The Canadian Government has recently announced plans for further tariff relief to benefit Canadian businesses. This proposal follows this year's earlier round of tariff relief measures on machinery and equipment that have been in effect since January 28, 2009. At that time, the government also made a commitment to undertake further consultations with industry for the purpose of providing tariff relief in additional areas.

Based on preliminary discussions with industry stakeholders, the government has stated its intention to reduce to free the Most-Favoured-Nation (MFN) tariff on a list of manufacturing inputs and on additional machinery and equipment. The scope of this current round of proposed tariff reductions is significantly greater than the earlier round — the proposed list covers tariffs items from over 30 chapters of the Schedule to the Customs Tariff . The earlier round covered only machinery and equipment under Chapters 84 and 85.

In its invitation to submit views on the proposed MFN tariff elimination list, (which can be found at http://www.gazette.gc.ca/rp-pr/p1/2009/2009-09-19/html/notice-avis-eng.html#d101) the Government has also stated that is willing to accept views on other tariff items that should also be considered for further tariff reduction that are not on the current proposed list.

The tariff items chosen for the proposed list were selected based on the following criteria:

  • goods covered by these tariff items are used in the production of other goods;
  • eliminating the tariff on these goods will reduce production costs for Canadian industry; and
  • requests from stakeholders for eliminating MFN tariffs to enhance competitiveness.

Canadian manufacturers, processors and importers should be carefully reviewing the proposed list and considering whether to express support for or object to any particular proposed tariff item elimination.

This is also a unique opportunity for businesses that use imported inputs in their manufacturing or processing activities to advocate for tariff items that they believe should be slated for tariff reduction and added to the proposed list.

Submissions in this regard must be made to the Department of Finance by November 6, 2009.