For Immediate Release:
May 9, 2012
Statement on cross-border shopping limit increase, by Senator Pierrette Ringuette
Senate of Canada
Honourable Senators, I rise today to bring to your attention the consequences of the Government’s budget policy of increasing the tax-exemption from cross-border goods from $50 to $200 for a 48 hours trip and from $400 to $800 for over 48 hours.
I have to wonder if the government consulted the businesses along the border or the provincial governments, because there are some concerns I have that seem painfully obvious to anybody outside the Conservative caucus.
Minister Flaherty has stated the federal government will lose $17 million annually by 2013-14, at 5% GST, it puts their estimate at $340 million in extra duty-free shopping.
Minister Flaherty said “I am not terribly concerned about cross-border shopping because we haven’t changed the 24 hour rule,” We know Mr. Flaherty isn’t losing any sleep over his policies, but many other Canadians are. Mr. Flaherty just threw away $17 million dollars at a time they claim to be forced to cut OAS and EI.
The provincial governments stand to lose roughly $23 million in lost sales tax revenue each year (considering the average provincial sales tax of about 7%), money that could be going towards provincial programs such as health, education, and food banks.
Annual tax revenue for federal and provincial governments of $40 million gone, about $½ billion in the next a decade.
The Harper government wants the provinces to take on an increased burden for delivery of services and at the same time are also unilaterally cutting their ability to generate revenue.
Minister Flaherty and the Prime Minister should be working with the Premiers, not passing on responsibilities along with reducing tax revenue.
Another hard hit group will be the retailers, particularly those along the US border. A group that is already having trouble due to the economic downturn.
$340 million in increased cross border shopping is the equivalent of close to 11,000 full time retail jobs in lost revenue to Canadian businesses.
This government has responded to concerns of retailers by bringing in policy that encourages their customers to spend even more money over the border. Why is Canadian policy aimed at helping the American economy at the expense of our businesses; our jobs?
I think the Mayor of Killarney, Manitoba said it best; “the only incentive for any Canadians in the last budget was, ‘hey, shop American’.”
In fact, US officials have been raving about how this move will boost their economy, a recent article in the Rochester Democrat and Chronicle was titled “Canada’s change in duty-free rules expected to boost western New York” and included the CEO of the city’s tourism agency saying that “This is great news for the Rochester region”.
Well, our government is doing what it can for Rochester; but what about helping our border retailer, communities, and Canadian jobs.
Canadian border city Mayors, Chambers of Commerce, and businesses are decrying this measure. But, the Conservative government only listen to Big Business and not small businesses.
This policy is one that helps those with money, not those struggling. How many poor Canadians are going to spend the weekend away and spend $800, $1600 for a couple, over a weekend trip? Families living in poverty could use the revenues that this government is throwing away.
This policy will take money out of the provinces and hurt our small businesses so that the weekend shoppers can save a few bucks. Meanwhile, the poor get cuts to services and their jobs endangered.
So let me congratulate the government for another ‘economic action plan’ that’s primary ‘action’ is to hurt our economy, our jobs, and our communities.
For Additional Information:
Tim Rosenburgh
Office of Senator Pierrette Ringuette
(613) 943-2248