Budget 2009 eliminated tariffs on imports of machinery and equipment in order to help Canadian manufacturers maintain and enhance their competitiveness during the economic downturn. This measure saved companies $88 million annually and was widely supported by manufacturers and economic experts. Stakeholders expressed an interest in further tariff relief, including the concept of establishing tariff-free zones.

After extensive public consultations with Canadian industry, Budget 2010 responds by making all of Canada a tariff-free zone for industrial manufacturers by eliminating remaining tariffs on machinery and equipment, as well as goods imported for further manufacturing in Canada.

This means that tariffs will be eliminated on 1,541 tariff items with most of the reductions taking place immediately, on March 5. The remainder will be gradually eliminated by no later than 2015.

Once fully implemented, this measure will save Canadian manufacturers $300 million in annual duties and eliminate the need for burdensome customs paperwork.

This measure will have wide ranging benefits for the economy and for manufacturers in terms of their ability to improve their competitiveness in domestic and international markets, maintain and increase jobs, raise productivity, and improve product quality and innovation.

Small and medium-sized enterprises that must source goods for production from global supply chains will be key beneficiaries.