OTTAWA — In a move that's straining already stressed Canada-U.S. relations, Canadians travelling by air or boat to the United States face a new $5.50 surcharge being implemented by the Obama administration.
As the Harper and Obama governments battle over Buy American rules in the U.S. jobs bill and other irritants, the two trading partners are now at odds over the surcharge on Canadians, Mexicans and others travelling stateside.
A provision in the U.S.-Colombia free-trade deal officially signed into law Friday by President Barack Obama will see the Americans repeal an exemption that has excluded travellers from Canada, Mexico and the Caribbean from paying the customs user fee to enter the United States by air or sea.
The "passenger inspection" levy — which first surfaced early this year — would apply to all commercial air and marine travellers from Canada, Mexico and Caribbean nations, and would be added on to the cost of an airplane or boat ticket.
The countries have long been exempt from the fee, but the cash-strapped U.S. government — which is facing a $1-trillion deficit — expects to collect about $110 million annually from the tax.
The new levy, which takes effect within two weeks, will not apply to Canadians crossing the border into the U.S. in their vehicles. Nevertheless, the Harper government is not impressed with the fee and is vowing to fight it.
"Raising taxes at the border just raises costs on consumers," International Trade Minister Ed 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."
Approximately seven million Canadians flew to the United States in 2010, according to Statistics Canada, while more than 150,000 travelled by boat.
However, U.S. Ambassador David Jacobson stressed Monday in an interview that the new tax isn't targeted specifically at Canadians. Rather, the whole world pays the fee for air and sea travel to the U.S.
Furthermore, the levy is necessitated by the budget situation in the United States and the government is looking to raise revenue through user fees, he said.
"This is not some type of fee that is directed towards Canadians," Jacobson told Postmedia News. "This is how governments pay for service."
The ambassador acknowledged nobody likes paying additional fees, but maintained the levy "absolutely is not straining the relationship" between Canada and the U.S.
"Tough times call for difficult measures," he added.
NDP international trade critic Robert Chisholm assailed the government Monday in question period for failing to stand up for Canadians when it comes to cross-border relations, and said the $5.50 levy is just the latest example.
"When it comes to defending the interests of Canadians, Conservatives have shown they cannot be trusted," Chisholm said.
Gerald Keddy, the parliamentary secretary to Fast, said in the House of Commons the government is "disappointed" the exemption is being removed.
"We would hope that they will recognize the error of their ways," Keddy said.
Interim Liberal leader Bob Rae said Monday the Americans must "wake up" and realize they're part of an open relationship with Canada.
"I continue to be very disappointed at these steps," Rae said. "They're very short-sighted and I don't think they make much sense. I would hope that the Americans would think again about this."
In February, after the fee came to light in a draft copy of the 2012 U.S. budget, Prime Minister Stephen Harper attacked the policy as a bad proposal designed to bail the U.S. out of a huge debt on the backs of Canadians and other visitors.
"It's clear that the U.S. government is casting around for ways to raise revenue," Harper said. "This is not a useful way to do that."
Canada and Mexico — who are partners with the U.S. in the North American Free Trade Agreement — have been exempted from the surcharge since the 1990s, along with countries in the Caribbean.
But observers argue the fees are no different than those charged in Canada and are likely necessary to help the Americans pay for additional security measures that have come with a thickening of the Canada-U.S. border since the early 1990s.
"What we've seen is a continuing process of American attempts to thicken the border," said Kim Richard Nossal, a specialist in Canada-U.S. relations and director of the Centre for International and Defence Policy at Queen's University.
Nossal said it's "pure hypocrisy" for the Conservative government to complain about the additional fee on Canadian travellers entering the U.S. when there are also surcharges on international visitors flying into Canada.
"It's a bit of a slippery slope and . . . why when this kind of thing is introduced the best that you can do is express your disappointment," he added.
Just last week, the U.S. ambassador said the Beyond the Border perimeter security deal that's in the works will mean the Canada-U.S. border becomes "thinner" for travellers tired of delays.
Jacobson said the upcoming agreement will enhance safety through security screening that occurs before people or cargo even reach the border of either Canada or the United States.
The ambassador also pledged last week that the Obama administration's "Buy American" provision in the $445-billion Jobs Act will not harm U.S.-Canada relations.
While most of the bill proposes payroll tax cuts for the middle class, extensions of unemployment benefits and education investments, there are rules that exclude Canadian companies from bidding on billions of dollars worth of infrastructure contracts.
