Ottawa faces renewed calls to let Canadians spend more without paying duty

With its maiden budget just days away, the new Liberal government is facing pressure to expand how much Canadians can spend on products shipped or mailed from abroad without paying duty.

OTTAWA — With its maiden budget just days away, the new Liberal government is facing pressure to expand how much Canadians can spend on products shipped or mailed from abroad without paying duty.

Last week, a U.S. senator urged at least one Trudeau cabinet minister in Washington to bump up Canada’s duty-exemption limit from its current level of $20, a business source told The Canadian Press on Wednesday.

The Liberals’ election victory last fall — and next Tuesday’s release of its first budget — have led to a renewed push on the issue by American officials and industry.

U.S. Sen. Jeanne Shaheen raised the subject directly with Economic Development Minister Navdeep Bains while he was in Washington as part of the delegation that accompanied Prime Minister Justin Trudeau during his official visit, said the source who was not authorized to discuss the matter publicly.

The source added that the subject was brought up again “in a big way” Tuesday in the American capital during a Canada-U.S. interparliamentary meeting.

In addition to the lobbying efforts in Washington, eBay Canada released new numbers on the issue Wednesday to The Canadian Press. The figures suggest that increasing the duty-free exemption limit would benefit Canada’s small- and medium-sized businesses, consumers, as well as Ottawa’s bottom line.

For example, on goods valued between $20 and $80, the federal government spends roughly $160 million to collect only about $40 million in revenue, said eBay Canada managing director Andrea Stairs.

The company, which hired law firm Sidley Austin to run the economic models, is hoping Ottawa will raise the limit — also referred to as the de minimis threshold — next week.

“Certainly, I would love to see it in budget 2016,” Stairs said in an interview Wednesday.

“I think that this government is looking to lean into parts of the economy that are working well and trade by small and medium businesses is certainly a bright spot.”

Stairs said eBay has been working internationally on de minimis issues and helped encourage the U.S. government to raise its threshold. Last month, U.S. President Barack Obama signed a bill that quadrupled the American duty-free exemption limit to US$800 — now more than 40 times the Canadian level.

For Canada, she said the numbers show that lifting the limit would help consumers and businesses save cash on duties, taxes and brokerage fees. The figures, to be released in a full report later this year, also examine the impacts of hiking the threshold to $80, $100 and $200.

“It’s one of a few changes that the government could make that is actually a win-win-win,” Stairs said.

In the lead-up to the budget, the Liberal government is also hearing opposition to any such changes.

Karl Littler, a vice-president for the Retail Council of Canada, said increasing the limit would put Canadian businesses at a tax disadvantage between five and 15 per cent in favour of foreign competitors, such as American companies.

“That makes it exceedingly difficult for Canadian entities to compete,” said Littler, who noted that retail employs more Canadians than any industry.

“Right now it’s a lobby driven by some fairly large entities that would like to sell more goods from outside into Canada or would like to get paid to be the freight carriers.”

Littler considers the de minimis issue a top concern for the Retail Council and it featured prominently in the group’s pre-budget submission to the government.

He said he hasn’t heard anything that suggests changes to the limit will be included in the budget. Littler added that even musings about an adjustment by the government in the budget would generate a strong reaction from retailers across the country.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

3 active COVID-19 cases remain in Red Deer

47 new cases Tuesday in Alberta, still 620 active cases

Severe thunderstorm watch in place for Red Deer

Environment Canada issued the watch Tuesday afternoon.

Red Deer RCMP seek public assistance after hit and run with pedestrian

A hit-and-run collision sent a pedestrian to hospital Monday evening in Red… Continue reading

COVID-19 milestones recounted in Red Deer museum display

Citizens have been adapting to the ‘new normal’ in innovative ways

Central Alberta artist depicts those lazy, hazy (virus-free) days of summer at Sylvan Lake

David More’s Shore Figures exhibit is showing at the Red Deer museum

QUIZ: A celebration of dogs

These are the dog days of summer. How much do you know about dogs?

Charges dropped against N.S. woman injured during arrest in racial profiling case

Charges dropped against N.S. woman injured during arrest in racial profiling case

Conservative stalwart Scott Reid backing newcomer Leslyn Lewis for leadership

Conservative stalwart Scott Reid backing newcomer Leslyn Lewis for leadership

Planned class-action lawsuit alleges illegal strip-searches of federal prisoners

Planned class-action lawsuit alleges illegal strip-searches of federal prisoners

Two protesters get conditional discharge after Alberta turkey farm demonstration

Two protesters get conditional discharge after Alberta turkey farm demonstration

Daisies bring a sunny look to the garden

Daisies bring a sunny look to the garden

IIHF encouraged by NHL’s potential return to Olympics in ‘22

IIHF encouraged by NHL’s potential return to Olympics in ‘22

Raptors coach Nick Nurse knows attention to family will be key for players

Raptors coach Nick Nurse knows attention to family will be key for players

NFL, NFLPA still haven’t resolved all protocol for camps

NFL, NFLPA still haven’t resolved all protocol for camps

Most Read