Income and Expenditure Accounts Technical Series
Estimates of Cross-border Shopping, 2006 to 2012
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This article presents current-dollar estimates of cross-border shopping (CBS) for the period 2006 to 2012. It defines CBS as the outlays that Canadian households make on goods that are purchased in the United States and then brought back to Canada, as well as goods that are delivered to Canada by post and courier. The value of these cross-border expenditure flows is then compared to total retail spending in the Canadian economy in order to evaluate changes in the intensity of CBS over time. Both annual and seasonally-adjusted quarterly data are reported.
The CBS estimates presented in this article are derived from the Canadian System of Macroeconomic Accounts (CSMA) and their underlying survey and administrative data sources. Using these data, a range of CBS estimates are developed that correspond to different statistical assumptions concerning the extent to which different types of U.S.-based outlays made by Canadian residents, are transported and consumed in Canada, as opposed to consumed in the United States. For instance, different assumptions are used to evaluate the share of same-day travel spending that goes towards goods that Canadian residents bring back to Canada. Similarly, various statistical assumptions are used to evaluate the share of spending on overnight trips on particular categories of goods, such as transportation or spending on recreation and entertainment, which are brought back across the border by Canadian residents. Since there is no consensus on the value of CBS, a range of CBS estimates are reported that correspond to three different scenarios: low, medium and high expenditures. Each scenario is based on a corresponding set of assumptions.
The data reported in this article are intended to inform discussion and analysis of the magnitude of CBS and the extent to which these cross-border expenditures vary with movements in the Canada/United States exchange rate. Since an estimated three-quarter of Canadians live within 100 miles of the United States borderNote 1, many Canadian residents travel to the United States to purchase goods that can be priced lower, from groceries to gas, especially in periods when the Canadian dollar is high. In June of 2012, the Canadian government increased the value of goods that Canadian residents can bring back into the country duty-free and tax-free for trips of more than one day.Note 2 This paper uses international travel and trade data to produce seasonally adjusted estimates of the value of CBS as a national aggregate, and evaluates how these expenditures compare to retail spending in Canada. It develops annual and quarterly estimates of CBS from 2006 to 2012; a period during which the quarterly value of the Canadian dollar fluctuated between 0.803USD (in Q1 2009) to 1.033 USD (in Q2 2011).