prancingbull.com

Living in a state that borders Canada, it is not uncommon to see many Canadian license plates as you drive around. Lately though, it seems like I have seen an increasing amount of Canadian license plates. Last week I was shopping at a local outlet mall and I noticed that about every other car had a Canadian license plate.

There are a couple of factors that contribute to the increase in Canadian visitors to our state.

1. Their dollar has reached parity with ours, and we sell many things for cheaper prices than they would find in their homeland.
2. Our state has much lower sales taxes, thus lowering the purchase price.
3. Not all American brands are sold in Canada.

I am not the only person who has noticed this. In a recent article in the Bellingham Herald by Dave Gallagher (Bellingham is about 20 miles from the Canadian border), they state that “we have the Canadians to thank for strong retail sales numbers during the holiday shopping season.” In college I worked at a restaurant that was near the mall (2004-2007), and observed each weekend the large number of Canadians that would come in to eat after they were done shopping for the day. In December of 2006, the exchange rate hovered around $1.15 CAD per $1 USD. Back then there were a lot of Canadian shoppers. Today the two currencies are as close to equal as you could possibly get. Today’s prices are about a 13% decrease from what they were a year and a half ago for them.

The closer a town is to the border, the greater the increase in total sales were. “While the state average increase (in sales) was just 2.7 percent, Bellingham was up 7.4 percent. The border towns of Blaine (up 12 percent), Lynden (up 12.8 percent) and Sumas (up 18.2 percent) saw a big boost in sales during the holiday season.” For those not familiar with the area of Northwest Washington, the towns of Blaine, Lynden and Sumas are not very large at all, and are definitely not considered “shopping destinations.” I feel that a major reason that sales in those towns rose so much was because Canadians were driving across the border to fill up on the cheaper gas. According to the article, “The price of gas in Canada is around $1.19 a liter, or $4.50 a gallon.” While Whatcom county typically has the highest gas prices in the state, these prices are at least $.50/gallon cheaper than our neighbors to the north pay.

Any theories on how low the dollar will go against the Canadian dollar this year? My guess is $1 USD = $.85 CAD. This is not based on any intense calculation of any sort. This is just a hunch.

Here is a thumbnail of what Whatcom county looks like so that you can see the relationship between these border towns and Canada. This image was obtained from dickmartin.com.