Wednesday, June 23, 2010

The Canadian Effect...

There has always been a lot of discussion about the effect of cross border traffic and trade on Whatcom County's economy. The reality is that global trade can erase borders quickly. Canadian's shop here like nobody's business.  Tonight, my wife and I parked in the first row of Costco's parking lot. To either side of us were BC (British Columbia) license plates.  So I checked the six car group that we were parked in. We were the only Americans!  As we drove down the first row with our usual $180.00 Costco run intact, we counted the BC license plates in the first and second row that we could see: 18!!  If that percentage held up, then nearly 20% of all the Costco shoppers that night were from BC.

With Bellingham ready to sue WA state to repeal a recent ruling that will allow Canadians to shop  in US without paying  sales tax, this type of observation is important.  Canada is changing the tax structure in Ontario and British Columbia, merging the PST and GST to create the "Harmonized Sales Tax" (HST).  The reform is creating anything but harmony in British Columbia. However that works out, the Canadians are here in big numbers and they are now (and always have been) an important part of our economy.  The irony about Canadians being forgiven sales tax in Whatcom County is that such a deal really quadruples their bottom line. They are here to take advantage of a the current favorable exchange rate, cheaper groceries, cheaper gas and now less taxes!

I think I will get to know more  Richmond, Surrey, Burnaby, Abbotsford, and Langley based Canadians. It occurs to me they could buy what I need at a discount and carry it to my house before they go home.  Perhaps in exchange I can lease them my spare room for the night!  Would that be black market activity or just one individual optimizing their profit in the global economy?  Heck, if the Costco backed liquor reform goes through in WA state, I think I would exchange their purchase of my bulk wine for a wonderful night here in Bellingham and a free ticket to a Bells game!

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