eBay pushes to increase limit on tax-free purchases from U.S.

CTV National News: Clash over online shopping Canadian businesses may soon have a tougher time competing with online giants because of possible duty cost changes. Todd Battis explains.

Online auction and retail giant eBay is asking a federal finance board to consider increasing the limit on tax-free purchases that Canadians pay when they buy items from the United States.

Under current regulations, Canadian shoppers are supposed to pay tax and duty fees for items over $20 coming across the border.

The $20 limit was introduced in 1985 and hasn’t changed since.

The e-commerce company is hoping to push that price to around $80 to $100, according to eBay Canada managing director Andrea Stairs.

“Both small businesses and consumers as well as government would win if we went to a more commercially reasonable level,” said Stairs, who presented the case to the Federal Finance Committee on Wednesday.

The online retailer has pushed for the change for years and has said that the change would increase mail delivery, reduce Canada Post administrative costs and offer a tax break to online shoppers.

eBay Canada is a member of the Retail Council of Canada, a national board that says that online merchandisers have been pressuring for an even higher duty-free ceiling of $200.

Such a change would be a bombshell for small Canadian businesses and would force them to compete with multinational digital retailers shipping products over the border, according to one council director.

“U.S. behemoths that are not paying taxes here in Canada, they are not employing people here in Canada, that would absolutely come in and pound the retail sector in Canada into submission,” said RCC Atlantic coordinator Jim Cormier.

If approved, the increased tax cap would be applied to provinces across the country and could form a system in which shoppers could potentially find the same products in the U.S. for a cheaper price, depending on the strength of the Canadian dollar.

With files from CTV Atlantic and The Canadian Press