Welfare Costs of Border Delays: Numerical Calculations from a Canadian Regional Trade Model/Les Couts en Bien-Etre des Retards a la Frontiere: Analyse Numerique a L'aide D'un Modele Canadien de Commerce Regional‪.‬

Abstract This paper provides a quantitative assessment of the welfare costs to Canada's provinces from border delays such as those that might occur as a result of post 9/11 security measures. The focus of the paper is on the provincial and sectoral allocation of the burden of border delays using a static regional computable general equilibrium model of Canada. Simulation results indicate that all regions in Canada could incur significant welfare losses ranging from $5.5 to $13 billion from increases in the transactions cost associated with both merchandise and service trade. In particular, Ontario stands out with the heaviest burden in the country. Our analysis suggests both that border delays may be even more important to Canada than previously thought and that the variation in their regional impact is considerable.