I’ve never lived in one of Ontario’s "border towns," but I’ve certainly held off on certain purchases until my next trip to the U.S. to take advantage of lower prices or products not available here in Canada. As evidenced in a recent Senate report, plenty of goods sell for less down south, and, regardless of the reason for that, budget-minded Canadians know where to get a deal. And, of course, the advent of online shopping makes the ease and opportunity to cross-border shop a 24/7 standing temptation, province-wide.

But what about those who live 10 minutes from the border? What if you could extract the kind of savings you got on that cute sweater or a brand-new alternator on your weekly grocery bill? Apparently, many Ontarians do just that -- heading over to the U.S. to fill up their fridge, their gas tank, and to sit down for a dinner for two with drinks for about half the price in Ontario. With the dollar hovering happily near parity, none of this is news, especially to those who live close to a major crossing. A business person in Sault Ste. Marie recently told me that in the past five years at least five gas stations on the Ontario side of the border closed, while the two stations just across in Michigan renovated and expanded. That’s anecdotal, but for retailers it’s increasingly real.

Indeed, last spring the Bank of Montreal’s Doug Porter argued that cross-border shopping could be costing the Canadian economy about $20 billion a year (read the full report). That’s a big chunk of change, and it's felt on Main Street and in the federal and provincial treasuries. And those estimates didn’t include the federal government’s move to raise duty-free limits, quadrupling the overnight limit from $50 to $200, and the over 48-hour limit to $800. As Sarnia businessman Grev Martin told the Sarnia Observer in June 2012, "If anybody had any reservations going over and buying a big-screen TV because it’s going to be a hassle, they don’t have to worry about that anymore."

Plenty of people see all this as a good thing that will finally force "greedy" retailers to respond to competition and quit their price gouging. While neither the Retail Council of Canada nor the Senate committee see retailer mark-up as the key part of this story, enough consumers seem to point in that direction.

Regardless of causes at this point, the current situation sets up almost a classic collective action problem experiment: individually, it’s obviously a real benefit to take advantage of lower prices, especially for those close to the border. But it’s equally obvious that if everybody did it, we’d have serious problems. So, in the absence of any big initiatives coming from government to level the playing field, what’s a consumer to do?

We’re going to do a segment on all this in the next few weeks, and we’d like to hear what you think to help shape the conversation. Start by answering the poll question, below, then please feel free to tell us what you think is happening and what should be done by who going forward.

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