Budget 2013: Ottawa drops tariffs on hockey equipment, baby clothes
Published Thursday, March 21, 2013 4:10PM EDT
Last Updated Thursday, March 21, 2013 4:38PM EDT
OTTAWA -- The federal government is trying to make Canada's favourite pastime a little more affordable, and also ease the financial burden for new parents, by proposing $76 million in tariff relief for sports equipment and baby clothes.
The plan follows a Senate report that investigated why Canadians pay up to 40 per cent more for some consumer goods than their neighbours south of the border.
The government's federal budget notes that “these price discrepancies persist despite the considerable appreciation of the Canadian dollar relative to the United States dollar over the past several years.”
Aside from baby clothes, the government plans to eliminate tariffs on "ice skates, hockey equipment, skis and snowboards, golf clubs and other equipment to promote physical fitness and healthy living."
However, economist Don Drummond noted that the overall impact of tariffs would actually increase -- the government wants to remove some countries from its preferential tariff regime, which would bring in $333 million for the 2015-2016 fiscal year.
"They make a big deal in the words about how they're reducing tariffs on sporting equipment and baby's clothes, but there's a much bigger increases on tariffs on underdeveloped countries," he said. "So the net impact of tariffs is actually higher prices."
If the tariffs are removed on baby clothes and sports equipment, it's unclear whether companies would pass on the savings to consumers.
The budget says removing the tariffs "comes with an expectation that wholesalers, distributors and retailers will pass these savings on to consumers. The government, in consultation with the Retail Council of Canada and consumer groups, will monitor the impact of these tariff reductions on Canadian retail prices."
The Senate finance committee report on the U.S.-Canada price gaps noted the discrepancy between tariffs on hockey equipment in the two countries.
Hockey pants had a tariff of 18 per cent in Canada, and 2.9 per cent south of the border – a difference of 15.1 per cent.
Two reports in recent years have highlighted the steep cost for some families to fund the hockey dreams of their children.
An RBC survey in late 2011 reported that the average family spends about $1,500 a year on hockey-related expenses.
“Of the families with a child previously enrolled in hockey but not in the current season, almost 40 per cent cited rising costs as their reason for leaving the sport,” the report said.
Another report from Scotiabank, which used Harris-Decima survey results, broke down the cost for families and found the primary expense was enrollment fees -- $654 on average -- with hockey equipment second at $375.