From: 1revenuecanada@canada.com   
      
   U.S. duty-free limit for web purchases 40 times higher than Canada's   :CRA   
   SOTW    
      
   New $800 US ceiling draws fire from critics of Canada's $20 Cdn exemption   
      
   The Canadian Press   
      
   Americans are now allowed to spend more than 40 times as much as their   
   northern neighbours without paying duty on products shipped from abroad as a   
   result of a new law.   
      
      
   Last week President Barack Obama signed a bill vastly expanding the duty-free   
   exemption for products imported by mail -- the new $800 US limit quadruples   
   the previous amount, which was already multiple times higher than Canada's $20   
   Cdn exemption.   
      
      
   There's pressure on the Canadian government in the run-up to Prime Minister   
   Justin Trudeau's trip to Washington to narrow that gap, with the pressure   
   coming from pockets of the U.S. government and industry.   
      
      
   One business group has even sought to enlist Canadian customers by circulating   
   an online petition asking people to add their names if they want to stop   
   paying what it calls an unfair duty.   
      
      
   "The gap is unsustainable in our integrated economy," said Maryscott Greenwood   
   of the Canadian American Business Council, which started the petition.   
      
      
   "Canadians we hear from see it as a fundamental issue of fairness. Why should   
   Canadians pay duty on the very same items Americans buy duty free?"   
      
      
   She and a U.S. federal source said American officials are raising the   
   so-called "de minimus" issue with their Canadian counterparts as they prepare   
   for Trudeau's state visit next month.   
      
      
   Canada grappled with issue before   
      
   As the House of Commons finance committee gathered advice for the 2014 budget   
   it received a submission from eBay -- one of the biggest potential winners of   
   a relaxed duty exemption.   
      
      
   The online retailer said Canada's standard was far stricter than most other   
   countries and was due for a revision, given that the $20 amount hadn't been   
   revised since 1985.   
      
      
   It said an increase would boost mail delivery, save Canada Post millions in   
   administrative costs and spare consumers from the sticker shock that   
   occasionally comes with online imports.   
      
      
   The government received similar advice from the Senate finance committee in   
   2013, which recommended a review of the de-minimus threshold.   
      
      
   The committee pointed to claims from the Canadian Association of Importers and   
   Exporters, which said the average fee charged by most courier companies or   
   customs brokers is $25, and that Canadians paid more than twice their American   
   neighbours for a $21    
   online imported product back when the dollar was at par.   
      
      
   In an example of the fee breakdown, a Canadian Press employee based in Ontario   
   recently purchased $208 US worth of clothes online from a New York-based   
   retailer; the shipping was an extra $20 US, then there was a surcharge of $62   
   US meant to cover    
   customs fees and federal and provincial taxes.   
      
      
   Canadian retailers fought policy change   
      
   Retailers in Canada warn a policy change would come with a cost.   
      
      
   The Retail Council of Canada identified several potential negative   
   consequences of a de-minimus increase, and expressed relief that last year's   
   federal budget avoided such a change: "[It] would lead to massive increases in   
   cross-border orders, with the    
   obvious negative consequences for Canadian retailers and their employees," the   
   council said in reaction to the budget.   
      
      
   "Even a seemingly small increase could have a major impact."   
      
      
   It said the federal and provincial governments would suffer a substantial   
   revenue loss. It also argued that such a move would be a disincentive for   
   Canadian companies to hire IT workers and invest in bricks-and-mortar   
   businesses at home.   
      
      
   "[We do] not understand the political or economic calculus that would confer a   
   tax and duty advantage -- as high as 33 per cent in some cases -- on a U.S.   
   warehouse seller who employs few if any people in Canada, at the cost of a   
   Canadian employer who    
   does create jobs and economic activity here."   
      
      
   Greenwood suggested a phase-in period might be a reasonable idea, if there's   
   concern in Canada about introducing the measure amid economic uncertainty.   
   However, she added: "I don't think it's anti-stimulative to lower the costs of   
   goods that Canadians    
   are already buying."   
      
   (c)The Canadian Press, 2016   
      
      
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