Obama proposes travel tax for Canadians
The budget U.S. President Barack Obama submitted to Congress on Monday proposes to slap a $5.50 fee on every visitor from Canada who travels to the U.S. by air or by sea.
The fee would not apply to visitors arriving in private vehicles.
Currently, visitors from Canada, Mexico and a number of Caribbean countries are exempt from "passenger inspection fees." It's an exemption these countries have enjoyed since 1997.
But Obama's 2012 draft budget includes a legislative proposal to lift those exemptions — a move that a supporting document from the U.S. Department of Homeland Security estimates would bring in an extra $110 million a year.
Revenue from the charges would be used to support U.S. Customs and Border Protection's inspection functions, the document says.
According to Statistics Canada, more than 16.3 million passengers took trans-border flights between Canada and the United States in 2009.
So far, the proposal to end the exemption for visitors from Canada is just that — a proposal.
Harper, Obama negotiate security perimeter
CBC's Susan Bonner called the president's budget "a first step" that will be debated, dissected, and possibly altered substantially, even though it has currently caught Canadians' attention.
"Whatever comes out at the end of the budget-making process is often very, very different from how it starts," she said, adding that it's possible Canadians may not end up having to pay a cent of the proposed $5.50 fee.
The submission of the draft federal budget to Congress comes after a recent meeting between Obama and Prime Minister Stephen Harper, in which the two leaders discussed ways to improve border flow and trade.
"Many people will argue that slapping a fee on Canadians who travel across the border in record number is just not going to help border flow at all," Bonner said.
Canada and the U.S. are in talks about establishing a national security perimeter. The proposed inspection fees could come up as a sticking point during those negotiations.
The 2012 budget pledged $1.1 trillion US in deficit savings over the next decade through spending cuts and tax increases. Obama is projecting the U.S. budget deficit will hit an all-time high of $1.65 trillion in 2011 — narrowing to $1.1 trillion in 2012.