The Government of Canada has removed tariffs on imports of baby clothes in its bid to reduce the up to 40 percent difference in Canadian and the US retail prices.
The move, announced as a part of the 2013 Federal Budget, also eliminates import tariffs on most sports equipment.
The Budget expects that wholesalers, distributors and retailers to pass on the savings in import tariffs to end-consumers.
The Government, in consultation with various consumer forums and the Retail Council of Canada, will keep a watch on the impact of the tariff cuts on Canadian retail prices.
Finance Minister Jim Flaherty called the removal of duties on baby clothes as a test case to see whether it results in a reduction in price gap between the US and Canadian retail prices.
The removal of tariffs on baby clothes applies to babies’ garments made from cotton, synthetic fibres, wool, other textile materials, as well as fine animal hair, and would be enforced from April 1, 2013.
The Government’s announcement follows a Senate report that sought to answer why the prices in Canada are up to 40 percent more for some consumer goods compared to what their neighbours pay across the southern border.
The abolition of tariffs on baby clothes and sports equipment will together cost Ca$ 76 million a year to the Government.
However, the Budget also increased the duties on imported goods from over 70 countries, including China and India, which is expected to cost Ca$ 330 million extra per annum in terms of retail price to Canadian consumers.