Western Hemisphere Travel Initiative: Proposed Air and Sea Rule
The Government of Canada appreciates this opportunity to provide official comments on the Proposed Rule for Documents Required for Travellers Arriving in the U.S. at Air and Sea Ports-of-Entry from Within the Western Hemisphere. Department of Homeland Security docket number USCBP 2006-0097.
The Government of Canada is committed to North American security and addressing the threat of terrorism. Secure borders are critical to U.S. and Canadian security. Since 2001, Canada has invested some U.S.$10 billion to protect Canadians, secure our borders and increase emergency preparedness. From the bilateral Smart Border Declaration and Action Plan (2001) and continuing with the Security and Prosperity Partnership (2005), Canada is working cooperatively with the U.S. to improve border security and facilitation. Our commitment to shared border management has enhanced security and brought tremendous economic benefits for both nations.
The Canada - U.S. border underpins the greatest trading relationship in the world and sees the movement of three hundred thousand people every day. Two-way trade in goods and services surpassed U.S.$585.6 billion in 2005. For the tourism industry alone, Canadians made some 37 million visits to the U.S. in 2005, spending about U.S. $8.2 billion. Canada received some 32 million visits by Americans during the same year. As a result, new entry requirements – if not implemented in a measured and prudent way – have the potential to disrupt the health of our economies, including tourism, and other sectors such as the North American automotive industry, which rely on an efficient border. It would also cause significant disruption in shared border communities across Canada and the U.S. Backlogs and congestion themselves create security vulnerabilities.
Accordingly, it is critical that we enhance security and streamline the movement of legitimate travellers and trade. Governments on both sides of the border are committed to these objectives. For these reasons, Canada continues to advance the need for flexibility in implementing WHTI requirements. Canada believes that passports or passport-like documents should not be the only legal means by which Canadian and U.S. citizens can cross our shared border, in particular the land border. The Intelligence Reform and Terrorism Prevention Act clearly specifies that "a passport or document, or combination of documents ... deemed to be sufficient to denote citizenship and identity" can be used. Canada believes that there are existing documents which can demonstrate identity and citizenship in the near term.
At the same time Canada believes that both our countries should explore how we can make these documents more secure in order better to satisfy WHTI requirements. We believe that proposals for secure alternative documents, including enhancing widely held documents that many citizens possess in any case, should be explored. We will be providing further comments on the land border context when the rule-making is published.
Air travel contributes significantly to our social, cultural and economic interactions. In 2005, approximately 9.5 million visits by U.S. and Canadian citizens took place via air. Secure and efficient cross-border travel and trade by air and sea remains crucial to both countries - for tourism, shipping, and business travel - and is key to our increasingly integrated relationships.
However, Canada is concerned that there is little time before the proposed air and sea rule is implemented (January 8, 2007) and that considerable confusion still exists in the public mind about document requirements under WHTI. Canada believes that if not done in a measured and prudent way, the implementation of the air and sea rule has the potential to significantly deter the travelling public on both sides of the border as well as cause unnecessary economic impacts. As Prime Minister Harper said recently, " ... let's make sure the WHTI works before it goes into effect, and lets take the time to get it right."
A number of concerns therefore need to be addressed:
- First, a significant number of Canadian and U.S. travellers arriving by air and sea still do not have a passport and will not have the required travel documents during the initial period of air and sea implementation. About 22 % of Canadians and 29% percent of U.S. citizens, who travel by air or sea, do not currently hold passports. This is a significant figure and will likely result in a reduction of travel across the border by air or sea, at least temporarily. This will not only affect the tourism and convention trade but may also deter business travel. While we believe our respective passport agencies can meet anticipated demand, we are concerned whether a significant spike in demand, particularly if it occurs during the peak period for Christmas and New Year, can be met on time. Similarly, people who travel by land to Canada and others who seek to re-enter the U.S. by air may not have appropriate documents after the proposed deadline. Canada is concerned about U.S. citizens who find themselves in Canada after January 8, 2007, and who seek re-entry into the U.S. by air and sea without one of the listed acceptable documents. Protocols will need to be established by the U.S. Government to efficiently process these citizens who find themselves in this situation.
- Second, without an immediate and high profile communications and outreach campaign, travellers and businesses will not be sufficiently prepared, or even aware of, new document requirements by January 8, 2007. However, it would be difficult to mount and implement such a campaign prior to the proposed implementation date, which is less than four months away. Furthermore, a communications campaign would need to articulate clearly air and sea requirements, advise that land border requirements have not yet changed and inform that no decisions have yet been taken on acceptable alternatives to the passport at the land border. This would be a complex communications challenge.
- Third, Canada is concerned that the potential economic impact of the proposed air and sea rule is not fully understood. The Regulatory Assessment of Customs and Border Protection (CBP) may have significantly underestimated the impact the proposed rule will have on the economies of both countries, in particular on airline industries, convention and tourism industries, and small and medium size businesses who depend on these (3)sectors. A more detailed analysis of these concerns is provided in the ANNEX, which can be found at the end of these comments.
