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.