Canadian Transport Minister Blasts Proposed Tax on US-Bound Cargo

Mark Szakonyi, March 27, 2014, Journal of Commerce

Canada Transport Minister Lisa Raitt sharply criticized proposed U.S. legislation that would tax cargo entering the U.S. from Canadian ports, saying that Senate and House bills would harm trade relations between the two countries if passed.

 

“We will vigorously defend our trade interests and the rights attained through our international trade agreements,” Raitt told attendees of the Association of American Port Authorities’ spring conference in Washignton, D.C., according to prepared remarks.

 

U.S. Rep. Jim McDermott, D-Wash., and U.S. Sens. Patty Murray and Maria Cantwell, both Democrats from Washington, have introduced bills in their respective chambers that would replace the Harbor Maintenance Tax with a fee on all containers that originate internationally. Backers argue the legislation would stop shippers from dodging the 0.125 percent levy on the value of cargo imported through U.S. ports by diverting shipments through Canadian and Mexican ports.

 

Responding to criticism that the HMT creates a competitive disadvantage for U.S. ports compared to Canadian ports, Raitt said Canada competes on a “fair playing field,” and the nation’s port are independent, self-governing and self-financing.

 

The Prince Rupert port has been growing at a much faster pace than U.S. West Coast ports including Seattle and Tacoma. From 2009-2013, Prince Rupert saw compounded annual growth of 19.3 percent, versus 3 percent for Seattle and Tacoma combined and 5.4 percent for Los Angeles and Long Beach combined, according to port data.

 

Raitt said the amount of Canada-bound cargo coming through U.S. ports is on average three times that of the traffic of U.S.-bound cargo through Canadian ports. The number of U.S-bound containers through Canadian ports has also fallen in the last decade, she said.

 

“The United States’ and Canada’s ability to move products across our borders safely and efficiently gives our integrated economy a major competitive edge,” Raitt said.

 

She said the proposed tax would undermine the two countries’ efforts to speed up the movement of goods and people via the Beyond the Border Action plan. The two countries “enjoy the largest and most important bilateral trade relationship in the world,” with U.S.-Canada trade hitting $605 billion in 2013, Raitt said.

 

“As a result, we have a shared interest in safe and efficient transportation systems that support job creation and economic growth on both sides of our border,” she said.

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