De facto US tariff hurts Yukon distributors

A local company moving king crab and frozen french fries into Alaska has hit the radar of American bioterrorism watchdogs.

A local company moving king crab and frozen french fries into Alaska has hit the radar of American bioterrorism watchdogs.

A few months ago, the US government told G-P Distributing it had to start meeting new reporting regulations called for under the Bush administration’s anti-terrorism rules.

The new rules make things more cumbersome, add to G-P’s labour costs, require the company to pay a $500 registration fee and force it to pay ongoing shipping fees for every delivery to every customer, said G-P sales manager Donna Stavst.

“What we were told this year, and I think started working on this in late March-early April, was we were required to have a registration to do with the Bioterrorism Act,” she said.

Section 305 of the US Bioterrorism Act focuses on the registration of food facilities and is designed to protect Americans, according to the US Food and Drug Administration, which enforces the law.

“The events of September 11, 2001, reinforced the need to enhance the security of the United States.

“Congress responded by passing the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, which President Bush signed into law June 12, 2002,” according to the enforcement agency.

Section 305 of the act requires companies handling food to list where they get all of their food, where that food has been and where it is going and how much is crossing the border.

Companies, including factories, warehouses, importers, manufacturers and/or processors, must also pay a “prior notice” fee, which varies from $29.95 to $14.95 per delivery to every customer, to help administer the act.

Farmers, restaurants, other retail food outlets and soup kitchens are exempt.

After registering, all Skagway customers were told of the changes and asked to give 48 hours advance notice, as opposed to 24, when ordering, said Stavst.

“I wrote a letter to our customers to let them know that we needed the food orders 48 hours in advance in order to do what the (US government) requested, which is, we needed to have the manufacturer, the weight of the product and where it’s made.

“Sometimes there’s up to three different companies on a box, or three different places where it’s been manufactured, distributed. We were trial and error for the longest time learning the system and learning where these products came from.

“Our produce is changing constantly. We don’t have the same products coming in every week. It’s quite labour intensive.”

Registering for bioterrorism purposes is another hoop the company has been asked to jump through, G-P co-owner Kyle Doll said.

A few years ago his company was told it could no longer ship meat across the border.

Then it was told they had to go through a customs broker for any order over $2,000. It used to be $5,000.

“When we started shipping down in Skagway in 1992, we were able to ship anything we wanted to, meat and everything.  We did that for 10 years.”

After the meat was barred, business in Skagway dropped by half, from about $500,000 per summer season to $250,000, he said.

The $2,000 restriction, before having to go through the cost of a customs agent, has become a little more problematic with the rising dollar, he added.

With the loonie nearly on par with the US dollar, G-P has had to cut the size of its shipments.

“We haven’t taken anything to task here because we didn’t know we could do anything, we didn’t know we had any support.

“We’re not doing this to cause trouble, it’s just that everybody’s asking us, so we’re giving the facts.”

Making G-P extend its order deadline to 48 hours and charging them more money to get things across the border flies in the face of the North American Free Trade Agreement, said Liberal Porter Creek South MLA Don Inverarity.

The little guy is getting squashed by our American big brother and somebody on the political level needs to stand up for companies like G-P and small business owners like Doll, he said.

“First of all, I recognize on some level this is a government to government thing, said Inverarity.

“The federal government needs to do something. The issue is they don’t care about a little business in Porter Creek.”

Economic Development Minister Jim Kenyon or Premier Dennis Fentie should lobby on G-P’s behalf, as the politicians have on the passport issue, said Inverarity.

“Fentie or Kenyon could contact the Alaska governor and get involved in this.

“This is really no different than soft lumber tariffs a few years ago.

“This is a tariff.”