The Windsor-Essex Regional Chamber of Commerce (WERCC) partnered with the Greater Niagara, Sarnia Lambton and Thunder Bay Chambers to ensure local business interests are strongly represented in NAFTA discussions by bringing their “Protect Canadian Business by Keeping the De Minimis Threshold Low” resolution to the Canadian Chamber of Commerce AGM, September 23-25, 2017 in Fredericton, NB.
Given that NAFTA renegotiations appear to be going forward, the four Chambers recommend that the federal government maintain the current Canadian De Minimis level of $20 to prevent granting an unfair advantage to foreign online retail sellers operating in the Canadian marketplace.
Any level of an increase in the DMT in Canada (currently $20) would be unwelcomed for retailers and raising the De Minimis level to $200 would lead to massive increases in cross-border purchases negatively affecting retailers in items such as apparel, footwear, books, toys, consumer electronics and housewares, most of which are priced below $200 and easily shipped. The losses in terms of new investments, jobs and economic activity could be significant.
The U.S. De Minimis level is $800. The U.S. retailers, however, are dominating their online retail space with only 22% of U.S. customers purchasing from non U.S. sellers. By contrast 67% of Canadians report having made online cross-border purchases. U.S. online sales are not subject to the collection of state or federal sales taxes.
To help our retail sector, the Government of Canada should support the continuation of a level playing field between retailers operating here in Canada and those who sell online from outside Canada and ship goods cross-border by post or courier.
“Given the large imbalance between online shopping in Canada and the U.S., it makes sense to leave the De Minimis where it is,” said WERCC President & CEO Matt Marchand.
“The Canadian retail landscape is undergoing tremendous change, and retailers are facing many challenges. The retail industry is Niagara’s largest collective employer, as it is in many other regions. To protect Canadian industry and Canadian jobs, we have added our voice to the call for a maintained De Minimis level and a NAFTA that works for Canada,” said Greater Niagara Chamber of Commerce President & CEO Mishka Balsom.
“Local businesses are going to be impacted by any changes to NAFTA,” said Shirley de Silva, President of the Sarnia Lambton Chamber of Commerce, “and the point at which taxation kicks is a real concern among our membership as it could put them at a competitive disadvantage.”
“Local retailers are already struggling to keep their heads above water with the rising costs of doing business in Ontario added to global competition from online shopping,” said Charla Robinson, President of the Thunder Bay Chamber of Commerce. “An increase in the De Minimis limits could be the last straw for many small retailers.”
In order for a resolution to pass, it requires support from two-thirds majority of Canadian Chambers across the country.