Registration

SOR/2008-256 September 4, 2008

CUSTOMS TARIFF

Order Amending Certain Textile and Apparel Remission Orders, 2008

P.C. 2008-1599 September 4, 2008

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 115 of the Customs Tariff (see footnote a), hereby makes the annexed Order Amending Certain Textile and Apparel Remission Orders, 2008.

ORDER AMENDING CERTAIN TEXTILE AND APPAREL REMISSION ORDERS, 2008

TAILORED COLLAR SHIRTS REMISSION ORDER, 1997

1. The Tailored Collar Shirts Remission Order, 1997 (see footnote 1) is amended by adding the following after section 2.3 (see footnote 2) :

2.3.1 Subject to paragraph 3(b) and section 5, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a tailored collar shirt manufacturer set out in the schedule in respect of tailor collared shirts imported into Canada by the manufacturer during the period beginning on January 1, 2008 and ending on December 31, 2008.

2. Section 2.4 (see footnote 3) of the Order is replaced by the following:

2.4 Subject to paragraph 3(b) and section 5, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in the schedule in respect of tailored collar shirts imported into Canada by the manufacturer during the period beginning on January 1, 2009 and ending on December 31, 2009.

3. The Order is amended by adding the following:

2.5 Subject to paragraph 3(b) and section 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in the schedule in respect of tailored collar shirts imported into Canada by the manufacturer during the period beginning on January 1, 2010 and ending on December 31, 2010.

2.6 Subject to paragraph 3(b) and section 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in the schedule in respect of tailored collar shirts imported into Canada by the manufacturer during the period beginning on January 1, 2011 and ending on December 31, 2011.

2.7 Subject to paragraph 3(b) and section 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in the schedule in respect of tailored collar shirts imported into Canada by the manufacturer during the period beginning on January 1, 2012 and ending on December 31, 2012.

4. Paragraph 3(b) of the Order is amended by replacing the reference to “December 31, 2009” with a reference to “December 31, 2012”.

OUTERWEAR GREIGE FABRICS REMISSION ORDER, 1998

5. The Outerwear Greige Fabrics Remission Order, 1998 (see footnote 4) is amended by adding the following after section 2.3 (see footnote 5) :

2.3.1 Subject to sections 3 and 4, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a producer of finished outerwear fabrics set out in the schedule in respect of greige outerwear fabrics imported into Canada by the producer during the period beginning on January 1, 2008 and ending on December 31, 2008 for use in the manufacture of outerwear apparel.

6. Section 2.4 (see footnote 6) of the Order is replaced by the following:

2.4 Subject to sections 3 and 4, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a producer of finished outerwear fabrics set out in the schedule in respect of greige outerwear fabrics imported into Canada by the producer during the period beginning on January 1, 2009 and ending on December 31, 2009 for use in the manufacture of outerwear apparel.

7. The Order is amended by adding the following:

2.5 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a producer of finished outerwear fabrics set out in the schedule in respect of greige outerwear fabrics imported into Canada by the producer during the period beginning on January 1, 2010 and ending on December 31, 2010 for use in the manufacture of outerwear apparel.

2.6 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a producer of finished outerwear fabrics set out in the schedule in respect of greige outerwear fabrics imported into Canada by the producer during the period beginning on January 1, 2011 and ending on December 31, 2011 for use in the manufacture of outerwear apparel.

2.7 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a producer of finished outerwear fabrics set out in the schedule in respect of greige outerwear fabrics imported into Canada by the producer during the period beginning on January 1, 2012 and ending on December 31, 2012 for use in the manufacture of outerwear apparel.

SHIRTING FABRICS REMISSION ORDER, 1998

8. The Shirting Fabrics Remission Order, 1998 (see footnote 7) is amended by adding the following after section 2.3 (see footnote 8) :

2.3.1 Subject to sections 4 and 5, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a tailored collar shirt manufacturer set out in Schedule A in respect of yarn-dyed shirting fabrics, imported into Canada by the manufacturer and to a producer of finished shirting fabrics set out in Schedule B in respect of greige shirting fabrics, imported into Canada by the producer during the period beginning on January 1, 2008 and ending on December 31, 2008 for use in the manufacture of tailored collar shirts.

