EBay lobbying Ottawa to reduce duties customers pay on imported items

EBay Inc. has been lobbying the federal government to reduce the duties people pay on items shipped into Canada.

The online retailer has been meeting with senior federal officials to call for raising Canada's duty-free threshold on shipped imports. Called the de minimis threshold, it means that people in Canada can currently order up to $20 duty-free; eBay has been adding to international pressure on the government to align its threshold with the United States.

"There is certainly international pressure to increase and harmonize these thresholds," said Andrea Stairs, manager for eBay's Canadian division, which has been lobbying to increase the de minimis threshold to $200.

The San Jose, Calif.-based company met with a handful of senior public servants in August .

"Given that they will have to do the due diligence and draft policy, we wanted to take a moment and speak to them directly about our position," Ms. Stairs said.

EBay, whose Canadian users spend more than $1-billion annually through the service, points out that Canada's $20 de minimis threshold stands apart internationally. In the U.S., it's $200 (U.S.); Australia's is $1,000 (Australian); in Mexico it's $50 (U.S.). The U.S. Congress considered a bill this year to raise the threshold to $800.

In February, a group of U.S. senators sent a letter to Canada's ambassador to the United States, Gary Doer, urging the Canadian government to raise its threshold. The letter said that "Canada has one of the lowest thresholds" internationally and that the level represents "an unnecessary trade barrier between our two countries, particularly for low-value, low-risk shipments."

While raising the threshold might seem an easy, populist move, it's not a simple policy question. Canadian retailers oppose hiking the threshold, arguing it would effectively create a tax advantage for U.S. retailers whose e-commerce could suffocate business in Canada.

EBay reported four meetings with senior government officials in August, including senior trade officials Dean Beyea and Nadia Theodore, director of the Foreign Affairs, Trade and Development Department's Trans-Pacific Partnership division.

The company also met with senior Industry Canada officials, including Corinne Charette, senior assistant deputy minister at Industry Canada, and Ryan Malloy, an official working on postal and courier policy at Canada Border Services Agency.

On eBay's behalf, consultants with Environics Communications in Ottawa also met with senior government officials, according to the federal lobbyist registry.

The Retail Council of Canada has been lobbying against raising the threshold, and also had some meetings with senior officials over the summer to discuss "consumer issues" and taxation, according to the registry.

"We've had discussions with them over the last number of years," said Karl Littler, an executive with the council. "We made it a part of our pre-election engagement, as people [in the political parties] were doing some platform formulation."

EBay and other proponents of raising the de minimis threshold will have to convince the federal government that Canadian retailers wouldn't suffer as a result.

"What we have a problem with is a push to confer a tax advantage on a foreign seller that would not be enjoyed by a Canadian merchant," Mr. Littler said, referring to imports that would not be subject to taxes or duties. "A very, very large amount of goods are sold for under $200 by retailers."

He said raising the threshold could take a bite out of government revenue. Ms. Stairs said a "modest increase in the threshold," coupled with more effective duty enforcement, would make the increase revenue-neutral .

The issue is likely to come up for whatever government is in place after the Oct. 19 election. How soon is another question.

While sources indicated an increase to the de minimis threshold is not likely to be a part of the Trans-Pacific Partnership, Ms. Stairs said she's hopeful it could appear in a successful free-trade deal and, following that, as a measure in the next budget.