Originally published in Blakes Bulletin on International
Trade & Investment, March 2011
On March 22, the federal government released its Budget for 2011
(Budget 2011). There are several international trade-related items
among the new measures announced in Budget 2011 (to view these
measures, click here). While it appears that the government may fall on
a non-confidence motion associated with Budget 2011, which would
prevent the passage into law any of the measures it has proposed,
Budget 2011 offers insight into the plans and priorities of the
current government. As well, if this budget remains unimplemented,
future governments may well choose to continue the plans outlined
in the budget and adopt the planned measures.
The government announced it will seek to "modernize"
the Customs Tariff. Little detail has been provided on the
precise nature of the changes contemplated, however, one measure
expected to be included in this 'modernization' is the
revocation of provisions which have become obsolete. As an example,
Budget 2011 suggests that certain provisions listed in the
"Special Measures", "Emergency Measures" and
"Safeguards" section of the Customs Tariff may
no longer be used because of commitments Canada has made in
international agreements. These, among others, will be removed to
make the Customs Tariff simpler to use.
The government has also said that it will make some structural
changes to the Customs Tariff in order to make it more
user-friendly. Budget 2011 indicates that one such modification
will allow importers to more easily identify the tariff
classification of their goods by reducing the number of tariff
items and eliminating "end-use" provisions. According to
Budget 2011, such measures should reduce administrative burdens
placed on importers. It is also expected that the changes to the
Customs Tariff will aim to make tariff treatment of
imports from each country more transparent.
Budget 2011 also includes an announcement that the government
will pursue measures to facilitate certain low-value importations.
In particular, through the addition of new Tariff Items,
non-commercial postal and courier imports valued at less than C$500
will be subject to tariff rates of 0%, 8%, or 20%, depending on the
nature of the goods being imported.
Foreign Trade Zone Policies
Canada maintains "foreign trade zone" programs that
generally provide favourable duty and tax treatment for goods
imported into Canada for subsequent value-added manufacturing and
export. In the light of their potential impact on Canadian
importers and manufacturers, Budget 2011 announced the
government's intention to review its foreign trade zone
policies. The focus will be the efficiency of the administration of
the Canadian programs, and the competitiveness of these programs
compared to foreign trade zones in other countries.
Export Development Canada
In 2009, Export Development Canada (the EDC) was provided
certain additional mandates to provide financing to Canadian
exporters. Included amongst these powers was the ability to provide
financing in the Canadian domestic market. In Budget 2011, the
government announced that it would extend these powers until March
2012, and will also review the regulatory framework of the EDC as
it relates to domestic financing.
Budget 2011 announces that new measures related to Canada's
trade remedy system are being considered. The trade remedy system
provides a mechanism by which Canadian producers can challenge
unfair trade practices in relation to imported goods. Under this
system, the government, after conducting highly technical
investigations and hearings, may impose import duties on goods
found to be "dumped" into Canada or improperly subsidized
by a foreign government. The government provided little detail on
the nature of such measures. However, it did indicate that the
measures would be related to the efficiency of the system.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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