The U.S. federal government was shut down at midnight this morning after a funding bill did not get 60 votes in the United States Senate. While the politicians work to find a solution before Monday, Canadians are reminded that the last U.S. federal government shut down lasted 16 days and a previous shutdown lasted 27 days. The political climate in the United States today is much different. Whether a bi-partisan deal can be reached is uncertain at best and unlikely at worst.
Approximately 700,000 U.S. federal government employees,who are deemed “non-essential”, will be furloughed. This means they will be put on leave until a funding bill has passed. Workers who are considered to be essential (military, law enforcement, border enforcement, national security, hospitals, federal courts, etc.) will still work, but many without any pay.
As a result, Canadians should consider how the U.S. federal government shutdown will affect Canadians. While we cannot list every possible effect, we can point out a few:
- Expect delays at pre-clearance areas at Canadian airports. U.S. Customs and Border Protection (“USCBP”) officers process travelers heading to the United States at many Canadian airports. They are not getting paid during the shutdown. What this means is that a full contingent of USCBP officers might not be on the front lines and those who are working may take longer to process each traveler. I recall having a conversion with a USCBP officer before a previous shutdown deadline and he informed me that “while I will have to work [as an essential service provider], if the border slows, that will incentivize the politicians to fund the government.” With this in mind, if you are traveling to the United States, build in extra time in your schedule to clear customs (in Canada or in the United States). You would not want to miss your flight if you must go through pre-clearance in Canada.
- Expect delays if a USCBP officer confiscates your electronic device during a secondary examination. If the USCBP officer confiscates your mobile device or computer because you will not give a password or if they want to review the contents, you are unlikely to get your electronic device beck before the end of the shutdown. Expect a delay after the end of the shutdown as they will have a number of inspections to undertake. As a result, travel using a non-essential device. If you cannot work without that device, do not take it. Take one that you a leave for a while.
- Expect delays when shipping goods to the United States. USCBP officers screen and inspect goods entering the United States. A full contingent of USCBP officers may not be assigned to the mail/courier/transport shipment departments. Expect clearance of goods to get backed up. Inform your customers to expect delays. It is not your fault, but the shipper may be blamed.
- Expect delays if shipped goods must be inspected by the United States Department of Agriculture (“USDA”). While the USDA performs an essential service relating to food safety, there were delays experienced by Canadian exporters during previous shutdowns.
- Expect delays when applying for or renewing NEXUS membership. USCBP officers and other U.S. government departments review each NEXUS application to vet the applicant. It is unlikely that USCBP officers will process many NEXUS applications or renewals during the shutdown because it is a non-essential service.
- Expect delays when applying for an immigration visa of any kind. USCBP officers and other U.S. government departments review the applications and issued the visas. While there will be some USCBP officers performing this task, most employees who perform this service will be deemed to be “non-essential”. All non-essential requests will be put aside for later.
- Expect delays when applying for a U.S. federal tax refund. Giving tax refunds is a non-essential service – you can wait for your money. If the U.S. federal government employees cannot get paid, you will not get paid either.
- Expect delays if you have requested a tax ruling. If you have applied for a U.S federal tax ruling, the person assigned to your file has likely been furloughed.
- Expect delays in obtaining an export permit from the U.S. federal government. If a Canadian company wants to export U.S.-origin goods from Canada (whether in the same condition or incorporated into a Canadian manufactured goods), if the goods are subject to export controls, you may need to obtain a Canadian export permit. Often, Global Affairs Canada requires a copy of a U.S. export permit or re-export permit from the United States Commerce Department, Bureau of Industry and Security (BIS) (and in some cases OFAC). The provision of export permits to a Canadian company would be a non-essential service. It is likely that the requests will be put in the pile for after the shutdown has ended.
- Expect delays in obtaining an OFAC (Office of Foreign Asset Controls) advisory opinion on whether a potential transaction is subject to U.S. economic sanctions. While the Department of Treasury will still be open, most of the persons giving OFAC advisory opinions will likely be furloughed.
- Expect disruption if you are involved in a case before a U.S. Federal Court (including the Supreme Court). U.S Federal Courts will continue to function, but at reduced staffing levels. Non-essential staff will not be working. Federal tribunals, such as the International Trade Commission (who are working on the Boeing AD/CVD injury proceeding), will be open for business, but Canadian respondents should expect added frustration.
- Your vacation to a U.S. tourist destination may not be all that you expected. Many national parks and federally-operated museums/tourist sites will be closed.
If you would like to know more about the possible effects of the U.S. shutdown, please contact Cyndee Todgham Cherniak at 416-307-4168 or at email@example.com.