Updated: Obama proposes travel fee for Canada - Macleans.ca

Updated: Obama proposes travel fee for Canada

Proposal would add $5.50 to the cost of visiting the U.S.


The 2012 budget plan that President Barack Obama unveiled this week includes a proposal to impose a $5.50 fee on every traveller entering the US from Canada by commercial vehicle aircraft or vessel (airlines, cruises, buses, etc.) More precisely, it would end a waiver that visitors from Canada (not just citizens or residents, but all visitors) have enjoyed until now.

(* I had understood that commercial buses were also included, but the language is limited to aircraft and vessels.)

According to Birgit Matthiesen of the Canadian Manufacturers and Exporters Association, 16,347,580 air passengers from Canada in 2009 at $5.50 would bring in $89,911,690 or almost the $110 million the Department of Homeland Security said they were looking to generate in the 2012 budget proposal.

Matthiesen says the proposal contradicts the border vision that Harper and Obama set out:

“It’s just yet another demonstration that crossing the border from Canada to the US is going to be costing us more and that the border is a real border. This will stymie not only tourism across our borders but also the travel of our business people,” she said.

“The idea that revenues to offset US budget deficits will come at the expense of Canadian tourists and businesspeople is worrisome – especially coming on the heels of Prime Minister Harper’s visit to the US when they pledged to do more for North American businesses and the North American economy. They pledged to reduce regulatory burdens. This is a huge burden.”

Matthiesen said that NAFTA does not give protection from the fee.

Of course, Obama’s budget is merely a proposal. The US Congress has to legislate any changes.

Here is the current COBRA language:

Fees for arrival of passengers aboard commercial vessels and commercial aircraft(1) Fees. (i) Subject to paragraphs (g)(1)(ii) and (g)(3) of this section, a fee of $5 must be collected and remitted to CBP for services provided in connection with the arrival of each passenger aboard a commercial vessel or commercial aircraft from a place outside the United States,other than Canada, Mexico, one of the territories and possessions of the United States, or one of the adjacent islands, in either of the following circumstances: (A) When the journey of the arriving passenger originates in a place outside the United States other than Canada, Mexico, one of the territories or possessions of the United States, or one of the adjacent islands; or (B) When the journey of the arriving passenger originates in the United States and is not limited to Canada, Mexico, territories and possessions of the United States, and adjacent islands.

Background on COBRA is here.

The DHS budget justification document mentions ending the exemption:

“The President’s FY 2012 Budget includes a legislative proposal to lift the country exemptions for Mexico, Canada, and the Caribbean, which will increase collections by $110 million. The Budget assumes implementation of this exemption by Q3 FY 2012 and therefore requests $55 million in discretionary funding to cover half of the costs.”


You can follow me on Twitter at luizachsavage

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Updated: Obama proposes travel fee for Canada

  1. Crazy.

    Didn't see this coming at all.


      • It's clearly not a tax. It's a fee. Nobodies forcing Canadians to travel to the US.

        You'd think what with all the talk coming from the Liberals about Canada losing it's sovereignty over the new border agreement, that you guys might respect American sovereignty just a bit.

        That said, it does seem like a bit of a dumb plan.

        • Fees = Tax Just ask McGuinty, he still thinks a fee is not a tax. Still fees cost people money and goes to some governing body, it is a tax. yeah, I would scream if I was a US border town or Tourist destination (Florida, Hawaii, California, Las Vegas, etc.). What do these politicians think with….not common sense.

          • Generally I agree that a fee is a tax. Just not if you're going to use the "No taxation without representation" argument. That's like me saying I shouldn't have to pay a provincial sales tax when I visit another province, or another country.

            As for the border town folks, it shouldn't make much of a difference because the tax/fee only applies to commercial vehicles, so if you're driving down to go shopping, you wouldn't have to pay the fee. And for those vacationing further south, I think tha an extra $5.50 is peanuts compared to other airport fees and taxes that you have to pay to get on a flight, not to mention it's probably less than 1% of the cost of the rest of the vacation.

            But ya, this one doesn't really make a lot of sense.

