US retailers are losing sales because Canadian duty free policies governing short trips across the border ‘discourage’ visitors from shopping in the US, according to US New York senators Charles Schumer and Kirsten Gillibrand who have written to Canada’s government and its Ambassador this week.

 

Both senators have launched a joint campaign to try and persuade the Canadian government to equalise duties on a par with the more favourable levels applied in the US. The senators say that this would go some way towards helping retailers in the US and particularly in Buffalo, Watertown and Plattsburgh.

 

US Customs currently permits US residents the right to a duty free value allowance of $200 to spend in Canada for those travellers staying less than 48 hours and up to $800 for those staying longer. But both senators argue that Canada’s duty free policies ‘are far less favourable’.

 

Schumer and Gillibrand argue that an increased duty free allowance for Canadians shopping in the US would bolster economic growth and help local retailers on both sides of the border.

 

Senator Charles Schumer said: “Right now, Canadian families wishing to spend the day shopping in upstate New York must carefully watch the clock to calculate how high their duty rates will be and that shouldn’t be the case between neighbours. America’s duty free policies are much more favourable than Canada’s and Canada, our great friend and ally, should level the playing field.

 

 

CALL TO BRING DUTIES INTO LINE

“That is why we are calling on the Canadian government to bring their duties on par with ours so we can allow both of our economies to grow and prosper.”

 

Senator Kirsten Gillibrand added: “Businesses in Buffalo, Niagara Falls, Plattsburgh and Watertown are missing out because Canada places a higher burden on its residents who shop in New York than the US does on the New Yorkers who shop in Canada.

 

“Canada’s current policies put New York companies at a disadvantage to their competitors over the border and discourage Canadians from shopping in the United States. I urge Canada to increase their duty free threshold to create a level playing field that will benefit both American and Canadian companies.”

 

 

LARGE DISPARITY IN ALLOWANCES

Both senators argue that a Canadian family purchasing US$100-worth of clothing on a day drip in Buffalo will be subject to C$22 ($17.61) in duty when that family travels across the bridge into Ontario, Canada. By contrast, an American family from Buffalo, purchasing the same merchandise on a day trip to Niagara Falls, Canada is not subject to any duty on that same merchandise when they return to the US.

 

Both senators now contend that instead of policing low-value shipments and merchandise from short trips across the border, a raised duty free exemption would allow the Canada Border Services Agency to concentrate more dedicated resources to policing higher risk shipments and higher ticket items – rather than those every day items purchased by ordinary citizens from retailers in the US.

 

In addition to their support, both Schumer and Gillibrand’s letter to the Canadian government and its Ambassador Gary Doer is also being supported by US Senators Cantwell, Risch, Crapo, Tester, Daines, Peters, Baldwin, Ayotte, Shaheen and King.

 

TRBusiness has obtained a copy of the Senators’ letter to Canadian Ambassador Gary Doer – a copy of which is published below:

 

 

 

LETTER TO THE CANADIAN GOVERNMENT:

DEAR AMBASSADOR DOER,

 

The United States places tremendous value on our trade relationship with Canada. With $632 billion in total goods trade (both import and export) in 2013, Canada is the largest goods trading partner for the United States.

 

At $300 billion in total goods exported to Canada, your country is also our largest goods export market. In support of increased goods trade between our two countries and as members of the United States Senate representing states that border Canada, we are writing to express our concern regarding Canada’s de minimis threshold on low-value imports to Canada.

 

De minimis thresholds vary greatly from country to country; however, Canada has one of the lowest thresholds at $20 per shipment or a personal exemption of $200 for Canadians returning from international travel.

 

The United States has a de minimis threshold of $200 for imported goods delivered via a shipper, while Americans returning from international travel have a personal exemption of $800 before meeting the de minimis threshold. Proposed legislation in the U.S. Senate would raise the de minimis level for imported goods delivered via a shipper in the U.S. to $800.

 

An increase in Canada’s de minimis level would have a significant and positive impact on U.S.-Canada trade, and help to bolster increased economic growth for both countries. An increase would particularly benefit small-and medium-sized businesses operating in e-commerce. Further, in addition to generating net economic benefits, an increase in Canada’s de minimis threshold would create customs efficiencies, allowing the Canada Border Services Agency to dedicate more resources toward higher risk shipments.

 

Canada’s low de minimis threshold represents an unnecessary trade barrier between our two countries, particularly for low-value, low-risk shipments. We respectfully urge the Canadian government to increase its de minimis threshold, ideally putting it on par with that of the United States, in order to further expand our historic and mutually beneficial trade relationship.

 

SIGNED BY SENATORS: Schumer; Gillibrand; Cantwell; Risch; Crapo; Tester; Daines; Peters; Baldwin; Ayotte; Shaheen; and King.