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

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
COVID-19: B.C. seniors aged 80+ can start to sign up for vaccination on March 8

Long-term care residents protected by shots already given

The Majagaleehl Gali Aks Elementary School in Hazelton is being shut down for a week by the Gitanmaax Band Council following a confirmation of a COVID-19 exposure there on Feb. 26. (Black Press Media File Photo)
COVID-19 exposure notice shuts down Hazelton school

Closure to last for one week and school is to be sanitized

Dave Livesey, right, has been elected as Telkwa councillor defeating Klaus Kraft (middle) and Erik Jacobsen. (Interior News composite photo)
Dave Livesey elected to Telkwa council

Livesey received 60 votes to Klaus Kraft’s 51 and Erik Jacobsen’s 34 in preliminary results

Smithers Local Health Area reported just one new case of COVID-19 from Feb. 14-20. (BC CDC graphic)
Local weekly COVID infections drop to one

The Smithers Local Health Area (Houston to Witset) reported a single case between Feb. 14 and20

A health care worker prepares to test a Coastal GasLink field worker for COVID-19. (Coastal GasLink photo)
Coastal GasLink begins COVID screening of pipeline workers

Construction is once again ramping up following Northern Health approval of COVID management plan

Langley resident Carrie MacKay shared a video showing how stairs are a challenge after spending weeks in hospital battling COVID-19 (Special to Langley Advance Times)
VIDEO: Stairs a challenge for B.C. woman who chronicled COVID-19 battle

‘I can now walk for six (to) 10 minutes a day’

Face mask hangs from a rear-view mirror. (Black Press image)
B.C. CDC unveils guide on how to carpool during the pandemic

Wearing masks, keeping windows open key to slowing the spread of COVID-19

Churches, including Langley’s Riverside Calvary Church, are challenging the regulations barring them from holding in-person worship services during COVID-19. (Langley Advance Times file)
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

Det. Sgt. Jim Callender. (Hamilton Police Service screenshot)
B.C. man dead, woman seriously injured after shooting in Hamilton, Ont.

The man was in the process of moving to the greater Toronto area, police say

(Black Press file photo)
Child in critical condition, homicide investigators probe incident near Agassiz

The child was transported to hospital but is not expected to survive

Sewage plant in Lower Mainland, operated by Metro Vancouver. (Metro Vancouver screenshot)
‘Poop tracker’ launches as researchers test Lower Mainland sewage water for COVID-19

‘Studying the virus in wastewater allows researchers to look at an entire population…’

(Pxhere)
Compensation fund opens for B.C. students negatively affected by incorrect exam marks

Marks for 2019 provincial exams were incorrectly tabulated

Most Read