Back to Canadian Visa users top contributors to U.S. economy
**Canadian Visa users top contributors to U.S. economy **
April 25, 2011
Allison Cross
Canadians using their VISA cards while in the U.S. spent $9.2 billion dollars last year, an 18 per cent increase from 2009, says a report from the credit card company.
That number makes Canadian VISA cardholders the top contributors to the U.S. tourism economy, a spot they’ve held for the past three years.
In a distant second place are tourists from the United Kingdom, who spent $2.5 billion in 2010, according to the report entitled 2011 Tourism Outlook: USA.
Mexicans, in third place, spent $2 billion.
“Canadian tourists continue to have a positive impact on the U.S. tourism economy. The strong willingness and desire of Canadians to travel across the southern border reinforces the importance of the North American tourism industry to the region’s continued economic growth,” said William M. Sheedy, Group President, The Americas, Visa Inc., in a news release.
Canadians used their Visa cards at ATMs, banks, jewellery stores, bookstores and specialty retail stores, the report says. They also used their Visa cards to pay for lodging.
But the fact that Canadians continue to head south to spend their money when the dollar is near parity is a sign domestic retailers are failing to adjust to the changing market, said Consumers’ Association of Canada president Bruce Cran.
As a result, their prices remain higher and they lose business, he said.
On Monday, the Canadian dollar hovered around $1.05 (U.S.)
Canadians looking for a new car could save thousands of dollars by crossing the border, Cran said.
“We’ve been flirting with parity for four years,” said Cran, who spent the Easter weekend comparing domestic and U.S. prices in Bellingham, Washington. “We’re still nowhere near equality with (U.S. prices). Consumers suffer all the way along.”
Canadian retailers and businesses have attributed the price disparities — sometimes as large as 40 per cent — to the higher cost of doing business in Canada.
It’s not surprising tourism is strong, said Anne Kothawala, the senior vice-president of public affairs for the Retail Council of Canada, and that Canadians want to shop while in the U.S.
That said, the council plans to work with whatever government is elected to re-examine the tariff system in Canada, which can up retail prices by 20 per cent, she said.
“The point is that consumers are not saving any money,” Cran said. “The only thing that matters to consumers is to do a value check. They find out the price in Canada and … in the U.S. And that’s how they decide.”
The length of time Canadians spent in the U.S. could change as a result of rising gas prices over the summer, said retail analyst Maureen Atkinson from J.C. Williams Group in Toronto, which could impact their spending habits.
Last week Statistics Canada said gas prices rose 18.9 per cent in March compared to a year earlier, and they have kept rising since.
On Monday, gas prices in the GTA were at 135.3 cents per litre, according to the website tomorrowsgaspricetoday.com
High gas prices may make the cross-border shopping trip less attractive but might not impact planned vacations, said retail analyst Maureen Atkinson from J.C. Williams Group in Toronto.
“If you’re going for two weeks, it may still be attractive to go there because you’re actually paying for other things, like lodging, with high-value Canadian dollars,” she said.
But the U.S. could further benefit from retailers that have developed online stores catered to foreign markets, Atkinson said.
Buyers don’t have to enter the U.S. to spend their money.
“People are now buying online cross-border,” she said. “A lot of these retailers have set themselves up so that they can do things like tell you how much it will be in your home currency (and) how much it will be when it’s delivered.”
Visa card transactions in the U.S. by country, 2010
Canada $9.2 billion
United Kingdom $2.5 billion
Mexico $2 billion
Brazil $1.9 billion
Japan $1.8 billion
China $1.1 billion
Australia $1.1 billion
France $1 billion
South Korea $824 million
Germany $800 million