Canadian "border retailers," i.e. those who are in close proximity to the U.S., face unique challenges when it comes to retail merchandising, especially as consumers are increasingly lured south of the border to shop.

In addition to many tax-free shopping areas on the U.S.-Canada border, a new increase in the duty-free limit worries both retailers and economists, The Vancouver Sun reports. In fact, a recent report from the Bank of Montreal found the business lost to the U.S. could be hurting the Canadian economy.

New legislation on the duty-free limits as outlined by March's budget states that for visitors who stay longer than 24 hours in the U.S. the duty-free limit will increase from $50 to $200. For those who remain in the country longer than 48 hours, the cap rises to $800.

"A culmination of factors is likely to unleash a wave of Canadians cross-border shopping this summer in numbers not seen in two decades," he said, according to the paper. "There are already more than 50 million visits to the U.S. by Canadian residents annually … (and) those numbers are poised to swell when Ottawa increases the duty-and-tax free limits on June 1."

However, for U.S. retailers, the increase could be a boon for business, encouraging shoppers to buy more and boosting the U.S. economy.