Passport requirement could hit Canada hard

The fight over imposing passport requirements for crossing the Canada-United States border will likely come to an end this June when a new U.S. law comes into effect.

U.S. Homeland Security Secretary, Janet Napolitano, had grim words for those hoping to extend the Western Hemisphere Travel Initiative (WHTI).

“It's a real border, and we need to address it as a real border,” Napolitano said at a Canada-U.S. border forum in Washington this past March.

The bill was passed by Congress in 2005 to address the emerging security and traffic issues following Sept. 11. Under the rule, all travellers – including U.S. and Canadian citizens – must present a valid passport or other approved documents to enter the U.S.  This includes a provincial enhanced driver’s license or a traveller program card (FAST or NEXUS).

Napolitano and the Obama administration are firm on their stance, and the Conservative government has given up trying to secure another delay.  Opposition critics worry the new regulations will have harmful repercussions for cross border trade and travel, especially during the recession.

Number of American passport holders low

The U.S. State Department only expects to issue 12 million passports this year.

Peter Julian, the NDP trade critic and MP for Burnaby-Westminster, says Canada and the U.S. are not ready for the heavy cross-border traffic that will result from the bill.  He is also concerned it will prevent Americans from visiting Canada, since only an estimated 28 per cent of Americans carry a passport, according to the U.S. State Department.

Although Americans will not need a passport to enter Canada, they will need one to get back into the U.S. after visiting Canada – which Julian says is a real problem.

“We’re looking at a situation where three-fourths of potential tourists are essentially shut out of coming to Canada,” he says.

The recession has also caused passport applications to plummet in the U.S.  The U.S. State Department said in January that it expects to issue 12 million passports during this fiscal year, about 25 per cent fewer than were issued in 2008

"Tourism Calamity" could deter Olympic visitors

Last year, Democratic Congresswoman Louise Slaughter, whose district includes Rochester, Buffalo and Niagara Falls, N.Y. successfully argued for the delay in the implementation of the bill by one year.  She told the Brookings Institute forum in March she intends to introduce legislation to delay the passport rule until June 2010.

Slaughter argues the bill will harm cross-border trade and travel. Another huge concern is potential border delays during the Winter Olympics in Vancouver, caused by passport confusion.  Julian agrees.  He argues the Conservatives should have pushed for an eight-month delay of the bill until after the Games.

“We’re facing a tourist calamity in the sense that Americans will find it difficult to get back across the border, and may be inclined not to come to the Olympics as a result,” says Julian.

Stephen Smith, director of Tourism Policy and Planning program at the University of Waterloo, says there are larger issues at play here and the rule will not be as serious as people feared in 2005.

Recession real villain - not passport law

“Considering everything else that’s happening, the impacts of the recession and fuel costs are probably going to overwhelm the impact from WHTI,” says Smith, who has also chaired the research committee of the Canadian Tourism Commission.

Canadian politicians and tourism officials are concerned that new WHTI requirements will mean fewer Americans passing through borders like the Peace Arch on the Washington-British Columbia border.

He says the border rule will still have an impact – affecting day trips from the U.S. into Canada – but day travellers are not as important to the Canadian economy. 

The market has dried up due to the recession and perceptions of long line-ups at the border, adds Smith.    

“The people that are likely to come to Canada probably already have their passports,” he says. "The ones that don’t only come for a day visit.”            

Smith says border states are crucial, but the tourism industry needs to spend more effectively in the U.S. market – marketing Canada as a must-see destination.  The industry must look beyond border states, and also target Americans who will fly to Canada and stay a few days in the country.

Some tourist officials, however, say the real problems lie in the numerous delays in changing the passport rules, which just prolong confusion among Canadians and Americans. 

Randy Williams, the president and CEO of the Tourism Industry Association of Canada, says the rule should only be delayed if the government isn’t ready.

"The more delays that are introduced, the more confusion in the marketplace on dates and that isn’t healthy for tourism,” he says.  “We’re best to get on with it if is ready to go.”

Williams adds the Canadian tourism industry can’t afford a decline in visitors, especially in a recession.  He says the new regulations will continue to slow down the traffic between the two countries and will make it difficult to entice Americans into Canada.

Canada’s travel deficit with the U.S. has skyrocketed to $8.9 billion in 2008, according to Statistics Canada.  Reasons for the deficit include Sept. 11, uncertainty from the WHTI, border delays, the rising Canadian dollar and high gas prices, which have encouraged Americans to stay at home. 

With these issues looming around the Canadian economy, Williams says implementing the bill will be a double-edged sword.           

“It’s probably a good time to do it when American visitation numbers are so low, but we can’t afford any drop in visitation because the economy is so slow,” he says.  “We need to welcome any Americans we can and we’re obviously going to try and get as many Americans in at the border.”

U.S. passport statistics: 2008

Check out which states received the highest (and lowest) percentage of passports in 2008.