Copyright 2012 by John T. Reed
I have since last year invested in Canadian dollars in Canada and urged readers to do the same.
I expected to learn details that would make me and my readers better at going there and transferring money there, but the details are always surprising.
1. Wires cost $45—and take five or six days!? Mailing a check is very cheap, but Canadian mail service is astonishingly slow. If I mail a letter or package to, say, Bellingham, WA, it gets there in a couple or three days. Bellingham is near the Canadian border. But it takes another 18 or 19 days to get to my bank in Vancouver Canada, which is only about ten miles from the U.S. border??
2. Some readers report getting hassled by U.S. and/or Canadian border officials. One said better to go by mass transit than car because they often search you car which is time-consuming. Also, if there is something in there you forgot about that is a cross-border no no, you could be in big trouble.
3. For Canada, you have to go in person to open a bank account and, in all countries, in person to put anything in or take anything out of a safe deposit box.
WSJ article on people using U.S. airports near the Canadian border rather than flying across the border
On 6/8/1, a reader forwarded to me an article from the WSJ about Canadians driving to U.S. airports rather than flying out of Canadian airports because it costs about double to use a Canadian airport for US-Canada travel. That article is at http://online.wsj.com/article_email/SB10001424052702303506404577448523616941712-lMyQjAxMTAyMDAwNzEwNDcyWj.html?mod=wsj_valetleft_email. A version of this article appeared June 8, 2012, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Hopping the Border to Hop a Flight.
It applies to both directions, saying it is cheaper to fly to a U.S. airport near Canada, then rent a car and drive across the border to get into Canada. So that suggests a car is better for cost but worse for customs/immigration hassles.
I would add that car is not the only alternative to using Canadian airports. You can also walk or use train, ferry, or bus, usually after flying to a U.S. airport near the Canadian border. Also, don’t forget the U.S. has two borders with Canada: one along the northern continental U.S. and one between Canada and Alaska ( there is no significant Canadian city on the Alaska border).
The reason Canadian airports are expensive is they are private and get no federal government subsidies. U.S. airports are federally run and subsidized.
From an economic standpoint, I favor the Canadian approach. But until the U.S. wises up—or goes federally bankrupt—check out the alternatives to flying into or out of Canada.
Within the U.S., we generally assume that to go more than 50 to 100 miles, you will probably find train or plane better. And you fly to the airport closest to your destination. The Journal article says, when it comes to US-Canada travel, you’d better double check the alternative travel costs, particularly of crossing the border itself on the ground or water.
I did an article for my hardcopy real estate investment newsletter Real Estate Investor’s Monthly on the real estate aspects of living near the Canadian border. One would be the ability to walk to your Canadian bank branch in some cases. That would dramatically lower your transaction costs regarding opening accounts in new banks and visiting your safe deposit box. In general, borders between countries with very different laws and/or economic conditions are very interesting places.
At present, the U.S. and Canada are not very different, the airport fees notwithstanding, but I am moving money to Canada and urging my readers to do the same because I expect the differences between the two countries may be night and day in the next five years—mainly hyperinflation/price controls/capital controls/rationing in the U.S.
As I said, I expected there would be a lot of little nuances and tricks to putting money in other countries. There are and I am learning them one-by-one from experience, research, and readers reports. Let’s become experts on the most efficient ways to move money out of U.S. dollars into better managed foreign currencies and banks.
I just did a quick check. Round-trip results:
Amtrak Seattle to Vancouver, Canada (actually a bus) $80
Air Canada SFO to YVR $359
Virgin America SFO to SEA $264
Value of your time
The value of your time may be high and important. In that case, travel other than by air is expensive in terms of your time. Car, ferry, and bus are more time-consuming. Walking, say from Detroit to Windsor, Ontario over the Ambassador Bridge is cheap and predictable, other than the time waiting to get through the border officials.
Researching this I discovered that a DUI is considered a felony in Canada and foreign felons, including DUI convicts, are not allowed to enter Canada. From the perspective of Canada, Americans are foreign. In other words, if you have a DUI on your record, you may not be allowed to enter Canada, period. Not my problem. I have never had a drink of alcohol in my life.
Do not try to take mace to Canada.
If you take a minor child to Canada, and your spouse is not with you, you may need o notarized statement from your spouse authorizing you to take the kid into Canada. Really.
I also discovered that crossing the Canada border by car takes about an hour normally, without your being thoroughly searched. There are even near-border radio stations that give wait times many times per hour like traffic reports in the U.S.
Here is an email about this article [and my comments]:
We have exchanged emails before. I have some notes on my Canadian bank setup.
I travel to Vancouver for business.
My last trip I walked into a BMO downtown Vancouver branch and opened an account. I used your earlier emails as my guide.
1. In my case, where I opened the account become my home branch. Now when I deposit I must postal mail it there. So pick the branch carefully. This would mean a main branch in a major city. You want one not likely to close.
2. I went to the lobby ATM beforehand and took out $100 Canadian to open my account with. I don't think I even needed to do that. But since they charge a service fee ($2.95/mo) I used that to cover it. [I just handed them a check drawn on my US account. I put in a lot more than $100 and would not have taken such a trip for $100.]
3. I was not asked and did not supply my SSN. [I was not asked for that in Australia, Canada, or New Zealand. In Canada, my banker said there are no such concerns. In Australia and New Zealand the government simply takes 10% of the interest as your tax There is no subsequent tax return about your income in the country.]
4. You MUST add online banking on the spot. I walked out with a chip encoded debit card. It took 45 minutes total. [They just did it without my even asking.]
5. I did not get Canadian checks. My account earns .25%.
6. I was not able to add a beneficiary to my account yet. I thought I could later do that online. I advise people ask the rep at opening about this. [I added my wife later by her visiting another BMO branch. I do not know what a beneficary is.]
7. Try to obtain the business card of the person who sets up your account. I put all my stuff in one folder and put that in my carry on.
8. Wires were expensive so I did a test deposit with a US drawn check. I postal mailed a check to BC from the East Coast. I used an .83 cent stamp. It took about 10 days to clear. There was a small fee for the exchange. Much better than wires if you have the time. Fedex would work well. [FedEx gets the check there faster, costs about the same as a wire, but then they have to collect the check before it is good funds in Canada.]
9. So far the BMO account is working out fine. Service was better than a US bank. Emails replied to decently. [Ditto]
10. When I cross the border via car, I say business as reason and state the purpose as "budget review meetings". Never state you are working there or working on a project.
11. Do not bring tools or other give aways. I buy stuff and leave it at our offices.
12. It can be more stringent coming back. My bags were opened. Doesn't bother me, just sayin… [Next time I go will be a day trip. No baggage other than a carry-on.]
13. If you want to do the Seattle Amtrak train to BC, you really have to book early. Same day its sells out.
14. Canada employs lots of road cameras. You will get tagged for aggressive driving.