Canada Announces Tariff Eliminations on Industrial Inputs, Machinery
Canada's Department of Finance has issued a press release announcing measures in Canada's 2010 budget to eliminate all remaining tariffs on manufacturing inputs and machinery and equipment.
(A first phase of tariff relief, implemented in Canada's 2009 budget, eliminated tariffs applied on a broad range of machinery and equipment. The 2010 budget implements a second phase of tariff relief by providing for the elimination of all remaining tariffs on manufacturing inputs and machinery and equipment.)
1160 Tariff Numbers Became Duty-Free on March 5, More to Follow
The 2010 budget provides for the elimination of all remaining tariffs on manufacturing inputs and machinery and equipment, with the majority being eliminated March 5, 2010 and the remainder to be gradually eliminated by January 1, 2015.
According to Canada Border Services Agency documents, tariffs on 1,160 tariff numbers were eliminated effective March 5, 2010, and tariffs on another 381 tariff numbers will be eliminated by January 1, 2015. See CBSA link below for complete list of manufacturing input, machinery, and equipment tariff numbers that became duty-free on March 5, 2010.
Canadian trade sources explain that all goods affected by the tariff eliminations are used in the production of other goods, i.e. items primarily used either as inputs or machinery and equipment used by manufacturers, and note that certain sensitive items were excluded, e.g. those subject to supply management such as some food inputs used by the food processors.
For the 381 items being phased out by 2015, the phase out schedule will likely be announced once the budget bill is introduced in the House of Commons.
Tariff Elimination Meant to Reduce Import & Compliance Costs
Canada's Department of Finance states that when the second phase of tariff relief is fully implemented, more than $5 billion (Canadian dollars) in imports will be liberalized, providing an additional $300 million in annual duty savings for Canadian businesses importing such items. The elimination of tariffs will also reduce customs compliance costs, allow for the simplification of the tariff structure and eliminate the administrative burden of complying with rules of origin and drawback regulations.
Unlike FTZs, Move Creates "Tariff-Free Zone" for All Industrial Manufacturers
According to the Government of Canada, this move will position Canada as the first among its G20 partners to allow manufacturers to operate without the cost of tariffs on inputs and machinery and equipment. It adds that its "tariff-free zone" for industrial manufacturers is superior to efforts by other countries that focus on location-specific free trade zones.
CBSA Posts Updates to Canadian Customs Tariff
Canada Border Services Agency has posted updates through March 11, 2010 on its 2010 Customs Tariff.
(See ITT's Online Archives or 09/22/09 news, 09092299 13, for BP summary of Canada's Department of Finance seeking comments on its proposal to eliminate duties on manufacturing inputs, machinery, and equipment.)
Canadian Department of Finance press release (dated 03/09/10) available at http://www.fin.gc.ca/n10/10-019-eng.asp
CBSA Tariff Amendment T2010-2 (effective 03/05/10) available at http://www.cbsa.gc.ca/trade-commerce/tariff-tarif/2010/01-99/01-99-t2010-02-eng.pdf
CBSA Customs Tariff (updated through 03/11/10) available at http://www.cbsa.gc.ca/trade-commerce/tariff-tarif/menu-eng.html
Canada 2010 Budget section referencing the tariff elimination available at http://www.budget.gc.ca/2010/plan/chap3c-eng.html