9. Section 2.4 (see footnote 9) of the Order is replaced by the following:

2.4 Subject to sections 4 and 5, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in Schedule A in respect of yarn-dyed shirting fabrics, imported into Canada by the manufacturer and to a producer of finished shirting fabrics set out in Schedule B in respect of greige shirting fabrics, imported into Canada by the producer during the period beginning on January 1, 2009 and ending on December 31, 2009 for use in the manufacture of tailored collar shirts.

10. The Order is amended by adding the following:

2.5 Subject to sections 4 and 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in Schedule A in respect of yarn-dyed shirting fabrics, imported into Canada by the manufacturer and to a producer of finished shirting fabrics set out in Schedule B in respect of greige shirting fabrics, imported into Canada by the producer during the period beginning on January 1, 2010 and ending on December 31, 2010 for use in the manufacture of tailored collar shirts.

2.6 Subject to sections 4 and 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in Schedule A in respect of yarn-dyed shirting fabrics, imported into Canada by the manufacturer and to a producer of finished shirting fabrics set out in Schedule B in respect of greige shirting fabrics, imported into Canada by the producer during the period beginning on January 1, 2011 and ending on December 31, 2011 for use in the manufacture of tailored collar shirts.

2.7 Subject to sections 4 and 5, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a tailored collar shirt manufacturer set out in Schedule A in respect of yarn-dyed shirting fabrics, imported into Canada by the manufacturer and to a producer of finished shirting fabrics set out in Schedule B in respect of greige shirting fabrics, imported into Canada by the producer during the period beginning on January 1, 2012 and ending on December 31, 2012 for use in the manufacture of tailor collared shirts.

OUTERWEAR APPAREL REMISSION ORDER, 1998

11. The Outerwear Apparel Remission Order, 1998 (see footnote 10) is amended by adding the following after section 2.3 (see footnote 11) :

2.3.1 Subject to sections 3 and 4, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a manufacturer of outerwear apparel set out in the schedule in respect of outerwear apparel imported into Canada by the manufacturer during the period beginning on January 1, 2008 and ending on December 31, 2008.

12. Section 2.4 (see footnote 12) of the Order is replaced by the following:

2.4 Subject to sections 3 and 4, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear apparel set out in the schedule in respect of outerwear apparel imported into Canada by the manufacturer during the period beginning on January 1, 2009 and ending on December 31, 2009.

13. The Order is amended by adding the following:

2.5 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear apparel set out in the schedule in respect of outerwear apparel imported into Canada by the manufacturer during the period beginning on January 1, 2010 and ending on December 31, 2010.

2.6 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear apparel set out in the schedule in respect of outerwear apparel imported into Canada by the manufacturer during the period beginning on January 1, 2011 and ending on December 31, 2011.

2.7 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear apparel set out in the schedule in respect of outerwear apparel imported into Canada by the manufacturer during the period beginning on January 1, 2012 and ending on December 31, 2012.

BLOUSES, SHIRTS AND CO-ORDINATES REMISSION ORDER, 1998

14. The Blouses, Shirts and Co-ordinates Remission Order, 1998 (see footnote 13) is amended by adding the following after section 2.3 (see footnote 14) :

2.3.1 Subject to sections 3 and 4, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a women’s blouse, shirt or co-ordinated apparel manufacturer, set out in the schedule in respect of blouses, shirts or co-ordinated apparel imported into Canada by the manufacturer during the period beginning on January 1, 2008 and ending on December 31, 2008.

15. Section 2.4 (see footnote 15) of the Order is replaced by the following:

2.4 Subject to sections 3 and 4, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a women’s blouse, shirt or co-ordinated apparel manufacturer, set out in the schedule in respect of blouses, shirts or co-ordinated apparel imported into Canada by the manufacturer during the period beginning on January 1, 2009 and ending on December 31, 2009.

