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Apr 2, 2013

Tariffs on Bicycles Imported to Canada

The vast majority of bicycles sold in Canada through all the retail channels including Costco, Walmart, Canadian Tire - and of course the "mom and pop" bike shops (shops like us) come from the far east - place like China, Taiwan, Indonesian, and Vietnam.  And that's cool.  Those countries make awesome bikes and they're full of cool people.  Bikes from brands like Trek, Specialized, Giant, Linus, Norco (really, name your brand)...brands you may know and even own, are all made there.  Those factories have the latest frame building and robotic technology and can produce bikes of amazing quality - very often far better than what can be made in Canada.

These bikes are subject to various import duties, that in some cases go as high as 63%.  Here is an example - if BikeBike buys a bike that was made in one of these countries that bike is subject to a 13% duty if it is a complete bike or an 8% duty if it is just a frameset (frame/fork). If we want to buy a bike from one of these countries that is below the $225 FOB that duty goes up to 63%.  Think about those numbers.  That 63% duty means a shop like ours finds it basically impossible to offer adult bikes below $400.  Do you ever wonder why stuff is more expensive here?  Well, it's staring you in the face with regards to bicycles.

(UPDATE: The 63% anti-dumping duty is gone! Rejoice!)

Here is another example - a small Canadian bicycle company called Beater Bikes cannot even sell their bikes in Canada because of the 63% duty.  A Canadian company that cannot sell their bikes in Canada, what's wrong with that picture?

Tariffs are suppose to protect domestic production, right?  Well, as far as can can tell, the biggest mass producer of bikes in Canada is Cycles Devinci - makers of mostly "enthusiast" type bikes and, maybe as importantly, makers of the BIXI bike share bikes, which are available in bike share schemes in Montreal, Toronto, Ottawa, London UK, New York City - and one or two I can't remember right now :)

Cycles Devinci make nice bikes, much respect.  But does one manufacturer deserve such protection?  Do these tariffs even help this company, considering so much of its business is derived from its international bike share operations?  Do these tariffs make sense in a country where bicycle use is booming, where cities across the country are adding bike infrastructure as fast as they can (except Toronto, curse you Rob Ford!), and where health epidemics like diabetes, heart disease, obesity are strangling budgets? 

I like to suggest that these tariffs are bad for small business in Canada.  And small business is the undisputed engine of the economy.  The tariffs make it not just difficult, but impossible for small bicycle shops to compete for business on inexpensive bikes in Canada.  These tariffs have essentially sliced the biggest portion of the bike business out of the pie and handed it over to the mass market operators on a silver platter.  We don't even get a chance to compete with the "big boys" - and I know many bike shops would happily compete - if the rules were fair.  Independent Bicycle Dealers (IBD's) in this country are competitive, creative, connected to their communities, and perfectly capable of competing with the mass market if the playing field was level and the rules fair.

Tom Babin at The Calgary Herald delves deeper into the issue here. 

The Bicycle Trade Association of Canada has a petition here.

Please take 5 minutes to reach out to your MP - find them on Twitter, email, Facebook, whatever - just make an effort to tell them you think tariffs on bikes should be abolished.