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February 12/14 18:45 pm - Federal Budget Both Good & Bad for Cycling

Posted by Editoress on 02/12/14

The latest federal budget, introduced yesterday afternoon by Finance Minister Jim Flaherty, had both favourable and unfavourable aspects for cycling.

First the favourable - sports funding was maintained, despite many other areas facing considerable cuts.  Funding for programs such as Own the Podium will remain at current levels, there will be increased support for Special Olympics Canada and more invested in programs such as participACTION and Grand défi Pierre Lavoie.  The budget also maintained a $450 million federal grant for sports facilities at the 2015 PanAm Games, including the Milton velodrome.

The downside of the budget?  Still no tariff elimination on bikes to match that announced last year on some other sporting goods, such as ice skates and hockey equipment.  Now, anti-dumping duties were removed last year, but that was because Raleigh, the final Canadian manufacturer, closed its factory in Waterloo, Quebec, making the duty redundant.  However, duties of 13% on imported bikes remain for the majority of countries.

Industry members had lobbied to have them removed, once the necessary step of eliminating anti-dumping duties had been completed.  But, they ran up against political necessity - reducing the federal deficit.  Tariffs on bikes only bring in an estimated $50 million, but this government is counting on a balanced budget when they go to the polls next year, so no tariff cuts at this time.  Plus, the feds have commissioned a study to see what the impact has been of the previous tariff elimination before making any other changes.

Some industry insiders are hoping that a pre-election budget next year will include tarfiff elimination on bicycles; hopefully, there will be some serious lobbying on the issue.

Another reason to push this matter is that China will lose its preferential 8.5% tariff rate at the end of this year, meaning that bikes sourced from there (and a lot are) will see tariffs increased to 13%.


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