Saying the government was pleased that the idea had been quashed, Government House Leader Peter Van Loan warned that such fees would have a detrimental effect on both sides of the border.
"A border fee like this would have been very damaging to both the American and Canadian economy," said Van Loan.
"The importance of movement of goods and people across our border to facilitate trade and growth is critically important."
International Trade Minister Ed Fast was equally elated, applauding the decision as a recognition that "free and open trade, rather than protectionism, is the way forward to create jobs and prosperity for workers in both our countries."
The U.S. Department of Homeland Security had wanted Congress to authorize the study of a fee that could be collected from everyone entering the U.S. from Canada and Mexico.
But the Senate judiciary committee voted Thursday to amend an Immigration Reform Bill that's designed to implements stricter border security measures, and closed the door on considering charging land border crossing fees.
The fight over potential hikes in the cost of moving across the border, however, isn't quite over as the Obama administration continues to examine ways of paring down its massive budget deficit.
The U.S. Department of Agriculture last week also recommended imposing fees for an array of border services, including inspections of agricultural products, commercial aircraft, rail cars, ships and even passenger baggage.
Van Loan said the prospect of new charges at the Canada-U.S. border is always looming, and that's why the federal government has to keep sending a message that they are not a good idea.
"Obviously this is an idea that pops up from time to time, but we have to remain always in Washington active in advancing our interests," he said.
The agriculture department last week suggested new border fees should be imposed to help offset the costs borne by U.S. Customs and Border Protection to provide free services at America's borders.
Fast also jumped on that proposal, saying he would press upon his U.S. counterpart the harm that USDA fees could cause to businesses and the economies in Canada and the United States.