Terrible Trade Move by Feds Could Cripple Canadian Shipbuilding, CAW says

(Exchange Magazine)

After a written promise to proceed tactfully on policy to support Canada’s all-important shipbuilding industry, the Harper government’s rash decision to kill a customs tariff will reverse years of progress, deter domestic investment and wipe out jobs at Canadian shipyards, said CAW President Ken Lewenza.

“The Harper government has sold-out Canada’s domestic shipbuilding industry, full stop,” Lewenza said responding to Finance Minister Jim Flaherty’s announcement on October 1 that Canada will eliminate a long-standing customs tariff on foreign-built ships.

“The Conservative government has just given international shipbuilders an overnight 25 per cent cost advantage when selling ships into our market, after former trade minister David Emerson notified our union this would not happen. It’s shameful.” Read more here.

Canada Waives Import Taxes on Some Ships

(Marine Log)

Jim Flaherty, Canada’s Minister of Finance, has announced a waiver of Canada’s 25 percent import tariff on imports of all general cargo vessels and tankers, as well as ferries longer than 129 meters.

Remitting the 25-per-cent tariff is expected to save shipowners $25 million per year over the next decade.

“This duty relief will accelerate the renewal of the Canadian marine fleet across the country and will help replace aging vessels with cleaner, safer and more efficient ships,” said the Chuck Strahl, Minister of Transport, Infrastructure and Communities. “All the while, it will build on unprecedented investments our Government has made in Canada’s infrastructure and gateways by contributing to the upgrading of marine transportation links across the country.”

Under the Customs Tariff imported ships are subject to a tariff rate of 25 per cent, the highest rate of duty for industrial goods. Read more here.

Tories Unveil Déjà Vu Tariff Measure

(Jane Taber — Globe & Mail)

For the second consecutive day, the Harper government re-announced measures that were in last week’s budget, declaring today that Canada will become a tariff-free zone for manufacturers.

Again, this is old news but suggests an effort by the government to show it is busy and working while Parliament was shut down for six weeks. The measure, which eliminates more than 1,500 tariffs, will create 12,000 jobs, according to International Trade Minister Peter Van Loan.

Mr. Van Loan was joined by Finance Minister Jim Flaherty. The two played up the budget measure, re-announcing that their move will make Canada more competitive and signal to other countries that “Canada is open for business.”

But Jason Myers, president of the Canadian Manufacturers and Exporters Association had said last week this will be a “pretty marginal benefit.” Read more here.

Mr. Harper, Cut Down These Tariffs

(Terence Corcoran — Financial Post)

The commentary brigades are rightly falling all over themselves in praise of the Harper government’s budget plan to eliminate tariffs on industrial machinery and equipment. As economic policy goes, it was the best move in the budget. Whether it says anything at all about the free trade resolve of the Harper Conservatives is another matter. Ottawa talks big on trade, but the equipment tariff cut is a small-time play in the government’s $4-billion annual consumer-punishing customs tariff regime.

The removal of tariffs on 1,541 equipment import categories is a tribute to the lobbying efforts of Canadian manufacturers. Businesses from car makers to carpet makers will benefit from the lower cost of equipment purchases. By definition, that improves their productivity because they will get the same amount of output from fewer dollars invested. Read more here.

Budget Highlights – Department of Finance

(CBSA)

Budget 2009 eliminated tariffs on imports of machinery and equipment in order to help Canadian manufacturers maintain and enhance their competitiveness during the economic downturn. This measure saved companies $88 million annually and was widely supported by manufacturers and economic experts. Stakeholders expressed an interest in further tariff relief, including the concept of establishing tariff-free zones.

After extensive public consultations with Canadian industry, Budget 2010 responds by making all of Canada a tariff-free zone for industrial manufacturers by eliminating remaining tariffs on machinery and equipment, as well as goods imported for further manufacturing in Canada.

This means that tariffs will be eliminated on 1,541 tariff items with most of the reductions taking place immediately, on March 5. The remainder will be gradually eliminated by no later than 2015.

Once fully implemented, this measure will save Canadian manufacturers $300 million in annual duties and eliminate the need for burdensome customs paperwork.

This measure will have wide ranging benefits for the economy and for manufacturers in terms of their ability to improve their competiveness in domestic and international markets, maintain and increase jobs, raise productivity, and improve product quality and innovation.

Small and medium-sized enterprises that must source goods for production from global supply chains will be key beneficiaries.

Canadian exports to all regions are expected to grow as a result of this measure. This will help diversify Canadian trade and build on the Government’s Global Commerce Strategy which includes opening new markets through bilateral and multilateral (i.e. Doha Round) trade negotiations. The Government is currently negotiating a Comprehensive Economic and Trade Agreement with the EU, undergoing exploratory work with India, and it has recently concluded FTAs with Peru, Colombia, Panama, EFTA and Jordan.

