Canada: No to Potential Cargo Tax

Canada says the proposal to impose a fee on cargo bound for the U.S. would create congestion and dislocate supply chains


On Thursday the Canadian ambassador to the U.S. Gary Doer told attendees of the NAFTANEXT conference in Chicago that the U.S. should use all of its harbor maintenance taxes for U.S. port work and should not impose a fee on U.S.-bound containers coming through Mexican and Canadian ports.

The proposal to impose a fee on cargo bound for the U.S. through the ports of its North American Free Trade Agreement partners would “create massive congestion” at the borders and dislocate supply chains.

Ambassador Doer also threatened that Canada could implement a reciprocal tax on Canadian-bound cargo that comes through U.S. ports if the proposal for a cargo fee is implemented, adding that any cargo fee would also hurt U.S. ports too.

“Thankfully, the proposal hasn’t gone anywhere,” Doer said.

The cargo fee proposal would charge shippers a fee equal to the 0.125 percent levy on the value of cargo they currently pay when moving cargo through U.S. ports. The legislation has been introduced by U.S. Rep. Jim McDermott and U.S. Sens. Patty Murray and Maria Cantwell, Democrats from Washington state, in response to the ports of Seattle and Tacoma steadily losing cargo traffic to Canadian ports and other U.S. West Coast ports.

Doer recommended that Washington give all Harbor Maintenance Trust Fund funding back to the ports. Roughly half of the $1.6 billion annually collected for the HMT is used to plug holes in the federal budget.

Both chambers passed their respective bills last year, but Senate and House leaders have yet to agree on a final bill to send to President Obama. There is, however, increasing hope that Congress will send a final bill to the president this spring.

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