Opinion

Canada's scorn of Donald Trump's protectionism stinks of hypocrisy: Neil Macdonald

We insist on maintaining a lopsided, non-reciprocal system, in which our retailers can sell up to $1,000 Cdn worth of goods with no impediment whatever. American retailers wishing to sell into Canada, meanwhile, face a slurry of taxes, duties and red tape on any shipment worth more than $20 Cdn.

Trump has protested the obstructive nature of the Canadian border, and he's right

Canada's de minimis has been the same for 33 years, and our government, which sees the world through a zealously protectionist lens, seems to think the fair thing to do is leave it that way. (Darryl Dyck/Canadian Press)

Just to irritate myself, I sometimes surf eBay's or Amazon's Canadian websites (I still don't know why the Canadian versions even exist), looking for some product I need.

Most recently, it was a pair of spectacle frames that are expensive, but which, I know from experience, fit my strangely shaped face.

The Amazon.ca sellers that offered them all turned out to be based abroad; you discover that when you type in your Canadian shipping address and watch the delivered price explode.

In the case of eBay, the experience is even more masochistic. Usually, a Canadian eBay seller doesn't have the product you need. EBay then helpfully lists a slew of American sellers who do, some of whom are willing, for a steep price, to pilot your purchase through the Canadian border blockade. Others just refuse to ship to Canada.

It's just one of the prices we pay for remaining a small, quasi-socialist state on a continent where, in general, markets are freer than anywhere in the world.

Canada's protectionist lens

President Donald Trump has protested the obstructive nature of the Canadian border, and he's right. We insist on maintaining a lopsided, non-reciprocal system, in which our retailers can sell up to $1,000 Cdn worth of goods ($800 US) at a time into the American market with no impediment whatever (no wonder, according to eBay, that 99.9 per cent of its Canadian sellers make most of their profits exporting to the United States).

American retailers wishing to sell into Canada, meanwhile, face a slurry of taxes, duties and red tape on any shipment worth more than $20 Cdn. It's been that way for 33 years, and our government, which sees the world through a zealously protectionist lens, seems to think the fair thing to do is leave it that way.

The legal term for the level under which a shipment proceeds without any duties or taxes is de minimis. President Barack Obama, who once laughably stood in our House of Commons and declared that Canadians abhor protectionism (!), raised the American de minimis to $800 US from $200 US.  

Canada's, as noted, is about one-fiftieth of that, and successive Canadian governments have further used our customs service to discourage cross-border shopping completely.

As the federal auditor general has pointed out, Canada spends roughly two dollars enforcing the de minimis for every dollar of taxes or duties it collects on shipments worth less than $200.

That is pure protectionism, something Canadians have relished accusing Trump of attempting recently. Our scorn stinks of hypocrisy, but there's nothing like good old self-interest to feed selective outrage.

Our vigorous policing of purchases becomes apparent when you type a Canadian shipping address into Amazon or eBay.

Most American sellers, unwilling to fill in Canadian forms and collect Canadian fees, turn the purchase over to a courier, say Fedex or UPS, which promptly hires a customs broker, which adds GST and applicable duties to the parcel before tacking on its own fee. That can inflate the cost of the purchase to the point where the buyer simply gives up, which is the objective in the first place.

Our vigorous policing of purchases becomes apparent when you type a Canadian shipping address into Amazon or eBay. (Andrew Harrer/Bloomberg)

Not everyone has taken this as meekly as Canada's consumers, who have been told since the cradle that government protects us from ourselves.

A loose affiliation of Canadian business interests, sick of the red tape and taxes they must endure to purchase American goods necessary to their operations, has been lobbying in Ottawa for years. So too have American retailers.

But Ottawa remains in thrall to Canadian retailers, which claim to employ a million Canadians, and which consistently threaten job losses if the de minimis is raised to $80, let alone $800.

The opposition Conservatives, cannily, maintain it's up to the governing Liberals to determine a proper de minimis, something the Conservatives themselves failed to do when they were in government.

The Liberals' response has been one of their supremely bland talking points: basically, that while Canada does want to minimize obstacles to commerce, great caution must be exercised when considering any elimination of tax or duty, and we must be fair and at the same time ensure a robust retail sector, blah, blah, etc., etc.

Then, last year, Trump made de minimis part of the NAFTA renegotiations, which, some thought, might actually make a difference.

Evidently, it hasn't. A participant in the government's biweekly briefing to de minimis "stakeholders," says Ottawa's position is the following:

De minimis has not been discussed in any of the seven NAFTA negotiating rounds so far. Perhaps later.

Canada does not want to discuss de minimis at the NAFTA table in any case. Not the appropriate venue, apparently.

Canada is concerned that raising its de minimis, the lowest in the industrialized world, might benefit nations other than America, which it doesn't want to do.

So there it is. Sorry, Canadian consumers. We can't let you just buy whatever you like, wherever you like, willy-nilly. You need government guidance.

In any case, back to my search for spectacle frames.

I eventually found an American eBay seller that offered them for half the price I'd pay at the few Canadian opticians who carry them. Then I had them shipped (free of charge, another American thing) to a warehouse in Ogdensburg, N.Y., a 45-minute drive from my home in Ottawa.

It's operated by a Canadian company, and situated right at the other end of the international bridge, barely 200 metres inside American soil. The warehouse will hold any shipment for up to a year, and charges $5 in cash for each pickup. It even pays your toll back across the bridge.

At the warehouse, there were thousands of packages waiting for pickup by Canadians. Business is good, the warehouse clerk told me with a big grin.

Such warehouses now exist in just about every border town; lovely, elegant hatches through Canada's nasty border brambles, at least for Canadians who live close enough.

Yes, I declared the frames to Canada customs on the way back. Yes, it was still worth it. Really, really worth it. (I filled up the tank in Ogdensburg, more than paying for the trip.)

But I did hesitate to write here about the border warehouse solution. If too many Canadians start using it, I could imagine our finance minister rising in the Commons to announce a new, "special tax on holders of American proxy addresses who need to pay their fair share."

Because, you know, Canada.

This column is part of CBC's Opinion section. For more information about this section, please read this editor's blog and our FAQ.

About the Author

Neil Macdonald

Opinion Columnist

Neil Macdonald is an opinion columnist for CBC News, based in Ottawa. Prior to that he was the CBC's Washington correspondent for 12 years, and before that he spent five years reporting from the Middle East. He also had a previous career in newspapers, and speaks English and French fluently, and some Arabic.

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