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CITT Bicycle Surtax

CBCUnlocked.com has an article about a proposal to slap a 30% tariff on imported (from Asia) bicycles that is being reconsidered.

This apparently is being proposed to protect two Canadian Manufacturers Raleigh and Procycle from the low-end imports of cheap bicycles. As such the tarrif is designed to only apply to the cheaper (less than $400) bicycles.

Personally I always prefer to buy Canadian where possible. I bought a Devinci bicycle partly because it was Canadian made, but I would hate to see someone not be able to afford a bike because of the tariff.

However, it seems that much of the hue and cry being made about this in the media is ignoring the details of the proposed tariff. It will only effect those bicycles with a FOB value of less than $225 (retail of about $400) and it will not effect bicycles with a wheel size of 15in or less. This really is aimed at the cheap steel bikes selling in Wal-mart and other discount retailers.

I think that rather than spending our time trying to lobby our politicians to stop this tax we should be lobbying them to spend more money on bicycle infrastructure and facilities and for subsidizing the cost of bicycles for people who can't afford bicycles. This will be a lot more effective in getting more people to ride bicycles than keeping the import door open on these low-end cheap bikes.

For more information see the report from CITT.

Response from M. Theil

I have had a number of e-mail correspondences with M. Theil of Bicycle Sports Pacific and he made some good points about this potential surtax:

  • the greater than $225 FOB exclusion will effect bikes sold at independent bicycle retailers (IBR) with a retail value higher than the $400 intended, this is because of a business model that includes a high level of service from the retailers and distributers to the consumers,
  • the exclusion for childrens bikes only effects the very smallest childrens bikes and not the more common 16 and 20in childrens bikes,
  • many offshore bikes are produced with Canadian intellectual property,
  • the entry level and childrens bikes that will be effected by this surtax is the most price concious market segment,
  • there is a potential for Canadian job loss in the companies specializing in the distribution and sale of overseas made bikes to the IBR market if this surtax goes ahead.
  • the Canadian manufacturers don't actually manufacture bicycles, they just assemble overseas frames and components (presumably they must paint them as well to be exempt from the surtax.)

I still feel that protecting Canadian companies from cheap chinese imports taking over the commodity department store bicycle segment is not unreasonable, but I agree that it is probably unfair to extend this protection into the entry level brand name imports where Canadian manufacturers have been competitive (see Norco, Devinci, Rocky Mountain and others).