Tariff Relief on Machinery and Equipment

Happy New Year!

There was some great news for our Machinery and Equipment clients in Canada's Economic Action Plan - 2009 Budget. There are over 200 tariff's that are affected, and we are working diligently here at A & A to ensure your items will receive the lowest possible duty rates under these new changes. More information is provided below. If you have any questions, please contact our Consulting Team at consulting@aacb.com

Providing over $440 million in savings for Canadian industry over the next five years by permanently eliminating tariffs on a range of machinery and equipment.

Tariff Relief on Machinery and Equipment

With almost 90 per cent of all imports entering the country duty free, Canada is one of the world's most open economies. Still, tariffs continue to apply on several goods imported from outside North America, including certain machinery and equipment used by Canadian industry.

Budget 2009 proposes to permanently eliminate tariffs on a range of machinery and equipment. This measure will lower costs for Canadian producers in a variety of sectors, such as forestry, energy and food processing, which must purchase specialized equipment from overseas to modernize their operations and enhance competitiveness. This measure will affect close to $2 billion in annual imports of machinery and equipment and provide over $440 million in savings for Canadian industry over the next five years. The Government will undertake further consultations with Canadian businesses to identify additional areas where tariff relief could be provided.

Budget 2009 will also take steps to facilitate the movement of goods by improving the Customs Tariff rules respecting the treatment of temporarily imported cargo containers, and undertake consultations with respect to further liberalizing the use of these containers in Canada.

January 2009 Economic Digest - Importing and Exporting

January 2009 Edition

SPENDING

 
The Canadian government will spend an anticipated C$9.9-billion on science and technology in fiscal year 2008\2009, a decline of about three per cent from the previous year. About 63 per cent of this expenditure will go on research and development and the remaining 37 per cent to related scientific activities. Of the total, natural sciences and engineering will receive just under $7.5-billion while social sciences and humanities will get $2.4-billion.

PARKING

London is now the most expensive city in the world to park a car, eclipsing even Tokyo and New York. London's most expensive parking spot is a multi-story carpark in Knightsbridge which costs US$87.00 for a six hour stay or a monthly average of $1500 a month. The next most expensive is in the Soho area and parking in the West End will cost you about $50.00 for a morning's shopping. Leaving a camper van at Bondi Beach in Australia will cost over $30.00 for a few hours.

AEROSPACE

here are more than 400 firms active in Canada's aerospace industry employing over 82,000 people. The industry had revenues of more than C$22-billion in 2007 and was responsible for five per cent of Canada's manufacturing GDP. Over 82 per cent of Canadian aerospace products are exported.

DIGITAL

Europeana is the name of the newly-opened European digital library designed to showcase the Continent's history, literature, arts and science. So far, the site has over two million items from the 27 countries of the European Union of which over half are from France. Europeana aims to provide a unique service because it combines the digital resources of museums, libraries and archives of video and audio material. All the material is free of copyright so it can be downloaded for blogs, academic research or schoolwork by anyone with an Internet connection.

OIL

The International Energy Agency forecasts that the world's demand for primary energy will grow by 45 per cent between 2006 and 2030. The global demand for oil is expected to rise from 85 million to 106 million barrels a day. The thirst for oil among the mostly rich countries in the OECD is set to fall, so that all of the increase will come from developing economies. China will account for 43 per cent of the rise in demand, with India and the Middle East contributing about 20 per cent each.

BRANDS

Private label products are increasingly encroaching on name brands' turf as a majority of U.S. consumers are viewing store-brand items positively, accounting for more than US$81-billion in sales in the U.S., up 10 per cent in 2008 over the previous year. 72 per cent of 54,000 consumers surveyed believe store brands to be good alternatives to name brands. However, sixteen per cent of respondents maintain that store brands are not suitable when quality matters. Private label represents 16 per cent of dollar sales and 21 per cent of unit sales showing that branded products still capture the lion's share of sales.

SPEED

Supercomputers, which are a million times faster than a typical desktop PC, are still a staple in laboratories and universities in the U.S., Japan and Europe. However, the falling costs of supercomputer systems has allowed a broader range of corporations and institutions, including many in China and India, to buy them. 18 months ago, China and India lacked a single system among the 25 fastest in the world. But on the latest list of the 500 fastest computers, China nailed the No. 10 spot and has 15 of the world's fastest computers. India has the 13th fastest supercomputer, beating Japan, a longtime leader.

NUTRITION

Statistics Canada reports that beverages constitute an important component of nutrition for Canadians. Children and teenagers aged 4 to 18 get about 20 per cent of their daily intake of calories from beverages. Youngsters aged 1 to 3, account for an even higher 30 per cent. Among adults, calories derived from beverages decline steadily with age. Among people 50 and older, coffee is the most common beverage after water. About three quarters of men and women drink coffee on any given day. About 20 per cent of men and 15 per cent of women exceed the recommended maximum of 400 milligrams of caffeine each day.

E-COMMERCE

More Canadians used the Internet to purchase goods and services in 2007, placing almost C$12.8-billion worth of orders, up 61 per cent from 2005. The increase was driven by a larger volume of orders which rose from 49.4-million in 2005 to 70-million in 2007. More than 8.4-million Canadians aged over 16 made an online purchase in 2007. The top 25 per cent of online consumers who spent an average of C$5,000, were responsible for 46 per cent of orders and 78 per cent of total dollar value.

