Border security controls are costing Canada $19.1 billion in lost revenues each year, according to a report released last month.
The Fraser Institute, a Canadian public policy think tank, said that Canada spends almost 1.5 percent of its GDP on border security with the United States. The report, titled "Measuring the Costs of the Canada-US Border," said that expenditure has escalated since 2000, thanks to a variety of new programs designed to manage risk. These controls have hindered the flow of capital between the two countries, said the document, pinpointing "border thickening" as a key problem in driving up the cost of border security.
"Paperwork and administrative costs were added to the border crossing process, but the goal of building a discernibly thinner border was not achieved," said the report.
Costs were incurred in three main areas. Firstly, the increased security controls have impeded bilateral trade. Canada sent just 75 percent of its exports to the U.S. in 2010, compared to 86 percent in 2000.
Secondly, American trips to Canada have also fallen, impacting tourism revenues.
Finally, the Canadian public has footed the bill for several federal government programs designed to increase border security.
The institute condemned the two countries for past border security initiatives that did not outline specific performance goals, adding that new initiatives must not make the same mistakes.
The U.S. and Canadian governments are currently implementing a unified border security initiative, called the Beyond the Border Declaration, announced in Dec. 2011. "These costs/expenditures must not only be linked to expected outcomes and timelines, but must also be evaluated in terms of performance," the report concluded.
