Evening star., 1933-03-22
CANADA'S TARIFF
JOLT TO j. S. FIRMS
Revenue Chief Empowered to
Initiate Value of Goods for
Duty Purposes.
BY MERWIN H. BROWNE.

OUSy VI HSSSSs
BY MERWIN H. BROWNE.
OTTAWA, March 22.-While i'm
proved relations between Canada and
the United States, as the result Of a
newly negotiated commercial pact,
might contemplate primarily relaxa-
ton in tariff barriers on both sides of
the border, under present conditions
actual rates of duty are relatively un-
important factor in the trade between
the two countries.
The great obstacle to trade from the
American viewpoint is the uncertainty
occasioned by the broad powers of the
Canadian minister of national revenue
to place arbitrary values for duty pur-
poses on American goods.
Besides increasing the cost Of Amer
lean goods in Canada by sometimes as
much as 100 per cent, under the present
Canadian system of tariff administra-
ton, Canadian customers can never be
sure of their landed import costs. In
addition, some of the rulings have been
made retroactive, applying even on
goods previously purchased.
u. S. Trade Demoralized.
The effect has been almost completely
to demoralize American trade with
Canada, and while, admittedly, the
Canadian tariff rates have been high
enough to make trading difficult, the
application of administrative restrictions
has been SO severe as to make them al
most prohibitive, and certainly the
United States will seek their elimination
as a Canadian concession in any pact
negotiated.
AS opposed to these activities by
Canada, the United States has no cor
responding authority to initiate the
values of Dominion imports for duty
PURPOSES. nor is there any American
statute limiting imports from countries
where the United States dollar Is either
above of below par.
Restrictions Summarized.
The administrative customs restric-
tions which have been enforced by
Canada largely during the past two
years may be summarized as follows:
/. An act authorizing the establish
ment for American commodities Of
arbitrary, inflated values for duty pur-
poses.
2. An act authorizing the Canadian
minister of national revenue to increase
NdiuSo 1Ol Outy PQ1 POoCo d6ohloG <Ai1lCA =
lean goods as much as he deems ad-
visable, when satisfied that such goods
are being imported to the injury of a
Canadian producer.
3. Application of exchange restric-
tions.
4. Assessment of an excise tax on all
imports, plus sales tax on the duty
paid value of most imports.
S. Fixing of the maximum discount
Canadian distributors may receive from
American manufacturers.
6. Application of rigid restrictions to
American commercial travellers.
Old Value Basis Scrapped.
All of the administrative restrictions,
which have worked great hardships on
United States exporters, have been pro-
mulgated by the administration of the
conservative Prime Minister, Richard B.
Bennett. Those dealing with the estab-
fishing of arbitrary values for duty pur-
poses and granting sweeping powers to
increase the rates themselves were en-
acted in September, 1880, shortly after
the Bennett government came into
power. The exchange restrictions were
applied in October. 1881, shortly after
Great Britain deserted the gold
standard
m setting up the arbitrary values for
duty purposes, Canada scrapped her old
basis of value for duty, which was the
fair home market value of the COM
modify in its country of origin. She
substituted for this basis the cost of
production plus reasonable advance
for selling cost and profit. making the
Canadian minister of national revenue
the sole judge of what that reasonable
advance should be.
AS an example, whenever a Canadian
importer attempted to bring in from the
United States product of a class or
kind made in Canada, the competing
Canadian manufacturer has requested
the national revenue department to
increase the value for duty purposes to
give him additional protection.
Agents of the National Revenue De-
partment have visited hundreds Of
American plants, going over their books
and records and reporting production
costs to the Canadian government. In
many cases, the Minister of National
Revenue has established a value based
upon the profits obtained by American
manufacturers in such prosperous years
as 1928 and 1929. which obviously are
not comparable with current price levels
in either country.
Empowered to Increase Value.
The other important restriction en-
powers the Canadian Minister Of Ma
tional Revenue, when satisfied that any
goods are being imported under such
conditions as prejudicially or injuriously
affect Canadian producers, to increase
the value for duty purposes as much -
he deems advisable. Under the former
liberal administration, such sweeping
authority was granted only in the case
tOf natural products, but in September,
1880. it was extended to all imports
The British delegation to the Imperial
Economic Conference, held here, sue
ceeded in persuading the Canadian Gov
eminent to exempt British goods from
this section of the customs act, but it
still applies to imports from the United
States and many orders-in-council af-
fecting American merchandise have
been Issued under it.
The exchange restrictions prevent
Canadian buyers of United States prod
ucts-eXcept those not of a class made
in Canada-from paying for their i'm
ports in Canadian dollars at par. even
II RENOVIZE*