The Real Reason Canada Advised Against Carrying Cash Into the U.S.

from The Wealth Watchman:

Official Warnings: Last week there was a disturbing headline that few seemed to take note of, but one which I believe should be given greater attention.  The headline was this:

“Canada Warns Its Citizens Not To Take Cash To The USA”

The original story made the rounds via zerohedge, and was taken from an interesting squib written by Martin Armstrong.  Here’s a few of Armstrong’s assertions in the piece:

“The Canadian government has had to warn its citizens not to carry cash to the USA because the USA does not presume innocence but guilt when it comes to money. Over $2.5 billion has been confiscated from Canadians traveling to the USA, funding the police who grab it.

If you are bringing cash to the land of the free, you will find that that saying really means they are FREE to seize all your money under the pretense you are engaged in drugs with no evidence or other charges.

Now, those are remarkably true statements, but I decided to do a little digging into the reasoning behind the Canadian government’s warning. What I found was a little different than what I’d expected to find, but still not too surprising.

The Official Reasoning Behind the Warning

When I first read that headline, I thought, “Wow, finally a government telling the truth to protect its citizens.  Good for you, Ottawa!”  

Sadly though, the official reasoning for the warning was a little different than what was advertised. Allow me to explain.  It was a little difficult to find, but if you go to the “Government of Canada” site, click “Travel”, then “United States”, and lastly, “Laws and Culture”, you can find the warning there. Here it is in its entirety, under the heading “Money”, it’s only a few paragraphs:

The currency is the U.S. dollar (USD). Canadian currency, traveller’s cheques in Canadian dollars, and personal cheques drawn on Canadian banks are not widely accepted or easily negotiable in the U.S. All major credit cards are accepted throughout the U.S.

There are banking machines that will accept Canadian bank cards, but these may be limited depending on your account access. Despite these difficulties, do not carry large amounts of cash. Non-U.S. residents generally cannot negotiate monetary bank instruments (international bank drafts, money orders, etc.) without having a U.S. bank account.

There is no limit to the amount of money that you may legally take into or out of the U.S.. However, if you carry more than US$10,000 in monetary instruments (such as U.S. or foreign coin, currency, traveller’s cheques, money orders, stocks or bonds) into or out of the U.S., or if you receive more than that amount while in the U.S., you must file a report (Customs Form 4790) with U.S. Customs. Failure to comply can result in civil and criminal penalties, including seizure of the currency or monetary instruments.

Kinda disappointing, isn’t it?  It’s not quite what it was said to be.  While technically still a warning not to bring a great deal of cash, basically, the Canadian government is saying that Canadians shouldn’t bring it simply because it can’t be easily used within the banking system. The remarks about seizure of cash was only in the context of failing to comply with the reporting requirements. “Aha!  So that was it, Watchman? It’s just the ‘hyping’ and puffery that the precious metal community does so well! The Canadian government would never accuse the U.S. authorities of blatant abuse and cronyism!” Not so fast, Jack!   It turns out there’s a bit more to this story, after all.

The Real, Unofficial Reason

Shortly after the warning was given, a high profile piece was written at the Canadian Broadcasting Company(CBC).  The CBC is Canada’s oldest existing broadcasting network, and is about as mainstream as it gets in Canada.  Beyond that though, the CBC is what’s known as a Crown Corporation of Canada.  Crown Corporations are actually owned by the British Crown, and are established through an act of Parliament.

The reason I bring this up, is to give context to the piece that was published at the CBC. The piece, by Neil Macdonald, which was published shortly after the government warning, was entitled “American Shakedown: Police Won’t Charge You, but They’ll Grab Your Money”. 

Sounds good, already, doesn’t it?

In its lines, the writer lays it down and pulls no punches, going so far as to say that, whether state trooper, federal agent, or sheriff, there is a “vast, co-ordinated scheme to grab as much of the public’s cash as they can, ‘hand-over-fist’.”

Mr. MacDonald then spells out in detail, how the ‘cash sting operations’ work, saying that police will pull American vehicles over for slight infractions, and then proceed to start chatting with the motorist, with the intent of initiating a search of the vehicle. Oftentimes, since the motorist knows they have nothing to hide, they will allow the searches, only to find themselves become victims of theft, of what the officer was looking for all along: cash.

Shield brother, let me stop right here to say that what he alleges is true, and it happens all the time.  Many police do indeed do routine stops, and seize cash from citizens, using the excuse that the “burden of proof” is on the carrier of the cash, to demonstrate that it wasn’t acquired illegally. The program they use(and very often abuse) is called “Equitable Sharing”, which is almost never equitable, and has nothing to do with sharing. All the officer has to do is simply say, “How do I know it’s not from drugs?” , and bam, brother: you’re guilty until you can prove you’re innocent.

Thankfully, these cash seizures don’t always go well for authorities.  Some travelers are able to sue to recover their stolen property.  One famous incident of this occurred in 2009, when the TSA detained a young man who happened to have a box of cash on him, in the amount of $4,700.  They told this young man that he needed to provide proof of why he had it, and where he was going.

Unfortunately for them though, the young man they stopped, Mr. Steven Bierfeldt, was Ron Paul’s treasurer for the Campaign for Liberty, who just so happened to be recording the entire thing on the iPhone in his pocket.  He contacted the ACLU, who sued, and won the case against the TSA.

While that was great news for those who may be flying, many of the cases don’t end up that way. The reason this is true, is that many of the stops conducted are simply over amounts of cash that are too little to justify the cost and time of litigation. For instance, the Washington Post revealed that although over $2.5 billion has been seized in this way since 2001, at least half the seizures are for amounts under $8,800.

Realistically, this makes most cases of abuse simply too costly to fight in court. The sad part is that though only 1 in 6 of such cases ever reach court, nearly half of them end in settlements favoring of the victims: proving that the majority of such seizures are just theft and government over-reach.

The Takeaway from the CBC

“Ok, Watchman, so theft happens!  Why is this story from the CBC a big deal anyway?”

Here’s why it’s a big deal.  I took the time to show that the CBC is a state-sponsored, state-owned broadcasting network, for a reason.  Government media exists is to present a narrative that is carefully crafted to say exactly the things that governments want them to say.  

Now, I know that the piece written was just an opinion piece, but it doesn’t matter.

Can you imagine NPR, running an opinion piece, which warned U.S. citizens not to take cash to Canada for fear of confiscation by “abusive” Canadian police, who were running a legal “shakedown”?

Can you imagine NPR telling U.S. travelers, “whatever you do, don’t consent to searches if you’re carrying legitimate cash” in Canada?

Nope, neither can I.  I’d have a very difficult time imagining such an abrasive thing being said about Canadian officials from a place like NPR.

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