Just saying no to quotas: Bicycle tariffs

Ottawa sides with independent bicycle shops and turns down new tariffs on imported bikes.

Good news for those Canadians buying and selling bikes and barbecues. In late May, Ottawa rejected the recommendation of the Canadian International Trade Tribunal (CITT) for new tariffs and special trade restrictions on bicycle and barbecue imports. “After considering all of the information, it was determined that temporary protective tariffs simply wouldn’t provide a competitive long-term solution in these two cases,” said Finance Minister Jim Flaherty (right) in a news release.

When originally floated last year, the proposed bike tariff resulted in a war of words between two bicycle trade associations.

The Canadian Bicycle Manufacturers Association (CBMA)–which represents the interests of two domestic manufacturers, Procycle Group Inc. and Raleigh Canada Ltd.–was in favour of new tariffs and quotas as a means of seeking protection from cheaper foreign bicycle imports (primarily from China). Procycle and Raleigh wanted to see a hefty 48% duty levied on imported bicycles and painted frames (the CITT recommended a 30% surtax).

Challenging the CBMA’s desire for increased protection was the Canadian Association of Specialty Bicycle Importers, which claims to speak for about 12 bike importers and whose views on the tariffs is shared by approximately 1,000 independent bicycle retailers across Canada. CASBI spokesman Jacob Heilbron noted trade protection for the likes of Procycle and Raleigh (which primarily produce low-end bikes sold through general merchandise retailers) would adversely affect Canadian cycling enthusiasts, given most performance bikes are imported. Heilbron predicted sales at specialty bike retailers would “be diminished by more than half,” forcing shops to close.

The Retail Council of Canada and the Bicycle Trade Association of Canada (which includes both CBMA and CASBI members) lauded Flaherty’s move. BTAC executive director Janet O’Connell said imposing higher tariffs would have also penalized consumers (bike sales in Canada are worth about $500 million annually). “[The tariff] didn’t make sense for the consumer or the independent bike store,” she said.

David Menzies