April 29, 2013 (Ottawa, ON) – Cyclists and independant bike shops across Canada might feel forgotten by the federal government. Despite measures in the latest budget to eliminate tariffs on many imported sporting items – notably hockey equipment – bikes are still subject to tariffs. And to make matters worse, the government is moving to eliminate preferential tariffs for 72 developing nations, including China and Taiwan. This will likely see tariffs increase on 1,200 consumer products – including bicycles – from 8% to 13%, apparently by 2015. The Bicycle Trade Association of Canada (BTAC) has spoken out against this, as have some bike industry leaders and opposition politicians.
BTAC President Kevin Senior, one of the owners of Calgary’s Bow Cycle, is speaking out against the tariff increase. “The bottom line is that we’re looking at higher prices, and we’re already looking at price discrepancies with the U.S. because (U.S. tariffs are lower),” Senior says. “Because virtually every bike sold at a retail level in Canada is imported, the price change would strike widely.”
Senior also notes that Canada now has virtually no domestic bicycle manufacturing since the announcement of the imminent closure of Raleigh Canada’s Waterloo, QC factory this year. Cycles Devinci in Chicoutimi, QC and a handful of custom builders currently make up most of Canada’s remaining bicycle manufacturing industry.
“Canada imports $125 million in bicycles from the 72 countries impacted by the Conservative tax increase,” reads part of an NDP press release. “The tariff increases will cost Canadian cyclists between $5 and $6 million annually.”
Dorel’s CEO Martin Schwartz, with multiple brands and price points in the marketplace, is also against the new measures according to AP saying that, “Ottawa’s decision to increase tariffs on imported bikes… will drive Canadian consumers to shop across the border in the United States. … [Dorel] won’t be hurt because it sells bikes and juvenile products on both sides of the border and will simply pass along the increased costs to Canadian consumers.”
“These tax hikes hurt Canadian businesses who will now find it even harder to compete with the U.S.A. as the cross-border price gap widens,” continued New Democrat Murray Rankin (Victoria), speaking at Joe Mamma Cycles on Bank Street in Ottawa. “The Government should be supporting Canadian retailers, not forcing cash-strapped shoppers to head south of the border.”
“[Tariffs are] a huge problem for the independent retailer. To me, it’s not helping anyone – I mean, who are they protecting? – and it’s hurting small business owners,” says Sean Carter of Calgary’s Bike Bike in the Calgary Herald.
Many local retailers are protesting the change by encouraging customers to sign a petition HERE. Carter says the current tariff regime makes it nearly impossible for him to carry a good quality bike below about $500, which means he can’t compete in the low-end market with big retailers such as Canadian Tire and Wal-Mart.
Petitions on this subject can be forwarded to:
BTAC / ACIV
202 Church Street
PO Box 72
Keswick, ON L4P 3E1
According to BTAC’s release on the matter an official from the Department of Finance Canada said the tariff is in place because there is still “significant” production of bicycles in Canada. But cycling industry officials point out that other tariffs have been in place for over 20 years to protect the domestic industry.
In a related issue the Canadian International Trade Tribunal (CITT) recently ruled not to conduct an internal review of the current duties on bikes from Taiwan and China with an FOB [freight on board value] not exceeding CAN$225 [approximately $400 retail] and excluding bicycles with foldable frames and stems. In essence this makes some imported bicycles subject to two tariffs.