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

Castlegar’s Gabrielle Herle (right) will be one of the speakers at the conference. She is seen here with Wendy Gaskill from Chinook Scaffolding accepting their Contractor of the Year Award in 2019 from the Builders Code Champion Awards. Photo: Submitted
Girls in STEAM and Leadership Conference offered free for all girls in the Kootenay Boundary

Virtual conference for girls in grades 8 to 12 will be taking place on March 8

A cougar in early February killed a family dog near Grand Forks, said Conservation Officer Mark Walkosky.
Grand Forks Conservation Officers want pet owners to be aware of area predators

Dogs have been recently been attacked and killed by wild animals near Saddle Lake

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

Friday’s announcement caps years of planning by policy planners and food growers across the Boundary. File photo
Boundary food hub to go ahead as province kicks in $750,000

The hub’s Rock Creek and Greenwood operations are designed to restore “food sovereignty,” says policy planner

Blaine Penner survived an avalanche in Norns Range. Photo: Blaine Penner
West Kootenay man survives avalanche in Norns Range

Blaine Penner accidentally stepped out onto a cornice, triggering avalanche

Thursday, Feb. 4: RDKB Chief Engineer Darryl Funk hoists a banner commemorating last year’s championship season by the Bantam House Bruins. Photo: Laurie Tritschler
Bantam Bruins honoured at hair-raising banner ceremony at Grand Forks’ Jack Goddard Arena

Asst. coach Mike Tollis said he reluctantly gave in to the team’s victory wish that he cut his pony tale

Justin Morissette is still recovering from the injuries sustained in the altercation. He is not yet able to walk without assistance. (Justin Morissette, Twitter)
B.C. man suing city and police over violent altercation with anti-LGBTQ preacher

Justin Morissette argues police knew the threat the preacher posed, and failed to keep the peace

Jack Barnes, who was Cowichan Valley Capitals property from May 2020 until last week, scores a goal for the Penticton Vees during the 2019-20 BCHL season. (Brennan Phillips/Black Press)
COVID-crunched BCHL facing trade deadline dilemma with its 20-year-olds

Hard decisions loom when BCHL may or may not resume play

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

UBC Okanagan students are among the most food insecure in Canada, according to a new study by UBC.
(Phil McLachlan - Capital News)
UBC Okanagan students among most food insecure in Canada

42.3 per cent either can’t properly feed themselves, or are worried they will soon run out of money

Average response times for critical “purple” and “red” calls were between nine and 10 minutes Feb. 19 in Metro Vancouver, with only less critical “yellow” calls receiving an average response time of 45 minutes. The longer than usual delay was due to a combination of factors, BC Emergency Health Services said. (APBC image)
After a night of one-hour waits for ambulances, union goes public with concerns

B.C. Ambulance Service says high-priority calls were still 10 minutes or less

NorKam secondary student Karis Wilson in the outfit that got her sent home from school on Tuesday, Feb. 23, 2021. (Contributed to Kamloops This Week)
B.C. teen in turtleneck, lace-edged dress sent home from school for ‘inappropriate’ outfit

NorKam secondary student Karis Wilson was told the lace on the garment made it look like a slip dress

B.C. NDP leader John Horgan and former finance minister Carole James roll out “StrongerBC,” a $1.5 billion business support plan for COVID-19, eight months after the B.C. legislature approved the money and four days before a snap election call, Sept. 17, 2020. (B.C. government photo)
B.C.’s COVID-19 business grant fund still mostly unspent

$300 million pandemic assistance approved almost a year ago

Most Read