Keith Edmund White

Canada Institute, Woodrow Wilson Center

Consternation on both sides of the border is brewing over the Obama administration’s proposal to study the “feasibility and cost” of imposing a land border fee for vehicles and individuals who cross the Canada-U.S. border and the Mexico-U.S. southwest border.

As you might expect, not everyone is a fan, especially Democratic Congressman Brian Higgins.

If interested, you can read the full language of the proposal in the White House’s proposed FY14 budget.

This “general provisions” section language, which I refer to as boilerplate, is included in appropriation to clarify (or direct) how a department should spend its funding.  

Just scroll to the bottom of this document, and you’ll find the boiler section that directs DHS to complete a study on “establishing and collecting a land border crossing fee for both land border pedestrians and passenger vehicles along the northern and southwest borders of the United States… .”

A few important details before checking out some critical coverage of the proposal:

• The proposal calls for a study, does not impose a fee.  The budget does not call for imposing a fee, but rather to studying whether a fee is cost-effective.  This means, ideally, it will look on how such a fee impacts crossborder trade.
• The study touches both the Canada-U.S. and Mexico-U.S. border.  This is not a Canada border-only proposal.  The southern border is included as well (a border that has already seen indirect border crossing fees increased).
• An increased fee does impact border trade, but the devil’s in the details.  Whether its a tax, tariff, or fee, it’s an increased cost to businesses.  But if a fee creates a predictable and sustainable source of funding for border improvements that spur trade, a potential trade barrier can become a trade facilitator.
• Improving the Mexico-U.S. border can help Canada too.  Mexico is Canada’s third-largest trading partner, a major tourism destination, and has been labeled as one of the 13  priority markets of the Canadian government. 

From the National Post:

The U.S. government is proposing to charge a new fee for every vehicle or pedestrian crossing the U.S.-Canada border — an idea that has prompted fierce objections from New York lawmakers who claim the levy would stifle transboundary commerce and undermine recent efforts to ease the flow of people and goods between the two countries.

The Canadian government, too, is raising alarms about the proposal, with an embassy spokesman in Washington telling the Buffalo News that “we’re confident that any study would conclude that the considerable economic damage any fee would do would greatly outweigh any revenue generated.”

From Global News:

One of the harshest critics of the fee is Democratic Congressman Brian Higgins — he’s vowing to put the brakes on the idea — saying it sends a bad message.

“Fact of the matter is, the United States and Canada have been trading partners and friends for more than a hundred years. We should be looking to remove obstacles between the U.S. and Canada and not impose new ones.”

Higgins also questions the motivation for the fee and where the revenue would be spent.

“And I have a concern based on nothing more than my intuition that this may be an attempt to extract a fee from northern border users to subsidize the labour and security intensive work that is needed on the southern border.”