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Imported bicycle prices to rise by 30% because of surtax

alexd

Administrator
Staff member
Canada Considers 30% Bicycle Surtax To Assist In Kyoto Commitments

Federal cabinet ministers are considering a recommendation by the Canadian International Trade Tribunal (CITT) to add a 30% surtax onto imported bicycles in order to protect two Quebec assemblers of low quality bicycles (Procycle Group Inc. and Raleigh Canada Ltd.) typically sold in mass merchandise outlets such as Wal-Mart and Canadian Tire.

Canadians already bear the highest bicycle tariffs in the world. The proposed 30% surtax would be applied in addition to two existing protections - a 13% customs tariff that is applied to every bicycle imported into Canada irrespective of origin and special antidumping duties ranging from 5-50% that have been imposed on bicycles from Taiwan and China for well over a decade. Procycle and Raliegh avoid the tariffs, duties and surcharges by importing 90% of their bicycle frames and components unassembled into Canada where they then assemble them for distribution to mass merchandise chain retailers.

The effect of this 30% surtax will be to increase the cost of import bicycles at price-points that are occupied by commuter bicycles and high quality entry level bicycles used by youths. The cumulative protections for domestic bicycle assemblers in concert with provincial and federal sales taxes would comprise about one quarter of the final sale price of a typical import bicycle priced in range of CDN $600-$700.

"Gasoline prices are up, inner city smog and traffic congestion are up, greenhouses gases are up, childhood obesity is up and virtually everyone has identified bicycles as part of the solution. So where is the public interest in a 30% import bicycle surtax?" asks Peter Lilly of CyclePath in Toronto, Ontario adding, "This is absurd. Toronto, Vancouver and cities across Canada are building bike lanes and putting bike racks on its transit buses. The University of Toronto is launching a bike share program to encourage cycling. Yet, in the face of these initiatives to encourage cycling, the CITT recommends an unwarranted surcharge that will effectively price affordable, quality bicycles out of the market."

Mike Theil, owner of four Bicycle Sports Pacific stores in Vancouver, adds, "It's outrageous that Canadian cyclists, my business, my staff's jobs, the health of our nation and the environment are all up for sacrifice, to bail out two globally uncompetitive businesses that have failed to adapt despite fifteen years of trade protection. They continue to try to compete for the bottom end of the bicycle market in Canada, a country with the highest standard of living in the world. These two companies need to focus on making better bikes, not continually coming back to Government for more trade protection. There are many successful Canadian bike manufacturers and they do not need or support this proposed tax."

Any proposed surtax would affect at least 1000 independent bicycle retailers across Canada.
 

OutcastTO

TRIBE Member
Alex,

what is the source of that article? I have a friend that imports Italian bikes that would be very interested in these developments (if he doesn't already know)

Thanks,

Matt
 

Subsonic Chronic

TRIBE Member
Canada Considers 30% Bicycle Surtax To Assist In Kyoto Commitments
The article fails to mention exactly how a bicycle surtax is going to help us reach our Kyoto goals.

Not to mention the idea is stupid, but that's already been pointed out. I just hope that this stays as just a recommendation and never gets put in place. I hope the people maknig the decisions have a better head on their shoulders than the ones making these suggestions.
 

alexd

Administrator
Staff member
Originally posted by OutcastTO
Alex,

what is the source of that article? I have a friend that imports Italian bikes that would be very interested in these developments (if he doesn't already know)

Thanks,

Matt
I pulled it off the intardet. There will be more information about this on the BTAC website. If he is a dealer he can login to it

http://www.btac.org/index_en.html

BTAC just sent me a press release about this here:

BTAC MEMBERSHIP VOICES OPPOSITION

TO CITT RECOMMENDATIONS

Friday, October 7 2005 - Toronto, Ontario - The Bicycle Trade Association of Canada (BTAC) is registering its opposition to the Global Safeguard recommendations proposed by the Canadian International Trade Tribunal (CITT). The BTAC believes that the recommendation of a 30 percent surtax on bicycles imported under Cdn. $225 FOB (Free on Board) proposed by the CITT will have a negative impact on the Independent Bicycle Dealer (IBD) sector of the Canadian bicycle industry. As the industry organization whose membership reflects all segments of the Canadian bicycle market, including dealers, importers and manufacturers of bicycles, BTAC has its finger on the pulse of Canada’s bicycle sector. In a recent membership survey, 69 percent of BTAC members opposed the CITT recommendations, with only 16 percent in support. “This is a very large issue for our membership and they have made it clear they want it treated as a top priorityâ€, stated Janet O’Connell, BTAC Executive Director.

