iPod tax called an 'accidental' part of 2013 budget

A business professor says a change in the federal budget will mean a 5 per cent hike in the tariff on some MP3 players. The NDP says that amounts to a dreaded "iPod tax," but the government says they're all wrong.

NDP quick to pounce after tariff changes implement a tax the Tories once mocked

Three out of the four types of iPods made by Apple would be subject to tariff increases introduced in the 2013 federal budget, including the iPod Shuffle, according to a business professor who has studied the budget. (Paul Sakuma/Associated Press)

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 denied 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 Thursday.

In a later email to CBC News, Perchaluk added that Finance department officials have confirmed the 1987 special tariff provision, applied to goods classified under the tariff code 9948.00.00, would supercede any changes to the General Preferential Tariff that come into effect in January, 2015.

On CBC News Network's Power & Politics Thursday, Conservative MP Michelle Rempel said "under the General Tariff Agreement, devices ... that plug in to a computer are exempt" from tariffs and won't be affected by the budget changes.

Moffat took to Twitter late Thursday to cite cases of corporations battling the government over tariffs on products that would appear to fall into that category, such as printers and USB drives.

And, in a Twitter exchange with Canada Post Friday morning, Moffatt asked what tariff code to use when importing an iPod and was told 8519.81 — one of the product codes that would presumably face a higher tariff under the budget changes.

NDP jumps on 'hypocrisy'

Moffatt's posts on Thursday 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."

NDP revenue critic Murray Rankin accused the Conservatives of "hypocrisy" on Power & Politics.

"I thought they were against 'iPod tax'?" wrote interim Liberal leader Bob Rae on Twitter.

with files from CBC News