Tuesday, October 19, 2010

Duty Details

1. Algoma Discovery, one of the ships to which the remission of the 25% import duty will apply. It was registered for the first time in Canada October 8. [Oct 10 photo]

The government has published details on the the 'elimination' of the 25% duty on foreign built ships. As predicted in a previous post, the press reports did not tell all!

1. The 25% duty on foreign built ships has not been eliminated.

2. Purchasers of certain foreign built ships may apply for remission of the 25% duty.

3. Only ships purchased after January 1, 2010 are eligible. No retroactive applications will be heard for imports prior to that date. The rebates to BC Ferries and Algoma Tankers are the only exceptions. The Algoma Discovery was purchased two years ago, but only now registered(i.e. imported into Canada.)
[This eliminates several large Canadian flag/non-duty paid tankers, that are not allowed to trade between Canadian ports, without special license. Special coasting licenses are granted, almost as a routine matter, but the ships have not paid duty. There seems to be very little benefit to Canadian registry for these vessels, however they do employ Canadians.]

4. Cargo ships, meaning container ships, car carriers, bulk carriers, self-unloaders, freighters and tankers, but not tank barges/tugs, will be eligible.

5. Ferries over 129 meters in length will be eligible.

So the flood gates have not been opened by this particular measure. However, read the fine print of the announcement in the Canada Gazette, which includes the rationale:


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