Trade lobby applauds tariff removal initiative

One of Canada’s largest trade and industry lobbies has endorsed the federal government’s plan to reduce tariffs on imports.

On Thursday, Finance Minister Jim Flaherty introduced the new federal budget. It outlined a number of Conservative initiatives, including the removal of tariffs on manufactured imports.

Jeff Brownlee, a public relations officer with Canadian Manufacturers and Exporters association, applauds the idea. He says manufacturing tariffs make up 30 percent of the federal taxes in Canada.

“The manufacturing sector was hit the hardest during the recent economic troubles,” Brownlee said. “We lost over 100,000 people in just under a month. But now we are going through a paradigm shift. (Removing tariffs is) a good thing for Canada.”

Brownlee said that eliminating manufacturing tariffs is a bold move by the government. It will cost just over $300 million in lost revenue.

According to Brownlee, tariffs tie up goods at the border and cost importers time and money. With the removal of tariffs, he said, it frees up that time and saves importers money. Brownlee said tariff reduction would make it easier to bring in internationally imported machinery (used in the manufacturing sector) and allow Canadian businesses to update or replace older models, and become more competitive.

“I always like to use the example of the iPod touch,” Brownlee said. “There are 450 parts in the iPod touch and each part is outsourced from over 50 different countries and sent to China for assembly. At the end of the day, the brand on the back says ‘made in China,’ even though the design and marketing, amoung other things, is done in North America.”

Flaherty advised that the elimination of tariffs would be costly for the government, but that it would also generate positive economic movement.

“This will give Canada the status of being the first G20 country to become a tariff free zone for manufacturers,” Flaherty said in his speech. “It will help keep jobs in Canada and keep jobs here for years to come.”