The Government of Canadian announced the elimination of duties on imported raw materials as part of the federal Budget, These cuts  included substantial reductions in duties on textiles. This is the most comprehensive package of input tariff reductions the Canadian government has ever undertaken.

Half of the duties paid on imported textiles were eliminated in the budget.  That means a savings of $31 million (on an annual basis) for Canadian manufacturers. Many of these are duty free effective March 5, 2010. Duties on other fabrics and yarns were reduced significantly, and are being phased out over  three to five years - with the first set of cuts coming in January 2011.  We will have more details on these cuts shortly, once the government tables the Budget Implementation Act. These reductions will be locked in, and for that reason manufacturers will know their cost structure for the future.

It is worth mentioning that it was extraordinarily difficult to push these amendments through at a time of fiscal restraint.  The efforts made by the Canadian Apparel Federation (CAF) helped ensure that the package of tariff relief moved forward.  No other industry in Canada benefits more directly from these measures than the apparel industry. No other industry in Canada lobbied for these measures as strongly as CAF did.

Details of the tariff reductions are in a "Notice of Ways and Means" included as part of the Budget.

Go to:  http://www.budget.gc.ca/2010/plan/anx5a-eng.html

Companies should also consult their customs brokers.

For more information please contact Bob Kirke at (613) 231-3220, ext. 224, bkirke@apparel.ca.