It will compliment Canada’s Tax Advantage and stable financial sector, making Canada a destination of choice for foreign investors. This measure also demonstrates Canadian leadership as the host and co-host of the G8 and G20. These countries have committed to maintaining open markets and making further progress on trade liberalization in order to promote global economic recovery.

The 2010 budget documents are available at www.budget.gc.ca. The list of affected tariff items is included in the Notice of Ways and Means Motion at the end of the budget at pages 431 to 447. The corresponding descriptions for the tariff items may be cross-referenced with the Customs Tariff which is available online here.

Tariff-ic Savings

(Thane Burnett — Winnipeg Sun)

We’re getting more bang for our buck – but good luck figuring out our confounding customs duties

Golly — everyone in the family wants something different.

You’re looking for an Andy Warhol painting for the den.

Your spouse can’t decide whether to get a great deal on a microwave oven or just spring for an entire $1.5-billion nuclear reactor.

And those darn kids. Neat freak Billy hopes to pick up a few hundred brooms while dreamer Sally thinks she’s finally saved enough for her own dirigible — because who doesn’t want their own lighter-than-air balloon?

It’s Thanksgiving weekend, and the Canadian tradition is to ditch Grandma again at someone else’s house for dry turkey and head off to old Uncle Sam’s for the real feast. And with our majestic loonie staring the bald eagle square in its single good eye — our dollar soaring to 31-year highs — it’s perhaps the proudest time to leave your money in another country.

But gosh — those most recent “Departmental Consolidation of the Customs Tariff 2007” reports are harder to follow than British darts on the sports network.

Most Canadians don’t realize there are scores of items that are entirely duty-free coming back into Canada — including almost anything made in the U.S. or Mexico. It means all you pay if you pick up, say, a helicopter — as long as it’s not over 2,000 kg — is just the Canadian sales tax coming back home.

But while Sally gets her dirigible free of any cross-border tariff, uptight Billy will pay 6.5% on his brooms. If he wants toothbrushes to wash that bad taste away, it’s another half a percent, son.

The rules of what’s allowed free between the U.S. and Canada (most downhill skis) and what’s not (most cross-country skis) have always taken the mind of a lawyer to figure out.

DEEP POCKETS
And sometimes, even that wasn’t enough. Heading into the U.S. by steamship in August 1897, wealthy Canadian lawyer and cabinet minister’s son Stewart Tupper was caught getting off the boat with his deep pockets filled with four silver candlesticks and silver salt shakers.

As a New York Times piece of the era explained: “Mr. Tupper was plainly embarrassed, and when he made a trip down into still another pocket, the crowd around stood on tip-toe expecting to see a diamond necklace come forth. It was, however, a handsome silver spoon in a morocco case.”

A diamond ring, a silver watch and several jubilee medals later, and poor Mr. Tupper was hit with a $30.32 duty.

“This staggered him, but he paid it and refilled his pockets,” the Times reported in the day.

Customs tariffs and duties — into the U.S. and into Canada — still confound. A Canada Border Services Agency spokesman recalled to Sun Media that the nuclear reactor your spouse wants to buy in America is entirely tariff-free. But, in fact, changes to the provisions clearly point out nuclear reactors carry an 8% tariff. It’s the machinery for isotopic separation and non-irradiated fuel elements which you can bring back for free. As long as they’re from the U.S. or another preferred trading country.

Better to just settle for a satellite, which carries a lesser 6.5% tariff. Or a hang glider, which, along with cellphones and video games and lots of stuff made out of plastic, you can bring in by the truckload with no tariff.

Carol Osmond, senior policy adviser for I.E. Canada, the Canadian Association of Importers and Exporters, said she understands why consumers would be confused about what — beyond the usual personal exemptions of $50 for a 24-hour trip or $400 for a 48-hour stay — we’re allowed to freely bring (after Canadian taxes) back home.

“There are hundreds of thousands of pages,” she said of the tariff provisions.

USED CARS POPULAR
But she said there are fewer than there once were. She added, however: “Will some go away completely? Maybe not.”

If you’re searching for a quick guide to what are the most popular items to bring back across the border for free, you’d have better luck walking on glass — which, by the way, can be brought back without a border charge. Canadian officials say while they’re seeing more used cars being brought north, it seems impossible for them to break down what we’re carrying back home. They simply suggest Canadians first check items by calling their help-line at 1-800-461-9999. Because there’s little chance of you making sense of it on your own.

If your family brings artist paintbrushes back into Canada — and you’ve used up your personal exemptions — prepare to pay a 7% tariff. But if you make it all the way into New York’s Lower East Side, to the trendy and chic Woodward Gallery — home to modern masters like Pablo Picasso — they’ve set aside a 1964 Andy Warhol painting of Jackie O. It’s yours for just under $3 million.

“It would be a very good weekend to come,” owner Kristine Woodward said.

And while those paintbrushes will get you stopped for an extra fee at the border, the almost-$3-million Warhol will not. It’s tariff-free. But sadly, there doesn’t appear to be a large discount for travelling so far.