The importance of the issue can be measured by the level of concern members expressed over the impact the recommendations could have on their businesses. The membership survey found that 75 percent of members believe that the recommendations, if implemented, will have a negative impact on their business, with 56 percent indicating the recommendations would have a very negative impact. “Any tariff of this nature will do nothing but hurt the health and business of a strong, competitive Canadian cycling industry, as well as the independent bicycle dealersâ€, stated BTAC Member Jim Harman, President of Norco Performance Bikes. There are approximately 1,000 independent bicycle retailers across Canada, employing more than 5,000 people who are working hard every day to support the recreational, commuter and competitive dimensions of cycling in Canada.

BTAC believes that the CITT’s report is deeply flawed and has not recognized the distinct differences between the IBDs versus mass merchandisers (e.g. Wal-Mart and Canadian Tire). The CITT stated in its report that it wishes to protect Canadian domestic bicycle manufacturers in the high- volume mass market by imposing tariffs on bicycles that will retail at or below $400. However, the majority of BTAC’s members believe a 30 percent tariff on imported bicycles will affect bicycles selling for as much as $700 within the IBD retail channel - a significant difference in price. “The majority of the bicycles we sell are in this price range. Adding the tariff means we will be forced to stop selling bikes and look for something else to sell, as our markup won’t cover the costsâ€, declared Paul Dragan, owner of five Reckless Bike Stores in BC. “The bikes that would be affected by this tariff are generally the largest unit volumes that an IBD sells, bikes that introduce consumers to the freedom of cycling and that, hopefully, create life-long cyclists and long term customers. We cannot stand by while our members fight for their ability to succeed and surviveâ€, acknowledged O’Connell.

17 Main St. North, Newmarket,ON L3Y 3Z6

Telephone : 905.853.5031 Toll Free : 866.528.BTAC

Fax : 905.853.7632 Email : info@btac.org

“We will be missing an opportunity to offer a healthy lifestyle alternative to our youth if bicycles become cost prohibitive. Today, with rising child obesity and growing government investment in programs to get kids active, it seems counter productive to tax bicycles at ANY levelâ€, commented former BTAC President Brian Sibthorpe, Owner Bow Cycle, Calgary, AB. “The bicycle industry in Canada supports every level of activity from trail riding and travelling safe routes to school to commuting and athletic sponsorship. The industry as a whole is very concerned about the effect rising price levels will have, especially on our youthâ€.

The Bicycle Trade Association of Canada is a non-profit trade association of independent bicycle retailers, manufacturers and cycling industry suppliers.

For further information, please contact:

Janet O'Connell

Executive Director

Bicycle Trade Association of Canada

Tel: 905-853-5031

E-mail: janet@btac.org

Website: www.btac.org
 

alexd

Administrator
Staff member
Bicyles reduce polution and are considered a part of the solution. I thinkmaybe part of kyoto is that we have to manufacture our own solutions in-country to get the extra carbon credits. Maybe we don't get as many if we import solutions from other countries.
 

Cydome

TRIBE Member
Originally posted by Klubmasta Will
what the hell does any of this have to do with kyoto?

did i miss something?
They going to take the bike money and use it to buy trees and then sell those as carbon credits = profit :D
 

I_bRAD

TRIBE Member
As an engineer and bicycling enthusiast I think it's a reasonable idea.

The average person has no idea about the huge huge huge outflow of jobs to china due to low labour costs. I see it every day.

I was just commenting the other day that the Canadian government is working to promote skilled trades as a viable option for a career, but is letting businesses get away with shipping all of their labour overseas...thereby decimating the opportunites for skilled labour in our own country. Don't kid yourself- that money is not going to china... it's going to rich fat-cats in North America. Enjoy your cheap imported bikes, cause that's all you can afford when you're earning minimum wage at wal-mart rather than working in Canadian Industry.

You know what the biggest labour market is in Southern Ontario? Automotive and automotive components manufacturing, and it's shrinking day by day with re-sourcing labour to China.

As pollution, gas prices and general public opinion turn towards bicycles and other enviro-friendly transportation solutions and away from wasteful forms of transportation such as cars, wouldn't it be nice to have a strong cycling industry of our own to fall back on rather than just changing what we buy from China.

I think it's a good idea, which although will hurt in the short term shows good long term planning on their part... and I'm not one to compliment the current Canadian government either.
 

OutcastTO

TRIBE Member
Originally posted by alexd
I pulled it off the intardet. There will be more information about this on the BTAC website. If he is a dealer he can login to it

http://www.btac.org/index_en.html

BTAC just sent me a press release about this here:

BTAC MEMBERSHIP VOICES OPPOSITION

TO CITT RECOMMENDATIONS

Friday, October 7 2005 - Toronto, Ontario - The Bicycle Trade Association of Canada (BTAC) is registering its opposition to the Global Safeguard recommendations proposed by the Canadian International Trade Tribunal (CITT). The BTAC believes that the recommendation of a 30 percent surtax on bicycles imported under Cdn. $225 FOB (Free on Board) proposed by the CITT will have a negative impact on the Independent Bicycle Dealer (IBD) sector of the Canadian bicycle industry. As the industry organization whose membership reflects all segments of the Canadian bicycle market, including dealers, importers and manufacturers of bicycles, BTAC has its finger on the pulse of Canada’s bicycle sector. In a recent membership survey, 69 percent of BTAC members opposed the CITT recommendations, with only 16 percent in support. “This is a very large issue for our membership and they have made it clear they want it treated as a top priorityâ€, stated Janet O’Connell, BTAC Executive Director.

