The Canadian International Trade Tribunal (CITT) is a quasi-judicial federal body. It arbitrates disputes related to trade, customs and procurement at the request of the government of Canada. It also provides the government with advice on tariffs, trade, commercial and economic matters. In fiscal year 2011-12, its estimated cost to taxpayers was $14.111 million.
According to its website, the CITT envisions itself as follows:
The Tribunal will be recognized as a centre of excellence in matters of trade, customs and procurement, and as a model administrative tribunal in matters of governance.
This claim is delightfully ridiculous. In fact, it is especially so given one of the CITT’s most recent published rulings. According to The Globe and Mail, this bureaucratic “centre of excellence” has availed us with the knowledge that Canadian Tire’s Dora the Explorer-branded trampoline is not in fact a toy, as the retailer suggests. Rather, Canadians should recognize it as a piece of exercise equipment. We are told:
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.”
If you’re wondering why your government is wasting your tax dollars to arbitrate the classification of pink trampolines intended for children ages three to six, you’re not alone. The infuriating truth of the matter is that this ruling allows the government to further expropriate your money. You see, when classified as exercise equipment, the Dora the Explorer trampoline is subject to a five percent import tariff. How convenient, then, that the CITT ruled in the government’s favour.
Tariffs are taxes on imported goods. They benefit government. They also benefit favoured domestic special interest groups who manufacturer the taxed goods. Because tariffs increase prices of imported goods, the domestic special interest groups are subject to less foreign competition. These benefits occur at the expense of everyone else, who must pay higher prices as a result. There is a net negative economic impact as government policy causes scarce capital to be wasted on inflated prices that would otherwise be cheaper. To be clear, protectionist import tariffs are a fine example of crony capitalism and failed economic policy.
Unfortunately, these tariffs aren’t limited to pieces of leisure equipment with a maximum weight limit of 100 lbs. They contribute to the ballooning retail prices in Canada that, despite a strengthened loonie, we have become all too accustomed to paying. As the article concludes:
The ruling was published the same week the Retail Council of Canada told a Senate committee that price differences between Canadian stores and their counterparts in the United States are partly due to import duties, which in some cases range as high as 18 per cent.
I have a suggestion for Canada’s Economic Action Plan. Abolish tariffs. Let Canadians keep their money. Granted, Harper should also shrink the federal government accordingly. He can start by abolishing the CITT.
Three to six year-olds across the country will line up to shake his hand in thanks. I can picture the photo-op now: