Finance Minister Jim Flaherty will give hockey moms and dads a break on the cost of equipping their kids in the 2013 budget.
In a populist nod to sports enthusiasts and parents, the Conservatives will announce in their fiscal plan that Ottawa is cutting tariffs on imported hockey gear as part of a pilot project to see whether the money the government loses in customs revenue is recouped in sales tax.
A Senate committee report last month examined the huge gap between U.S. and Canadian retail prices and urged Ottawa to shrink it by reducing tariffs and other barriers at the border. A Bank of Montreal report found last year that domestic retail prices are about 14 per cent higher than those in the United States.
Tariff rates on hockey goods include: 18 per cent on hockey pants; 16.5 per cent on gloves; between 5 per cent and 8.5 per cent on helmets.
This budget tariff reduction move is expected to affect other items as well, but it’s not clear how widely this measure will apply.
Mr. Flaherty asked the Senate finance committee to study price gaps in the fall of 2011. It concluded in a February report that Canadian consumers are the victims of higher prices because there is less competition than in the United States.
As long as competition is weaker in Canada, consumers here will face higher prices, it said.
Steeper costs and tariffs play a part in the higher prices, and in sectors such as automobiles, the manufacturers “can charge what the market will bear,” the Senate finance committee said. “This is not against Canada’s Competition Act. It does explain large gaps in the list prices of vehicles sold in Canada and the United States, especially for high-end vehicles.”
Even as consumers feel “ripped off” by price gaps at a time when the loonie is at par or higher than the U.S. dollar, the committee could offer no full explanation for the price discrepancies, putting into question whether much will change despite its 16-month study into the issue.
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