U.S. ponders $5.50 entry tax for Canadian air, marine travellers
OTTAWA — The Obama administration wants Canadians to pay to enter the United States to help ease that country's desperate financial crunch.
A proposed "passenger inspection" fee is outlined in the draft 2012 U.S. federal budget that has been sent to Congress. If adopted, the charge is expected to be levied against millions of commercial air and marine travellers from Canada, Mexico and the Caribbean, the only nations now exempt from the fee, and generate $110 million annually.
The fee would not apply to automobile traffic.
With about 16 million Canadians flying to the U.S. each year, a $5.50 head-tax would raise almost $90 million of the annual total and help pay for more beefed up U.S. border security.
The proposed tariff follows a 2009 U.S. entry law requiring Canadians to carry passports and dampens hopes that border issues would be less of a sore point under the new administration, especially as Prime Minister Stephen Harper and President Barack Obama met in Washington this month to seek a sweeping deal to establish a North American security and trade perimeter.
"It's an indication that the United States is going to be looking to generate new moneys to offset their budget deficit on outsiders who don't vote — and that would be us," said Birgit Matthiesen, of the Canadian Manufacturers & Exporters, Canada's largest trade and industry association. "The raising of any fees on the Canada-U.S. border is troubling."
Colin Robertson, a member of the team that negotiated the Free Trade Agreement with the U.S. and later helped implement the North American Free Trade Agreement (NAFTA), believes more U.S. cash grabs are coming.
"They will be looking everywhere to find money, so it wouldn't surprise me that our exemption is being lifted," said Robertson, a fellow of the Canadian Defence and Foreign Affairs Institute.
"Do I think we can succeed in pushing back? Probably not given the desperate financial situation the States is in. But, obviously, we should make our best efforts.
"This is one where we should make a joint cause with Mexico. The push back (also) has to come through the airline industry and though the travel agencies in the States."
Officials with the Department of Homeland Security (DHS), which is proposing scrapping the fee exemption, did not respond to calls for comment. But an expert on Canada-U.S. relations advises Canadians not to jump to conclusions about the administration's attitude toward Canada.
"Don't worry that Obama is not your friend," said Christopher Sands, a senior fellow at the Hudson Institute in Washington.
"We're in a fiscal mess and just about all agencies are looking for ways they can get a little more money, whatever it takes, so that the president doesn't get accused of a tax increase. It isn't necessarily intended for Canada," he added.
"If the fee is something Canadians really would find problematic, they ought to raise a ruckus, not necessarily beat the administration over the head with it, but make it clear to the (U.S.) business community that this would be an additional impediment on trade. If Congress (agrees to) the fee then . . . through some focused diplomacy . . . Harper can go to Obama and say, 'Before we ink this deal on a perimeter, I'd like to have you reconsider the fee'."
Under NAFTA, Canadians were hit with the same passenger inspection fee beginning in 1994, but were exempted in late 1997 at the insistence of a group of border-state congressmen who argued it was bad for cross-border commerce.
Sands suggests the U.S. passport law may have led to the proposed reimposition of the fee by the U.S. Customs and Border Protection service, part of DHS.
"Now (that) you've eliminated the documentary basis for treating this class of enterers differently, why not impose the fee on them like everybody else? You can see the logic of this coming out of," the bureaucracy, he said.
News of the proposed lifting of Canada's fee exemption comes as Canadian airlines, hoteliers and others in the tourism industry are urging the Harper government to eliminate the various taxes and fees charged on air travel, which they argue are raising fares and sending an increasing number of Canadians south of the border in search of cheaper flights.
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And Canadian women should have to pay an extraction tax when leaving America. 
