What Are the HST Place of Supply Rules for Customs Brokers’ Services?

(Trade Lawyers Blog Cyndee Todgham Cherniak, Lang Michener LLP)

On February 25, 2010, the Department of Finance released a News Release about what will be the harmonized sales tax (“HST”) place of supply rules and shortly thereafter the Canada Revenue Agency released a GST/HST Notice setting out their administrative position. On April 30, 2010, the Department of Finance released Draft Regulations in respect of Place of Supply of Property and Services (the “Draft Regulations”). There is a separate HST place of supply rule for customs brokerage services. Read more here.

Request for Definition Expansion of Tariff Items 9995.00.00 and 9996.00.00

(IE Canada)

The Department of Finance is seeking views on the expansion of the definitions of tariff items 9995.00.00 and 9996.00.00 to provide for duty-free treatment for imported synthetic shells and fibre-filled shells using synthetic materials, for use in the manufacture of duvets, featherbeds and pillows. We are proposing to amend these tariff items as follows (proposed amendments appear in bold):

9995.00.00 Woven fabrics, whether or not embroidered, solely of single cotton yarns, measuring 70 decitex or more but not exceeding 150 decitex, having a sum of yarns per 10 cm in the warp and the weft of 790 or more, with an air permeability not exceeding 5.0 cm³/cm²-s-1 as determined by CAN/CGSB-4.2 No. 36-M89, for use in the manufacture of shells for duvets, featherbeds and pillows filled solely with "commercial landfowl feather", "commercial waterfowl feather", or "commercial down" or any combination thereof, as defined in the Textile Labelling and Advertising Regulations, or synthetic staple fibres of Chapter 55.

Shells, made of fabrics of Chapter 52, 54, 55, 58 or 60, for use in the manufacture of duvets, featherbeds and pillows filled solely as described above.

9996.00.00 Woven fabrics, unbleached or bleached, solely of single cotton yarns, measuring 151 decitex or more but not exceeding 300 decitex, having a sum of yarns per 10 cm in the warp and the weft of 790 or more, with an air permeability not exceeding 5.0 cm³/cm²-s-1 as determined by CAN/CGSB-4.2 No. 36-M89, for use in the manufacture of shells for featherbeds and pillows filled solely with one of the following:
(a) "commercial landfowl feather" or "commercial waterfowl feather", or any combination of the two, as defined in the Textile Labelling and Advertising Regulations;
(b) 85% or more by weight of "commercial waterfowl feather" mixed solely with "commercial down", as defined in the Regulations;
(c) 85% or more by weight of "commercial landfowl feather" mixed solely with "commercial down", as defined in the Regulations;
(d) 85% of more by weight of a combination of "commercial waterfowl feather" and "commercial landfowl feather" mixed solely with "commercial down", as defined in the Regulations; or
(e) synthetic staple fibres of Chapter 55.

Shells, made of fabrics of Chapter 52, 54, 55, 58 or 60, for use in the manufacture of featherbeds and pillows filled solely as described above.

IE Canada is asking that you send any views that you or others may have on this matter to Amesika Baeta abaeta@iecanada.com by August 31, 2010.

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.