A Rising U.S. Dollar Discourages Canadian Shopping Tourism

The steep rise of the U.S. dollar has discouraged some Canadian visitors from crossing the border. Specifically, Canadians who traveled often to Michigan for retail and entertainment purposes are no longer commuting. Though trade between the two nations remains strong, the savings incentive promoting personal travel to the United States has diminished.

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The Decline

According to the Canadian Tourism Commission, the number of Ontario residents visiting the United States via vehicle declined this past December by 13.4 percent. Canadians who once came to the U.S. for gasoline, among other commodities, are making do without leaving their country.

Due to the rise, it’s more expensive for Canadians to spend time in the United States, yet cheaper for Americans to visit Canada. This past week, the exchange rate fell to $1.2818 Canadian dollars per U.S. dollar—the lowest rate since 2009, according to Bloomberg Business.

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The Expected Impact

Though it’s difficult to pinpoint where specific impacts may occur, businesses in the Upper Peninsula may absorb the brunt of the blow. According to the Michigan Department of Transportation, the number of non-commuter passenger cars crossing the International Bridge at Sault Ste. Marie fell 17.9 percent this past December.  

However, a variety of shopping centers in southeast Michigan haven’t yet reported a decline in Canadian shoppers. Specifically, the Auburn Hills retail destination Great Lakes Crossing Outlets has not experienced a loss, with 10 percent of their shoppers still coming over from Canada. Sales tax is still much cheaper in Michigan versus Ontario—6 percent instead of 13 percent.

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