New travel exemptions reduce border delays
June 19, 2012
Last week, Ben Brunnen, chief economist with the Calgary Chamber, presented to the Senate Finance Committee to provide feedback on the government’s budget legislation, as well as the new duty free travel exemptions for Canadian visitors to the U.S.
The policy harmonizes the amount of duty-free-goods Canadians can buy south of the border with policy currently in place for U.S. shoppers in Canada. This will reduce costs and increase efficiency at border services while simultaneously forcing Canadian retailers to be more competitive so they don’t lose out on customers who might head to the U.S. to shop.
“Reducing border backup is one of the biggest complaints we hear from business,” said Brunnen. “The congestion at the border has a real cost impact on business.”
According to Brunnen, having two different duty free amounts that border service agents have to check for results in time delays and escalating costs that are passed on to consumers. By harmonizing the duty free amount for travellers, it makes it easier for consumers to move between Canada and the U.S., leading to more visits and purchases. “When you reduce congestion at the border, you open the door for more business,” said Brunnen.
One other benefit of the new duty free travel exemptions is that it will force Canadian retailers to be more competitive with their pricing. Right now, consumer goods in the U.S. can be up to 14 per cent lower when compared to their Canadian equivalents. “When you open up the border, you open up competition and that’s always a good thing for consumers,” Brunnen said.
Brunnen also said that small moves like these to remove red tape at the border can act as a first step in tackling some of the bigger issues with border gridlock. “It serves as a great opportunity for further streamlining of trade regulations, he said.