Loonie closes in on $1.06 US

The Canadian dollar surged to a 50-year high against the U.S. greenback Wednesday after the U.S. Federal Reserve cut interest rates again, oil prices surged and the Canadian economy showed steady growth.

At the close of trading, the loonie was up 0.93 of a cent to $1.0585 US and traded as high as $1.0593 US.

The Canadian dollar has not been that high since Aug. 21, 1957, according to Bank of Canada data.

That's the same day the loonie reached its post-war high of $1.0614 US.

The loonie reached parity with the U.S. dollar on Sept. 20 and has just kept climbing in the six weeks since.

It's risen by 23 per cent against the U.S. dollar since the start of the year.

The loonie's rise was, in part, simply due to another drop in the worldwide value of the U.S. dollar.

Wednesday afternoon's Federal Reserve rate cut helped to drive down the U.S. dollar against most major currencies.

Also giving some support to the loonie Wednesday were rising oil prices, a relatively good August economic report for Canada, and the promise of $60 billion in tax cuts over the next five years outlined in Tuesday's economic statement.

Oil hits new record high

Canada's dollar is regarded as a commodity-driven currency that is closely tied to the fluctuations in the price of oil. Following the release of the latest U.S. oil inventory figures Wednesday that showed an unexpected fall in supplies, light sweet crude for December delivery surged more than $4 US to hit a record $94.45 US a barrel.

Earlier Wednesday, Statistics Canada reported that the Canadian economy grew by 0.2 per cent in August, surpassing the 0.1 per growth that had been projected by economists.

Market watchers also said the corporate and personal tax cuts contained in Tuesday's economic statement were stimulative and therefore loonie-positive.

FAQs: Cross-border shopping

Considering a cross-border shopping trip but unsure of what you'll save once you figure in duty, taxes, and credit card fees? Here are some answers to common questions from personal exemptions to bringing back artwork to calculating duty charges.

When is the best time to plan my trip?

It's difficult to predict when there will be a backlog of cars waiting to cross the border. If you live close to the border, you can gauge traffic flow by checking the Canada Border Services Agency's website which updates wait times at least once an hour. Other border offices also have webcams showing traffic waits. Make sure you have your identification ready to make crossing into the U.S. as fast as possible. Anecdotally, some people say if you're travelling on the weekend, aim to be at the border in the early morning — about 7 a.m. — to avoid lineups. Traffic at some border checkpoints also tends to be heavy on long weekends.

What's the best way to pay for my purchases in the U.S.?

Many consumers use their credit cards for ease, but buyer beware: a 2.5 per cent fee for out-of-country purchases is applied to credit cards from TD Canada Trust, RBC, Scotiabank, Bank of Montreal and CIBC. If you plan on spending a lot in the U.S. you may want to consider applying for a U.S. credit card or open up a U.S. banking account.

How much can I bring back with me?

The longer your trip, the more you can bring back. If you are going for a week or more, your exemption is $750 Cdn. You can bring back 1.5 litres of wine or 1.14 litres of liquor or 1.14 litres of wine and liquor, or 24 cans or bottles of beer. You may also bring back 200 cigarettes, 50 cigars or cigarillos, 200 grams of manufactured tobacco and 200 tobacco sticks. You can include tobacco and alcoholic beverages for a partial exemption and you can ship some of your items home before you cross the border. Be aware though the day you left for your trip is not counted as part of the week's seven-day calculation.

If you are away for more than 48 hours, you can bring back $400 worth of goods, 1.5 litres of wine or 1.14 litres of liquor or 1.14 litres of wine and liquor, or 24 cans or bottles of beer. You may also bring back 200 cigarettes, 50 cigars or cigarillos, 200 grams of manufactured tobacco and 200 tobacco sticks.

If you are going for more than 24 hours but less than 48 hours, you can bring back $50 Cdn worth of goods without paying duties. You must have the goods with you when you cross the border and you can't include tobacco or alcohol in the exemption.

If you go for less than 24 hours, you do not qualify for any exemption and must pay duties on all of your purchases.

I spent more than my exemption – can I combine my purchases with another person?

You cannot combine your personal exemptions with someone else's. You may make claims on behalf of your children if the goods purchased will be for their use.

What penalties will I face if I don't declare all of my purchases?

