Cross Border Shopping

by Mr. Cheap

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I was down in Niagara Falls last weekend and decided to do a little cross border shopping. I’ve always been curious as to what the cost would be to exceed the exemption on alcohol. With this in mind I bought a 12 pack of beer and a 1.75 L bottle of bourbon.

The bourbon (my pal Jim Beam) was available in the U. S. of A. at an unbelievable price of $22. A similar bottle would be at least $40 or $50 at the LCBO. Coming back, I boldly declared to the custom guard that I’d bought a bottle of bourbon and a 12 pack of beer. My first hint that I was in trouble was when his eyes widened a bit and he asked for my receipts. The second hint was when he asked me what I thought the bottle would have cost me at the LCBO. The third hint (and at this point he was done hinting) was when he told me I’d be paying more than that in duty and instructed me to pull over to the left after exiting the custom booth.

All told, they wanted to charge me $36 in duty for the bottle, more than 150% of what it cost me. Part of this was an $18 “LCBO markup”. Outrageous! I decided in the end to abandon the bourbon and carry on with my trip (out of sympathy, the guy inside decided not to charge me for the beer). Truth be told, I think I would have been further ahead to pay the $36, since I this is still cheaper than what the bourbon would have cost at the LCBO. I certainly proved to myself is that the duty on hard liquor is VERY high. Apparently bringing across beer, even if you exceed the exemption, is reasonable, but you’ll lose money trying to bring across the hard stuff. Both customs guards asked me if I’d every paid duty on imported liquor before, and I think what they were implying was that I was a dumb-ass for trying to bring it across and it’s cheaper to just buy it at the local store.

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{ 24 comments… read them below or add one }

1 Four Pillars

Haha, I think you should write it off as research for this post. Lol.

One time I was in the British Virgin Islands and I bought a Cuban cigar to take home as a gift for someone. It was only a couple of bucks, but I had completely forgotten that I had to pass through the US Virgin Islands since that’s where the airport was. Of course I declared it and the custom dude ended up confiscating it – since that one cigar might have ended up traveling from Toronto to parts unknown, USA and started a communist revolution or something, I suppose.

It was interesting though, the guy seemed to think it was a pretty nice cigar and I think his real dilemma was to either; let me have it or keep it for himself. :)

2 Million Dollar Journey

I had a reader email me 2 days ago about the penalties for bringing liquor and cigarettes back to Canada on a 1 day trip. Good timing boys!

3 plonkee

Now I’m grateful for the common market of the EU ;) .

4 WhereDoesAllMyMoneyGo.com

Should’ve downed it in no-man’s land…

5 Nobleea

That is a pretty hefty duty! They said it was an LCBO markup…what would happen if you crossed the border in to a different province?

6 Kyle

Well I think all us responsible adults would agree the best course of action would have been to drink it before you got to the checkpoint. I’ve brought back wine from overseas several times and never paid a duty in the US. I don’t think we have a similar law so long as you don’t bring back more than 2 bottles at a time.

Thanks for the stumble, by the way.

7 Nicolas

Nobleea,

In Quebec, it would have been a SAQ markup. This might be interesting in a province which does not have a Liquor Board of any sort.

Kyle,

Conditions regarding the amount of alcool you can bring back tax free depend on the time you spent abroad. When overseas, the amount of wine is 1500ml (Basically 2 bottles) but I’m note sure of other types of alcool as I only bring back wine.

As for drinking it at the border, just don’t drive afterwards :-)

8 Four Pillars

WDAMMG – excellent suggestion! :)

Keep in mind that it sounds like Cheap just did a day trip. You need to stay for I think 48 hours before you can bring stuff in duty free. If you go for a week then you can bring quite a bit of stuff back.

9 Jesus

This kind of thing happens when people is not inform. When you spend at least 24 hours outside canada the exemption is $50 but but liquor and cigarettes are not allow and if the goods you bring in are worth more than CAN$50 in total, you cannot claim the 24-hour exemption. After 48 hours exemption is $400 and liquor and cigarettes are allow. After 7 days the exemption is $700.
So for a day trip you sould only pay GST on the declared goods.

10 The Personal Finance & Tax Blogger

I had a good laugh on this one but I had to ask my self why you wouldn’t have called the CBA and asked them the question? Hey $22 saved is $22 earned (or something like that).

Oh well, someone above has it right. Write it off as research.

11 Elaine

Yeah… even after a week, the dollar value limit might be $700 but the volume limit on liquor is still a magnum per person. If you have more people coming with you who aren’t buying, you can share it around though.

12 Gates VP

Yeah guys, if there’s one thing I like about living in the US, it’s that the alcohol down is so cheap.

I just bought some bottles of Arbor Mist from the discount section (Discount Alcohol!) for 3.50 each. The grocery store is littered with $4 & $5 bottles!

Truth is, I’d love to see cheaper alcohol, but free healthcare seems like a fair trade.

13 Four Pillars

Gates – maybe the fact that our booze is more expensive is one of the reasons why we have cheaper healthcare?? :)

14 Mr. Cheap

The Personal Finance & Tax Blogger: That would have been the far wiser course of action. It was a “spur of the moment” experiment, not something I really planned out in advance (I couldn’t resist when I saw almost two liters of hooch for $22!).

Kyle: I thought of suggesting that too! The custom guards would probably have all come out to watch the nut try to down that much hard liquor (and maybe all the ambulance for me once I was done).

15 growthinvalue

maybe the fact that our booze is more expensive is one of the reasons why we have cheaper healthcare??

You’re definitely on to something there.

