Canadians Drive South for Lower Prices : Commerce: Higher taxes are pushing more Canadians over the border and into New England for items from chicken to clothing to gasoline.

HIGHGATE SPRINGS, Vt. —  Point me to the mall.

That’s what an increasing number of Canadians are asking Johanne LaBounty, who tends Vermont’s Welcome Center on the United States-Canada border.

“There’s a lot more (shoppers). A lot of them are looking for particular places, furniture stores, motels,” LaBounty said, after pointing out Burlington’s malls to a Toronto couple.

It’s not just lower prices on big-ticket items like electronics and furniture that draw Canadian shoppers, but also prices on everyday items.

For instance, A 7.4-pound package of chicken that goes for $5.31 in a U.S. grocery store can cost up to $17.65 in Canada, according to a price comparison by the tabloid newspaper Good Neighbors, which introduces Quebec shoppers to Vermont goods.

Gasoline prices are significantly lower, too. “You’ve got six cars lined up in a row, and they are just going to Swanton to get gas because it’s about half the price,” said Robert Cyr, a U.S. Customs agent at Highgate Springs. “They just go to the first exit on the Interstate (89), fill up, turn around and go back home.”

Higher taxes also are luring more Canadians over the border to northern New England. A controversial 7% general-services tax was enacted earlier this year, and Quebec levies a 7% provincial tax on goods and services.

Cross-border shopping is not a new phenomenon. Quebec residents have long taken advantage of bargain shopping areas in states like Vermont, Maine and New Hampshire, but merchants say they’re seeing more Canadians this year.

“It’s definitely picked up in the past few months,” said Amy Baker, director of marketing at the Burlington Square Mall, which includes mostly clothing stores. “The perception that we hear from them is they feel they can get (clothing) in the U.S. for 50% less.”

Sharon Wellman, co-manager of Colonial Plaza Antiques in Lebanon, N.H., also has seen more Canadian groups in her store recently.

“A lot of our Canadian customers have been talking about their tax increase and have been intrigued by our sales taxes,” Wellman said. “I don’t think many of them are really aware of the lack of sales tax in New Hampshire until they get here.”

Those attitudes irritate Canadian retailers, which are expected to lose an estimated $11 billion from cross-border shopping this year.

“They’re cutting my throat, not just that of the Canadian government,” said Diane Christie, manager of a woman’s clothing store in Fredericton, the capital of New Brunswick, located 50 miles from Maine.

At some points along the Maine border, crossings into the United States were up as much as 39% during the first six months of 1991.

Conversely, Canadian officials report dramatic increases of Canadians leaving Maine and declaring purchases of U.S. goods. There were 26,508 such declarations in April, May and June, for instance, compared with 8,028 for the same months in 1990.

The story is similar in Vermont. The number of private vehicles crossing at the Highgate checkpoint is up 17% for the last three months, compared to the same period last year.

Vermont merchants have been leaping at the chance to bolster businesses in a soft economy by catering to Canadian shoppers.

University Mall in South Burlington has distributed bilingual brochures this year in Montreal and at hotels and border crossings. The mall also exchanges Canadian money at its customer-service center, according to Julie Nelson Basol, marketing director.

On a larger scale, Emerson Lynn, publisher of the St. Albans, Vt., Messenger, has joined with Robert McConnell, former publisher of the Montreal Gazette, to launch Good Neighbors, a weekly tabloid that publishes English and French editions and is aimed at bringing Quebec shoppers across the border to Vermont.

Lynn called the general-services tax the last straw for price-weary Canadians.

“Prices in Canada for just normal, everyday things are just outrageous, compared to Vermont and northern New York,” Lynn said. “If they can save $1,000 on a computer, they will drive.

“There are three million Quebecers within an hour’s drive. That’s one hell of a market,” he said.

Vermont travel officials targeted more money for Ontario tourists this year, doubling the spending for advertising in Ottawa and Toronto to $85,000, said Donald Lyons, director of Vermont’s travel division.

New Hampshire doled out $150,000 on advertising efforts in Canada and expects to see 400,000 Canadian visitors this year, Chris Jennings, director of New Hampshire’s travel and tourism development office, said.

Ray Pecor, owner of Lake Champlain Ferries, said much of the increase in ferry traffic from Essex, N.Y., to Burlington has come from Canadians, many of whom are from Ontario.

“They’ve saved our summer,” Pecor said, noting that traffic to Burlington is up 15% and half of that traffic is Canadian.

Pecor said anecdotal information tells him more than taxes and prices bring tourists from Ontario to northern New England. Political tension between Quebec and the English-speaking remainder of Canada encourages some to avoid Quebec, he said.

Still, some Canadians, like Lois Van Buskirk of Montreal, see it as a point of national pride to buy Canadian. She says she’ll pay the new tax and enjoy the benefits of the Canadian national health care system.