If you are caught lying, your purchases may be confiscated and you may have to pay a fine ranging from 25 to 80 per cent to get the goods back. You may also face prosecution and border authorities have the right to seize the car in which you're travelling and issue a fine for its return.

Border agents will seize undeclared tobacco and alcohol permanently.

If you're caught not declaring goods, you will be entered into the Canada Border Services Agency computer system and you may face scrutiny crossing the border on future trips for up to six years. You can appeal seizures within 90 days of the incident.

I want to bring my camera with me on my trip – how can I flag it so customs agents won't suspect it's a new purchase upon my return?

If you have something valuable you want to bring with you on your trip, ask a customs agent for a Y38 form. For goods without serial numbers, CBSA agents will give you a sticker to mark the product.

The CBSA warns that jewelry is often difficult to identify and therefore include on the Y38 form. You may want to consult a jeweller or insurance agent for an appraisal report. Carry a signed and dated photograph of your jewelry or certification documents to prove that you purchased the items in Canada.

What is the NAFTA exemption?

Many goods made in Canada, the U.S. and Mexico are subject only to the GST and applicable sales taxes. That means you can bring them back without paying duty, even if you're only across the border for a few hours.

The list includes books, cellphones, cordless telephone sets, video games, antiques, most types of original art, picks for climbing or mountaineering, one-handed pruners and shears (including poultry shears), juice extractors, hair-removing appliances, hair dryers, electric irons, microwave ovens, bread makers, indoor smokeless barbecues, and CD players.

The complete list is available here.

If I buy a sweater from a U.S. outlet but it was made in China does it qualify for the NAFTA exemption?

No. Clothes must be made in Canada, the U.S. or Mexico to qualify for the NAFTA exemption. If you exceed your personal limit, you will have to pay duty of 18 per cent in addition to provincial and federal sales taxes.

How is duty calculated?

Duty rates vary according to the item and may vary according to materials used. For example, sandals made solely of rubber have a different tariff rate from sandals made of plastic.

What items do I have to declare?

You must declare the following items if you are bringing them back across the border:

• Meat products.
• Dairy products.
• Plants, trees, cut flowers.
• Wood products.
• Fruits and vegetables.
• Pets, animals.
• Feathers and down.
• Seeds and nuts.
• Baby formula.

If you're planning on stocking up on groceries, you must abide by certain limits of 24 eggs, 20 kg of dairy products not worth more than $20 in value, 3 kg of margarine or butter substitutes, 20 kg of meat products, a maximum of one whole turkey or 10 kg of turkey products, maximum of 10 kg of chicken, maximum of 5 kg of edible meats, meat products from cattle, sheep, goat, bison, buffalo and a maximum of 250 g of caviar.

What other goods face special restrictions?

If you're buying a piece of artwork or an antique you should first contact the Department of Canadian Heritage as certain goods deemed cultural objects may require export permits.

Similarly if you plan to buy a firearm or a weapon, you should contact Canada Firearms Centre for authorization. Explosives, ammunition and fireworks must also receive clearance first from Natural Resources Canada.

Before bringing a car into Canada you must contact Transport Canada's Registrar of Imported Vehicles first to ensure it meets import and Canadian standards.

And finally, if you plan on buying a second-hand mattress you must get a certificate showing that it has been cleaned and fumigated.

Loonie hits 47-year high above $1.05 US

Last Updated: Monday, October 29, 2007 | 4:34 PM ET

CBC News

The Canadian dollar's upward charge continued unabated Monday, as it topped $1.05 US to reach its highest level since March 1960.

The loonie was quoted at $1.0501 US in mid-afternoon trading, up more than a full cent from Friday's close.

It later slipped back to close at $1.0496, up 1.03 cents US.

That leaves the Canadian dollar a little more than one cent away from its postwar high of $1.0614 US, set in August 1957.

Rising oil prices and the likelihood of an imminent interest rate cut in the U.S. were giving the loonie more support on Monday.

Crude oil futures topped a record $93 US a barrel in New York trading as an approaching storm prompted Mexico to shut about a fifth of its oil production.

Rising commodity prices tend to boost the value of Canada's currency, as Canada is a net exporter of oil and many other commodities. Gold prices were also surging Monday, up another $4.80 to $792.30 US an ounce — a new 28-year high.

The U.S. dollar fell to a record low against the euro on Monday. On Wednesday, the U.S. Federal Reserve is widely expected to cut its key overnight lending rate by a quarter of a percentage point to 4.50 per cent.

