An Amazon warehouse north of Calgary in Balzac, Alta., is shown on Monday, May 4, 2020. THE CANADIAN PRESS/Jeff McIntosh

Federal pledge to get GST from goods in Amazon warehouses could net $600M

GST is collected on the wholesale value of the goods when they come across the border

The parliamentary budget officer estimates the Trudeau Liberals’ pledge to collect federal sales tax on some goods sitting in Amazon warehouses could net Ottawa just over $600 million.

The extra tax revenue is spread over five years, starting this year and ramping up every year thereafter for a total of $604 million over that time.

The proposal would try to close a loophole for unsold goods foreign-based sellers ship to Canada, then house until they are sold and shipped domestically to local buyers.

GST is collected on the wholesale value of the goods when they come across the border but the federal sales tax isn’t always collected by sellers when the goods are sold to consumers.

That creates a gap the Liberals want to close by either making sellers registered to collect the GST do so on the final sale price, or making platforms like Amazon responsible for it instead.

The Liberals are promising to have the policy come into effect on July 1.

There are sources of uncertainty within the estimate crafted by budget officer Yves Giroux’s officials, including how much of the shift to online shopping caused by COVID-19 will remain when the pandemic recedes.

The report was one of two released by Giroux’s office on Thursday as it continues to cost out promises the Liberals made in November’s economic statement.

The second report estimated that a crackdown on tax cheats could yield close to $800 million in new revenue over a five years.

Collection is likely to start slow by the budget office’s forecasts, beginning with just $1 million in tax revenue this year, and rising each year thereafter.

By 2026, the budget office suggests federal coffers could collect $782 million from Canadians using offshore tax havens or aggressive plans to reduce the amounts they would otherwise have to pay.

To get there, the government will have to spend $606 million over the same period to boost the audit capacity at the Canada Revenue Agency to focus on those most likely to use such schemes, including wealthy Canadians.

The report warns it is difficult to predict with certainty how much more spending will lead to the collection of extra tax revenue.

Giroux’s experts also write it is difficult to predict how taxpayers will respond to the beefed-up audit capacity at CRA, noting some may declare more of their offshore holdings, while others may find new ways to evade taxes that are harder to detect in audits.

The report also said the extra audits could lead to more appeals, delaying when taxes are collected.

The government suspended its audit activities for part of last year because of the pandemic and the Tax Court of Canada did not sit. The PBO report made note of those issues, pointing to comments from the court’s chief justice, in a webinar earlier this month, warning of a deluge of appeals likely to be filed later this year.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Cowichan Capitals traded defenceman Clark Webster to his hometown Summerside Western Capitals. (Kevin Rothbauer/Citizen)
Hopeful Cowichan Capitals make flurry of deadline deals

Roster bolstered in case BCHL season gets go-ahead

Neurologist and medical educator Dr. Alexandre Henri-Bhargava, seen here speaking at the 2020 Breakfast to Remember in Victoria, will delve into the latest in dementia research during an interactive research event exclusively for attendees of this year’s virtual Breakfast. Access to the March 10 research event is included with the purchase of a Breakfast to Remember ticket. (Kevin Light Photography)
Blast off with Chris Hadfield at Alzheimer Society’s Breakfast to Remember in March

The Society hopes people in all corners of the province will make the most of this opportunity

The City of Duncan will implement a new pilot project targeting vandalism this spring. (File photo)
Duncan initiates pilot project to deal with graffiti

Project based on a successful one in Port Alberni

The victim of the homicide on Cowichan Lake Road early Monday morning was 17 years old, and was stabbed in the incident. (Kevin Rothbauer/Citizen)
Duncan homicide victim was 17 years old

RCMP report that teenager was stabbed

Health Minister Adrian Dix looks on as Dr. Bonnie Henry pauses for a moment as she gives her daily media briefing regarding COVID-19 for British Columbia in Victoria, B.C. THE CANADIAN PRESS/Jonathan Hayward
7 additional deaths and 542 new COVID-19 cases in B.C.

Provincial health officials reported 18 new COVID-19 cases linked to variants of concern

Chief Justice Christopher Hinkson (Office of the Chief Justice)
Judge questions whether B.C.’s top doctor appreciated right to religious freedom

Lawyer for province says Dr. Henry has outlined the reasons for her orders publicly

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A sample of guns seized at the Pacific Highway border crossing from the U.S. into B.C. in 2014. Guns smuggled from the U.S. are used in criminal activity, often associated with drug gangs. (Canada Border Service Agency)
B.C. moves to seize vehicles transporting illegal firearms

Bill bans sale of imitation or BB guns to young people

BC Housing minister David Eby is concerned that Penticton council’s decision to close a local homeless shelter will result in a “tent city” similar to this one in Everett, Wa. (Olivia Vanni / Black Press file)
‘Disappointed and baffled’ B.C. housing minister warns of tent city in Penticton

Penticton council’s decision to close a local homeless shelter could create tent city, says David Eby

This was the scene outside North Saanich’s Parkland Secondary School after an attempted but unsuccessful break-and-enter into the school torched an ATM inside of it. Sidney/North Saanich RCMP did not make any arrests and currently lack suspects as the investigation continues. Members of the public who may have witnessed something or possess other information can contact police at (250) 656-3931 or to Crimestoppers at 1-800-222-TIPS. (Submitted)
Money to burn: burglars torch North Saanich high school ATM

Police dogs searched the exterior and interior of the school after early morning break-and-enter

A recently published study out of UBC has found a link between life satisfaction levels and overall health. (Pixabay)
Satisfied with life? It’s likely you’re healthier for it: UBC study

UBC psychologists have found those more satisfied with their life have a 26% reduced risk of dying

A vial of some of the first 500,000 of the two million AstraZeneca COVID-19 vaccine doses that Canada has secured through a deal with the Serum Institute of India in partnership with Verity Pharma at a facility in Milton, Ont., on Wednesday, March 3, 2021. THE CANADIAN PRESS/Carlos Osorio - POOL
Federal panel recommends 4-month gap between COVID vaccine doses due to limited supply

The recommendation applies to all COVID-19 vaccines currently approved in Canada

t
Province invests $2M in three Vancouver Island food hubs

Hub network provides shared-use processing facilities to small agri-businesses

Most Read