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Dough, Canada

Over Canada's Remembrance Day holiday weekend in early November, Chris Stroud's family of four made its first trip to Grand Forks in 12 years. "It's because our dollar is good," the Winnipeg resident said. "We've wanted to come here for a long time.

Over Canada's Remembrance Day holiday weekend in early November, Chris Stroud's family of four made its first trip to Grand Forks in 12 years.

"It's because our dollar is good," the Winnipeg resident said.

"We've wanted to come here for a long time. The tipping point was when our dollar reached par in September."

It's now better than par, returning $1.10 in U.S. funds at its peak this fall. Since their dollar averaged about 80 cents before its meteoric rise the past few months, Canadians are traveling to the States in increasing numbers to capitalize.

Statistics suggest there are others, such as Stroud, who are newly traveling to take advantage of the increased bang for the Canadian buck.

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Grand Forks' lodging occupancy rate for September was 73 percent, a 12 percent increase over 2006. The yearly occupancy rate shows a 7.5 percent hike. Those percentage increases come despite Canad Inn adding 200 rooms to the marketplace.

A better portrayal of the rise in overnight stays may be the city's 3 percent motel tax. Through September, it raised $552,000, a 21.7 percent increase during the first nine months of 2006.

According to a Greater Grand Forks Convention and Visitors Bureau survey conducted this fall, 36 percent of the motel visitors are from Canada, a higher percentage than North Dakotans and Minnesotans combined. October vehicle crossings at the Pembina/Emerson port were 35 percent higher than a year ago, according to both Canadian and U.S. custom officials.

Eighteen percent of CVB survey respondents said their express purpose for the visit was to shop.

"Eighteen percent may not sound like much, but the national average is 3 percent," said Julie Rygg, CVB executive director.

Stroud is among the majority of Canadians who travel here for a combination of shopping and a vacation. "We'll be back in the spring at least we will if our dollar is still good," Stroud said.

Plastic bags,

packed SUVs

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Loretta Tetrault packed lightly for the family's three-day, two-night stay in Grand Forks.

"The only clothes we brought down were what we were wearing," she said. "We came down with empty suitcases and are leaving with the suitcases full of purchases."

Even then, it was a tight fit. Loretta and husband Travis accompanied by daughters Leena, 2, and Sophie, 10 months, and family friend, Yuko Sawa estimated they spent $2,000 on shopping alone. That total didn't include the hotel bill ($425) and meals.

"We upgraded our hotel room because we figured we could spend more on it with all of our other savings," Loretta said.

The $2,000 was about twice what they normally spend on their twice-a-year trips from Winnipeg, she said.

The increased buying power was the reason their Toyota Sienna literally was jammed with now-full suitcases, plus plastic shopping bags tucked in every nook. The Sienna literally was packed head-to-toe, as it sported new tires from Sears.

"The tires are $180 plus tax in Manitoba and $120 plus tax here. Plus the tax is lower here," Travis said.

Manitobans pay 13 percent in sales taxes, compared with 7 percent in Grand Forks, a tax they can get refunded with the proper paperwork. Even without the refund, the tax difference is significant, Travis said.

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Another incentive for shopping in the U.S. came in March. That's when the rules doubled the amount to $400 per person that was duty-free with a 48-hour stay. For a same-day trip, the duty-free amount is $50.

So, with $2,000 in spending, the party of five still was within its limit. But they still had stops at Happy Harry's for alcohol and to a grocery store for multiple items not available in Winnipeg. Travis said his vodka brand costs $9 for 40 ounces in Grand Forks and $35 back home.

Duty-free rules allow one 40-ounce bottle of alcohol or one case of beer per person. "But the kids don't qualify because they're underage," Loretta said. "Believe me I asked."

Waiting for

bargains

Canadians returning home on some three-day weekends have experienced border waits as long as two hours. Those long waits have caused some to take alternate routes, said Mary Delaquis, Pembina port director.

The Neche, N.D., port had a 45 percent increase in October crossings from a year ago, while the port at Lancaster, Minn., had a 29 percent hike.

"The biggest change I've seen is that there was only one car at the Canadian duty-free shop when we came down here," said Donna Foster of Winnipeg. "No one wanted to lose their place in line."

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But even annoying delays are worth the savings, travelers say, because their trips are about more than just the higher-valued dollar, the sales tax gap and increased duty-free limits. It's also about better prices better dollar or no better dollar and more variety.

CBC Radio conducted price checks on 28 items, ranging from contact lens solution to a Maytag range. Grand Forks was less expensive than Winnipeg on 25 of the 28 items, and the other three were the same, radio host Marcy Markusa said. The average savings was 15 percent.

"What has everyone talking is that they come (to Grand Forks), and everything is cheaper," she said. "Everything.

"People want to be loyal to Manitoba. But more and more, people are asking why they have been paying more and why should they pay more."

Gerry Chudrick, Winnipeg, is one of them. "The retailers have not adjusted and brought their prices down," he said. "We can't understand why it's so much higher."

For examples of bargains, Loretta Tetrault cited her family's new tires, a digital camera that cost $1,500 in Winnipeg and $700 in Grand Forks, and facial makeup that is half the price. For variety, she mentioned the wider flavors of cereal, Kool-Aid and potato chips.

Michael Kaul came down for a ceiling product for his remodeling project. "It's not available up there and, with the dollar, it was a no-brainer to come down," he said.

Kaul and Jennifer Lundin were among a group of 30 co-workers who came down together. Lundin talked of the joy of not using a calculator to compute the true cost of purchases.

