Trump & NAFTA – Raising Canada’s de minimis

In its relentless determination to keep retail prices higher for Canadians by severely restricting competition and consumer choice, the federal government actually appears willing to use taxpayers’ own dollars against them.

No other sensible conclusion can be drawn from a recent report by the auditor general of Canada.

The report, delivered in the dry, uninflected jargon of the professional auditors who wrote it, basically concludes the government knows very well that for shipments from abroad valued at less than $200, it is spending more money collecting duties and taxes on shipments than those duties and taxes are worth.

Put more simply, the government is spending more than two dollars to collect one.

The AG’s report describes a chaotic system in which customs enforcement at the border is utterly inconsistent. (Sean Kilpatrick/Canadian Press)

This point was already made in a study issued by the C.D. Howe Institute last year, but apparently, the government has reached more or less the same conclusion itself.

The AG’s report further describes a chaotic system in which customs enforcement at the border is utterly inconsistent. Canada Border Services Agency administers nearly 90 acts, regulations and international agreements, unevenly imposing a web of rules many shippers (and customers) appear unable to comprehend. This all acts as a retardant to smooth cross-border trade and commerce, making life more expensive for both Canadian consumers and Canadian businesses that import goods from the United States.

Shocking? Hardly. It’s actually the essence of the Canadian system: the consuming public is treated like a herd of lactating Holsteins, ready for milking and reserved exclusively for the enrichment of Canadian merchants. Competition is not welcome.

Canada’s de minimis

The AG’s report devoted an entire section to the de minimis level – the threshold under which any package sails through the system, with neither tax nor duty applied.

Until last year, the American government’s de minimis limit was $200 US. In March of 2016, U.S. President Barack Obama quadrupled it, meaning that any American ordering from a Canadian retailer (or from anywhere else in the world), can expect any package worth less than $800 US to arrive promptly, without impedance at the border or an additional bill for hundreds of dollars in duties, taxes and fees.

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