Duty-free shopping limits raised under new trade agreement

There’s only one way to shop at Tara Davis Studio Boutique: in person.

“You get a completely different experience when you shop in-store,” said Tara Davis.

She’s run her Exchange District business for eight years, and said she’s not concerned with Winnipeggers turning to the web to shop, even with a new trade deal giving Canadian’s more reason to buy online.

“People want to not only just shop local, but support local businesses in general, so for me those are the clients I work with and those are the ones I go after,” said Davis.

Under the NAFTA replacement, which is called USMCA, Canadians shopping with U.S. retailers can spend more before import duty is tacked on.

It’s known as the de minimis threshold, which for Canada used to mean that any goods worth more than $20 would be subject to import duties. The amount has now been increased to $150. 

“This is good for consumers because you can buy more online and you’ll pay sort of these less extra taxes,” said business journalist Bryan Borzykowski.

Canada’s de minimis threshold hasn’t increased since 1985, and was one of the lowest in the world.

Former foreign affairs minister Lloyd Axworthy said Canadian stores have already been up against online retailers, many of which are based in the United States, and this could be troublesome. 

“I think there will be a loss of the cash flow and the fact that we see Sears disappearing and other well established retail chains, I think that does create a problem,” said Axworthy. 

Meanwhile, Borzykowski said local retailers shouldn’t be too concerned. 

“I don’t think it’s going to be a big deal because people have been online shopping for a longtime now before the new deal took place, and they will continue to shop online after,” said Borzykowski. “I’m not sure they are paying as much attention to the duty on this.”

Davis doesn’t think she’ll be hit by the new deal. 

During the ongoing NAFTA talks, Davis said she actually saw a boost in American shoppers. 

“Many of them were saying that they wanted to come to Canada, and specifically to this shop, because they had heard that everything is made in Canada, and they were wanting to support the Canadian economy over their own economy.”

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