        • You are a real patriot, sourstud.

          • Oh, now I'm unpatriotic because I think that we should respect other countries sovereignty? What's next, "why do you hate the troops?" #fail

    • The US has a well known debt problem. The budget proposed by the Obama administration has been criticized widely for ignoring this fiscal reality. By setting these new fees, (or rather by ending an exemption) Obama is at least symbolically recognizing that government services must be paid for. And this time by (at least in part) Canadians!

      Actually I'm a bit unclear who will pay? My reading of the quoted COBRA section is that ALL PASSENGERS arriving by commercial vessel or aircraft will pay the fee. So returning Americans will also be charged, right?

      Also, I don't think a Greyhound bus can be classed as a commercial vessel, which I think must float (like a boat or an airship). So will this proposed change affect people crossing the border on board a bus?

      Too bad that there will be a another disincentive for Canadians to visit the US (or for US citizens to come here). I really miss the open borders that much of Europe has enjoyed for 30 years. No doubt the new fees will cost us all a bit of money.

    • Easy on our next budget , charge the Americans entering Canada $13.50 to compensate the unbalance in population and may be cover some of our own unbalanced budgets …. The only lesson Americans will understand is a return to their own limitations for visiting their country by the same limitations to visit ours …. ( see what Brazil did as an example …only North-americans have to pay a visa to get in , Europeans don't and this was just a response to Americans ' visa limitations on Brazilians ).

    • Thats the problem…you don't know what's next. I truly believe this will backfire bigtime. Canadians will be more cautious about buying Real Estate in the USA for fear of the unexpected. That would have a far greater impact on the US economy than a travel tax. The USA needs to be very careful here…..sending the wrong messages!

  2. Hm. It's too bad Mr. Harper didn't have any recent occasions where he could have made the case to the American press that charging people to enter from Canada would hurt both their tourism industry and any industry (such as homebuilding) reliant on Canadian products.

  3. Well, that'll certainly "harmonize" the border, eh?

    • haaaaaaaaaaaa

  4. Amazing that this news is not anywhere else.

    The rest of the media in Canada is all tied up in a "Not".

    Luiza has a scoop all to herself.

    • It's a proposal.

      It hasn't been accepted yet.

      • That it's been proposed, is the problem.

        • No.

          Discussion is healthy. Dumb decisions are the problem.

          • This completely makes a joke of the meeting between Harper and Obama.

    • Guess In School You Never To World Geography Like Most Americans

  5. How exactly does this engender free trade?

  6. As a Canadian all I can say is… who cares. It's only for commercial vehicles, which means that fees will be added by exporters, but the end-cost will get defrayed to the American end-user. Not. My. Problem.

    • Read it again. All visitors coming in via commercial carrier. That means unless you drive yourself, or happen to own your own jet or yacht, you will be travelling via commercial carrier.

    • That's a very good point. I guess Obama's trying to find creative ways to tax Americans without appearing to tax Americans.

      • Oh – now it's a tax, sourstud?

    • Depends. Is your employment in Canada one that relies on low-margin bulk-exports to the US?

      Suddenly it is your problem.

  7. One more reason to stay on this side of the border…

    • I'm going to hold my breath and deprive Obama of my better-than-par Canadian dollar until he stops, so there! :D

    • 70% of Canadian export is to the u.s and 70% of that export is moved by Canadians
      are way of life is dependent on crossing that border

  8. Man, if I lived in a US border town I would be furious. As for Canadian border towns, this will be good for their liquor stores (in AB ) and gas stations as less people will be crossing the line for cheaper stuff. If I was the congressman from Buffalo I would certainly be making a stink though!

    • It specifies "commercial vehicles", so theoretically it wouldn't affect those jumping the line for shopping.

      • Some people just do not read, they assume, which makes them look dumb as is the case of Jesse A

      • In BC, many of us do take trains, buses, and ferries to cross border shopping.

        • Fair enough. 5.5 reasons to take your own car, I suppose :)

    • Jesse, Did you actually read this before you made your comment?

