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CITT 2006 — Update on New Government’s Position on Bicycle Surtax

January 25, 2006 — There’s a new decision maker in charge of the controversial 30% surtax issue facing the Canadian cycling industry.

The Conservative Party led by Stephen Harper defeated Paul Martin and the Liberals in Monday’s federal election and with their new power comes a new responsibility in dealing with the outstanding CITT surtax recommendation.

It’s one of many issues Harper’s minority government has to address within its first few weeks in office, and although they haven’t taken a firm stand on the issue yet, the Conservatives said they will deal with it quickly.

“We will certainly be addressing it. Once our new Prime Minister appoints a cabinet, we will have to open that up and take a serious look at it,” said Ted Menzies, a long-time Alberta member of parliament who was re-elected in his riding. Menzies was appointed senior Critic for International and Internal Trade by Harper in 2005, so he is well aware of the situation and its importance to the cycling industry.

“I know there was a recommendation that went to former Finance Minister Goodale and he chose to not to do anything about it, which I guess isn’t a big surprise,” said Menzies, who was listed as one of the politicians opposing the surtax in a release by the The Canadian Association of Specialty Bicycle Importers (CASBI) last year. “Canadian people have been waiting for those decisions to be made for a long time. It will be a tough decision, but it has to be made.”

The issue came about when Procycle Group and Raleigh Canada requested a Canadian International Trade Tribunal global safeguard hearing as a result of what they said was financial hardship caused by lower-priced bicycles being imported from Asia.

After months of surveys, hearings and research, the CITT released its recommendation for a 30% surtax on bikes with an FOB value at or below $225 Canadian, which according to the CITT translated into a retail value of approximately $400. That set off an ugly exchange between both sides in fall 2005, as CASBI, bicycle retailers across Canada, and the industry at large, claimed the ruling would affect bicycles at much higher retail levels, $600-$700, and hurt countless cycling businesses across Canada. But once the election was announced, the whole surtax issue was temporarily put on hold.

Now that the Conservatives are in power, it will take a few weeks for the transfer of office to take place and for Harper to name his new cabinet, including the all important Minister of Finance.

Once that happens, the surtax issue can be looked at again. Although Menzies was said to be opposed to the surtax in the fall, he said Harper and his new cabinet will take a balanced look at the issue before making its decision.

“We’ll try to look at it as fairly as we can from both perspectives. There are certainly two schools of thought,” he said. “It’s going to be a difficult decision and we’ll have to weigh that carefully.”

Menzies said Harper was briefed on the issue prior to the election.
“We’re not going to pre-judge it right now because we’re in transition. But we’re well-aware of the issue”¦so we will have that discussion very soon.”

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