Borealis Outdoor Adventure opposes surtax

Cycling News

Proposed 30% bicycle surtax
harms cyclists and local bike shops

On September 1, 2005, the Canadian International Trade Tribunal (CITT) recommended that the Government of Canada impose a 30% surtax on certain bicycles primarily imported from developing countries. The CITT issued its recommendation in response to a complaint filed by two companies, Raleigh and Procycle, that already are protected by two layers of Canadian border protection – an unusually high 13% customs tariff that is applied to every bicycle imported into Canada and antidumping duties that have been imposed on bicycles from Taiwan and China for more than a decade.

November 3, 2005

The Hon. Ralph Goodale
Minister of Finance
Finance Canada
Minister's Office — L'Esplanade Laurier
140 O'Connor Street
Ottawa, ON K1A 0G5

Dear Minister Goodale:

RE: Canadian International Trade Tribunal Global Safeguard Inquiry into the Importation of Bicycles and Finished Painted Bicycle Frames

On September 1, 2005, the Canadian International Trade Tribunal (CITT) recommended that the Government of Canada impose a 30 percent surtax on certain bicycles imported primarily from developing countries.

I am writing to request that you reject this recommendation because it is not in the public interest.

The CITT issued its recommendation in response to a complaint filed by two companies, Raleigh and Procycle. These companies are already protected by two layers of Canadian border protection, an unusually high 13 percent customs tariff that is applied to every bicycle imported into Canada and antidumping duties that have been imposed on bicycles from Taiwan and China for more than a decade.

Both of these companies concentrate on selling bicycles to mass merchants, including Canadian Tire, Wal-Mart and Zellers. The CITT Bicycle Report focusses unduly on the mass merchant sector and has overlooked the independent bicycle dealer sector. This latter group is critically important to the future of the Canadian bicycling industry. It would not be in the public interest to add a third layer of protection for the following reasons:

Higher bicycle prices will discourage healthy family recreational activity at a time of rising concern over the physical fitness of Canadian adults and children.

Given Canada's Koyoto commitments regarding greenhouse gas emissions, environmentally friendly means of transportation should be encouraged, not discouraged.

It does not make sense to impose additional taxes on cycling when rising gasoline prices are making driving unaffordable to many Canadians.

It is unfair to hurt hundreds of independent bicycle dealers — locally owned and operated businesses located all across Canada — to protect a relatively small number of jobs in a couple of towns.

Imposing protectionist barriers on imports from developing countries will not help Canada to diversify and grow its trade with these increasingly important trading partners.

Many Canadians will refuse to pay these higher taxes, resulting in more cross-border shopping and smuggling.

Allow me to make some personal observations about the proposed surtax and its effect on local businesses. As a bicycling education instructor, a bicycle tour operator, a consultant in bicycle transportation, a bicycle club volunteer and a cycling advocate, I depend on the support of the community. Although I am located in Saskatoon, I maintain ongoing relationships with local bicycle shops throughout Saskatchewan, Alberta and British Columbia, as well as in parts of Manitoba and Ontario. These shops are the cycling lifeblood of our country. Local bicycle shops — the independent bicycle dealers who will be harmed by this surtax — are strong and committed supporters of cycling. They are dedicated to cycling for sport, for recreation and for transportation. They volunteer their time to local clubs, they help organize events and they support local charities. They are located not only in the cities, but also in small towns where there are no mass merchants. I do not see anything approaching this level of commitment or activism from the staff and owners of the businesses that sell the products that will be protected by this proposed surtax.

My own business — and the business of other tour operators and others serving the cycling public — depends on a thriving independent bicycle dealer industry. The mass merchants are of no help to the tourism sector. The Canadian manufacturers demanding this surtax offer no products of suitable quality or durability to serve the needs of the tourism industry or of dedicated cyclists. Businesses such as mine depend on independent bicycle dealers to provide the products and services we need to keep our businesses healthy and viable. Anyone who relies on their bicycle, whether for transportation or for competition, depends on their independent bicycle dealer for parts, service, advice and reliable bicycles. None of this is available through the mass merchants which sell the products that will be protected by this proposed surtax.

Canadian manufacturers do not need a protectionist surtax to make their products appear to be more of a bargain compared to imported competitors. Instead, they need encouragement to build better products. Consumers already have demonstrated that they prefer quality to cheapness. The proposed surtax does nothing to encourage these two Canadian manufacturers to improve quality. In fact, it does exactly the opposite.

I strongly oppose the proposed 30 percent surtax on imported bicycles. I request that the Government of Canada reject the CITT's recommendation.

Thank you for your consideration in this matter that is crucial to the future of cycling and the bicycling industry in Canada.