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"I usually have guilt when I spend a lot of money shopping," she said. "Now, I don't have that guilt because I'm getting more for my dollar."

Retailers see hike

Canadian shopper traffic to Grand Forks grew as its dollar grew.

Brian Leach, owner of The Golf Center in Columbia Mall, first noticed the increase in Canadian business in mid-summer. "By late summer, it was really dramatic," he said.

And October was beyond dramatic. His gross sales for the month were a 114 percent increase over a year earlier.

"Not only are there more Canadian shoppers, but they're making more substantial purchases," he said.

Scott Kilde, owner of Classic Jewelers in the mall, agreed about the bigger purchases. "Before, some would spend $100 to $200, but now they're even putting merchandise on layaway because they know they'll be back," he said.

"I used to be reluctant to do layaway for Canadian residents. Now, I embrace it."

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Kilde said the sales process is different, too. "When their dollar was at 70 or 80 cents, they'd always ask for a better deal," he said. "Since their dollar got better, there's no squabbling over the price."

Kilde said he will advertise in Canada for a sale between Thanksgiving and Christmas. Conlin's Furniture also is advertising north of the border for its northern tier stores in Grand Forks, Minot and Williston in North Dakota and Great Falls and Kalispell in Montana, all of which have experienced sales spikes.

"Our Canadian customers tell us that they are saving anywhere from 20 to 40 percent," said John Knutson, Conlin's manager in Grand Forks.

For October, Canadians accounted for about 4 percent of their business. "That may not sound like much, but before the last couple of months, our Canadian business was virtually zero," Knutson said.

He said the number of Canadian inquiries about inventory and prices the past month is unprecedented, even though they need to transport their furniture home.

"This is just starting to get momentum," he said. "If they're happy, they'll tell their friends, and they'll come here, too. It's just like what we did years ago when we could buy so much with our dollar in Winnipeg."

Hal Gershman, president of the Grand Forks City Council, has seen the impact in his businesses, Happy Harry's bottle shop and the Road King Inn.

Happy Harry's has seen a "double-digit" increase in business, and the motel has seen a steady increase in Canadian traffic since April. Gershman said Canad Inn's arrival has further raised awareness north of the border and "helped all hotels."

Used car

sales boom

Jay Holm's Valley Auto Sales sold 12 used vehicles to Canadians in October. That compares with "nearly nothing" in normal times, Holm said.

"It's been even more explosive since October," he said. "Recently, I've received more traffic from Canadians than locals. On (Nov.10), I had 12 Canadians looking at one time, and I don't have a big lot."

He has extended his hours to accommodate those who are driving down after their work day.

"We're having trouble keeping our inventory up," Holm said. "I just ordered a truckload of cars, and I basically repeated what I've been selling to Canadians because we anticipate a lot more when word spreads.

"Buyers are telling me that they're saving several thousand dollars."

Used vehicles

Statistics at the Emerson, Man., port of entry show that Holm isn't alone. In October, 1,110 used vehicles defined as cars, trucks, boats, motorcycles, snowmobiles and ATVs came across the border after being purchased in the U.S., according to the Canada Border Services Agency.

Loretta Nyhus, spokesperson for Canada's equivalent of customs, said it was Emerson's biggest one-month jump in imported vehicles ever.

Jeff Severson, sales manager of Forks Equipment in Grand Forks, said he's sold lawn and garden equipment to Canadians, which he has never done before. And they're showing vigorous interest in used farm equipment. Based on the volume of pricing calls, the John Deere dealership expects at least 15 percent of his used equipment sales to be to Canadians.

"I think they're taking our price quotes on new equipment and beating up their dealers with them," Severson said. "But once we get our used inventory up, we expect sales on that."

He said price differences are dramatic. "On a self-propelled sprayer that we sell for $250,000, we are $50,000 cheaper," he said. "On a compact utility tractor that costs $20,000 here, we're $4,000 cheaper. On some used tractors, we're $10,000 to $15,000 cheaper."

The Canadian dollar's improvement has benefited the retail industry and the overall Grand Forks economy.

The CVB survey showed that a couple's average spending was $283 per day and $777 per trip. Forty-five percent of that amount was on shopping, 27 percent on lodging, 18 percent on meals and 10 percent for miscellaneous reasons.

The city has collected $14.8 million this year in city sales tax revenues, an 8.6 percent increase over 2006. This November's collection was the city's second-highest in history, topped only by the February 2007 amount.

Since city collections from the state run roughly two months behind when the taxes are paid by consumers, that means February's record amount was paid during the prime Christmas shopping season. The November collections were from sales in September, which isn't close to December as a heavy retail month under normal circumstances.

"This is very significant because the sales tax helps offset property taxes," Grand Forks Finance Director John Schmisek said. "To get 8.6 percent growth is excellent since we used 4.5 percent growth for budgeting purposes."

Without the city sales tax, Schmisek said, the owner of a $100,000 home in Grand Forks would have to pay another $162 in property taxes.

The spending also helps lower property taxes in another way, according to Ralph Kingsbury, a local economist who writes a business column for the Herald. "If these visitors are creating an increase in business, it means these businesses can remain here and pay property taxes," he said. "Without the Canadian business, there would be fewer buildings in town, and the property taxes collected would be less."

Successful businesses also pay more income taxes to the state, reducing individual obligations.

"Theoretically, especially at such low levels of unemployment that we're experiencing now, business increases also should drive up wages, especially at the lower end of wages," Kingsbury said.

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