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Quebec Tire Law Drives Up Vermont Business

(Free Press) Northern Vermont tire dealers are reporting a surge in business from across the border, thanks to a new law in Quebec that mandates winter tires on all passenger vehicles beginning Dec. 15.

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“They’re coming down here for availability and price,” said Sharon Baker, co-owner of J&L Service Center.

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“We started noticing it last year,” said Lynn Wood, of the George S. Wood tire dealership. “There’s a big difference in price.”

Last year, when the Canadian dollar was the strongest it has been in five years vis-À-vis U.S. currency, the price difference was even bigger. Now, the mandatory tire law is enough to induce Quebecois to do some tire shopping in Vermont. They have another week to get their cars outfitted with “pneus d’hiver” or face fines of $200 to $300.

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Vermonters who plan to drive to Montreal on all-season tires can relax. The law doesn’t apply to visitors.

Saturday is when Canadian customers are most likely to show up, Wood said. None of the cars in the lot last Thursday afternoon had Quebec plates. Randy Feeley, sitting in the waiting room as winter tires were put on his Monte Carlo, lives in Highgate – close enough to Canada, but with the added benefit that he only has to pay the Vermont sales tax of 6%.

According to the Canadian Border Information Service, Quebec residents who buy tires here and declare them at customs pay taxes of 12.5% – 5% federal, and 7.5% Quebec. There’s no duty if the tires were manufactured in North America, thanks to the North American Free Trade Agreement. For tires made in Europe or Japan, though, Canada’s customs duty is 7%.

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Data collected by Quebec’s ministry of transportation (ministere des Transport du Quebec) indicate that “90% of passenger vehicles already have snow tires,” according to the ministry’s Web site. Any sales surge would then be coming from the other 10%.

Relatively fewer drivers in urban areas such as Montreal have winter tires, said Mario St. Pierre, a ministry spokesman. A Montreal tire dealer, Francois D’Andre, who owns Pneus Bois St. Pierre, said owners of older vehicles who “weren’t interested in investing in them the last four or five years now don’t have a choice” and are suddenly in the market for winter tires – often in odd, obsolete or hard-to-find sizes.

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“We have old sizes on back order,” D’Andre said. “You can’t find them, or they’re produced in small numbers.”

One rationale for the new law, St. Pierre said, is that vehicles without snow tires are involved in a disproportionate share of winter accidents. He said 30%-40% of all vehicles in winter accidents were found to be lacking snow tires.

Accounts vary on whether there are winter-tire shortages in Quebec that propel customers south.

Shortages are for real, D’Andre said. “Every size is missing.”

Not so, countered Liberato Martelli, a salesman at a Canada Tire outlet in Montreal. “There’s not a shortage,” he said. “The reason people come down there (to Vermont) is that they’re less expensive than up here.”

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In St. Albans, Wood said Canadian customers commonly say that four winter tires cost them $125-$130 less in Vermont than at home.

Still, the Canadian dollar is weaker now than last year, when the price differential was even more in the American dealers’ favor.

A U.S. dollar was worth about 1.25 Canadian dollars on Friday. In the fall of 2007, the Canadian dollar for a time was worth more than the American greenback.

“I would say that last year, with their dollar being stronger, we had a lot more Canadian traffic,” said David Butterfield, manager of Vermont Tire & Service in South Burlington. “If you pulled in here on a Saturday last fall, it looked like Montreal.”

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Even with the shift in the exchange rate, he said, “the phones are ringing, we’re doing some quotes,” but he thinks there are “more shoppers than buyers” from Canada this year. (Tire Review/Akron)

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