@pierrelebel wrote:
In fact, increasing the exemption for postal imports from $20 to $200 will HURT Canadian businesses and their employees at the expense of American and foreign exporters. There is no logic in helping Canadian buyers avoid paying Canadian consumption taxes (GST/HST/PST) by making it easier and cheaper to buy from American businesses.
I agree with your comments. My impression always was that the low $20 allowance was intended to encourage Canadians to buy from Canadians, if not always in practice, at least in principle.
The fact that CBSA permits so much personal merchandise valued at over $20 to just "slide" through the border means that most Canadians who do any regular online shopping from the U.S. perceive their allowance to be higher than the $20 it is -- which is why all the brouhaha over the GSP.
Whether the lax line of enforcement by CBSA is the result of sloppiness, lack of staffing, unmanageable volume, or some combination of all three, I really don't know.
However, as a thought experiment, we could imagine what would happen if the current fuzzy allowance of $20 were raised to $200, given the same conditions of enforcement and a fairly strong Canadian dollar. I think it would create a free-for-all of cross-border shopping by Canadians (online or otherwise), who, unless CBSA increased their vigilance considerably, could be buying items worth in the neighbourhood of $300 Cdn. tax-free. Considering that a price tag of $100 to $300 encompasses an awful lot of electronic gadgets, one of the most sought-after markets, such a move to raise the allowance would be a death blow to any Canadian electronics retailers in particular, and suppress or kill off a lot of other Canadian retailers selling in that range of value.
I agree that the most likely result would be that Canadian buyers would ignore Canadian retailers and the 13% to 15% HST/GST that those retailers have to collect, and flock en masse to U.S. or overseas sellers. This is exactly, you may recall, what happened before the GST when the U.S. dollar slumped to about 75% of the $Cdn. back in the 1980's. There were line-ups at every U.S./Canadian border crossing. Canadians, it seems to me, have always been eager to get their hands on the U.S. market whenever they're given a chance to do so at a bargain rate.
China has already managed to swamp the Canadian market -- can you picture what handing an even bigger advantage to non-Canadian retailers would do? And yes, eBay itself would certainly profit from such a move, but the money wouldn't flow into Canadian hands (aside from, presumably, any Canadian shareholders). It could conceivably be the end of Canadian sellers' ability to sell profitably on eBay.
The whole Canadian tariff/cross-border system, as I see it, is an extremely touchy mechanism that has to be adjusted very minutely and carefully, if at all. Any sudden, big changes could have a devastating and far-reaching impact on the Canadian economy. Raising the personal limit to $200 would be like opening the flood gates -- and it might be hard to put the water back after the fact.
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