  9. as long as we get to do same could be a few bucks

    • I think that would be a really bad idea.

    • Money for nothing. (wait, can I still say that in Canada?)

    • Yeah – we really need new ways to discourage American tourism.

  10. Port Huron Michigan will be in trouble now. Half the economy is derived from Sarnia and surrounding counties all the way to London, St. Thomas, Woodstock and beyond. Just check the licence plates at the malls and Sam's Club – ONTARIO.

    Too bad.

    • Again, the proposal is not to charge the fee to passenger vehicles.

      Seriously friends, you only betray how sloppy you are in your reading.

      • Never let the facts get in the way of a good rant!

      • I agree

  11. Don't care. Will travel to Europe.

  12. Should it happen, I would consider (never would have thought) to boycott travelling to US. What is going on with US, it is going down the trash.

    • Are all you people not reading this or are you just not understanding it, it will not affect Car travellers to the USA, hope you finally get it

      • It does affect when one flies, takes a train, bus ride, ferry, or a cruise. We already paid too much travel fees and taxes. Whoever proposes this has one track mind. They only thought how much money they will earn but they have never given thought to how much business and money they will lose with this proposal. Added to those losses, they will have to spend money on infrastructures and manpower for administration. Will it be a net gain or a big loss at the end? I never thought it could ever get worse after Bush required Canadians to carry passports when crossing, boy was I wrong! Canada might have smaller population than many of US trading partners but inspite of that we are US largest trading partner. We purchase US products/services 4 times more than China (which has a billion people), and more than that of all European countries combined. Should they start this unneighbourly practice, even without an eehk from whichever of our elected whimpy government, they might find that the Canadian people may not be that reticent and complacent. Taking us for granted is one thing but punishing us monetarily for contributing to their economy is beyond lunacy. When this proposal goes through, this might be a good time for us Canadians to take a stand and avoid the US unless it is extremely necessary. I just can't imagine what hurdles our clueless Canadian geese and birds will be facing.

  13. I'm not sure what the huge deal is to be honest. I have to pay US$26 whenever I leave Costa Rica to come back to Canada, and many places have a departure tax. So long as the US doesn't start charging an arrival AND departure tax, I'll be happy. That said, it's a little difficult to understand if passengers transiting through the US via air will have to pay this arrival fee, since, while technically we are in the US, we stay at the airport waiting for our next flight out.

    • You normally only officially enter a country when you leave the airport, for the purposes of visas, fees, etc…

      • True, but here in Canada, you've left the country before you've boarded the plane.

  14. Shoot, why not have Canada impose that same fee on travellers entering from the United States. Then we can just each collect each other's taxes (on the reasonable assumption that most people who enter will leave), link the crossing to our passports, and charge our own citizens who cross. That sure would be better than the long lineups while Mom rummages through her purse for $22USD, or $21.80CAD (sorry, couldn't help myself), for herself, Dad, Wally, and the Beaver to pay the man.

    • Your math is all wrong boy!

      • Not only his math but his understanding of what it says and how it implies to who what when and where, cars and passengers free, read the damn thing

        • You miss the point, Dave. The point is a tongue-in-cheek reference to the Canadian dollar trading above par against the US dollar for the first time in many years.

          But as both you and Raif are so sure that the math is wrong, what exactly is wrong with four bus passengers at 5.50US each yielding 22USD, or given that the Canadian dollar is trading higher than the US dollar, albeit only marginally, resulting in a little less than 22CAD being equivalent?

        • And geez, the article explicitly refers to charging travellers on commercial vehicles, including buses, so how are passengers free?

          • Never mind, June. Sucks when you have to explain. I got it.

  15. How about a tax of $100 for all Canadians travelling from Canada to the US, but only payable by Canadians and only if they are travelling into the US or via the US. We can use this to fund refunding $5.50 per person entering Canada to offset the US charge.

  16. Canada should retaliate with our own tax payable in Canadian currency only or gold. Not that worthless American stuff wet with fresh ink that they keep flooding the markets with.

