Jim Flaherty explains why he increased tariffs - Macleans.ca

Jim Flaherty explains why he increased tariffs

About that iPod tax…


In an op-ed for the Globe, Finance Minister Jim Flaherty suggests the tariff increases are part of pursuing new trade agreements.

The recent changes will provide an important incentive for many countries to open their markets to Canada through reciprocal trade agreements that will allow for more export opportunities – meaning better jobs for Canadians – and further tariff reductions for Canadian consumers.

Mr. Flaherty also offers an assurance about imported iPods.

Finally, due to recent confusion, I want to be clear that the changes had no effect on iPods and other music devices and their special and long-standing tariff-free exemption.

Mike Moffatt responds to that much with a question.

My question to the Minister (or to the CBSA or whoever would like to answer):How can retailers receive this exemption? What steps do they need to take to qualify?

I detail the current CBSA enforcement of the 9948 exemption in my tariff FAQ.    I am having trouble reconciling the Minister’s statements with the fact that Sony has already paid an iPod tax.

It’s been a week since I asked the government to explain the exemption—specifically: Is it true that sellers of iPods and MP3 players are required to collect “end use certificates” from the final consumer to meet the requirements of 9948? I’ve renewed my request just now.

See previously: A tax on imported blanketsThe Commons: Ted Menzies challenges everyone to find a tax increase in the budgetA tax on bicycles, baby carriages and iPodsThe Great iPod Tax Crisis of 2013The iPod tax: The finance department responds and Will the Conservatives repeal the iPod tax?


Jim Flaherty explains why he increased tariffs

  1. It is obvious what has happened here. Sony claimed it either manufactured the MP3 players in a non exempt country, or didn’t obtain the necessary documentation from its customers (their choice).

    It got audited, didn’t have the req’d documentation, and was therefore req’d to pay back the tariffs it wasn’t entitled to deduct.

  2. Jim Flaherty stated the ipods are tax free (duty free) and that it will not go up; however, if you have a requirement such as end user certification and it would be virtually impossible to get that ceritificate then the there is a tax increase. The minister is saying one thing but the CBSA is saying something totally different. Canada Customs is all about protecting their revenues such as ipod duties and duties on tv that in essence should be duty free based on the ” long-standing tariff-free exemption” for goods that hook up to Computers.

  3. This is so absurd. Somehow a tariff increase is justified because it will allow a future tariiff decrease. One has to start to wonder about the colour of the sky on Mr. Flaherty’s planet. I hope that this is not a symptom of his illness which I didn’t previously think had any mental component.

    • It’s not that complicated, really. Rather than Canadian taxpayers subsidizing Chinese and Indian manufacturers, we make them pay the same rates as every other country, unless they’d like to sign a trade agreement that benefits both countries.

      • Funny NAFTA is not working for us, so why would the other trade agreements work? The US has a separate price list for Americans and a higher price list for Canada. So how does that help Canadians. Time to end all so called Free Trade Agreements, but Harper is signing more and more of them. Can’t wait for the EU trade agreement to come into effect, once signed. Plan on paying outrageous prices for drugs for one. And our own water is at stake here. The Harper Government (as he calls it) is out and out just stupid.

        • “NAFTA is not working for us” That’s simply not true. Canada’s GDP has grown faster after NAFTA than before, employment is much higher. Which is exactly why we need more trade agreements, not less.