The Canadian Press - ONLINE EDITION
Posted: 06/10/2014 12:42 PM | Comments: 0
Last Modified: 06/10/2014 2:33 PM
WASHINGTON - Canada's shipping industry appears to have steered clear of a threatened U.S. cargo tax.
The push for a tax on cargo from Canada and Mexico was excluded from the new Water Resources Reform and Development Act, signed into law Tuesday by U.S. President Barack Obama.
"(This) would have been a massive tax grab and a massive congestion problem," a pleased Canadian ambassador Gary Doer said in an interview before the bill was signed.
"This would have been a real blow to Canadian ports, and real congestion points at our borders."
The final legislation doesn't include the proposed 0.125 per cent tax, which would have been collected by U.S. Customs on all cargo carried into the U.S. via Canadian ports.
The bill negotiated between the two houses of Congress does address some of the complaints from Washington state lawmakers, who say their ports are currently disadvantaged by the American tax system.
They say it's unfair that certain ports have been forced to put disproportionately high sums into a national harbour maintenance fund, making them less competitive against Canadian ones.
The new law offers $25 million to certain ports, like those in Seattle and Tacoma, that are net contributors to the fund. Other provisions include authorizing 34 new Army Corps of Engineers projects.
The Canadian government had feared that the sweeping, 10-year funding plan would incorporate the tax idea. Washington state Democrats in the Senate and House of Representatives had proposed such a levy in similar bills.
In a recent U.S. speech, Transport Minister Lisa Raitt even hinted at the possibility of trade retaliation.
The Canadian side argued that its ports are gobbling up business from Asia because of faster maritime routes and fast-expanding infrastructure.
Wendy Zatylny, president of the Association of Canadian Port Authorities, said the tax would have been an unfair penalty — not just on Canada's ports, but on the entire continental economy.
"Canada's port authorities invest heavily in infrastructure and innovation, and their efforts have allowed them to remain at the forefront of a highly-competitive and mobile sector," Zatylny said in an email.
She said 10 million jobs on the continent depend on trade and investment between the two countries and they benefit from ongoing efforts to speed up the flow of goods.
The proposed cargo tax, she said, would have pushed things in the wrong direction and "would have been detrimental to these positive efforts."
The idea of a tax isn't completely dead, but without the help of a larger piece of legislation, it's likely to falter, as it has in the past, Doer said.
"We've defeated it three times now — three attempts," he said. "But this was a really important one — because it had both (Washington state) senators proposing it. And it did not pass."
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
Farm bank donates $10 billion for rural projects
China factory index at 18-month high in July
Japan trade deficit at record $75B in first half
South Korea unveils stimulus after ferry sinking
Cruise passengers recount horror stories to Senate
Argentina president says country will not default
Mullen Group sees Q2 net profit decline
Arctic region hot topic at Whistler, B.C., summit
SEC considering action against S&P over ratings
Provincial utilities agree on hydro deal
Fortune 500 firm Sealed Air moving HQ to Charlotte
Twitter admits to diversity problem in workforce
Setback for Nygård in Bahamas
FDA approves new painkiller from OxyContin maker
Nunn and Perdue shift to fall battle of outsiders
New Zealand raises interest rate to 3.5 per cent
Audit: NASA doesn't have the money for big rockets
Bombardier restructuring operations
Most actively traded companies on the TSX
Social Security spent $300M on 'IT boondoggle'
Cheaper wireless plans cut into AT&T 2Q profit
Rehab clinic fined in staged-collision probe
CRTC to meet with companies about paper bills
Former trader gets 2 years in prison for fraud
5 tips for selling your home for the best price
Meat supplier in China scandal has global reach
Oil gains on sharp drop in U.S. supplies
Supreme Court upholds firing of tourism director
Holmes lawyers question firearms analysis
Toronto firms fined over do-not-call list
Senate agrees on $11B highway funding measure
US economy, though sluggish, may now be sturdier
50K Canadian vehicles in latest GM recall
IMF sees US growth at weakest since recession
Chinese leader signs accords, wraps up Cuba visit
Medicaid enrollees strain Oregon
Agency continues ban on US flights to Tel Aviv