    • What…that quantitatively eased green currency crap? :D

  17. I fully expect the Canadiangovernment to respond by imposing an entrance fee on all USA trucks, etc owing into Canada.

  18. LMAO !!!!! If that isn't the most idiotic concept I've every heard.

    Wait! Wait! I have an even better idea…. lets say only half as many Americans visit Canada every year, that would be 8,173,790 people. Then we charge them 10$ (US) for entering Canada, with a favourable US currency rate, not only would we as Canadian people get our annual refund back but we might make a slight profit on the currency exchange.

    Again, this is the most idiotic concept I've ever heard of. Come and bring it on my southern friends, we can go back and forth with this type of stupid fee until we are both dishing out a couple hundred dollars and then we can just shut down the border because no one will want to pay. Tit for Tat morons!

    • No, no, no. $5.99. Exact change only! We don't accept tips!

  19. If they pass this, Canada should do the same and rebate travelers with the revenue from us travelers.

    • Exactly Tim, but do you think we will, I don't. I pay 350. just to take my birds to the US. It is all about money!!!!

  20. jerk

  21. I think a lot of people are missing the point on this. It applies to commercial vehicles, not to individual vehicles. If I drive to Detroit to do some shopping, in my own car, I won't get charged the $5.50. Business as usual. Simple enough.

    • 16,347,580 air passengers from Canada in 2009, again that is approx. 16 million of us who would be affected per year and charged 5.50, I doubt you'll wanna drive to Miami, Dallas, Las Vegas or Los Angeles to save 5 bucks.

    • What about the elderly folks going off in a coach to las Vegas for the weekend.

  22. Macleans who ?

  23. Simple fix. Just charge Americans the same fee and use the money to subsidize the fees the Americans want to collect from us. That way it'll end up costing more than it brings in and the Americans will be screaming for the fee to be dropped and of course, blaming us I'm sure.

  24. Canadins don't mind $5/head to visit the US as long as the US doesn't mind $5000/vehicle for using the Alaska Highway corridor!


  26. I find it interesting that the US treats 3rd world dictators and communist countries like China with blind affection, but feels justified in punishing Canadians like we're the ones responsible for their problems.

  27. By the time they get this thing to pass, the Canadian $ will be even higher. So not to worry, it'll only cost us $4.00… hahaha

  28. It is all very simple, if and when the US implement this levy on Canadian travelers we as Canadians in turn collect $5.75 from every US citizen crossing into Canada

  29. If thats what he wants then maybe they should enjoy a nice hike in prices for all of our cheap natural resources they've been getting.

    Oh, and you know all that power we give them? Yeah, lets overprice that too.

    Greedy bugger.

  30. this is a joke. lets hurt all boarder towns on both sides of the boarder. The Americans are only hurting themselves if they do that. Has anyone seen there boarder towns. Going into Detroit or Buffalo is NO treat.

    Canada has everything I need.

  31. first of all , the Department of Homeland Security could get more money than the 100 Million in there budget, if they were to confiscate the 100 suitcases full of money that Mubarak's son brought in to UK . how much of that 1.3 billion in military aide did they skim to fill 100 suitcases.
    And what about the hundreds of millions of dollars that went to Karzai in Afghanistan and then left the country with his brother to another Arab country.

    The US has enough money to take care of their own problems domestically, if they'd only stop sending it abroad to buy off other countries or the massive blackbook projects at Area 51 and now Area 52 or the massive amounts of monies the US Navy is spending on the secret base down in Puerto Rico.

    This is a great way to start a WAR between neighbors in North America.

    Why don't we take all that oil that we are sending down to the US from Alberta and put a $5.50 exit fee on each gallon, US gallon that is ,not an Imperial gallon that goes into the US.

    This would be the equivalent of Donald Trump putting a 25% tax on Chinese goods, if he became president. ( you had to see the Piers Morgan interview to get this).

    That would sure as hell, would bring the American's to the table…..screaming bloody murder!!!

    So President Obama, do you still want to charge your good friends $5.50 to come to your country, cause I'd rather use that money to put toward my fund to go to Canada's Wonderland…..Think about it Barack and get back to me on it.

