Letter to the Honourable James Flaherty

October 7, 2013
Honourable, James Flaherty, P.C., M.P.
Minister of Finance
Department of Finance
140 O’Connor St.
Ottawa, Ontario K1A 0G5

Dear Minister Flaherty:

Re: 2013 Tariff Pilot and the Bicycle Trade Association of Canada recent submission and positive ruling from the Canadian International Trade Tribunal (CITT) regarding the current state of domestic bicycle manufacturing.

On behalf of independent bicycle retailers, distributors, and indeed all those who enjoy Canada’s dynamic and vibrant cycling industry in all its forms, the Bicycle Trade Association of Canada (BTAC) would like to take this opportunity to once again extend our sincere congratulations to you on your reappointment as Canada’s Finance Minister.

As small business owners, we are very familiar with all the components necessary to ensure a stable economy in Canada and are extremely proud of the contributions independent bicycle dealers across Canada play in the economies of their communities and indeed the country.

Minister, as you are aware, our members and customers were very disappointed with your government's omission of bicycles from the original tariff elimination pilot project announced in your 2013 budget. As a result of your changes to the General Preferential Tariff Regime, bikes imported into Canada from a number of countries will see a tariff increase from 8.5% to 13%. While bikes currently imported with a 13% tariff continue to have the tax imposed.

This hike will increase the cost of purchasing a bicycle for Canadian families, seniors, commuters, athletes, and everyone who enjoys cycling for recreation, travel, and/or health and wellness. These increases will also exacerbate Canadian bicycle independent retailers’ already-thin margins, and as a result of increases in pricing, Canadian consumers will be driven to find better deals from vendors online or retailers in the USA.

To be clear, BTAC was very supportive of the government’s proposed changes in the Economic Action Plan regarding the tariff pilot. We understand the need to keep Canada’s system of tariffs up-to-date and reflective of current economic circumstances, as well as the need to provide certain targeted protections to our domestic manufacturing base.
Minister, as you are aware, we were disappointed bicycles were not included in your tariff elimination pilot and although we disagreed with your reason in your August 15th, 2013 letter to our Vice President, Mr. Garry Norkum, we understood your rationale. In that letter you stated; “The decision to exclude bicycles from this measure recognizes the guidance of the Senate Committee to keep in mind the potential impact of tariff relief on domestic manufacturing.  As there is still domestic production of bicycles in Canada, a fact affirmed by the Canadian International Trade Tribunal in its recent review of unfairly traded imports of certain bicycles from China and Taiwan.”  You further stated that, “it was decided not to include these products at this time.”
In its September 30, 2013 order the CITT stated the following: "domestic production (of bicycles) ceased in June 2013. In addition, the Tribunal is not convinced that domestic production is likely to resume in the near future."

In light of the fact that Prime Minister Harper has stated that your government’s priority in the next session of parliament will be consumer protection and pricing and the fact that the CITT ruling is now clear that there is no domestic production of bicycles in Canada, your government have no reason to protect an industry that no longer exists. Our members and their customers are expecting a positive response to our request to add bicycles to the tariff elimination pilot.
Our vibrant bicycle retail sector is looking to you and the Prime Minister for continued financial leadership.  At a time when the government is promoting the health and well-being of Canadian families, doing what it can to protect the environment, and working with provinces and municipalities to help fund long-term solutions for traffic congestion and urban transit, it is no better time to eliminate the tariffs on bicycles than now.

Each year more and more Canadians are drawn to the health, environmental, and economic benefits of cycling. Promoting active transportation is sound policy for governments, municipalities, transportation management, and health care systems.
As projections for bike sales and bicycle mode share continues to show growth going forward, it is essential that the Canadian government stands behind our country’s independent bike dealers. It is our hope that as you plan for the second part of the tariff pilot in your 2014 budget, that you and your government will recognize the cycling industry for its contributions to the economy, health, and the environment by including bicycles in the tariff elimination pilot.
Our members are expecting it and our customers—your constituents are respectfully demanding it.

Bill Yetman
Executive Director

Cc. BTAC Members
Patrick Halley
Chief, Tariffs and Market Access
House of Commons Finance Committee
Senate Committee