A new regulatory change at the U.S border is a double-edged sword for the Greater Trail business community, says the region’s new chamber executive director.
Norm Cafler said the federal government’s move to increase and harmonize low-value shipment thresholds with the United States is supposed to increase the competitiveness here, but it might not have that effect in reality.
“You can’t fault Canadian businesses, especially in a border community, to wanting to go where they can get a better price on a product,” he said about the desire to head south for cheaper deals.
“But at the same time, if we are trying to encourage shop local, buy Canadian, that’s the down side.”
The Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) increased and harmonized the value thresholds for expedited customs clearance to $2,500 (Canadian) and $2,500 (U.S.) respectively.
This is an increase from the current levels of $1,600 for Canada and $2,000 for the United States. In addition, Canada has increased the low-value shipment threshold to CDN$2,500 for exemption from North American Free Trade Agreement (NAFTA) Certificate of Origin requirements, aligning it with the current threshold of the U.S.
Cafler believed the issue would become a hot button topic for small businesses in the area, similar to what cross-border shopping has done to the notion of shopping local.
He said he would be taking the issue to the membership.
“I would be very interested to hear what they have to say over the coming weeks,” he said.
“But we don’t seem to have a whole lot of say in changing that at all.”
Cafler said the local business community has to question what they are doing.
“How many businesses are doing that locally and will be doing that?” he asked.
Vic Toews, minister of Public Safety, felt the change would reduce “the administrative burden” on small business and improve it’s competitiveness.
It is expected the new levels will make it easier and faster for Canadian and American businesses to move goods across the border.
Increasing and harmonizing thresholds could allow an additional 1.5 million shipments to be cleared on the day of arrival across Canada, instead of these goods being held up in customs clearance.
Each day, more than $1.6 billion worth of goods cross the common border between Canada and the U.S., bringing the annual value of traded goods to more than $580 billion in total.
According to CBSA figures, every year $16 billion in trade activity has been lost due to a variety of border delays.