The introduction of the 2012 federal budget last week has the local business community concerned with changes to duty free shopping.
BC Southern Interior MP Alex Atamanenko said the change was “a gift to American retailers,” that undermines our tax base further.
The new increase means starting June 1, shoppers heading south of the border can now bring back up to $200 (up from $50) worth of product duty free for a 24-hour visit and $800 (up form $400) for a 48-hour visit.
Tom Thomson, executive director of the Nelson and District Chamber of Commerce, said the change is a concern for both the chamber and business community.
“It’s one more thing that a business has to be concerned about now,” he said.
“You’ve got things like tax hikes, water and sewer service fee increases, out of area shopping already with people going to places like Kelowna and elsewhere, the Canadian dollar is at or near par… and now the increase in duty free limits.”
Thomson said businesses in communities near the US border are likely to see quite an impact.
One local business owner feels the government is again putting the retail industry in an even tougher spot.
“We’re already at a disadvantage, but now they’re going to go and tell people to go ahead and spend more money down in the US,” said Dale Donaldson, owner of Mallards Source For Sports in both Nelson and Castlegar.
Donaldson said it’s hard to be competitive when a pair of skates imported to Canada from China has an 18 per cent duty, and the same skate arriving in the US only has three per cent duty.
Mayor John Dooley said businesses are going to find a way to continue to be as competitive as they can
“These challenges have been there for some time,” said Dooley.
“This is a bit of an added dimension to it now, but it’s one of those things that is implemented. It’s not going to change and we’re just going to have to figure out ways to be as competitive as possible.”
Regardless, Donaldson said he thinks it’s going to negatively impact his business.
“It’s not just my business, it’s with a lot of businesses. We’re stuck with these big import duties and yet our government just goes and makes it easier for people to shop down south.
“Every single skate that I bring into the store has to have duty paid on it, but our customers can go to the US and bring back a skate and not pay duty on it. Nobody in their right mind thinks that’s fair, but yet we are stuck with this… I’m not blaming the consumer, it’s the governments fault.”
However, Dooley said businesses still have a lot that can encourage people to shop locally.
“Local businesses add value because they can support the product by standing behind it and delivering warranty on products. They have a lot of assets going for them locally to encourage people to continue to shop as much as possible in the area rather than taking their money elsewhere,” said Dooley.
“Our chamber and business partners are going to continue with an education campaign about the importance of supporting the local economy,” said Thomson.
“If we’re supporting our local businesses, the sustainability of our downtown and our businesses community is going to be much more in tact in the long term.”