OTTAWA – A business professor has discovered that last month’s federal budget contained a five-per-cent increase in the tariff on iPods, as well as tricycles and wigs often used by cancer patients.
But Mike Moffatt said he thinks the government placed the levy on iPods and other digital music players by accident, tripped up by the complex tariff codes.
Moffatt is an assistant professor at the Richard Ivey School of Business who says the tariff increase went unnoticed until he found it.
He says the increase was included in a small budget section that dealt with the general preferential tariff regime for developing countries.
“No one noticed because this stuff is maddeningly complex,” Moffatt wrote on Twitter.
“I suspect the Tories had no idea about this new iPod tariff,” he wrote in another tweet. “Suspect it’s accidental. The tariff rules are mind- numbingly complicated.”
The tariff schedule, he said, is nearly 1,500 pages long.
A spokeswoman for Finance Minister Jim Flaherty denies there is an iPod tax, saying the devices are imported into Canada duty-free under a long-standing special tariff classification from 1987.
“That special tariff classification was in no way altered by recent changes to the General Preferential Tariff foreign aid program,” said Kathleen Perchaluk in an email.
Moffatt’s posts prompted a news release from the NDP, which scornfully recalled how the Harper government reacted in 2010 against any suggestion of a tax on iPods.
“(Heritage) Minister James Moore and (Treasury Board President) Tony Clement must be furious about this development, since it contradicts previous statements they’ve made against implementing an iPod tax,” the news release said.
The release quoted a joint Clement-Moore statement from December 2010:
“During this fragile economic recovery, the last thing Canadian families and consumers need is a massive new tax on iPods.”
The NDP accused the government of cowardice and hypocrisy.