16. The Order is amended by adding the following:

2.5 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a women’s blouse, shirt or co-ordinated apparel manufacturer, set out in the schedule in respect of blouses, shirts or co-ordinated apparel imported into Canada by the manufacturer during the period beginning on January 1, 2010 and ending on December 31, 2010.

2.6 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a women’s blouse, shirt or co-ordinated apparel manufacturer, set out in the schedule in respect of blouses, shirts or co-ordinated apparel imported into Canada by the manufacturer during the period beginning on January 1, 2011 and ending on December 31, 2011.

2.7 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a women’s blouse, shirt or co-ordinated apparel manufacturer, set out in the schedule in respect of blouses, shirts or co-ordinated apparel imported into Canada by the manufacturer during the period beginning on January 1, 2012 and ending on December 31, 2012.

OUTERWEAR FABRICS REMISSION ORDER, 1998

17. The Outerwear Fabrics Remission Order, 1998 (see footnote 16) is amended by adding the following after section 2.3 (see footnote 17) :

2.3.1 Subject to sections 3 and 4, a further remission of 25% of the customs duties paid or payable under the Customs Tariff is hereby granted to a manufacturer of outerwear fabrics set out in the schedule in respect of outerwear fabrics imported into Canada by the manufacturer during the period beginning on January 1, 2008 and ending on December 31, 2008 for use in the manufacture of outerwear apparel.

18. Section 2.4 (see footnote 18) of the Order is replaced by the following:

2.4 Subject to sections 3 and 4, remission is hereby granted of 75% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear fabrics set out in the schedule in respect of outerwear fabrics imported into Canada by the manufacturer during the period beginning on January 1, 2009 and ending on December 31, 2009 for use in the manufacture of outerwear apparel.

19. The Order is amended by adding the following:

2.5 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear fabrics set out in the schedule in respect of outerwear fabrics imported into Canada by the manufacturer during the period beginning on January 1, 2010 and ending on December 31, 2010 for use in the manufacture of outerwear apparel.

2.6 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear fabrics set out in the schedule in respect of outerwear fabrics imported into Canada by the manufacturer during the period beginning on January 1, 2011 and ending on December 31, 2011 for use in the manufacture of outerwear apparel.

2.7 Subject to sections 3 and 4, remission is hereby granted of 50% of the customs duties paid or payable under the Customs Tariff, to a manufacturer of outerwear fabrics set out in the schedule in respect of outerwear fabrics imported into Canada by the manufacturer during the period beginning on January 1, 2012 and ending on December 31, 2012 for use in the manufacture of outerwear apparel.

COMING INTO FORCE

20. This Order comes into force on the day on which it is registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Order.)

Executive summary

Issue

Under six longstanding duty remission Orders, named below, certain textile and apparel manufacturers are allowed to be remitted the customs duties paid or payable on the importation of certain products in order to complement their domestically produced lines. Remission benefits under these six remission Orders are to be gradually phased out by December 31, 2009.

Objectives

The main objective of the amendments is to reinstate some of the remission benefits under the six Orders for 2008 and 2009, while extending the remission benefits for an additional period of three years. It is expected that this will help certain textile and apparel manufacturers face the challenges of increased international competition.

Description

The Order amends the Tailored Collar Shirts Remission Order, 1997; the Outerwear Greige Fabrics Remission Order, 1998; the Shirting Fabrics Remission Order, 1998; the Outerwear Apparel Remission Order, 1998; the Blouses, Shirts and Co-ordinates Remission Order, 1998 and the Outerwear Fabrics Remission Order, 1998.

The amendments reinstate remission benefits for 2008 and 2009 to the level they were in 2007 (i.e., 75% of the amount of customs duties paid or payable that can be remitted under the existing Orders). The remission benefits in each of the three additional years (2010 to 2012) will be 50% of the amount of customs duties paid or payable that can be remitted under the existing Orders. The amended Orders will expire on December 31, 2012.

