Federal cabinet ministers are considering a recommendation by the Canadian International Trade Tribunal (CITT) to add a 30% surtax onto imported bicycles in order to protect two Quebec assemblers of low quality bicycles (Procycle Group Inc. and Raleigh Canada Ltd.) typically sold in mass merchandise outlets such as Wal-Mart and Canadian Tire.

Canadians already bear the highest bicycle tariffs in the world. The proposed 30% surtax would be applied in addition to two existing protections - a 13% customs tariff that is applied to every bicycle imported into Canada irrespective of origin and special antidumping duties ranging from 5-50% that have been imposed on bicycles from Taiwan and China for well over a decade. Procycle and Raliegh avoid the tariffs, duties and surcharges by importing 90% of their bicycle frames and components unassembled into Canada where they then assemble them for distribution to mass merchandise chain retailers.

The effect of this 30% surtax will be to increase the cost of import bicycles at price-points that are occupied by commuter bicycles and high quality entry level bicycles used by youths. The cumulative protections for domestic bicycle assemblers in concert with provincial and federal sales taxes would comprise about one quarter of the final sale price of a typical import bicycle priced in range of CDN $600-$700.

"Gasoline prices are up, inner city smog and traffic congestion are up, greenhouses gases are up, childhood obesity is up and virtually everyone has identified bicycles as part of the solution. So where is the public interest in a 30% import bicycle surtax?" asks Peter Lilly of CyclePath in Toronto, Ontario adding, "This is absurd. Toronto, Vancouver and cities across Canada are building bike lanes and putting bike racks on its transit buses. The University of Toronto is launching a bike share program to encourage cycling. Yet, in the face of these initiatives to encourage cycling, the CITT recommends an unwarranted surcharge that will effectively price affordable, quality bicycles out of the market."

Mike Theil, owner of four Bicycle Sports Pacific stores in Vancouver, adds, "It's outrageous that Canadian cyclists, my business, my staff's jobs, the health of our nation and the environment are all up for sacrifice, to bail out two globally uncompetitive businesses that have failed to adapt despite fifteen years of trade protection. They continue to try to compete for the bottom end of the bicycle market in Canada, a country with the highest standard of living in the world. These two companies need to focus on making better bikes, not continually coming back to Government for more trade protection. There are many successful Canadian bike manufacturers and they do not need or support this proposed tax."

Any proposed surtax would affect at least 1000 independent bicycle retailers across Canada.