Monday, May 29, 2006

The productivity agenda

If you thought it would be politics as usual once the Conservatives got elected, then you must read this recent press release from the Department of Finance:

The Canadian International Trade Tribunal (CITT) had recommended last fall that the Government of Canada impose surtaxes on imports of bicycles and barbeques as a way to counter the effects of increased imports of these products.

"After considering all of the information, it was determined that temporary protective tariffs simply wouldn’t provide a competitive long-term solution in these two cases," said Minister Flaherty. "We want to grow and strengthen our economy, and imposing these surtaxes would have increased costs for both Canadian retailers and consumers."


"Our government believes there is a better way," said Minister Flaherty. "To ensure Canada remains competitive in the global marketplace, we are reducing taxes and providing additional support for education and the skilled trades. These tax measures include lowering the GST as well as small business and other corporate taxes, and providing tax credits to encourage apprenticeships."

Under the Liberals, I fully expected the government to cave into requests by Quebec bicycle manufacturers for protection. After all, despite the economic arguments against a tariff, there were votes at stake. Consequently, I rushed out to buy a Chinese-made, Supercycle bicycle for my daughter at Canadian Tire for $130 last fall.

Obviously the new Conservative government is different. Most encouragingly, Flaherty's decision is the right one. At last, we have a government with a real productivity agenda backed with action not talk.