Posted on 01/11/2020 6:01:28 PM PST by NoLibZone
The Retail Council of Canada wants things to remain as they are, preferably forever.
Part of being a Canadian – along with telling each other at dinner parties how compassionate and lucky we are – involves gazing at computer screens, morosely taking in the dazzling choice and competition-driven prices in the American consumer marketplace.
In the old, pre-internet days, Canadian consumers didn't realize the extent to which they were being hosed, and the business sector could collude in peace, and the government could collect taxes and protectionist duties to its heart's content without disturbing the bovine quiescence of the consuming public.
Now, though, it's in your face every time you Google a price for something you need: consumer life on the other side of that high border customs wall, the one topped with the Canadian-installed concertina wire and guarded by ferocious uniformed tax collectors, has the unattainable allure of the Tuscan countryside. You can visit it, but you can't live it.
Your own government won't let you. Because Canada.
It's awfully easy to take that view; I just did, didn't I?
It's easy to ask why, if Canada and the U.S. are supposed to be a trading bloc, American consumers can buy from Canada easily and with virtually no government-imposed costs or interference, while our government sees to it that purchasing from an American retailer quickly becomes impossibly expensive for Canadians.
It's easy to ask why our government spends a lot more to collect taxes and duties at the border than it actually collects.
And it's easy to side with the business lobby that's pushing for Canada to unblock the border and raise the threshold under which purchases can be imported exempt from duty and taxes – the so-called de minimis.
The American de minimis is $800 US, which gives American consumers the right to import pretty much whatever they please from anywhere. Canada's de minimis is $20 Cdn, which denies Canadians the right to bring in pretty much anything without big, punishing fees.
Rise in duty-free allowance could cost hundreds of thousands of jobs: study
Canada's scorn of Donald Trump's protectionism stinks of hypocrisy: Neil Macdonald
There is a ferocious struggle going on in Ottawa right now over the de minimis; American companies regard the Canadian market as ripe, unpicked fruit, and want reciprocal treatment. The issue is on Trump's NAFTA renegotiation agenda. The Americans also have the support of Canadian businesses that import from the U.S., and are sick, as are many of us, of our sclerotic border and the taxes and the duties.
On the other side of the issue is the Retail Council of Canada (RCC), which wants things to remain just the way they are, preferably forever. So far, the RCC has won the day.
Why? Because Canada, basically.
That may sound flip, but it is the simplest possible way of stating reality. Here, in part, is the case made by Canadian retail against pulling down any border walls. I cannot really argue with much of it.
Jobs
This is the big one. According to a study by PricewaterhouseCoopers, commissioned by the RCC, the Canadian retail sector "generates and facilitates" almost 3.4 million jobs.
That many of those jobs exist because of protectionism is beside the point; they are facts on the ground. The report estimates that raising the de minimis to $200 US – just a quarter of the level Trump is demanding – would shift about $70 billion worth of Canadian purchases a year to the U.S., and wipe out 286,000 jobs within three years.
That's about all the government needs to hear.
Economies of scale
Because Canada is a comparatively tiny market, Canadian retailers, according to the study, must pay between 10 and 50 per cent more than U.S. retailers for the same products.
Add to that the fact that manufacturers increasingly insist on setting prices at different levels in Canada, and bully retailers into playing along.
The result, says Price Waterhouse Cooper, is that even with all the expenses Canada imposes on cross-border commerce, even factoring in higher shipping costs Canadians must endure, and parasitic customs brokers' fees, U.S. "e-tailers" still enjoy a price advantage of about 12 per cent over their Canadian competitors. That gap, says the study, would grow to a bankrupting 25 per cent if the de minimis were to be raised.
Taxes
In Canada and in the United States, governments force merchants to work as tax collectors, charging sales tax and remitting it to state treasuries.
But Canada demands a lot more sales tax, and our federal and provincial tax departments co-operate. The combined federal-provincial HST is about 13 per cent, and it's imposed on all incoming shipments.
The Americans, by contrast, have no federal sales tax at all, and the U.S. federal government doesn't collect sales taxes for state governments, and even the states don't collect taxes on most out-of-state shipments.
So, argues the Retail Council of Canada, a higher de minimis would put Canadian retailers at a further disadvantage of at least 13 per cent.
Yes, it is true that Canadian e-tailers can ship tax- and duty-free to, say, a customer in New York City, whereas brick-and-mortar retailers there must charge both state and city sales tax on purchases made in their stores.
But in the real world, why would anyone in New York City order from a Canadian retailer? (Or, for that matter, why would anyone who has a choice?)
See the earlier bit about economies of scale and price-fixing. Plus, Americans don't like ordering from outside their country. That's sort of understandable. They have the best deals in the world right at home.
