South Dundas - April 3, 2012 - One of the more interesting aspects of the Federal Budget last week
was the increase of the personal exceptions on travel to the United
States. More perplexing was Stormont, Dundas and South Glengarry MP
Guy Lauzon's comments that this was one of the suggestions that came
from our area that had the good fortune of being part of the budget.
HUH? While I did not attend the "pre-budget" meetings that Lauzon held
this year, I heard that they were mostly attended by business people.
I don't know many business people who'd applaud more exemptions to
encourage cross-border shopping.
Is the cross-border exemption really an issue though for border
communities? On the surface, it looks that way. Once the budget
passes, a 24-hour visit to the US will allow you to bring back $200
per person. Stay 48-hours and it's $800 per person. That's a lot of
shopping. However, in the Cornwall and SD&G area, one can drive to
Plattsburgh, NY or Watertown, NY comfortably and return same day.
Driving to Burlington Vermont is a bit more of a stretch but can be
done. From that wide swath of area you have the northern Adirondacks,
Malone, Massena, Potsdam and Ogdensburg. Retail stores from Old Navy
to Target, Kohls to TJ-Maxx, K-Mart to Walmart. An average family can
drive to Malone to go skiing, grab a bite to eat, shop at Walmart,
stock up on groceries at Price Chopper and be home the same day. No
exemptions given and HST is paid, only when the CBSA collects it on
re-entry, which is not all the time.
So how do businesses here compete against cheaper prices in the US and
easy day trips? In order to compete fairly, there needs to be a level
playing field between the countries and with NAFTA, good luck with
that. Sales tax is lower, wages are lower, prices are lower, all in
the United States. Agriculture in the US is subsidized at a much
higher rate than in Canada, and marketing control boards on this side
of the border don't help with prices. Add to that a vastly weakened US
dollar that artificially inflates the value of the Loonie, it's hard
to compete. Also, despite survey after survey asking consumers what
stores people want to shop at in the area, those businesses are not
locating themselves in Cornwall.
What is the solution to the retail woes in this area? Sell the
location. Sell the savings in gas for not having to drive. Offer
service. Offer the selection that will keep people here. When
Brockville, which is half the size of Cornwall, has a Future Shop and
a Super Walmart, is growing and thriving, despite the economy, you
have to ask and answer those questions first. Then you have to act on
it, and Cornwall sadly has not.
Blaming cross-border shopping isn't going to fix the retail woes here,
although it plays well in the media. There will always be some bargain
shoppers, but if consumers had the selection and products they wanted,
there'd be less traffic crossing the St. Lawrence River.