Prime Minister Stephen Harper said he doesn't think much of a new border tax that's being proposed by the United States, calling it a cash grab designed to help a budget crisis.

Air travel fees

For travel to and from the United States, Canadians may already be paying the following U.S. taxes and fees:

  • International tax.
  •  INS fee.
  •  Passenger facility charge (up to $4.50 US per passenger).
  •  Sept. 11 security fee.
  • Transportation tax, and U.S. Department of Agriculture APHIS fee (animal and plant health inspection service).
  • Federal Aviation Administration "overflight" fees for all flights that fly in U.S. air space but take off or land elsewhere.

Source: The Canadian Press

The U.S. government wants to slap a $5.50 inspection fee on Canadians who travel into the country by air or by sea. Canadians crossing into the U.S. by land wouldn't have to pay the fee.

"I think it's clear the U.S. government is casting around for ways to raise revenue," Harper said Thursday. "I think that this is not a useful way to do that."

"We want to ensure that trade and travel between our countries is easier, not more difficult, and we don't need additional taxes on that kind of economic activity," he added.

In the House of Commons, Foreign Affairs Minister Lawrence Cannon said the traveller's fee was "just a draft idea."

Cannon noted that the measure was in the recently unveiled 2012 U.S. budget and that the 2011 budget has not yet passed Congress.

Currently, visitors from Canada, Mexico and a number of Caribbean countries are exempt from "passenger inspection fees." It's an exemption the countries have enjoyed since 1997.

The new U.S. budget includes a 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.

Canada and the U.S. are currently in talks to put up a North American security perimeter. The proposed fee could become a sticking point in those negotiations.

Aviation groups opposed

Several aviation industry groups also came out against the proposed fee.

"An additional tax on air travellers will decrease the ability of Canadian airlines to compete with low-cost operations at border airports...," said National Airlines Council of Canada president George Petsikas.

"Indeed, the announcement of an additional cost advantage for border facilities should make clear the need to reduce the commercial aviation cost structure in Canada," Petsikas said in a statement.

A group representing Canadian airports echoed those comments.

"We share the concern of our tourism partners that an additional fee would further drive Canadian travellers to take to their cars and fly out of U.S. border airports," said Canadian Airports Council chairman Bill Restall.