The iPod tax: The finance department responds -

The iPod tax: The finance department responds

More on the portable music player tariff crisis


Yesterday evening, after CP reported that Sony was concerned about the tariff requirements on iPods, I emailed the Finance Minister’s office to ask if there was any response.

Tonight, the Finance Department sends along the following response.

“iPods and other MP3 players have come into Canada duty free in the past under 9948.  iPods and other MP3 players continue to be eligible to come into Canada duty free under 9948 in the future.”

Both CP and Mike Moffatt have reported that sellers must obtain a certificate from the final consumer to qualify for the exemption under 9948. I’ve asked the Finance Department to confirm that and will post the response as soon it is received.

Meanwhile, Moffatt reported earlier tonight that Sony has already paid this iPod tax.

I have just learned that Sony has already paid an iPod tax on a number of their Walkman MP3 products including their Sony 2GB Wearable MP3 Player (NWZW262B).  These items entered the country under 9948.00.00, but were re-assesed after the fact, as Sony could not produce end use certificates.


The iPod tax: The finance department responds

  1. Even the complication of jumping through the bureaucratic hoops must be acting as a small de facto tariff. 18th century laws as applied to ipods.

  2. blackwhite – Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary.

    • Cons demonstrate this below.

    • If George Orwell were alive, I believe he’d sue you for copyright infringement.

  3. Just like a manufacturers rebate at point of purchase. If you don’t fill in the forms, and send in the mail, you don’t get the rebate.

    • Don’t forget that if you don’t get the rebate, it’s a tax imposed by the evil Stephen Harper.

  4. In a Colin Horgan piece on corporate taxes, “tariff expert ” Moffatt points out the role of taxes and tariffs in determining where a company locates:

    “There are 101 other reasons why a firm would locate in a particular place. I don’t think any serious person would argue that … corporate taxes are the prime factor. But they certainly help,” Mike Moffatt, assistant professor of business and economics at the Ivey School of Business at the University of Western Ontario. “I think where they help a little bit more is in where multinational companies decide to repatriate their profits – meaning that they record their profits from being in Canada rather than being in the U.S. or someplace else. I don’t think it changes production decisions all that much.”

    Furthermore, in the Moffatt link provided above by Wherry, Moffatt notes:

    Sony could not establish to the CBSA’s satisfaction that they were produced in China (which would have qualified them existing 0% GPT rate).

    So, it seems that Sony made a corporate decision. Manufacture in China and don’t pay duty, or relocate elsewhere, pay lower taxes and wages, and pay a duty.

    Is this somehow “BREAKING” news as Moffatt claims? Maybe to him.

  5. “Sony could not produce end use certificates”…. Probably because there isn’t a Canadian dumb enough to have purchased a single Walkman MP3 product? You’d think that a company that’s in the final stages of it’s demise would have better things to do than complain about a tariff on a single product, but they do seem to have figured out the trick to get the leftwing media to give them all kinds of free advertising.

    • Nice water carrying there, I’m sure your retroactive Queen’s jubilee medal is in the post.

    • Is this the new talking point, or have you missed the entire story?

      • Yes, my opinion should be completely disregarded as a “talking point”. It doesn’t matter if it’s accurate. Who cares that not a single other MP3 manufacturer has mentioned this “tax”, which it turns out Sony has been paying for some time, because they can’t get their paperwork in order. None of that matters. What matters it that Canadian consumers should subsidize Sony’s off shore manufacturing because it’s currently the politically popular thing to do. Heck, why don’t we start allowing Chinese cars into the country without a tariff? We could all be driving $5000 cars in a couple of years!

        • Well, at least Sony doesn’t have to pay for a lobbyist. They now have an i-moff.

        • Two cents a word, that’s all they pay me, two cents a word…………..

          • Who’s paying you? If you’d specified that, that would have been more words.

        • I debunked your line of thinking yesterday, you seem to have since ducked and ran from that discussion.

          Sony neither gains nor loses (nor does Apple, since you seem to be trying to pigeon-hole this as a Sony issue). Tariff goes up, price goes up. Tariff goes down, price goes down.

          “I’m completely against trade barriers.”
          -Rick Omen

          If you are against trade barriers, why are you for this?

          • Because it’s the fair, right thing to do. I’d rather the government lower all tariffs to what China was receiving previously. But in the interest of fairness, raising them to the level everybody else pays is better than leaving them in a position which gives them a competitive advantage over other countries.

            You still haven’t answered my original question as to why you think China, India and other countries should be given an advantage over everybody else. Care to answer that now?

          • “I’d rather the government lower all tariffs to what China was receiving previously.”

            Then why aren’t you on board with this? Why don’t you believe the solution would be to lower other tariff levels, as a true-blue conservative would?

            “You still haven’t answered my original question as to why you think China, India and other countries should be given an advantage over everybody else. Care to answer that now?”

            Yes I did, you just didn’t like the answer. Businesses in China, India, other countries, they neither lose nor gain if these tariffs rise or fall. If tariffs go up, Chinese and other companies will raise their prices to compensate. And since I cannot buy a non-Chinese-built iPod/Walkman/whatever, my only option is to pay the higher price or not buy an iPod.

            Any true blue conservative would be against higher tariffs. But not you. And not today’s ‘C’onservative party. Shame.

          • The price of iPods is not inelastic. If the price of iPods go up, they sell fewer of them. And not all conservative’s are against all tariffs all the time.

          • Don’t disagree Rick, so let’s think about this here…
            Apple raises the price of an iPod to pass on the tariff (the price will go up somewhat as iPods are not perfectly elastic, though agree they’re not perfectly inelastic either).
            Apple loses out since they have fewer sales. Consumers lose out since the price of iPods go up.
            So who exactly gains here (since someone has to gain for Apple and consumers’ losses)? One and only one entity – the federal government, for whom this is one big cash grab. By Mr Moffatt’s article the other day, an even $1 billion cash grab by the next election.

            Agree or disagree, Rick?

  6. So in order to cut “red tape” the Harper regime has instituted a policy whereby the manufacturer has to produce and include an end user certificate in the box, get the customer to fill in details about themselves, send that back to the manufacturer, process it, send back another completed form and then the whole thing has to be processed in Ottawa to see if the i’s were dotted etc.

    Red tape reduction…. they keep using those words, but I don’t think it means what they think it does.