Regulatory and non-regulatory options considered

There are no practical alternatives to amend and extend the existing Orders. An Order in Council made pursuant to section 115 of the Customs Tariff is the appropriate mechanism.

Benefits and costs

Under the six textile and apparel remission Orders, duties are remitted to certain manufacturers upon their importation of specified products (e.g., tailored collar shirts, outerwear greige fabrics, shirting fabrics, outerwear apparel, outerwear fabrics and blouses, shirts and co-ordinates). These benefits to manufacturers translate into a corresponding cost to the government in terms of revenue foregone. Based on past import levels, the amounts remitted annually are approximately $30 million (if 100% of the amount of customs duties paid or payable that can be remitted under the existing Orders is remitted).

Currently, remission benefits are to be gradually phased out and the six Orders are scheduled to expire on December 31, 2009. In addition, remission benefits in 2008 are set at 50% of the amount of customs duties paid or payable that can be remitted under the existing Orders and are to be reduced in 2009 to 25% of that amount.

The amendments will reinstate some remission benefits for 2008 and 2009 to bring them to the level they were in 2007 (i.e., 75% of the amount of customs duties paid or payable that can be remitted under the existing Orders). As such, it is estimated that additional duties remitted annually could amount to approximately $7.5 million and $15 million for 2008 and 2009, respectively.

Furthermore, the Order extends the six remission Orders for a further period of three years (2010, 2011 and 2012) at 50% of the amount of customs duties paid or payable that can be remitted under the existing Orders. As such, it is estimated that duties remitted annually for each of these three additional years could amount to $15 million. Pursuant to the Order, the six remission Orders will expire on December 31, 2012.

It is expected that the amendments will continue to assist a number of Canadian textile and apparel manufacturers complement their lines of products that are domestically produced with imports of select products (e.g., tailored collar shirts, outerwear greige fabrics, shirting fabrics, outerwear apparel, outerwear fabrics and blouses, shirts and co-ordinates). It is expected that this will allow those manufacturers to be better positioned to face the increased international competition in the textile and apparel sectors.

Rationale

Duty remission orders for textiles and apparel have been a feature of Canada’s import policy for some time and are mainly intended to assist Canadian manufacturers in these sectors face intense international competition. The Order follows from other specific initiatives that the federal government has taken over the years to enhance the competitiveness of the Canadian textile and apparel industries, including Industry Canada programs, such as CANtex, and other tariff-relief initiatives.

Consultation

Over the last year, a large number of representations from industry have been received urging the amendment and extension of the Orders. Officials have consulted on the measure with certain manufacturers and key industry associations that support amendment and extension of these remission Orders. Industry Canada and the Canada Border Services Agency have also been consulted in the development of the Order.

Implementation, enforcement and service standards

The Canada Border Services Agency will continue to monitor compliance with the terms and conditions of these remission Orders in the normal course of its administration of customs and tariff-related legislation and regulations.

Performance measurement and evaluation

As the agency responsible for the administration of such remission Orders, the Canada Border Services Agency will continue to monitor their performance. The Government will, as required, review the current administration of the remission Orders to ensure they benefit Canadian manufacturers.

Contact

Patrick Halley
International Trade Policy Division
Department of Finance
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-2518

Footnote a
S.C. 1997, c. 36

Footnote 1
SOR/97-291

Footnote 2
SOR/2005-9

Footnote 3
SOR/2005-9

Footnote 4
SOR/98-86

Footnote 5
SOR/2005-9

Footnote 6
SOR/2005-9

Footnote 7
SOR/98-87

Footnote 8
SOR/2005-9

Footnote 9
SOR/2005-9

Footnote 10
SOR/98-88

Footnote 11
SOR/2005-9

Footnote 12
SOR/2005-9

Footnote 13
SOR/98-89

Footnote 14
SOR/2005-9

Footnote 15
SOR/2005-9

Footnote 16
SOR/98-90

Footnote 17
SOR/2005-9

Footnote 18
SOR/2005-9

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