That would equal the Bank of Canada's overnight lending rate and would erase the interest rate differential between Canada and the U.S.

The speed of the loonie's recent rise has been astonishing — up about 10 cents US just since the start of September.

Since the start of the year, the Canadian dollar has appreciated by 22 per cent. Its rise since the 62-cent US depths of early 2002 has been almost 70 per cent.

Nfld. couple claims discrimination by U.S. car dealers

Associated Press

October 20, 2007 at 11:19 AM EDT

BANGOR, Maine — A Canadian couple says they were turned down dozens of times when they tried to buy a new car in the United States and are challenging what they regard as illegal discrimination.

Rhonda Chancey and Allan Coombs, a married couple from Paradise, Nfld., claim that more than 80 New England dealerships, including 61 in Maine, refused their business.

Ms. Chancey and Mr. Coombs filed a discrimination complaint with the Maine Human Rights Commission and plan to sue five car companies.

Similar complaints are planned in New Hampshire and Massachusetts, according to the couple's lawyer, Stephanie Jazlowiecki of Topsham.

Ms. Jazlowiecki said General Motors, Ford, Chrysler, Jeep and Dodge were seeking to maximize profits by not allowing Canadians to take advantage of their strong dollar and buy new cars in the United States, where prices are much lower.

"The dealerships' uniform denial of sales of new vehicles to Canadian citizens is a blatant pattern and practice of nation of origin discrimination," Jazlowiecki told the Bangor Daily News. "Individual dealerships claim they are not allowed or that it is illegal to sell to Canadians. But this would appear to be a patent violation of state and federal anti-discrimination laws, as well as federal anti-competition statutes," she said.

Automakers impose the same rule on Canadian dealerships, barring U.S. residents from buying vehicles when the dollar is particularly strong, Jazlowiecki said. Ms. Chancey and Mr. Coombs visited most of the dealerships and e-mailed some of them in the last two months, Ms. Jazlowiecki said.

In many cases, sales staff only became aware of the manufacturer's rule against selling to Canadians when they tried to go forward with a transaction, the lawyer said. She said dealers were permitted to sell the couple a used vehicle. Savings can be significant. A $40,000 Cadillac Escalade in the United States now fetches about $80,000 in Canada, Ms. Jazlowiecki said.

Last month, consumer advocacy groups in Canada filed a class-action lawsuit in Ontario Superior Court seeking $2-billion in general damages and $100-million in punitive damages from General Motors, Honda, Chrysler and Nissan for allegedly fixing car prices 25 per cent to 35 per cent higher in Canada than in the United States.

Ms. Jazlowiecki said her clients' case could also warrant class-action status. She said she has "been getting calls left and right" from Canadians who also have tried unsuccessfully to purchase cars in the U.S.

Ms. Chancey and Mr. Coombs finally did buy a car, a 2008 Pontiac Torrent. A relative in New Hampshire purchased it for them at a local dealership and then sold it to the couple. Even though they had to pay transfer tax and sales tax twice, the vehicle was still cheaper than it would have been in Canada, Ms. Jazlowiecki said.

Loonie briefly nudges above $1.04 US

Last Updated: Friday, October 26, 2007 | 10:29 AM ET

CBC News

The Canadian dollar kept gaining ground Friday while the U.S. continued to slump to new lows.

The loonie opened the day at $1.0401 US, before pulling back to trade at $1.0386 - up 0.33 a cent from Thursday's close. The loonie has not been in its current range since mid-1974.

So far this year, the loonie has gained almost 20 cents against the U.S. dollar.

The Canadian dollar's postwar high was $1.0614 US, set back on Aug. 21, 1957, prior to the government allowing the dollar to float against the U.S. greenback.

As part of its continued weakness, the U.S. dollar earlier reached a new record low Friday against the euro before regaining some ground.

Economists see the U.S. Federal Reserve moving to cut interest rates next week to boost the economy. The Fed made a surprise cut of one-half of a percentage point in September, but some economists said that has not been enough to stimulate demand in the U.S.

Soaring oil prices were also contributing to the loonie's rise. The price of light, sweet crude oil for December delivery rose $1.40 to settle at $91.86 US per barrel on the New York Mercantile Exchange. Earlier in the day, the price of crude pushed above $92 US.