Consultation on the Renewal of Canada’s Tariff Preference Programs for Developing Countries
Current status: Closed
This consultation sought feedback on proposals for the renewal of Canada’s tariff preference programs for imports from developing and least developed countries (LDCs), two of which are set to expire at the end of 2024: the General Preferential Tariff (GPT) and the Least Developed Country Tariff (LDCT).
This engagement process gave all interested members of the public the opportunity to provide input on this topic. The consultation ran from August 9 to October 11 2022. Thank you to everyone who participated.
Key questions for consideration
Under the Generalized System of Preferences (GSP), Canada currently extends non-reciprocal preferential tariffs to imports from developing and least developed countries through specific programs, in order to facilitate and promote their export-driven industrialization and development. Two of these programs are set to expire at the end of 2024
- (1) The General Preferential Tariff (GPT) offers duty-free treatment or reduced tariffs to 106 developing countries on 84 per cent of tariff lines. This includes most goods, other than apparel, textile products, footwear, and certain sensitive agricultural goods including supply-managed products.
- (2) The Least Developed Country Tariff (LDCT) offers duty-free treatment for essentially all goods, excluding only over-quota supply-managed products, from 49 LDCs largely based on the UN List of LDCs.
Legislative authority for the GPT and LDCT programs expires and has been renewed by Parliament every 10 years since their establishment. The programs were last renewed in 2015, and are currently set to expire on December 31, 2024.
This consultation sought feedback on proposals for the renewal of these two tariff preference programs, including on options to introduce inclusive trade elements, improve the programs’ performance, enhance predictability, and ensure alignment with Canada’s broader trade and development policy objectives.
Specifically, we sought to hear views on:
- Creating a new GPT+ program extending tariff benefits based on labour and environmental criteria;
- This proposal would expand tariff benefits for developing countries that meet certain international labour rights and environmental standards and ensure closer alignment with Canada's broader trade and development policy objectives and free trade agreements.
- Updating GPT eligibility through a formal five-year review process;
- Introducing a 3-year transition period following LDCT graduation to minimize supply chain disruptions; and,
- Simplifying program requirements to ease administrative burden and reduce compliance costs for businesses.
The consultation paper contains additional details. The paper can be reviewed in full here.
What's next?
Your input will inform the research our economists have been doing to help inform decisions on the renewal of Canada's tariff preference programs for developing countries.
Information received through this comment process is subject to the Access to Information Act and the Privacy Act. If you have indicated that your comments, or any portions thereof, be considered confidential, the Department of Finance will make all reasonable efforts to protect this information.
While this formal consultation has now concluded, Canadians are welcome to share their ideas and comments with the Department of Finance at any time, by emailing tariff-tarif@fin.gc.ca.
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