SERVICE

Hotels are under such pressure to keep up with gadget-obsessed guests that they are working with technology companies to keep their edge. Sheraton teamed with Microsoft to provide services in lobbies where guests can use public computers to check their e-mail, print boarding passes and record video greetings to send to family and friends. Westin has struck a deal with Nintendo to provide Wii consoles and games in their fitness centres.

BOLIVIA

High in the Andes, in a remote part of Bolivia lies more than half the world's reserves of a mineral that could radically reduce our reliance on dwindling fossil fuels. Lithium, already used in the batteries of laptop computers and mobile phones, allows more energy to be stored in a lighter, smaller space than most alternatives. As the auto industry rushes to produce new fuel efficient and electric cars, it too is turning to lithium batteries as its first choice to boost the power of their new models. Lithium is found in rocks and in brine under salt flats.

TRENDS

For the first time in half a century, Vatican administration staff will clock in for work as part of a clampdown on slackers. As of January 1st, all Holy See employees will be given magnetic badges and be forced to clock in and out in an effort to track their movements and ensure they are working a full day. The Holy See has 2,748 employees including lay people and priests and has also devised an evaluation system to reward hard workers and punish slackers.

DUTY-FREE

Canada's eight largest airports have joined forces to promote duty-free shops for arriving passengers, arguing the change would repatriate the C$60-million a year that Canadian travellers spend at foreign duty-free stores. Under current federal rules, departing passengers are allowed to buy goods at Canadian duty-free outlets prior to their international flights, but Ottawa bans duty-free sales for arriving travellers. The eight airports are proposing that existing duty-free shops continue operating for departing passengers but that new outlets to sell to incoming passengers be opened.

TRADE

Officials from China and Taiwan have recently signed trade deals covering direct air flights between the two historic enemies, as well as direct cargo and postal links, and food safety. The Taiwanese and Chinese economies are already heavily linked, with Taiwanese-owned manufacturers of everything from iPods and laptops to brand-name shoes running huge factories across the mainland. Until recently, all flights between the two had to travel via Hong Kong or Macau, while cargo vessels had to travel via Okinawa in Japan.

ROSES

After twenty years of scientific research, the world's first blue roses have been unveiled. The creation of blue roses, long thought to be impossible, has been masterminded by the Australian subsidiary of a Japanese firm. Their blooms have been genetically modified and have been implanted with a gene that simulates the synthesis of blue pigment in pansies. Having been cultivated for more than 5,000 years, as many as 25,000 different species of roses currently exist. The potential worldwide market for blue roses is thought to be enormous.

RECOGNITION

An international survey of 2,700 people has ranked Canada as the second-strongest national brand in the world. Australia ranked top and the U.S was eighth. Last year, Canada was sixth and 12th the year before. Canada used to sell itself strictly on moose, mountains and Mounties but the Canadian Tourism Commission is now trying for a more sophisticated approach.

FEES

As many as 190 million migrant workers sent home about US$337-billion in 2007, of which $251-billion went to developing countries. The costs of sending the money varies. On average it costs only $7.68 to send $500 from Spain to Brazil, a 1.5 per cent fee. By contrast it costs a whopping $86.41 (a charge of 17.3 per cent) to send the same amount from the Netherlands to Indonesia. Remittance costs are generally cheapest in Russia, Saudi Arabia, Spain, the U.S. and Britain and highest in Germany, the Netherlands and Japan.

AIRLINES

The biggest U.S. airlines stand to return to profitability in 2009, a stunning turnaround for an industry that appeared to be heading towards the biggest crisis in history a few months ago. A surge in fuel prices had overwhelmed airlines, draining profits and sending them to slash costs, tack on new fees and raise money from sceptical lenders. However, the recent rapid descent in oil prices, coupled with the steps carriers took to reduce expenses, has turned the industry's outlook for this year much brighter than originally forecast.

MIGRANTS

Britain's small and medium enterprises community (SME) employs about 13.5-million people and produces an annual turnover of US$2.9-billion. In 2006, just 21 per cent of SMEs had non-UK workers, last year that figure was 48 per cent. With about 40 businesses a day failing because of the recession amid a lack of credit and a downturn in demand as consumer spending is tightened, if large numbers of migrant workers decide to return home, it will have a significant impact on the economy.

SUPERSONIC

The Aerion Supersonic Jet may not have the same grace, style and size of the Concorde but its top speed of mach 1.6 could transform the way international travel is conducted. Test flights will begin in 2012 and the American company claim to already have 50 interested parties, all of whom have paid a US$300,000 deposit. The plane will be capable of flying between London and New York within three hours. The jets will be priced around US$100-million each.

FISHING

According to the World bank and FAO, up to US$50-billion is lost to poor management, inefficiency and overfishing each year in world fisheries or $2.2-trillion over the past three decades.

PETS

A Chinese firm has come up with the perfect solution for pet-loving families who don't have space to keep animals: the fish tank toilet. The clear toilet has three compartments, one for water flowing in, one for water flowing out and a third for fish and underwater plants, ensuring that the fish always have enough water to swim in and are never sucked out. They are ideal for families without the room for a bigger stand-alone fish tank or a bigger pet.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp