Flying to the U.S.? Get ready to pay $5.50 tax
Published Tuesday, October 25, 2011 11:44AM EDT
Canadian travellers heading to the United States will once again have to pay a $5.50 levy when they enter the country by air or sea.
The return of the tax comes as Washington signs a new free trade deal with Colombia, which has a provision that does not allow tariff exemptions for travellers from the Caribbean, Mexico and Canada.
The trade deal was passed last Friday, leaving Canadian officials like International Trade Minister Ed Fast disappointed.
"Raising taxes at the border just raises costs on consumers," Fast said in a statement. "Canadian officials have raised concerns about the removal of this exemption at the highest level. We will continue to raise Canada's concerns with U.S. lawmakers."
It wasn't immediately clear when the charge will go into effect, but the administration of U.S. President Barack Obama has been analyzing its 2012 budget shortfalls.
The charge exemption was brought into effect in 1997 under provisions of the North American Free Trade Agreement.
But with the U.S. facing a national debt of $14 trillion, Washington is looking for ways to cut costs and increase revenues.
Still, critics say that the new tax shows that the Conservative government isn't doing enough to represent Canada's interests in Washington.
"When it comes to defending the interests of Canadians, Conservatives have shown they cannot be trusted," said Robert Chisholm, who is the NDP's international trade critic.
Around 7 million Canadians fly to the U.S. annually, with thousands arriving by boat aboard ferries along the coasts and in the Great Lake region.
Prime Minister Stephen Harper publicly assailed the tariff when the spectre of it was raised earlier this year.
However, as the surcharge makes its comeback, the NDP critic suggested that Harper's Conservatives have been sleeping on the job.
"I would suggest they're not paying attention ... they're not negotiating hard, they're not standing up for Canadians," he told The Canadian Press.
U.S. Ambassador David Jacobson urged Canadians not to take the fee to heart, and he defended the Obama administration's decision to resurrect it.
"The elimination of the exemption was necessitated by the budget situation in my country," he said.
"It is paid by American citizens and foreign nationals alike just like Canadian citizens and non-Canadian citizens pay fees at Canadian airports .... This fee is not in any way an action against Canada and will not have any effect on the progress of the ongoing discussions surrounding the Beyond the Border initiative."
The initiative in which Jacobson referred is a new, sweeping agreement on border security that will result in Canada paying $1 billion for new facilities.
The tariff comes as Canada continues to lobby against U.S. protectionism in Washington, part of $447 billion in jobs legislation in the capital.
In a speech last week in Ottawa, Jacobson said any new "Buy American" provisions in Washington would not affect the Canadian economy compared to the ongoing economic malaise south of the border.
Jacobson added that the best way to help the Canadian economy would be to ensure that growth resumes in the U.S.