My only experience with “smuggling” booze across the border was when I returned from spending several months in Australia. A long-lost branch of the family that owns a vineyard down there send me home with about a case of wine. I don’t think it was quite 12 bottles, but it was at least 9-10 as I recall.

One bottle cost nearly $100, and the rest were above-average bottles in the $20+ range. So I’d guess the total value of all the bottles was probably $300 if you bought them at a store in Australia.

I was tempted to stuff them in my bag, not declare them and just walk through, but then I realized I didn’t want to risk having them confiscated as they weren’t just about the dollar value — it was “family wine” I was meant to share, so in this case, I felt obligated to pay whatever I had to to get the bottles in.

I told the customs agent I had 10 bottles of wine, and he sent me to the next office. He didn’t recognize any of the names or bottles (it’s an obscure vineyard) so without asking me, I saw him write down that the total value of the goods I was declaring was under $100. As I recall, I had to pay something in the neighbourhood of $20 in duties and he sent me on my way.

And that, friends, is the story of how I got $300 of excellent Shiraz for $20.

All it cost me was a $3000 trip to Australia.

16 Four Pillars

Great story GIV. So you still have any of that wine left??

:)

17 Gates VP

Hey GIV & Cheap;

I think we missed my big wink there ;) The reason we have “free healthcare” is clearly the extra taxes.

Honestly though, having been in the US for a few months, I really appreciate the public programs that we have in Canada. We definitely pay more outright income taxes in Canada, but it’s not like way more, it really amounts to just a few percent more.

If anything, it’s really hard on families who have to pay more in basic insurance and then a whole bunch on “co-pays” and deductibles.

To put this into perspective, my company covers 90% of my healthcare (including dental / vision) and it still costs me $120 / month to insure my wife and I. Families cost ~$200 / month. There’s a $25 co-pay for regular visits, plus a $300 annual deductible per person and only 80% coverage on many services.

So a family of four could be in for $3600 dollars in medical expenses every year without anything really significant. Standard visits, a filling or two a broken leg, bruised wrist, the usual. Even after coverage, pregnancy to maternity costs $5k barring something out of the ordinary, but blowing out your knee on a wicked mctwist could cost you 5k+.

And all of that is with some of the best healthcare coverage around. Imagine how the “average” or “uncovered” Americans feel?

We Canadians complain about high consumer taxes, but I’m paying 9% on goods here (which is more than Alberta). We Canadians complain about expensive alcohol and cigarettes and gas (and they all are). But hey, it’s nice to know that when the worst of life happens you’re not sitting in bed unable to work wondering how you’re going pay for sitting in bed.

Personally, I’d like to see lowered prices on alcohol, but I understand the big burden alcohol & smoking place on our healthcare system. I like knowing that my 17-year old niece can still go to school even though she’s a mother.

And the Americans that I’ve spoken with also like the public healthcare idea. There’s already a slow acceptance that the US is well on its way to publicizing healthcare and slashing some serious overhead on the private system.

18 WoolyWoman

Great experiment Mr. C. Thanks for doing it for all us Canadians :) In general I have always made sure I keep within my limits of allowed duty free liquor, and now I can see this is a good idea! When Mr W and I were returning from the US to get married in Canada we brought back more than our limit, but I guess the nice customs guy was feeling kindly, heard the word “wedding” and just waved us through. The return trip home on our honeymoon was much more rocky (NAFTA visas can be tricky) so all in all it balanced out.

19 telly

Sorry to hear you got busted Cheap! ;)

I think you’re right about the hard liquor thing. I stop for a case of beer pretty regularly from Duty Free on my way home from work and haven’t been asked to pay duty yet. Even if they did, it’d still be cheaper than paying Beer Store prices (plus, I can get Blue Moon :) ).

As far as other stuff goes, I think being a “regular” helps. I don’t end up paying duty very often.

Oh yeah, and it helps if you flirt too. ;)

20 Mr. Cheap

telly: I *tried* flirting, and the guy just looked unimpressed ;-). When you buy something at duty free, you can take it across without paying anything? How do the prices there compare to liquor stores away from the border?

21 guinness416

Wow you’re brave, Cheap. Having had several nasty run ins with them I try not to mess around with customs any more in my old age. As well as being as aggressively humourless as most other uniformed gorillas, they always impress as the gang that were to too dumb to become real cops. Although the airport ones are slightly brighter than the world-class idiots on the land borders.

Gates, your run down is good but you’ve yet to experience the annual change in insurance suppliers. Once every twelve months-ish the two-hour meeting, the new round of limits and copays to learn,the new histories to fill in, and the discovery that your regular doctor doesn’t take the new coverage. Complete nightmare. I don’t miss US “healthcare”.

22 Four Pillars

Guinness, we’re still waiting for a written account of the “wallet throwing incident”. :)

Mike

23 Telly

Cheap, if you haven’t spent the required time in the US than “Duty Free” isn’t necessarily duty free. I do find (and know many others have said the same) that they don’t tend to pull people over for a case of beer, either purchased at a duty free or a liquor / grocery store. Apparently they don’t much mind about wine either but I’ve never tried it.

Duty Free isn’t necessarily cheaper than many of the grocery stores in the US for beer but if you want say, a Canadian Blue as opposed to the US watered-down version, you’re better off stopping at the Duty Free. Also, you can return these bottles to the Beer Store, whereas the US bottles you just have to recycle.

Duty Free case of beer is ~$17 US.

24 Mr. Cheap

Telly: ahh, thanks for the clarification! $17 US is definitely a better deal than beer up here…

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