Vol. 150, No. 13 — June 29, 2016

Registration

SOR/2016-125 June 13, 2016

CUSTOMS TARIFF

Order Amending the Schedule to the Customs Tariff, 2016–1

P.C. 2016-465 June 10, 2016

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 82 of the Customs Tariff (see footnote a), makes the annexed Order Amending the Schedule to the Customs Tariff, 2016–1.

Order Amending the Schedule to the Customs Tariff, 2016–1

Amendments

Coming into Force

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

SCHEDULE

PART 1
(Section 2)

Amendments to the List of Tariff Provisions

PART 2
(Section 3)

Additions to the List of Tariff Provisions
   

Most-Favoured-Nation Tariff

Preferential Tariff

Tariff Item

Description of Goods

Initial Rate

Final Rate

Initial Rate

Final Rate

 

---Other:

       

7612.90.91

----Embossed aluminum cans for use in the packaging of beverages

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

7612.90.99

----Other

6.5%

6.5% (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: 3.5%

GPT: 5%

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (F)

GPT: 5% (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

8201.10

-Spades and shovels

       

8201.10.10

---Heads for use in the manufacture or production of spades and shovels

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

       

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

8201.10.90

---Other

5%

5% (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: 3%

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: 3% (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

 

---Other:

       

8201.90.91

----Heads for use in the manufacture or production of other hand tools of a kind used in agriculture, horticulture or forestry

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

       

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

8201.90.99

----Other

6.5%

6.5% (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: 2%

GPT: 5%

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (F)

GPT: 5% (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

8507.60.20

---For use as the primary source of electrical power for electrically-powered motorcycles of subheading 8711.90

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

9001.40.40

---Other, unfinished

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

       

9001.50.40

---Other, unfinished

Free

Free (A)

UST: Free

MT: Free

MUST: Free

CT: Free

CIAT: Free

CRT: Free

IT: Free

NT: Free

SLT: Free

JT: Free

PT: Free

COLT: Free

PAT: Free

HNT: Free

KRT: Free

GPT: Free

LDCT: Free

CCCT: Free

AUT: N/A

NZT: N/A

UST: Free (A)

MT: Free (A)

MUST: Free (A)

CT: Free (A)

CIAT: Free (A)

CRT: Free (A)

IT: Free (A)

NT: Free (A)

SLT: Free (A)

JT: Free (A)

PT: Free (A)

COLT: Free (A)

PAT: Free (A)

HNT: Free (A)

KRT: Free (A)

GPT: Free (A)

LDCT: Free (A)

CCCT: Free (A)

AUT: N/A

NZT: N/A

PART 3
(Section 4)

Addition of Tariff Items

Tariff Item

Most-Favoured-Nation Tariff

Preferential Tariff

7612.90.99

 

Effective on January 1, 2017

KRT: 2.5%

   

Effective on January 1, 2018

KRT: Free

8201.90.99

 

Effective on January 1, 2017

KRT: Free

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

The Order Amending the Schedule to the Customs Tariff, 2016–1 eliminates customs duties on a number of goods used in the production of other goods (manufacturing inputs). Reducing tariffs on manufacturing inputs helps lower production costs for Canadian businesses and enhances their overall competitiveness.

Background

The Government of Canada regularly receives requests for duty relief, including as it pertains to manufacturing inputs, from Canadian companies. Any company can ask for duty relief on any manufacturing input. These companies seek tariff relief to lower their costs and enhance their competitiveness, at home and abroad.

The Government of Canada has had a longstanding framework for considering the removal of tariffs on goods used in the production of other goods, in order to enhance the competitiveness of Canadian manufacturers. Tariff relief through this Order is made pursuant to section 82 of the Customs Tariff. This section provides authority to amend the schedule to the Customs Tariff to give tariff relief for “goods used in the production of other goods.”

This tariff relief Order reduces to “Free” the Most-Favoured-Nation (MFN) rate of customs duty for the products listed in the Order. The Order would also consequentially eliminate any other tariff on these goods that is not at a rate of “Free” (e.g. in the case of aluminum cans contained in this Order, the General Preferential Tariff for goods that originate in developing countries). This ensures that preferential tariffs are not higher than the MFN tariff, consistent with section 25 of the Customs Tariff.

Objective

The objective of this Order is to reduce tariffs on manufacturing inputs to help Canadian manufacturers.

Description

As a result of industry-specific requests for tariff relief, the Order eliminates customs duties on the following products used in manufacturing:

Additionally, the Order would clarify the wording of a tariff item (8507.20.10) amended by a similar order approved by the Governor in Council on June 12, 2014. Among other things, that order eliminated customs duties on certain lead-acid batteries used in the production of smoke, fire or gas detection and alarm systems, including power supply panels and modules. The existing wording requires that these batteries be “used in the manufacture of ” the systems. This wording would now be revised to “used in the initial installation of” the systems. The revised wording better reflects the production process of these goods — specifically, that the lead-acid batteries are only integrated into the systems at the building site, and not in the manufacturing plant, since they require special handling during transport.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this Order, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this Order, as there are no costs imposed on small business.

Consultation

Extensive consultations were undertaken with industry representatives, and implicated industry associations, on each product included in this Order. All stakeholder views have been considered in the development of this amendment, and there was no opposition to having the tariffs eliminated.

Rationale

The tariff elimination in this Order is consistent with the Government’s longstanding policy of providing tariff relief to support manufacturing competitiveness. It also follows broad-based measures announced in Budget 2009 and Budget 2010 to eliminate tariffs on manufacturing inputs, machinery and equipment to assist Canada’s manufacturers.

Based on recent trade patterns, the estimated annual duties foregone by the Government would be approximately $1.8 million. These foregone duties represent corresponding savings for Canadian industry on inputs used in their production processes.

Implementation, enforcement and service standards

The Canada Border Services Agency (CBSA) is responsible for the administration of, and compliance with, customs and tariff legislation and regulations. In the course of its administration of these tariff amendments, the CBSA will inform the importing community.

Contact

Diane Kelloway
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Telephone: 613-369-4038