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Canada's Senate seeks review of tariffs

Canada's Senate seeks review of tariffsOttawa, Feb 7 : A Canadian Senate committee has called on the federal government to review tariffs on imports with the goal of narrowing the price gap on consumer goods between Canada and the US.

"Canadian consumers are feeling ripped off... When the Canadian dollar is at parity with the US dollar, Canadian consumers notice that prices here are typically higher than in the United States," Conservative Senator Larry Smith, deputy chair of the Standing Senate Committee on National Finance, said Wednesday.

Committee chair Liberal Senator Joseph Days said: "There is no one definitive explanation for the price discrepancies for products between Canada and the United States."

But the committee found there were many variables beyond tariffs that contribute to the price of products, including the transportation costs, market size and that also "biased suppliers" who often charge Canadian retailers up to 30 percent more for goods sold here than for the identical items sold south of the border.

Even Canadians wanting to play their defining national game of ice hockey face an 18-percent import tariff on hockey pants, while Americans only pay a 2.9-percent mark-up for the same item.

The committee recommended that the finance ministry conduct a comprehensive review of Canadian tariffs and come up with a plan to reduce the price gap between Canada and the US without harming domestic manufacturing.

Finance Minister Jim Flaherty, who in 2011 asked the Senate committee to study cross-border price discrepancies, told reporters Wednesday that while tariffs are sources of government revenue, "we would like to eliminate tariffs going forward".

Official figures showed that customs tariffs generated 3.6 billion Canadian dollars ($3.61 billion) in 2010-11, which represented 1.5 percent of total government revenues collected that fiscal year.

The price gap between the two neighbouring countries has become a major reason for Canadian residents to go shopping on the other side of the border.

According to Statistics Canada, an average of 3.4 million Canadian travellers entering the US by automobile each month in 2011, while only 1.1 million American visitors crossed the border by vehicle each month that same year. (IANS)