Borders might be arbitrary but they have significance. Jurisdictions and the law vary from one place to another. Borders come with citizenship rights as well. Benefits accrue to citizens. If you happen to be a citizen of Canada, you have government provide medical care for instance. Just being in Canada does not provide that benefit. So in a way the borders don't matter as much as citizenship, except if you are a Canadian citizen in the U.S. you don't get Canada provided medical care inside our borders. If you eliminated the border which country's rules apply.