Government of Canada recently published the Order Amending the Schedule to the Customs Tariff, 2016-2 (Agri-food inputs) in Canada Gazette SOR2016-313 that eliminates customs duties on a number of certain imported food manufacturing ingredients used mainly in the production of food products that are used by Canadian food processors in their operations.
The reduction in tariffs on manufacturing inputs helps lower production costs for Canadian businesses to enhance their overall competitiveness, both domestically and abroad. In addition, the Order also makes revenue-neutral technical changes to the Schedule to the Customs Tariff in order to simplify its structure. The amendment to the customs tariff is effective of January 16, 2017.
The Order reduces the Most-Favoured Nation (MFN) rates and on certain preferential rates of customs duty to duty free status on certain imported ingredients. There are significant duty rate reductions on various fruits, vegetables, wheat, barley, flours, spices, fats and oils, cocoa powder, malt, couscous, baking powders, jelly powders, concentrated juices, alcoholic beverages, essential oils, albumins, certain milk protein substances, such items used in processing of food products or beverages or sold in retail.
In certain instances (e.g. where the affected tariff items include both inputs and goods for retail sale), new tariff classifications are created to afford duty-free status only to goods used in processing.
There are 40 new tariff classifications with duty rates provided in Part 3 section 3 of the Order Amending the Schedule to the Customs Tariff. There is a new tariff code 99070000 – Goods of chapter 20 (with exceptions) used in the processing of food products or beverages. Part 4 section 5 of the Order provides a list of tariff classifications that are currently dutiable and will be duty free status under MFN and under preferential treatment.
The Order is scheduled to come into force on January 16, 2017.