In light of these concerns Canada proposes that:
- The U.S. Government harmonize the implementation date of the air and sea rule with its land rule, which is currently scheduled to come into effect on January 1, 2008. The Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA), does not require an earlier date for air and sea. Canada believes that the earlier dates will only add to confusion resulting from a staged implementation.
- Canada believes that until WHTI requirements for all modes of travel are decided and implemented, existing entry requirements should continue to apply to Canadian or U.S. citizens entering or re-entering the U.S. by air and sea.
- Canada will have further recommendations on implementation and acceptable documentation pursuant to WHTI when the land border rule is published.
- This harmonized approach overcomes confusion resulting from a staged implementation of WHTI requirements by modes of travel. Additional time could be used to deliver a more effective communication and outreach campaign in advance of implementation. It would allow U.S. and Canadian citizens more time to obtain passports or other acceptable documents. This approach would also greatly assist in mitigating negative impacts on our economies and even communities given the millions of U.S. and Canadian citizens who travel and reside in each other's countries.
- Canada recommends that a more thorough and exhaustive economic analysis needs to be done before the implementation of WHTI.
The Government of Canada would like to thank the U.S. Government for this opportunity to participate in this rule-making process and we look forward to continuing our close and beneficial cooperation with our U.S. counterparts on border security and other issues.
-Annex-
Comments on the Regulatory Assessment
We note that the CBP regulatory assessment for WHTI implementation in the Air and Sea modes focusses almost exclusively on the cost to U.S. citizens of obtaining passports. While the analysis admits that "U.S. travel and tourism could also be indirectly affected by the proposed rule if fewer Canadian, Mexican Border Crossing Card holders, and Bermudan travellers visit the U.S.", it does not attempt to quantify this impact. Instead, the analysis concludes that, in all probability, the indirect impact of the proposed rule-making will be "small". However, the analysis itself states that "we have only rough estimates of how many people travel, where they come from, and where they go. We know even less about how they will alter their behaviour if they do, in fact, forego obtaining a passport" (p. 2-71).
Furthermore, while the assessment recognizes that there will be an indirect economic impact on small businesses in the U.S. tourism and travel industries, it also argues that small businesses are not directly regulated by the WHTI rule and therefore need not be included in a detailed economic and regulatory impact assessment.
The Government of Canada is of the view that this approach is unnecessarily limited and, as a result, fails to address the full range of potential impacts. Canada believes that the proposed rule could indeed significantly impact small businesses which service air and sea tourism and travel, given that 95 per cent of U.S. tourism and travel industries comprise small businesses according the U.S. Travel Industry Association of America. These businesses include accommodations, travel agencies, dining services, retail shopping, tour operators, and hired transportation. In addition, the reduction in business revenues resulting from a significant loss of Canadian travellers to the U.S. would also impact travel revenues collected by local and state governments, especially in those regions in the U.S. which attract a large proportion of Canadian air travellers, for example "snow bird" states such as Florida.
With respect to business travel, the regulatory assessment states that the impact would be minimal, given that most business people already hold a passport. We point out, however, that the study admits that it may have "overestimated the number of [US] business travellers already holding a passport", thereby "underestimating the direct costs of the rule" (2-54). Moreover, the regulatory analysis makes no distinction between discretionary (i.e. convention attendance) and non-discretionary business travel; the former (which is an important segment of the business travel population) would likely be adversely affected by the proposed rule-making.
With respect to passport possession rates, we note that the rule-making provides a CBP estimate for air and sea modes (71%), while the regulatory analysis quotes a Conference Board of Canada survey* (pp.2-24, 2-54), which provides a lower rate and includes only adults 18 years of age and older. Industry stakeholders have informed us that families with children are a critical segment of the discretionary travel market most vulnerable to WHTI impacts. The same survey also found that 63% of U.S. overnight travellers to Canada, and 44% of Canadian overnight travellers to the U.S., would obtain their passport "at the last minute". This serves to illustrate the concern that a significant spike in demand could occur during the holiday peak period, and whether it could be met on time.
We note also that in Exhibits 26 of the assessment "Activities Consumed in the U.S. by Caribbean and Mexican Travellers" is not complete as it does not include similar data on Canadian travellers.
We believe the assumed loss of only 114,370 Canadian travellers (out of a total loss of 135,000 foreign travellers), or 2.2 per cent of 2005 travellers, is underestimated. A broader analysis of Canadian passport possession rates, traveller composition, characteristics, and motivations ("last minute") of the Canadian air visitor to the U.S. would lead to a higher estimated impact.
Finally, the regulatory assessment states that the impact on the U.S. due to a loss of foreign travellers (because of WHTI) would be offset by an equal amount of U.S. travellers willing to stay at home. However, in the case of Canada, this assumption is countered by the fact that there are considerably more Canadian visitors to the U.S. than vice versa by all modes, including some 5.3 million visits by Canadian residents compared to some 4.2 million visits by U.S. residents in 2005.
* Conference Board, Canadian Travel Research Institute Study of July 29, 2005.
