though I’ve only been in the US for 9 hrs or so, I always declare and have never been asked to pay duty. Even if I did (40% on alcohol I believe), it would still be cheaper than paying $40 at The Beer Store.

  13. Canadian Capitalist

    A couple of weeks ago, a story in the Ottawa Citizen pointed out that Ontarians pay through the nose for the LCBO and Beer Store monopolies. It said that Ottawa residents flock to a corner store in Hull to get savings of as much as 50% on beer. So, it’s not surprising that bargains can be found in beer and spirits in the U.S.

    A colleague at work shops at Home Depot / Lowe’s across the border and mentions that some items sell for 50% cheaper and sometimes customs stationed in Quebec do not charge the PST.

  14. http://www.wheels.ca/article/31673 – article about importing US cars to here.

  15. I am a beer drinker, but a 24 is simply too heavy to carry on the plane. If I were driving across the border, I would buy cheap American beer (like Genessee Cream Ale) at roughly $8 USD or so a 24 (compared to about $25 for Lakeport at the LCBO), so at par, it’s roughly 1/3 the price! But I rarely drive across the border anymore, so I would usually buy a bottle of some high end bourbon or something like that while I’m down visiting friends or family. Those tend to be roughly 50% of the price at the LCBO – with our currency at par.

    Like I said earlier, most of the cost of booze in Canada is due to taxes. I’m sure another good portion is from the monopoly that is LCBO & Brewer’s Retail. So, even when the Canadian dollar was at $ 0.65, some types of booze were still less expensive to buy in the USA.

  16. Oh by the way, in the USA, I found that booze is usually much less expensive in some no-name discount liquor barn than at the duty-free shop. I am assuming that comes from the higher operating cost of the duty-free shop renting valuable real estate at an airport versus some inexpensive hole-in-the-wall liquor store in some run down neighbourhood. The difference is often quite large – sometimes in the order of about 20%!

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  18. The D40 may be enough of a consumer product that Best Buy’s prices are pretty close, plus Best Buy is not necessarily the cheapest place to shop. When I was shopping for camera gear I found differences of over 50%. For example, a Vivitar 285HV speedlight is $190 in Canada, and less than $90 in the US. A Nikon D80 ($999 US at Best Buy) can be had for $875 from B&H, compared to $1100 in Canada.

    I ended up buying the camera locally because if anything goes wrong it’s a lot easier to drive a couple blocks than to ship something to New York, but for accessories there’s just no point buying in Canada. Even with duty and shipping it’s still significantly cheaper. I got an almost-new flashmeter for $160US on eBay, compared to $320 from a Canadian mailorder place.

  19. Canadian Capitalist

    Aleks: You’re right about photography equipment. Even with the dollar at 67 cents, I found that it was far cheaper to mail order from B&H. I’ll bet that lenses are still far cheaper in the US.

  20. I was in the states about a month back and many of the shops/ restaurants were offering to accept CAD on par. But for the most part nothing was any cheaper except books.

    I’ve heard that many electronics will not honour a warranty for something purchased in the USA and owned in Canada.

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  23. Another Example

    ok could any one tell me , I see a Panasonic 50″ Plasma Tv it sells for $ 2400 CDN, you can get it for $1600 US , not even an hours drive away.

    now being its made in Probably Japan or Korea, any idea of the Tax and more so duty charges ?

    I know one thing would be a concern would be warranty

    Thanks I just want to be informed thats a huge difference for the exact same product

    John

  24. when i shop, i first compare via the internet. Example, a digital sony camera. the top of the line, touchscreen (t200) is $100 cheaper in the US $399, and on the canadian site, it;s $499; when my friend was in the States, he went to the sony store and it was cheaper!!! So, doing your homework first on the name brands pays off!

  25. Canadian Capitalist

    AE:Yeah, $800 is enough of a difference to justify a drive to the States. The duty would be 5%, I think.

    Tony: Hopefully, prices would come down in Canada as well. It is nice to see that the new PlayStation 3 will be priced the same in Canada as is in the US. When more people shop across the border, retailers will get the message in a hurry.

  26. Hey great article. I totally agree that you have to consider whether each item is worth it. Some cases yes and some no. I have seen huge savings on tires. Check out the link for some price comparisons.

    http://borderdeals.ca/2007/11/25/best-cross-border-shopping-buys-discount-tires/

  27. Samsung LNT4071 is NOT 2% less. It’s $1518.98 in USA and $2499.99 in Canada. That’s $981 less in the United States not to mention the 14% GST/PST (Ontario) tax. Get your facts straight, Canadians are getting ripped off royally.

  28. Canadian Capitalist

    Dean: LNT4071 is selling today for is $2399.99 in the US and $2499.99 in Canada, according to Best Buy websites. Of course, there are far more discounts and offers to be had in the US due to intense competition whereas we have two chains owned by the same company in Canada. Like many commenters have said, you should compare prices on the product you are looking for and decide if it is worth driving across the border.

  29. e-commerce is getting more and more popular. this creates the need of having good tools to help shoppers make right decisions while buying online. reizit.com is a place where shoppers can recommend or bury a product, share experience and discuss shopping deals.

  30. i don’t understand how can the prices differ so much from wisconsin to canada…