As the Harper and Obama governments battle over Buy American rules in the U.S. jobs bill and other irritants, the two trading partners are now at odds over the surcharge on Canadians, Mexicans and others travelling stateside.
A provision in the U.S.-Colombia free-trade deal officially signed into law Friday by President Barack Obama will see the Americans repeal an exemption that has excluded travellers from Canada, Mexico and the Caribbean from paying the customs user fee to enter the United States by air or sea.
The "passenger inspection" levy — which first surfaced early this year — would apply to all commercial air and marine travellers from Canada, Mexico and Caribbean nations, and would be added on to the cost of an airplane or boat ticket.
The countries have long been exempt from the fee, but the cash-strapped U.S. government — which is facing a $1-trillion deficit — expects to collect about $110 million annually from the tax.
The new levy, which takes effect within two weeks, will not apply to Canadians crossing the border into the U.S. in their vehicles. Nevertheless, the Harper government is not impressed with the fee and is vowing to fight it.
"Raising taxes at the border just raises costs on consumers," International Trade Minister Ed 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."
Approximately seven million Canadians flew to the United States in 2010, according to Statistics Canada, while more than 150,000 travelled by boat.
However, U.S. Ambassador David Jacobson stressed Monday in an interview that the new tax isn't targeted specifically at Canadians. Rather, the whole world pays the fee for air and sea travel to the U.S.
Furthermore, the levy is necessitated by the budget situation in the United States and the government is looking to raise revenue through user fees, he said.
"This is not some type of fee that is directed towards Canadians," Jacobson told Postmedia News. "This is how governments pay for service."
The ambassador acknowledged nobody likes paying additional fees, but maintained the levy "absolutely is not straining the relationship" between Canada and the U.S.
"Tough times call for difficult measures," he added.
NDP international trade critic Robert Chisholm assailed the government Monday in question period for failing to stand up for Canadians when it comes to cross-border relations, and said the $5.50 levy is just the latest example.
"When it comes to defending the interests of Canadians, Conservatives have shown they cannot be trusted," Chisholm said.
Gerald Keddy, the parliamentary secretary to Fast, said in the House of Commons the government is "disappointed" the exemption is being removed.
"We would hope that they will recognize the error of their ways," Keddy said.
Interim Liberal leader Bob Rae said Monday the Americans must "wake up" and realize they're part of an open relationship with Canada.
"I continue to be very disappointed at these steps," Rae said. "They're very short-sighted and I don't think they make much sense. I would hope that the Americans would think again about this."
In February, after the fee came to light in a draft copy of the 2012 U.S. budget, Prime Minister Stephen Harper attacked the policy as a bad proposal designed to bail the U.S. out of a huge debt on the backs of Canadians and other visitors.
"It's clear that the U.S. government is casting around for ways to raise revenue," Harper said. "This is not a useful way to do that."
Canada and Mexico — who are partners with the U.S. in the North American Free Trade Agreement — have been exempted from the surcharge since the 1990s, along with countries in the Caribbean.
But observers argue the fees are no different than those charged in Canada and are likely necessary to help the Americans pay for additional security measures that have come with a thickening of the Canada-U.S. border since the early 1990s.
"What we've seen is a continuing process of American attempts to thicken the border," said Kim Richard Nossal, a specialist in Canada-U.S. relations and director of the Centre for International and Defence Policy at Queen's University.
Nossal said it's "pure hypocrisy" for the Conservative government to complain about the additional fee on Canadian travellers entering the U.S. when there are also surcharges on international visitors flying into Canada.
"It's a bit of a slippery slope and . . . why when this kind of thing is introduced the best that you can do is express your disappointment," he added.
Just last week, the U.S. ambassador said the Beyond the Border perimeter security deal that's in the works will mean the Canada-U.S. border becomes "thinner" for travellers tired of delays.
Jacobson said the upcoming agreement will enhance safety through security screening that occurs before people or cargo even reach the border of either Canada or the United States.
The ambassador also pledged last week that the Obama administration's "Buy American" provision in the $445-billion Jobs Act will not harm U.S.-Canada relations.
While most of the bill proposes payroll tax cuts for the middle class, extensions of unemployment benefits and education investments, there are rules that exclude Canadian companies from bidding on billions of dollars worth of infrastructure contracts.
