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Region likely to benefit from new duty-free limits Canadian rules on U.S. sales eased

A change in the Canadian federal budget may be as good as pennies from heaven for Western New York retailers.

Beginning Friday, Canadian citizens who stay in the United States for more than 24 hours will be able to bring $200 in merchandise back across the border, duty free. That's up from the current limit of just $50 in goods.

Canadian visitors staying more than 48 hours can bring back $800 in merchandise without paying additional taxes. The old rule limited purchases to $400 for those staying one week and $750 for those staying longer.

"My thoughts are that it's going to be a very positive thing," said Mary Whelan, general manager at Fashion Outlets of Niagara Falls. "Our Canadian customers are very much aware of it, and I've heard nothing but positive things. They're very excited."

When asked if the new, higher limits would encourage her to spend more during her visits, Patricia Fournier let out a laugh.

"Yes, of course!" she said.

The Ontario shopper said she already makes day trips to Western New York roughly twice a month to shop, but she will begin spending more while she's here once the tariff limits increase.

Regular day-tripper Karl Rohrmoser, of Burlington, said the new rules will more than likely entice him to stay overnight.

"If I have to buy something really sharp, like a suit, I would probably spend the night to take advantage of the cap," Rohrmoser said. "I usually do my heavy-duty damage [shopping] when I'm here on vacation. The new allowance will make a difference."

Ingrid Carrera, of St. Catherines, said she makes the 40-minute drive to Western New York to shop nearly every weekend. She said she keeps a running total in the back of her mind, taking care not to spend too much beyond the duty-free limit.

Come June, she said, she'll be able to spend freely.

Lisette Klimek, of St. Catherines, said that shopping is one of her favorite pastimes and that she comes to the United States several times a month to do it.

"In Canada, all the stores have the same clothes, so everyone ends up wearing the same thing," she said. "You have to come here to get the variety. It's cheaper, too."

Indeed, a report put out earlier this month by BMO Capital Markets found that a set basket of goods cost roughly 14 percent more in Canada than in the United States.

The higher duty-free limits coupled with the U.S.'s lower prices will act as a "magnetic pull from the south," leading to "a notable upswing of Canadians cross-border shopping this summer, in numbers not seen in two decades," according to the report.

The most marked price difference is in running shoes, showing an average price gap of 37 percent in the BMO analysis.

The report lists the sample Canadian sneaker price at $145.99, compared with the U.S. price of $105.99 for the same shoe. Prices here are cheaper, but they are still higher than the current duty-free limits.

Sellers of sneakers in the Buffalo Niagara region are already familiar with the higher prices of Canadian footwear and believe the new tariff rules will increase local sales.

"People are reluctant to buy shoes and pay the duty on them," said Jim Monezynski, assistant manager at Laux Sporting Goods in Amherst's Boulevard Mall. "I think we'll end up selling a lot more cleats, a lot more football and soccer shoes."

Monezynski expects sales of Buffalo Bills jerseys, another popular item with Canadian shoppers, to increase as well. With a price tag of about $100, they fall outside the current duty-free limit, but they'll be tax-free come June. That's good news for stores such as Laux, especially since the Bills are about to finalize a new five-year agreement to play football games in Toronto.

Last year, more than 12.6 million people drove across the Canadian border via Buffalo and Niagara Falls. Another 729,403 Canadians entered the United States by bus.

In addition to the retailers and restaurants that expect to benefit from more Canadian visits and higher spending, hoteliers are expected to benefit from the new limits.

They will reap the benefits of Canadians turning day trips into long weekends to take advantage of the higher tariff limit on purchases made over stays longer than 48 hours.

"We've been working with the motorcoach companies on ways they can help passengers extend their stay," said Julie Clark, marketing director for the Fashion Outlets of Niagara Falls. "I think it's going to have a very positive effect for this area."