Yours sincerely,

Darrell Noakes
President

cc Rt. Hon. Paul Martin, Prime Minister
The Hon. David Emerson, Minister of Industry
Lynne Yelich, MP Blackstrap

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Proposed 30% bicycle surtax harms cyclists and local bike shops On September 1, 2005, the Canadian International Trade Tribunal (CITT) recommended that the Government of Canada impose a 30% surtax on certain bicycles primarily imported from developing countries. The CITT issued its recommendation in response to a complaint filed by two companies, Raleigh and Procycle, that already are protected by two layers of Canadian border protection – an unusually high 13% customs tariff that is applied to every bicycle imported into Canada and antidumping duties that have been imposed on bicycles from Taiwan and China for more than a decade. November 3, 2005 The Hon. Ralph Goodale Minister of Finance Finance Canada Minister's Office — L'Esplanade Laurier 140 O'Connor Street Ottawa, ON K1A 0G5 Dear Minister Goodale: RE: Canadian International Trade Tribunal Global Safeguard Inquiry into the Importation of Bicycles and Finished Painted Bicycle Frames On September 1, 2005, the Canadian International Trade Tribunal (CITT) recommended that the Government of Canada impose a 30 percent surtax on certain bicycles imported primarily from developing countries. I am writing to request that you reject this recommendation because it is not in the public interest. The CITT issued its recommendation in response to a complaint filed by two companies, Raleigh and Procycle. These companies are already protected by two layers of Canadian border protection, an unusually high 13 percent customs tariff that is applied to every bicycle imported into Canada and antidumping duties that have been imposed on bicycles from Taiwan and China for more than a decade. Both of these companies concentrate on selling bicycles to mass merchants, including Canadian Tire, Wal-Mart and Zellers. The CITT Bicycle Report focusses unduly on the mass merchant sector and has overlooked the independent bicycle dealer sector. This latter group is critically important to the future of the Canadian bicycling industry. It would not be in the public interest to add a third layer of protection for the following reasons: Higher bicycle prices will discourage healthy family recreational activity at a time of rising concern over the physical fitness of Canadian adults and children. Given Canada's Koyoto commitments regarding greenhouse gas emissions, environmentally friendly means of transportation should be encouraged, not discouraged. It does not make sense to impose additional taxes on cycling when rising gasoline prices are making driving unaffordable to many Canadians. It is unfair to hurt hundreds of independent bicycle dealers — locally owned and operated businesses located all across Canada — to protect a relatively small number of jobs in a couple of towns. Imposing protectionist barriers on imports from developing countries will not help Canada to diversify and grow its trade with these increasingly important trading partners. Many Canadians will refuse to pay these higher taxes, resulting in more cross-border shopping and smuggling. Allow me to make some personal observations about the proposed surtax and its effect on local businesses. As a bicycling education instructor, a bicycle tour operator, a consultant in bicycle transportation, a bicycle club volunteer and a cycling advocate, I depend on the support of the community. Although I am located in Saskatoon, I maintain ongoing relationships with local bicycle shops throughout Saskatchewan, Alberta and British Columbia, as well as in parts of Manitoba and Ontario. These shops are the cycling lifeblood of our country. Local bicycle shops — the independent bicycle dealers who will be harmed by this surtax — are strong and committed supporters of cycling. They are dedicated to cycling for sport, for recreation and for transportation. They volunteer their time to local clubs, they help organize events and they support local charities. They are located not only in the cities, but also in small towns where there are no mass merchants. I do not see anything approaching this level of commitment or activism from the staff and owners of the businesses that sell the products that will be protected by this proposed surtax. My own business — and the business of other tour operators and others serving the cycling public — depends on a thriving independent bicycle dealer industry. The mass merchants are of no help to the tourism sector. The Canadian manufacturers demanding this surtax offer no products of suitable quality or durability to serve the needs of the tourism industry or of dedicated cyclists. Businesses such as mine depend on independent bicycle dealers to provide the products and services we need to keep our businesses healthy and viable. Anyone who relies on their bicycle, whether for transportation or for competition, depends on their independent bicycle dealer for parts, service, advice and reliable bicycles. None of this is available through the mass merchants which sell the products that will be protected by this proposed surtax. Canadian manufacturers do not need a protectionist surtax to make their products appear to be more of a bargain compared to imported competitors. Instead, they need encouragement to build better products. Consumers already have demonstrated that they prefer quality to cheapness. The proposed surtax does nothing to encourage these two Canadian manufacturers to improve quality. In fact, it does exactly the opposite. I strongly oppose the proposed 30 percent surtax on imported bicycles. I request that the Government of Canada reject the CITT's recommendation. Thank you for your consideration in this matter that is crucial to the future of cycling and the bicycling industry in Canada. Yours sincerely, Darrell Noakes President cc Rt. Hon. Paul Martin, Prime Minister The Hon. David Emerson, Minister of Industry Lynne Yelich, MP Blackstrap Related item News index page

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