Why Ontario chambers of commerce want to limit you to $20 in duty-free shipping at the border
Raising duty-free shipping amount to $800 U.S. could result in a loss of up to 300K jobs by 2020
A coalition of chambers of commerce from across Ontario have banded together to call on the Canadian government to maintain a $20 limit for goods that can be shipped duty-free across the border.
That limit, called the de minimis threshold (DMT), is one tool protecting businesses from American retailers and online shopping, according to Windsor-Essex Regional Chamber of Commerce CEO Matt Marchand, but it could be threatened by U.S. demands as part of ongoing NAFTA negotiations.
While a higher limit might be attractive to consumers, it could be a real danger for border businesses.
"They want that exemption up to $800," said Marchand, explaining the U.S. government wants consumers to be able to bring more across the border without paying duty. "But what we're saying is 'Look we haven't really resolved NAFTA yet, we've got other trade stuff we're doing with the U.S. we think it would put our retailers at a competitive disadvantage.'"
The chambers of commerce in Windsor-Essex, Sarnia-Lambton, Greater Niagara, Sault Ste. Marie and Thunder Bay are calling for the limit to stay at $20 and issued a press release Friday stating "raising the DMT to $800 U.S. would result in a loss of up to 300,000 jobs by 2020 and a loss of labour income of up to $9.2 billion."
Rory Ring from the Sault Ste. Marie Chamber of Commerce said the threat of an increased DMT is especially dangerous for border communities.
"In Sault Ste. Marie, there are roughly 6,400 jobs in the retail sector … one in 11 jobs could be put at risk through this particular increase," he explained.
DMT could be a 'trump card'
Ring said he hasn't seen much activity around the DMT when it comes to NAFTA negotiations, but it's something he's worried the Canadian government might sacrifice to get the U.S. to make concessions on another subject during the talks.
"It could be one of those things that is, no pun intended, a trump card," he said. "We want to make sure that it's not lost upon our government that even though it may seems like an insignificant element in its trade relationship, it has the ability to significantly impact the retail sector."
With brick and mortar retailers already struggling to stay open in Sault Ste. Marie and downtowns across the country, Ring said the last thing owners need is another obstacle keeping them from making a living.
"The cost of energy, cap and trade, there are many elements businesses in Ontario are struggling to compete as it is today, without this becoming an issue to deal with."