During the heady, humid days of summer, 1977, when the Canadian dollar was worth 95 cents, American border towns existed only to serve Canadian bargain hunters and British Columbians went wild over the price of soup in the town of Bellingham, Washington, a fast 40-mile smuggle south
from Vancouver. “They were lining up for grocery carts,” a Bellingham Chamber of Commerce executive remembers. Now those days are over. The Queen’s green visage is worth a paltry 85 cents, and so many fewer Canadians are journeying to Bellingham and every other American border town that sales have tumbled by as much as 20 per cent.
With only a month until Christmas, Americans are falling over themselves to win back traditional Canadian buyers while Canadians woo Yankee greenbacks amid a barrage of countervailing television, radio and newspaper advertisements promising spoils for the unpatriotic.
Thanks to a 15-per-cent premium on the U.S. dollar and a recently enacted customs regulation that permits Americans to import more duty-free Canadian merchandise, Canadians retain the upper hand, regaling day-tripping Yankees with frantic fests like Moncton’s recent “Mainly for Maine Days.” Desperate merchants in Maine and Wash-
ington and some 600 firms in New England (where Canadians spent $78 million in 1976) retaliated last month by taking anemic Canadian dollars at par.
The tactic seems to have worked. Business at larger companies like Grayline Tours in Seattle is up, and the Bellingham Holiday Inn’s weekend occupancy rate has jumped from 30 per cent to full in a month. Attentive firms in California, Oregon and Florida may follow suit. But the idea horrifies smallbusiness owners like clothing-store owner Jim Kelley of Calais, Maine. Canadians bring them a third of their business, which is “way down” despite generous discounts and prices that are still competitive after exchange rates, duties and taxes raise them 45 per cent.
Unfortunately, it could be worse— and is in Detroit. There, some hotels on the city’s notorious Eight-Mile strip refuse Canadian money completely as ex-
change rates flutter from nothing (at some bookstores and for buying Detroit Symphony Orchestra tickets) to 20 per cent at the odd McDonald’s. While commuters going the other way pay Canadian income tax on U.S. salaries boosted as much as a fifth by the exchange rate, U.S. residents working in Canada these days take an automatic salary cut of 20 per cent. Then, for people like CBC Program Director Don West, it’s 30 miles home to Michigan’s Bloomfield Hills, worrying all the way about making ends meet. “Every few days,” West says, “I go through this mental exercise: is it cheaper to buy gas in the U.S. for 62.9 cents an American gallon at a dollar discount of 16.5 cents, or an Imperial gallon in Windsor at 91.9 cents Canadian? I’m forced to put every cent I earn in the bank in the desperate hope it will change.”
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