A New Canada-U.S. Border Fee? Prospect of a New U.S. Fee Worries Both Sides of the Border

Will the United States slap travelers with a new fee when crossing the Canada-U.S. border?

The White House's proposed Department of Homeland Security (DHS) budget includes boilerplate directing DHS to study the "feasibility" of imposing a new Northern and Southwest cross border fee.

Beyond the Border Observer, a blog from the Woodrow Wilson Center's Canada Institute, provides some useful background and roundup of critical responses in Canada and the United States. 

From BTB Observer:

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.

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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.