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Obviously sitting in jail for 4 weeks for a trial is stupid but I don't know if I agree with you either. It's essentially a license. It creates a contract between the US and Canada for that person where we're vouching for them there are background checks involved. She actively canceled her license, refused to renew the part for travel on purpose.
It's like if you cancel your driver's license, then drive around anyway and get caught You're not going to just be able to pay the MVA $35 while you're standing there to reinstate your license You're in trouble for driving without a license.
They don't say it in the story but I suspect maybe when she crossed over into Canada she did it just on her nz passport like she was just a tourist. But there are different rules for US residents versus NZ residents. They just happen to catch her before she got back.
Like I said in my original post It's just messy there's international law here. She's crossing country borders. If she just flew in from New Zealand She would have just needed a $7 Canadian ETA. Could have done that right on her passport and not had any issues. It's because she's US resident that they scrutinized her more.