A Dora the Explorer-branded trampoline sold through Canadian Tire has landed the retailer in a tariff flap with Canadian border and trade authorities after they determined the item was a piece of exercise equipment and not a toy, as the company maintains.
The trampoline in question is pink, round, 55 inches wide and surrounded by a mesh enclosure, with a maximum weight limit of 100 lbs and retails for $149. It is branded with the popular Nickelodeon animated characters Dora and Diego and is for use by children ages three to six.
Customer reviews on Canadian Tire's website are mixed, but when Canadian Tire tried to convince the Canadian Border Services Agency last June that the item was a toy – specifically, a toy that was exempt from import tariffs – the CBSA gave Canadian Tire a firm thumbs down.
Canadian Tire spokeswoman Liz Hamilton said the product, which is made in China, was already classified as exercise equipment and subject to a 5-per-cent tariff. "As a mass retailer, we regularly review tariffs as a normal course of doing business and approach the appropriate authorities for rulings in this regard. In this case … we sought classification of the Dora the Explorer product as a toy."
Canadian Tire appealed to the Canadian International Trade Tribunal, but the quasi-judicial federal body, in a decision published this week, sided with the CBSA.
The CITT rejected Canadian Tire's argument that the item only provided amusement and play value – and that any physical exercise by the jumpers was merely "an ancillary benefit."
Instead, the tribunal agreed with the CBSA that the item was designed specifically to provide physical exercise and provide children with health benefits.
"Even though the bright colours and printed pictures of Dora or Diego demonstrate the obvious intention to attract young children's attention, the Tribunal is of the view that the main purpose of the good in issue is to encourage children to jump, bounce and generally exert themselves physically," the CITT said in its decision. "It is this physical action of jumping and bouncing on the trampoline that provides said amusement … In the Tribunal's opinion, it is a fully functional trampoline designed specifically for young children."
Ms. Hamilton said because the company was already paying the tariff, "our business impact is unchanged" by the ruling. She wouldn't disclose sales figures for the product, and said the company hasn't yet decided whether to appeal the CITT's decision.
The ruling was published the same week the Retail Council of Canada told a Senate committee that price differences between Canadian stories and their counterparts in the United States are partly due to import duties, which in some cases range as high as 18 per cent.