Updated: Obama proposes travel fee for Canada

Proposal would add $5.50 to the cost of visiting the U.S.

The 2012 budget plan that President Barack Obama unveiled this week includes a proposal to impose a $5.50 fee on every traveller entering the US from Canada by commercial vehicle aircraft or vessel (airlines, cruises, buses, etc.) More precisely, it would end a waiver that visitors from Canada (not just citizens or residents, but all visitors) have enjoyed until now.

(* I had understood that commercial buses were also included, but the language is limited to aircraft and vessels.)

According to Birgit Matthiesen of the Canadian Manufacturers and Exporters Association, 16,347,580 air passengers from Canada in 2009 at $5.50 would bring in $89,911,690 or almost the $110 million the Department of Homeland Security said they were looking to generate in the 2012 budget proposal.

Matthiesen says the proposal contradicts the border vision that Harper and Obama set out:

“It’s just yet another demonstration that crossing the border from Canada to the US is going to be costing us more and that the border is a real border. This will stymie not only tourism across our borders but also the travel of our business people,” she said.

“The idea that revenues to offset US budget deficits will come at the expense of Canadian tourists and businesspeople is worrisome – especially coming on the heels of Prime Minister Harper’s visit to the US when they pledged to do more for North American businesses and the North American economy. They pledged to reduce regulatory burdens. This is a huge burden.”

Matthiesen said that NAFTA does not give protection from the fee.

Of course, Obama’s budget is merely a proposal. The US Congress has to legislate any changes.

Here is the current COBRA language:

Fees for arrival of passengers aboard commercial vessels and commercial aircraft(1) Fees. (i) Subject to paragraphs (g)(1)(ii) and (g)(3) of this section, a fee of $5 must be collected and remitted to CBP for services provided in connection with the arrival of each passenger aboard a commercial vessel or commercial aircraft from a place outside the United States,other than Canada, Mexico, one of the territories and possessions of the United States, or one of the adjacent islands, in either of the following circumstances: (A) When the journey of the arriving passenger originates in a place outside the United States other than Canada, Mexico, one of the territories or possessions of the United States, or one of the adjacent islands; or (B) When the journey of the arriving passenger originates in the United States and is not limited to Canada, Mexico, territories and possessions of the United States, and adjacent islands.

Background on COBRA is here.

The DHS budget justification document mentions ending the exemption:

“The President’s FY 2012 Budget includes a legislative proposal to lift the country exemptions for Mexico, Canada, and the Caribbean, which will increase collections by $110 million. The Budget assumes implementation of this exemption by Q3 FY 2012 and therefore requests $55 million in discretionary funding to cover half of the costs.”


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