Vancouver Sun columnist Barbara Yaffe has an outstanding piece on the front page today, putting a human face on the issue of cross-border shopping. Yaffe tells the story of a Lower Mainland business owner who opened a second shop in Blaine, Washington, to corral B.C. shoppers there. From the Sun:

Six months ago, the owner of After Five Fashion stores opened his first retail outlet in Blaine’s Birch Bay Square. The mall is owned by Canadian investors and is just 10 minutes from the Pacific Border Crossing.

Now, 70 per cent of business at that outlet is from Canadian customers.

The phenomenon may come to be known as “Blaine drain.”

“Now we don’t look like the bad guy-retailer in Canada, charging more than a store in the U.S.,” says Chenkis, who is planning a shopping website. “We explain [to customers], for example, why a prom dress costs more in Canada ... and if they want to save money they can go to our Blaine store.

“Though most customers still do buy with us in Canada, some will make the trip to save a few dollars, while getting gas, milk and eggs.”

The Vancouver store, at Oakridge Centre mall, offers alteration services to the Blaine outlet’s customers.

The retailer says his prices in Canada are higher because he must pay an 18-per-cent duty on the clothing he brings in to stock his Canadian stores.

This is no surprise. In May, during our annual Gas Tax Honesty Day, I outlined the problem of crossborder shopping in this op/ed:

Amazingly, when you take out gas taxes, convert gallons into litres, and American into Canadian currency, the cost of a litre of gas in Surrey, B.C., and Blaine, WA, is virtually identical: in early May, it was 98.9 cents in Surrey, 95 cents in Blaine.

Yet, Canadians going south and filling up a 50 litre tank pay $18.95 less than they would here. All but a twoonie of those savings are due to gas taxes. In fact, if no gas taxes existed on either side of the border, that tank would cost $49.45 in Canada and $47.50 in the U.S. – and we would rarely hear of anyone crossing the border to fill up.

The lower the taxes, the cheaper the gas.

B.C. gas taxes are pushing more and more Canadians south. Last year, Canadians made 15.4 million trips into Whatcom County, the most since 1997. Those numbers don’t include crossings at Point Roberts or east of Abbotsford.

For the definitive explanation on tariffs, check out this Mark Milke gem.