Thank you very much, Mr. Chair.
Mr. Chair, members of the committee, thank you for inviting me here today. My name is Ms. Andrea Stairs and I'm managing director for eBay Canada.
Launched more than 20 years ago, eBay has become one of the world's largest online marketplaces, with approximately one billion items and 164 million users around the world. Here in Canada, eBay is a top e-commerce destination, with more than eight million unique monthly visitors who spend more than $1 billion annually.
At the outset of consultations, the committee asked for views on federal actions that would promote Canadian business prosperity and economic growth. I'd like to describe for you the benefits of e-commerce and recommend a policy change that will empower Canadian small and medium-sized businesses to thrive in the global economy.
In addition to changing how consumers buy, e-commerce has changed the way we sell, and eBay has created a platform where anyone can become an entrepreneur, starting with a single listing. E-commerce is levelling the playing field for rural and urban retailers. You no longer need to live in a city to access enough buyers to make your business viable.
What excites me most is that eBay is the launching point for small businesses that want to go global. In fact, I am joined here today by eBay's 2015 exporter of the year, Kimberley Wotherspoon, of LumberMart in Dartmouth. By selling on eBay, Kimberly increased LumberMart's online sales by 1,000%, with 50% of those sales going to customers outside Canada.
Kimberley is one example among thousands on our platform. In fact, in 2015, 99% of Canadian commercial sellers on eBay exported. That compares to less than 12% of traditional Canadian small and medium-sized businesses who export. By selling to customers across the globe, these micro-multinationals are able to create jobs and drive other social benefits here at home.
While technology and platforms like eBay are making international trade more inclusive, small businesses are not able to realize their full exporting potential because of outdated government policies. We hear from our Canadian sellers that Canada's de minimis threshold causes significant shipping issues and border friction that complicate exporting.
For those unfamiliar with Canadian customs policy, the de minimis threshold is the value below which goods can be shipped into the country before duties and taxes are assessed. This is why we're proposing that the Standing Committee on Finance recommend that the Government of Canada increase the de minimis threshold from its current level of $20. This $20 threshold was originally set in the early 1980s, prior to the birth of e-commerce. In fact, had it simply been increased with inflation, Canada's de minimis threshold would now stand at almost $45. Instead, Canada's de minimis is the lowest in the industrialized world and among the lowest globally.
The low de minimis level causes major friction for Canadian small business. It negatively impacts their ability to access low-value international supply chains and creates red tape when purchases are returned from foreign buyers. In fact, a report from the C.D. Howe Institute found that an increase in the de minimis level from $20 to $80 would benefit Canadian businesses by more than $100 million in reduced red tape and other costs. Furthermore, Canada's low de minimis threshold does not support what the Canadian consumer wants: fairness and choice.
E-commerce gives rural Canadians or Canadians with physical limitations access to goods that are otherwise hard to find. It's easy to see why a recent Nanos poll found that 76% of Canadians were in favour of increasing the de minimis.
Finally, an increase of the de minimis would improve government efficiency. The report from the C.D. Howe Institute also found that the Government of Canada is spending $166 million to collect just $39 million in duties and taxes on goods valued between $20 and $80. As taxpayers, we should all be concerned that the costs in assessed duties dramatically exceed the revenues actually collected on low-value purchases.
In conclusion, as a platform for small business and a member of the Retail Council of Canada, eBay respectfully requests that the committee recommend an increase to Canada's outdated de minimis threshold.
I look forward to your questions.