December 9, 2005 – Saskatoon city council has passed a resolution to write to the federal government, opposing the Canadian International Trade Tribunal’s recommendation to impose a 30% surtax on imported bicycles.

A group of 10 cycling businesses in the city had urged councillors to let the government know that the tax would hurt consumers and local businesses. Council agreed and passed the resolution at it November 28 meeting.

The city council resolution, a copy of the letter to council and other background information are reproduced below.

BACKGROUND

From City Council minutes, November 28:

Moved by Councillor Fortosky, Seconded by Councillor Alm,
1) that City Council send a letter to the Federal Government, urging the government not to impose the proposed surtax; and
2) that a copy of Council’s letter be forwarded to the Saskatchewan Urban Municipalities Association.
CARRIED.

Text of the letter to City Council from Saskatoon’s bicycling industry:

November 14, 2005
City of Saskatoon
222 — 3rd Avenue North
Saskatoon, SK S7K 0J5

His Worship the Mayor and Members of City Council:
RE: Surtax on Imported Bicycles

On September 1, 2005, the Canadian International Trade Tribunal (CITT) recommended that the Government of Canada impose a 30 percent surtax on certain bicycles imported primarily from developing countries.

Saskatoon’s independent bicycling businesses and their more than 120 employees request the support of Saskatoon City Council in urging the federal government not to impose this tax because it is not in the public interest.

The CITT issued its recommendation in response to a complaint filed by two companies, Raleigh and Procycle. These companies are already protected by two layers of Canadian border protection “” an unusually high 13 percent customs tariff that is applied to every bicycle imported into Canada and antidumping duties that have been imposed on bicycles from Taiwan and China for more than a decade.

The independent bicycle dealer is crucially important to the future of the Canadian bicycling industry. It would not be in the public interest to add a third layer of protection for the following reasons:
“¢ Higher bicycle prices will discourage healthy family recreational activity at a time of rising concern over the physical fitness of Canadian adults and children.
“¢ Given Canada’s Koyoto commitments regarding greenhouse gas emissions, environmentally friendly means of transportation should be encouraged, not discouraged.
“¢ It does not make sense to impose additional taxes on cycling when rising gasoline prices are making driving unaffordable to many Canadians.
“¢ It is unfair to hurt hundreds of independent bicycle dealers “” locally owned and operated businesses “” to protect a relatively small number of jobs in a couple of towns.
“¢ Imposing protectionist barriers on imports from developing countries will not help Canada to diversify and grow its trade with these increasingly important trading partners.

Saskatoon’s local bike shops are the cycling lifeblood of the community. The staff and owners of these shops are dedicated to cycling for sport, recreation and transportation. They volunteer their time to local clubs, they sponsor or organize events and they support local charities. Anyone who relies on their bicycle also depends on their independent bicycle dealer for parts, service, advice and reliable bicycles.

The CITT recommendation, while focussed on mass bikes, actually increases the cost of all imported bikes (including children’s bikes) priced below about $650. This will cause sales to drop, and jobs and business to be lost.

The CITT recommendation is opposed by other Canadian bicycle manufacturers, the Bicycle Trade Association of Canada, Canadian municipalities, independent business owners, and thousands of cyclists. In response to the legitimate concerns of the industry and Canadian cyclists, the Canadian Bicycle Manufacturers’ Association (whose sole members are Procycle and Raleigh) has hired one of the top lobbying firms in Canada, Earnscliffe Strategy Group. This firm includes former Liberal cabinet ministers, the former Chairman of the Liberal Party leadership campaign, and other former Liberal Party insiders including senior advisors to the Hon. Prime Minister Paul Martin.

This city’s cycling businesses request that Saskatoon City Council write to the Federal Ministers of Environment, Health, International Trade, Sport, Finance, Transport, Infrastructure, Public Health and Families, and to the Members of Parliament representing Blackstrap, Saskatoon-Humboldt, Saskatoon-Rosetown-Biggar and Saskatoon-Wanuskewin constituencies, to express support for local businesses and strongly urge the government not to impose this tax.

The bicycling organizations and their employees represented by the signatures below respectfully request Saskatoon City Council to pass the following resolution at its next Council meeting:

THAT WHEREAS:
1. the Canadian International Trade Tribunal is recommending that the Canadian government impose a 30% surtax on imported bicycles with a wheel size of 15″ or greater with a F.O.B. factory price of $225 or less, to protect jobs for two bicycle assembly companies in Quebec;
2. And whereas this surtax is on top of existing tariffs of 8.5–13% on all imported bicycles, as well as anti-dumping duties;
3. And whereas this surtax is strongly opposed by all but two Canadian cycle manufacturers and by nearly 1,000 independent specialty retail bicycle stores across Canada;
4. And whereas these dealers estimate that this tax would add an estimated $50 to the price of the lowest-cost mass market bicycles, making a first bicycle purchase prohibitively expensive for many children and families;
5. And whereas cycling is “¢ a transportation priority for the City of Saskatoon,
“¢ a key factor in reducing youth and adult obesity,
“¢ essential for Saskatoon meeting environmental and conservation goals and
“¢ a vital element of a healthy city;

THEREFORE BE IT RESOLVED that Saskatoon City Council shall send a letter to the Federal Ministers of Environment, Health, International Trade, Sport, Finance, Transport, Infrastructure, Public Health and Families, and to the Members of Parliament representing Blackstrap, Saskatoon-Humboldt, Saskatoon-Rosetown-Biggar and Saskatoon-Wanuskewin constituencies, strongly urging the government not to impose this tax.

We hope that you will support the foregoing resolution and help Saskatoon’s bicycling businesses continue to serve the 160 competitive cyclists, 2700 cyclists who cycle to work, and125,000 casual and recreational cyclists who make up the 180,000 bicycle owners in Saskatoon. Additional background information is appended to this letter.

Should you wish to discuss any of the foregoing prior to the City Council meeting, please do not hesitate to contact any of the organizations shown below.

Saskatoon’s Bicycling Industry
Borealis Outdoor Adventure, 8B-305, 3110 “” 8th St E, Saskatoon, SK S7H 0W2 (306) 343-6399
Bike Universe, 730A Broadway Ave, Saskatoon, SK S7N1B4 (306) 244-0200
Bike Doctor, 623 Main St, Saskatoon, SK S7H0J8 (306) 664-8555
Broken Spoke, 149 Jessop Ave, Saskatoon, SK S7N1Y3 (306) 242-5304
Bruce’s Cycle Works, A-1104 Central Ave, Saskatoon, SK S7N2H1 (306) 934-2552
City Park Cycle, 614 Duchess St, Saskatoon, SK S7K0R1 (306) 384-2282
Doug’s Spoke’n Sport Inc, 31A-2105 8th St E, Saskatoon, SK S7H0T8 (306) 373-4224
Jad’s Cycle & Skate Repair, 434 20th St W, Saskatoon, SK S7M0X4 (306) 653-1803
MWD Industries, Cellular Telephone, Saskatoon, SK (306) 280-3990
Outtabounds, 105 Ave B S, Saskatoon, SK S7M1M2 (306) 244-7813