One concession Canada seems likely to make in the current round of free trade discussions with the U.S. and Mexico is on the level of duties that Canadians must pay when shopping online — and it's one where Canadian consumers could end up be happy with the result.
Known as the de minimis threshold, it's the level at which consumers have to pay duties and taxes on imported goods, whether through bringing items back on a trip or ordering them online and having them delivered by mail or courier...
The issue has been divisive in trade negotiations for years...
The American position has been that Canada's lower threshold [of $20.00] unfairly protects Canada retailers by increasing costs and red tape for anyone wishing to buy things from the U.S. [the US threshhold is $800 US]
Policy-makers and retailers in Canada warn, however, that raising the limit would harm domestic retailers, which would hurt the Canadian economy and cost hundreds of thousands of jobs.
Economist Brett House, with Scotiabank, is among those who thinks the time has come for Canada to raise its threshold, and he says if it's handled properly, it can be a win for all sides.
Among his criticisms of the current system is that enforcement is lax, which only adds to the uncertainty. "In practice ... we just don't collect most of them because it's too complicated and too costly for customs and Canada Post to collect this welter of different tariffs."
A recent report from the Auditor General of Canada found that more than half of all the customs-duty revenues the government collects come from three consumer goods categories: apparel, footwear, and vehicles and auto parts. The vast majority of items theoretically covered by the tariffs raise no revenue at all.
And the cost of the current system may be more than it's worth. A C.D. Howe report in 2016 found that Ottawa spends four times more on enforcing duties than it takes in from them. And the Canada Border Services Agency estimates that for postal shipments valued at less than $200, the government doesn't record any net revenue from charging duties.
Canada's position makes even less sense considering Ottawa recently overhauled the limits that Canadians can spend in person when they cross the border...
House says a good compromise would be for Canada to raise its de minimis threshold to something around $200, but make sure that sales taxes are being enforced on absolutely everything that comes over the border...
Raising the threshold at which Canada can impose duties on imported products, while ensuring U.S. retailers can't sell to Canadians tax-free would level the playing field for Canadian retailers, give a boost to government revenues and make a more competitive marketplace for consumers, he argues...
This was excerpted from 28 August 2018 edition of the CBC News.