The importance of the issue can be measured by the level of concern members expressed over the impact the recommendations could have on their businesses. The membership survey found that 75 percent of members believe that the recommendations, if implemented, will have a negative impact on their business, with 56 percent indicating the recommendations would have a very negative impact. “Any tariff of this nature will do nothing but hurt the health and business of a strong, competitive Canadian cycling industry, as well as the independent bicycle dealersâ€, stated BTAC Member Jim Harman, President of Norco Performance Bikes. There are approximately 1,000 independent bicycle retailers across Canada, employing more than 5,000 people who are working hard every day to support the recreational, commuter and competitive dimensions of cycling in Canada.

BTAC believes that the CITT’s report is deeply flawed and has not recognized the distinct differences between the IBDs versus mass merchandisers (e.g. Wal-Mart and Canadian Tire). The CITT stated in its report that it wishes to protect Canadian domestic bicycle manufacturers in the high- volume mass market by imposing tariffs on bicycles that will retail at or below $400. However, the majority of BTAC’s members believe a 30 percent tariff on imported bicycles will affect bicycles selling for as much as $700 within the IBD retail channel - a significant difference in price. “The majority of the bicycles we sell are in this price range. Adding the tariff means we will be forced to stop selling bikes and look for something else to sell, as our markup won’t cover the costsâ€, declared Paul Dragan, owner of five Reckless Bike Stores in BC. “The bikes that would be affected by this tariff are generally the largest unit volumes that an IBD sells, bikes that introduce consumers to the freedom of cycling and that, hopefully, create life-long cyclists and long term customers. We cannot stand by while our members fight for their ability to succeed and surviveâ€, acknowledged O’Connell.

17 Main St. North, Newmarket,ON L3Y 3Z6

Telephone : 905.853.5031 Toll Free : 866.528.BTAC

Fax : 905.853.7632 Email : info@btac.org

“We will be missing an opportunity to offer a healthy lifestyle alternative to our youth if bicycles become cost prohibitive. Today, with rising child obesity and growing government investment in programs to get kids active, it seems counter productive to tax bicycles at ANY levelâ€, commented former BTAC President Brian Sibthorpe, Owner Bow Cycle, Calgary, AB. “The bicycle industry in Canada supports every level of activity from trail riding and travelling safe routes to school to commuting and athletic sponsorship. The industry as a whole is very concerned about the effect rising price levels will have, especially on our youthâ€.

The Bicycle Trade Association of Canada is a non-profit trade association of independent bicycle retailers, manufacturers and cycling industry suppliers.

For further information, please contact:

Janet O'Connell

Executive Director

Bicycle Trade Association of Canada

Tel: 905-853-5031

E-mail: janet@btac.org

Website: www.btac.org
Thank you.
 

AdRiaN

TRIBE Member
I am proposing a 30% surtax on imported shoes to help protect the Canadian shoe manufacturing industry from foreign competition, and to help this country meet its Kyoto targets by encouraging people to walk more in Canadian shoes.

It's time to put our feet to the fire!
 

freshest1

TRIBE Member
good to hear. This just gives people more incentive to buy a rocky mountain or norco bike. what about natfa, is this cnd's responce to the soft wood lumber traif?
 

Subsonic Chronic

TRIBE Member
Originally posted by Klubmasta Will
what the hell does any of this have to do with kyoto?

did i miss something?
The *only* way that I can link it to Kyoto is less products coming from overseas = less fuel spent transporting goods. (and that's quite a stretch)
 

graham

Well-Known TRIBEr
inflation will make japanese bikes more expensive, that's a symptom of their improving economy, first time in a decade yo
 

I_bRAD

TRIBE Member
Originally posted by freshest1
good to hear. This just gives people more incentive to buy a rocky mountain or norco bike. what about natfa, is this cnd's responce to the soft wood lumber traif?
Rocky mountain and Norco both make their frames in Taiwan though. They're just assembled here, just like the companies mentioned in the article. Same with Cervelo.
 

I_bRAD

TRIBE Member
I'm pretty sure there's no such thing as a Canadian made frame. With the exception of a few tiny custom shops.
 

wayne kenoff

TRIBE Member
This law only hurts Canadian consumers. It makes bikes more expensive and will reduce ridership. Protectionist trade is not the answer.
 
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