An American Town Fueled by Amazon and Canadians
So if you are a town in Washington state, how do you increase your population by 36% and your tax revenue two to five times that of other comparable sized municipalities? Economic magic? Nope; just be located close to the northern border, a major Canadian population center, and be thankful for regulation and tax laws that bring Canadian e-commerce shoppers flooding in for parcel pickup.
Although Amazon hung out a shingle in Canada in 2002, its operations were initially limited by regulations intended to protect Canadian publishing. While Amazon.com expanded into more product categories, Amazon.ca contained only a tiny fraction of its US offerings well into the 2000s. And Canadian retailers were in no rush to match the e-commerce boom of the US: imagine selling to a population the size of California’s, but shipping products across the entire land mass of the United States. (Amazon did not respond to a request for comment.)
As a result, Canada’s armchair shoppers were left to drool over the online offerings of retailers to the south — many of which, if they could be delivered to Canada at all, arrived with an unpredictable bill for shipping, taxes, and / or customs duties. Just as US e-commerce was taking off, the Canadian dollar went through one of its rare periods of strength (even surpassing the US dollar at various points in 2011–2012), making it that much easier for Canadians to shop in US dollars. No wonder Canadians close to the US border soon opted to ship directly to the States: the selection was larger, shipping was cheap or free, and customs duties were often nonexistent (depending on your honesty at the border and on the moods of the border agents).
I’m one of those cross-border e-shoppers. As a dual citizen who has spent many years living on each side of the border, my Blaine mailbox, Trader Joe’s, and Target runs have allowed me to scratch my American retail itch even after settling in Vancouver. My family set up our Blaine mailbox in 2010, and we now make monthly pilgrimages to pick up such elusive goodies as Hanna Andersson’s kid clothes (cheaper to ship to the US), a round of Rent the Runway outfits (won’t ship to Canada), or a new set of drinking glasses (so much more expensive on Amazon.ca, you wouldn’t believe it). These pilgrimages became even more frequent when Ben & Jerry’s stopped distributing New York Super Fudge Chunk in Canada. Once you’ve committed to hitting Blaine for a monthly ice cream restock, you might as well order some shoes, board games, or toilet paper from Amazon.com.
Cross-border shoppers like me have helped drive a major boom here, swelling Blaine’s population from a sleepy 3,770 in 2000 to an almost-bustling 5,075 in 2017. That impact is felt not only in the number of parcel shops in town but also in the volume of business they’re doing. An employee at 24/7 Parcel told me that their customer list has grown from about 8,000 to nearly 40,000 in less than five years.
There are so many parcel shops, in fact, that it’s causing a disturbance. “People are annoyed to see more and more parcel places open when they’d rather see a bakery or grocery store,” said a local diner worker. “We used to have another grocery store, but it closed 20 years ago. We used to have a bakery, but it closed.”
Do read the whole piece, which also references Amazon’s recently announced plans up the road a piece from Blaine in Vancouver, BC, which CTVNews expands on:
Amazon will only occupy about a third of the new development, dubbed The Post, which is scheduled for completion in mid-2022. Developer Quadreal said the project will feature a mix of office and retail space.
The new office will not be Amazon’s much-hyped second North American headquarters, HQ2, whose location hasn’t been announced yet. Toronto is the only Canadian city to make the company’s shortlist.
But Trudeau said the federal government is keen to work with the company as it develops its presence across the country.
“Canadians share your passion for invention and your commitment to excellence, and that’s why we’re so excited to see Amazon growing right here in Vancouver,” he said at Monday’s event.
There are about 1,000 people working at Amazon’s existing Vancouver office, and the company promised a 1,000-worker expansion last fall. The new jobs announced Monday will bring the company’s local workforce up to 5,000 in the coming years.
Dougherty noted Amazon’s Canadian presence has boomed since it opened its first software development site in Vancouver seven years ago with fewer than 30 workers.
We now have teams of developers building critical software for Amazon and our customers all over the world,” he said. “Amazon’s future here in Vancouver is very bright.”
While the new growth of the Vancouver tech hub doesn’t directly affect Blaine, if history tells us anything it is Amazon is not in the habit of standing pat, which the folks in and using Blaire, like Alexandra Samuel details, are all too aware of.
Even habitual cross-border shoppers like me can now hold out hope that Amazon may eventually close the persistent, puzzling, and much-discussed price difference between US and Canadian prices for many items.
But what’s good news for Canadian shoppers could be bad news for Blaine. Just a few years ago, the city manager named Amazon the number one contributor to the city’s sales tax base. And you only need to eyeball the piles of Amazon boxes in the recycling bins of local mailbox shops to know that it still dominates among Canadian shoppers. Now, Canadians can not only get their electronics, books, and housewares from Amazon.ca, but they can also access a comparable range of clothing, shoes, and other goods. So it’s unlikely that they’ll still submit to the hassle of cross-border package pickup.
Improved Amazon.ca shipping isn’t the only threat to Blaine’s e-commerce economy. If Amazon sets up its own lockers in Blaine — as Amazon.com has in more than 50 US cities and Amazon.ca has in Toronto and Vancouver — it’s hard to imagine that more than one or two of Blaine’s mailbox shops will be able to survive.