  32. Luiza was about 7 hours ahead of the CBC on this one.

  33. Obama is bankrupting the US, the Democrats give away other people's money to their lazy constituents and special interests, that's the only policy that gets them elected, but of course it's shortsighted, they can't beg, borrow and steal from others forever.

  34. Harper, hello are you trying to encourage canadians to stay home? Surely you knew about this.

  35. Its just $5 Why all the hoopla?
    Tit for Tat…Why doesn't Canada do the same sort of thing and put some of the money towards the U.B.B. problem?

  36. I get the idea of having a a counter-tax, but really—who in their right minds goes to Canada?

    I can't believe the Canadians have their panties in a bunch over $5.50.

    • The US government surely have their panty in a twist proposing this $5.50 charge in the first place.

  37. canada border crossing to be downsize in a few areas now this news of fees from obama to enter the usa for canadians. ( no one else)? numerous news reports of body pat ~downs ,court cases. nah~~~ not worth the 5.50 to cross the zone . load of places to travel to and enjoy. that person whom is titled president should have his birth certificate and legit passport viewable for the world to see , as a first to do even on behalf of the military personnel whom risk their careers for their country. american coins in canadian change ,just will ask the cashiers for canadian money only . not going to travel to usa anymore. if his id is not cleared up, then there is no america !

  38. Maybe they can have Tips jars at the border crossings?

  39. Only fair, most zoos charge an admission feee.

  40. If Obama really wants to help reduce the deficit in the US, he should just step down as president.

  41. I guess Quebec can cut the power to Vermont and Upstate New York, they wont really need that. Plus I guess the oil that the US buys from us can go to China now.

    With them trying to make $110 million, they will lose billions. Good job Obama.

  42. The only thing Canadian travelling to the US can do is show their disapproval by not going there. I am sure the Canadian government will complain about the fee for commercial vehicles but if Obama doesn't back down, there isn't much to be done. People who arrive in the US by air already pay a $10.00 homeland security fee. This will just be one more "get us out of debt fee" tacked on. Going to Europe sounds good but much more expensive for us in the west. If we want some warm weather during a cold winter, a quick trip to Phoenix works out great – just have to suck it up and pay out that 5 bucks.

  43. I'm saving hundreds of dollars by flying through the U.S. on a U.S.-owned airline to my next vacation spot, so I'm not going to notice $5.50. I suppose it could add up for a family with several children, though. For those who might say I'm unpatriotic, I have always tried to fly Canadian before, but I've had more bad experiences with our local friendly airline than with any American line. Just my own experience, not a generalization or even an unscientific poll….

  44. The moment that this gets passed… if it gets passed. Canada should do the same, get American tourists to pay the same amount to our government.

    I don't think that this is a good idea but hey… if we Canadians have to pay to go down to the States then I guess that most Canadians won't be going there anymore. Looks like this is going to cut a huge loss to the Tourism.

  45. is the USA now the new wally world or what?…
    were you have to pay for admission… and soon you will need to pay to get out…

    what a disaster the USA has become… book burnings now too…

    welcome to the hotel california…
    where you can check in anytime you like but you can never leave

  46. Oh Gee! A whole fiver to go see the USA!
    If you have enough money to go do the tourist/travel thing, well then, maybe you have enough cash to pay the fiver.

    And if it discourages Canadian Tourists/Travelers from heading South, why that may be a good thing, anyway….
    It will keep the Tourists here, and we will see those dollars helping our economy, which is not exactly booming at the moment.

    Worry not, certain US States will soon see the drop in tourism/travel, and act accordingly.

    Meanwhile, charging Yankees to come North, is just plain stupid, and more stupid….
    We don't need to, anyway: The high Loonie has seen to that. Former Canadian spots that were making money off of Americans are now doing so poorly, they should apply for US foreign aid!

    Come North, my little friends, spend your casholla here! (After you have converted it to Kanuck-a-bucks!)
    Meanwhile, as for tourists/travelers, "Ha, Ha, Ha — there's more for us!"