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A tax on imported blankets

Ted Menzies says foreign aid, the budget says tax measures


 

Mike Moffatt reviews the Harper government’s changes to the tariff system.

The 2013 Budget would decimate the GPT category, and apply the higher MFN rate to imports from the 72 countries losing GPT status. The countries losing the GPT classification comprise some of Canada’s largest trading partners and include Argentina, Brazil, China, Hong Kong, India, Indonesia, Malaysia, Russia, Singapore, South Africa, South Korea, Thailand and Turkey. Beginning Jan. 1, 2015, an imported blanket (made of synthetic fibres) imported from one of these 72 countries will be assessed the higher 17-per-cent MFN rate, rather than the 12-per cent GPT rate – making them more expensive to consumers.

By my estimate, there are 1,290 product classes where the existing GPT rate will be replaced by a higher MFN rate. It is difficult to say where consumers will feel the biggest hit from these rate increases, since import statistics at the product level are unavailable to the public. The tariff on bicycles is going up significantly (from 8.5 per cent to 13 per cent), as well as scissors (from 0 per cent to 11 per cent), rubber sandals (0 per cent to 16 per cent), wigs (0 per cent to 15.5 per cent), vinegar (0 per cent to 9.5 per cent), petroleum jelly (0 per cent to 7 per cent), carving knives (0 per cent to 7 per cent), perfume (0 per cent to 6.5 per cent) and artists’ brushes (0 per cent to 7 per cent). The tariffs on some less common goods are increasing as well, including rocket launchers (0 per cent to 7 per cent), diesel-electric locomotives (5 per cent to 9.5 per cent), swords (0 per cent to 7 per cent) and grand pianos (0 per cent to 7 per cent). Fortunately, the tariff on nuclear reactors will remain unchanged.

In defending the changes yesterday, Ted Menzies said the general preferential tariff program was a “foreign aid program.” This is basically true.

But if you’d like more information on the changes, you might consult the budget. Specifically Annex 2. Which is entitled “Tax Measures.” (The previously leaked plan to eliminate tariffs on hockey equipment and baby clothing is covered under “Supporting Families and Communities.”)

Meanwhile, Stephen Gordon deems this the anti-trade budget.


 

A tax on imported blankets

  1. I think it’s time to start a Canadian vinegar, sword, or rocket launcher industry. Too late for any protectionism around Electro-Motive Diesel. That one already got away.

    And I see petroleum jelly pipelines all across Canada!

    • Pristine white Canadian vinegar – this will require some slick marketing.

      • Insert joke about VQA wines here…

    • Aha! The much-touted Sword missile, fueled by Canadian vinegar.

        • What? Did the Cons raise the tariiff on piss, too?

          • No, but it’s a cheap and common commodity ripe for the Resource Extraction economy.

  2. Conservative tax on immigrants and poor people in Canada and Third World – revenues from tariffs are expected to raise hundreds of millions of $$$ by making cheap products and food from Asian countries significantly more expensive. Lower tariffs make foreign products more attractive in price to Canadians which helps people in Third World earn $$$ which gets them out of poverty. Cons just raised the cost of products produced by the some of the most downtrodden people on the planet.

    There was big UN study recently that looked at how much poverty is decreasing around the world due to trade and wealth distribution – Harper Cons must have seen the stories about poor people in Third World improving their lot in life and thought they should put a stop to the positive trend and make it much more difficult for people who earn $3 a day to improve their life.

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