In Budget 2016: Growing the Middle Class, the
Government of Canada announced its intention to eliminate tariffs
on food manufacturing ingredients, such as those used in the
agri-food processing industry, as part of its plan to support
investment and job creation in the Canadian agri-food sector,
Canada's largest manufacturing employer.
This announcement presents a unique opportunity for Canadian
manufacturers, foreign companies with manufacturing or importing
operations in Canada, and importers of food manufacturing
ingredients to take advantage of the proposed elimination of
tariffs for certain agrifood inputs and advocate for the inclusion
of others not already captured in the government's
Scope of the Proposed MFN Tariff Elimination
The government proposes to eliminate tariffs on certain items
through changes to the MFN rates of customs duty. The selected
items are used in agri-food processing and will reduce production
costs for Canadian industry, which should enhance
Specifically, the proposal provides for a reduction in the MFN
rates for the goods covered by these tariff items – which
currently range from 2 percent to– 17 percent – to
"free." The goods selected include:
Edible vegetables, roots and
Certain edible fruits and nuts
Certain grains and cereals
Certain products used in the milling
Flours, malts, starches, aand wheat
Animal or vegetable fats and oils
Prepared foodstuffs (only those used in the manufacture of food
products or beverages), beverages, spirits, vinegar, and products
of the chemical or allied industries.
In addition, the Department of Finance will also accept views on
other tariff items that could be considered in the context of
possible further tariff elimination initiatives designed to assist
Canadian industry. For example, corn syrup.
The government has requested that any interested parties wishing
to comment on the proposed MFN tariff elimination should submit
their views in writing by June 21, 2016.
Submissions should include, at minimum, the following
Canadian company/industry association
name, address, telephone number, and contact person;
Relevant eight-digit tariff item(s)
and description of the goods of particular interest;
Reasons for the expressed support
for, or concern with, the proposed tariff elimination, including
detailed information substantiating any expected beneficial or
If concern is expressed with respect
to the proposed tariff elimination for one or more eight-digit
tariff item(s), views should be provided on ways to alleviate such
concerns (e.g. limiting tariff elimination to certain end uses,
gradual tariff elimination over a longer time period); and
Identifying if information provided
in the submissions is commercially sensitive.
The government will also accept views on other items that could
be considered in possible further tariff elimination initiatives
designed to assist Canadian industry.
This initiative presents a unique opportunity for importers of
food manufacturing ingredients to benefit from tariff elimination
on the goods which are already identified, as well as have their
say on other goods not identified in the government's
Manufacturers Should Carefully Review Affected Tariff Items and
Submit their Views by June 21, 2016.
In order to determine to what extent they may benefit from
reduced production costs as a result of the reduction in MFN
tariffs, manufacturers should confirm whether specific goods are
covered by the MFN tariff elimination proposal by carefully
consulting the complete list of tariff items identified in the
Notice on the Customs Tariff and their corresponding descriptions
in the Customs Tariff.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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