The study goes on. And on. The main takeaway is clear: raising the de minimis would be terrifically disruptive to the Canadian economy.
So what to do?
Well, that depends on whether you want Canada to remain sealed off from the largest, deepest, richest economy in human history, and how much you're willing to pay for that isolation.
Because the cost is all the foregoing data, flipped around.
The sensible solution is more integration with the U.S. economy – a great deal more. A customs union, and perhaps a currency union, too, and if that means giving up our pretty polymer money, well, fine and dandy. European nations did. And anyway, physical cash is being replaced by digital money. I'm even fine with using the U.S. dollar; yes, yes, we would lose control of our monetary policy, but reality forces our central bank to track the Fed's anyway.
Who isn't sick of the yo-yo value of our dollar? Who doesn't want to see our money go further? Who cares if Porky Pig's picture is on a $10 bill if it buys more? Protectionism, so long the Canadian way, leads to complacency and uncompetitive behaviour.
But I suspect that is hardly the majority view.
In the here and now, in Canada as it is, the Retail Council is correct. Raising the de minimis would be a savage disruption. And Canadians aren't big on creative destruction or competition theory.
Which is why the Trudeau government hasn't the faintest intention of raising our de minimis.
The more Canadian solution would be to block consumers here from being able to see all those lower prices on U.S. websites. You know, for our own good.
Some companies, I notice, do that already.
Wonder if they have a high tax on the gasoline to pay for all the free stuff.
Gasoline in Canadia is $5-$6 a gallon.
My understanding is that is to pay for nationalized healthcare which is a cluster.
If I filled up my truck up there it would cost about $170.
That’s still a much better price than gas in europe, which can be up to the equivalent of 4-5 bucks per liter, or just more than a quart.
My aching heart pumps urine for the Canadians... You have habitually voted for the Marxist habit, so go out into the northern wilderness where we can’t hear you complain...
It is not just for the healthcare.
Prices on Amazon.ca for identical natural health products are sometimes double those on Amazon.com. And Canada participates in the Codex which limits which products can be sold there.
CBC is globalist and socialist. Integration? No WAY! We would end up with Canadian rules here. The people there need to pull their heads out of their rear ends and stop voting for leftists.
I don’t know if you can order from them but I’ve found Costco pharmacy in Canada to be the cheapest up here.
It’s “Hark off ya hoser , eh?’’. (My daughter-in-law is from Calgary.)
Each of the Canadian banks has a proprietary “client card” that functions as a debit card. The CA client card is not tied into Visa, Master Card, etc. companies so is non-functional outside CA. You can get a major credit card through the banks, Visa, etc., and it's mandatory for outside the borders use.
When I went to Canada for a year working, it was mandatory for me to import my truck into CA, what a hassle dealing with customs, insurance, title and tag, inspections, drivers license plus surrender my state license plate and driver's license.
Canadian law does not allow US banks to own an affiliate in Canada so I was not able to use a US bank. The US does however allow foreign bank affiliates. I'm still doing my banking with my CA bank via their US affiliate. I guess the reasons are twofold. First, it's so darn easy dealing with them and I have the flexibility to transfer between US and CA $$$ without any fees. Heck, with a phone call or two to set it up, I can have a British bank account as well. This flexibility served me well during my year up north because I still had US bills to pay and US checks to deposit on-line.
Another reason I have kept my CA bank account is that every US bank I've had accounts with have eventually been jerks so I'd move my business elsewhere.
I had an experience buying some some large cartridge filter elements that was way too complicated. I took over operations of a section of a process plant and a few days into it, realized that new filter elements were needed. No filters were on hand and I was less than impressed with the engineer they transferred out.
So, I got the contact info from purchasing for the industrial supplier that turned out to be the only supplier for the eastern half of CA. They were in Montreal and I rang them up. It took a few minutes but finally they got someone with functional English fluency in the line. They were happy to supply me but they were out of stock and would not be available for six weeks. The items were not at all exotic and in the US I could have the filter elements the next day if I needed and I did need them the next day.
I called the US manufacturer direct and verified that they could take a credit card and had a years supply in my hands in 3 days at half the price the CA distributor quoted and this included the CA import taxes. The purchasing folks were quite surprised at all this and tolerated this BS in the name of buy Canadian.
Voting has its consequences........eh?
Poor Canaduh, bereft with a political class who took lessons from their British cousins, and a leader who wishes he was Macron.
So, I can order on ebay dot ca pen refills for less than two bucks, and y’all can’t?
Sounds to me like y’all need to clean house.
Voting has its consequences........eh/eh!
“The CBC is really, really big on high taxes. I wonder why?”
CBC, the government operated broadcaster? That CBC? Hmm...
Oh, CanaDUH.
“Voting has its consequences........eh?”
I imagine if they voted differently, the emptiness in their rectums would take some getting used to...
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