By Canadian Press

PBO says Liberal pledge to get GST from goods in Amazon warehouses could cost $600M

Feb 18, 2021 | 8:51 AM

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

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

The spending 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.

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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. 

This report by The Canadian Press was first published Feb. 18, 2021.

The Canadian Press