Canadian Retailer - Spring 2014 - 12

RETAIL: AT ISSUE

EXPERIMENT IS WORKING
Canadians save plenty through tariff reductions
BY KARL LITTLER, Vice-President, Provincial GR & Strategic Issues, Retail Council of Canada
IN the 2013 Federal Budget, the Minister
of Finance introduced an important pilot project meant to determine the consumer beneﬁt of reduced customs tariffs
at retail. The ﬁrst step involved the elimination of duties on baby clothes and on
most sports and athletic equipment.
Now, as we arrive at the ﬁrst anniversary of that important decision (March 21,
2014), work undertaken by Retail Council
of Canada (RCC) shows that these tariff
reductions are paying off-with big savings for Canadian consumers.
Background

The Customs Tariff prescribes rates
of import duty on over 7,500 different
items-7,526 to be precise-arranged under
99 chapter headings. While many of these
items are industrial inputs, the heaviest
share of import duties falls on imported
goods that are then sold at retail.
Historically, tariffs were meant to protect nascent Canadian industries, while
also serving as a revenue tool for governments. These 19th and 20th Century
policies worked well enough to help establish our manufacturing base but have
always imposed signiﬁcant additional
costs on Canadian consumers.
Fast forward to today and there
has been large scale rationalization
and outsourcing of industry, yet the
import duties remain. There are multiple examples of tariffs as high as 20
per cent in product areas where there
is not even a single Canadian manufacturer. And once
the industrial policy rationale is lost, a customs duty is
simply another tax, attached to particular goods. Taken
together, these specialized taxes add up to more than $4
billion annually.
Fortunately, through the tireless work of RCC and its
members, the federal government recognizes the negative
impact of import duties on the Canadian consumer, as well
as the negative effect on Canadian exporters of duties imposed by other countries. Most of the attention in this area
has been paid to trade negotiations, including NAFTA, the
recent agreement between Canada and the EU and the ne-

12 |

canadian retailer | spring 2014 | www.retailcouncil.org/cdnretailer

gotiations now underway within the TransPaciﬁc Partnership.
Starting in 2013, following the Senate Finance Committee's hearings on the CanadaU.S. price gap, the government decided to
begin addressing the issue through changes
in domestic legislation. Minister of Finance
Jim Flaherty asked RCC for help concerning ways to approach the issue. RCC then
worked closely with the government through
late 2012 and early 2013 on the deliberations
that led to the Budget 2013 pilot project.

http://www.retailcouncil.org/cdnretailer

Canadian Retailer - Spring 2014

Table of Contents for the Digital Edition of Canadian Retailer - Spring 2014

Publisher’s Desk
Retail Currents
Retail: At Issue
Understanding the Channels
Reversal of Flow
Omnichannel Retail—Everywhere All the Time
At Home Online
A Space to Grow
Blocking and Tackling With a Canadian Marketing Legend
Advertiser's Index
Retail Quick Tips
Canadian Retailer - Spring 2014 - cover1
Canadian Retailer - Spring 2014 - cover2
Canadian Retailer - Spring 2014 - 3
Canadian Retailer - Spring 2014 - Publisher’s Desk
Canadian Retailer - Spring 2014 - 5
Canadian Retailer - Spring 2014 - 6
Canadian Retailer - Spring 2014 - 7
Canadian Retailer - Spring 2014 - Retail Currents
Canadian Retailer - Spring 2014 - 9
Canadian Retailer - Spring 2014 - 10
Canadian Retailer - Spring 2014 - 11
Canadian Retailer - Spring 2014 - Retail: At Issue
Canadian Retailer - Spring 2014 - 13
Canadian Retailer - Spring 2014 - Understanding the Channels
Canadian Retailer - Spring 2014 - 15
Canadian Retailer - Spring 2014 - Reversal of Flow
Canadian Retailer - Spring 2014 - 17
Canadian Retailer - Spring 2014 - 18
Canadian Retailer - Spring 2014 - 19
Canadian Retailer - Spring 2014 - 20
Canadian Retailer - Spring 2014 - 21
Canadian Retailer - Spring 2014 - Omnichannel Retail—Everywhere All the Time
Canadian Retailer - Spring 2014 - 23
Canadian Retailer - Spring 2014 - 24
Canadian Retailer - Spring 2014 - 25
Canadian Retailer - Spring 2014 - 26
Canadian Retailer - Spring 2014 - At Home Online
Canadian Retailer - Spring 2014 - 28
Canadian Retailer - Spring 2014 - 29
Canadian Retailer - Spring 2014 - 30
Canadian Retailer - Spring 2014 - 31
Canadian Retailer - Spring 2014 - A Space to Grow
Canadian Retailer - Spring 2014 - 33
Canadian Retailer - Spring 2014 - 34
Canadian Retailer - Spring 2014 - 35
Canadian Retailer - Spring 2014 - Blocking and Tackling With a Canadian Marketing Legend
Canadian Retailer - Spring 2014 - 37
Canadian Retailer - Spring 2014 - 38
Canadian Retailer - Spring 2014 - 39
Canadian Retailer - Spring 2014 - 40
Canadian Retailer - Spring 2014 - 41
Canadian Retailer - Spring 2014 - 42
Canadian Retailer - Spring 2014 - 43
Canadian Retailer - Spring 2014 - 44
Canadian Retailer - Spring 2014 - 45
Canadian Retailer - Spring 2014 - 46
Canadian Retailer - Spring 2014 - 47
Canadian Retailer - Spring 2014 - 48
Canadian Retailer - Spring 2014 - Advertiser's Index
Canadian Retailer - Spring 2014 - Retail Quick Tips
Canadian Retailer - Spring 2014 - cover3
Canadian Retailer - Spring 2014 - cover4
Canadian Retailer - Spring 2014 - outsert1
Canadian Retailer - Spring 2014 - outsert2
Canadian Retailer - Spring 2014 - 51
Canadian Retailer - Spring 2014 - 52
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