Obama proposal for entry fee on Canadians creates uproar

TORONTO - President Barack Obama’s proposal to charge an entry fee from Canadians entering the US has infuriated political and business leaders in this country.

In his proposal in the 2012 draft budget submitted to the US Congress Monday, Obama has proposed a ‘passenger inspection fee’ of $5.50 for Canadian entering the US to raise millions of dollars annually. An estimated 16 million Canadians flew to the US in 2009. If each was levied the $5.50 entry tax, the US exchequer would make well over $90 million, according to the Canadian Press.

Currently, visitors from Canada, Mexico and some Caribbean countries are exempted from paying entry fee to the US authorities.

Millions of Canadians enter the US each month as the two countries form the biggest trading bloc in the world, with daily bilateral trade about $2 billion.

Canadian Prime Minister Stephen Harper said the proposed entry fee on Canadians would hamper trade and free flow of people across the border.

The prime minister said though he empathized with the US over its $14-trillion debt, “additional tax” on Canadians would not solve the problem and there were better ways for the US to raise money.

“Some 40 per cent plus of the American spending is financed by borrowing. These are enormously challenging figures. We want to ensure that trade and travel is easier, not more difficult, and we don’t need additional taxes on that kind of economic activity,” the Canadian prime minister said.

Canadian opposition leader Michael Ignatieff slammed the proposed US entry fee as a “nasty surprise” sprung on Canada by its big neighbour down south.

The opposition raised the issue in the Canadian parliament, describing the US move as an indication of deterioration in their bilateral relations. But foreign affairs minister Lawrence Cannon tried to calm them by saying that the idea was only at a proposal stage.

The National Airlines Council of Canada (NACC) also expressed concern about the proposed entry fee. “An additional tax on air travellers will decrease the ability of Canadian airlines to compete with low cost operations at border airports, an alarming trend outlined in recent studies by the NACC, the National Travel and Tourism Coalition and the Hotel Association of Canada, ” said NACC President George Petsikas.

“Indeed, the announcement of an additional cost advantage for border facilities should make clear the need to reduce the commercial aviation cost structure in Canada,” he added.

The National Airlines Council of Canada is a trade association of the country’s largest commercial airlines.

(Gurmukh Singh can be contacted at gurmukh.s@ians.in)