OTTAWA — The federal government wants to slash prices on imported baby clothes, golf clubs and hockey equipment, but it plans to raise the cost of fine-cut tobacco and chewing tobacco to discourage consumption.

There were no individual or corporate income tax cuts in Thursday’s federal budget, but these boutique tax changes may draw a bit of spark in Finance Minister Jim Flaherty’s otherwise tame stay-the-course budget.

The prices on goods from China, Brazil and Korea, however, are likely to jump after the federal government said it plans to hike tariffs on countries formerly considered as "developing." Seventy-two higher-income and trade competitive countries will no longer benefit from Canada's General preferential Tariff (GPT) that offers lower-than-normal tariff rates on developing countries as a way to spur their economic growth.

Flaherty said the government has been preoccupied with the Canada-U.S. price gap, which has persisted despite the appreciation of the Canadian dollar against the U.S. dollar.

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  • Imported goods

    Year: 2013 What: The federal government wants to <a href="http://www.huffingtonpost.ca/2013/03/21/canada-budget-2013-surpri_n_2919842.html?1363898276" target="_blank">slash prices on imported baby clothes, golf clubs and hockey equipment</a>, but it plans to raise the cost of fine-cut tobacco and chewing tobacco to discourage consumption

  • Volunteer firefighters

    Year: 2011 What: Tax credits for volunteer firefighters

  • Travellers

    Year: 2004 What: A reduction in the Air Travellers Security Charge

  • Adoptive parents

    Year: 2005 What: Tax credit of up to $10,000 for adoptive parents for fees related to their adoption.

  • Parents of active kids

    Year: 2006 What: Parents can get a tax credit of up to $500 if children under 16 enrol in fitness activities.

  • Students

    Year: 2007 What: Canadian museums get $5 million to get summer interns

  • Traveller

    Year: 2007 What: Forty-eight hour visits outside of the country gets at $400 limit duty and tax free.

  • Armed Forces members

    Year: 2004 What: Canadian soldiers don't pay income tax while on "high risk operational missions" overseas. It was pegged to cost about $30 million a year.

  • We politicians feel your pain too

    Year: 2010 What: PM, MPs, senators take a wage freeze.

  • Patriotism

    Year: 2008 What: $25-million for 2010 Olympic torch relays.

  • Truck drivers

    Year: 2007 What: Truck drivers can deduct meal expenses of up to 80 per cent from 50 per cent.

  • Pocket change

    Year: 2012 What: Canadian penny eliminated at savings of $11 million.

  • Funny money

    Year: 2010 What: Polymer bills that will last longer, saves $15 million.

  • Next: 2012 budget highlights

  • 2012 BUDGET HIGHLIGHTS

    The government is calling the budget a plan for Jobs, Growth and Long-term Prosperity.<br><br> "In this budget, our Government is looking ahead not only over the next few years but also over the next generation," said Finance Minister Jim Flaherty. "The reforms we present today are substantial, responsible and necessary. They will ensure that all across government we are focused on enabling and sustaining Canada's long-term economic growth."<br><br> However, while the budget does include many investments, it also make a number of cuts and changes that will save money. Here are some of the highlights. <br><br> (File photo by THE CANADIAN PRESS/Sean Kilpatrick)

  • PUBLIC SERVICE CUTS

    The government is cutting spending by $5.2 billion on an ongoing basis, but it says it will not reach that total until 2014-2015. <br><br> Ottawa says 70 per cent of these savings will come from "operational efficiencies." <br><br> The planned reduction in spending is expected to result in the elimination of 19,200 public service jobs over a three-year period, 4.8 per cent of total federal employment. The government expects 7,200 of those positions to be eliminated through attrition. Six hundred executives positions are expected to be slashed. <br><br> Roughly $900 million will be spent making these job cuts, on things such as severance and benefits. <br><br> After 2014-2015, the public service cuts will save the federal government $5.23 billion per year.

  • THE CBC

    The government is cutting the budget of Canada's national broadcaster by $115 million per year by 2014-2015. Currently, the CBC's total budget stands at roughly $1.1 billion per year, making for a cut of roughly 10 per cent.

  • THE PENNY

    The federal government is eliminating the penny. <br><br> But prices won't necessarily be rounded. The cent will continue to be the smallest unit of sale and non-cash transactions, such as spending done with credit cards, will continue to be settled to the nearest cent. <br><br> Existing pennies will continue to be legal tender for an indefinite period of time, but the Mint will stop producing new ones and distribution will cease in Fall 2012. <br><br> If no pennies are available for a cash transaction, it will be rounded to the nearest five cent increment after GST/HST. <br><br> The government says it currently costs 1.6 cent to manufacture a penny and that supplying them to the economy costs $11 million per year. (CP photo)

  • CRIME & JUSTICE

    The government says it has no intention of building any new prisons, despite the passage of the omnibus crime bill that some experts suggests will increase the number of people incarcerated. The Tories plan to slash $295 million from Corrections Canada by 2014-2015.<br><br> The RCMP will also receive major cuts, $195.2 million by 2014-2015.<br><br> But the government will spend $9.6 million over three years to combat counterfeiting.

  • ENVIRONMENT

    The government is moving to alter the current process for the environmental assessment of resource-based projects. <br><br> It plans to move to one review for one project and to give these reviews a definite deadline. The change will affect the Northern Gateway pipeline. Additionally, the government wants to focus resources on reviewing the largest plans with the greatest potential for environmental impact. The federal government says it will do this while continuing to protect the environment. <br><br> The government says this change is aimed at simplifying a complex system of reviews that imposes costly delays and deters investment.<br><br> Canada's first near-urban national park will also be declared in the Rouge Valley in suburban Toronto. <br><br> Other highlights include: - By 2014-2015, Environment Canada's budget will be reduced by $53.8 million per year.<br> - $50 million will be spent over two years to protect species at risk.

  • OAS: FREEDOM 67

    The government is increasing the eligibility age for receiving Old Age Security (OAS) and Guaranteed Income from 65 to 67. <br><br> The change will be made starting on April 1, 2023 and will be fully implemented by January 2029. <br><br> The government will also allow individuals to choose to defer payment for a maximum of five years starting in July 2013. <br><br> If a person does defer, they will receive a larger adjusted pension than if they had begun collecting at 65. <br><br> The government says it is making the changes primarily due to demographic shifts. The pending retirement of the Baby Boomers will increase the total cost of the program from $38 billion in 2011 to $108 billion in 2030.

  • HEALTH CARE

    The feds are planning to reduce Health Canada's budget by nearly $310 million per year by 2014-2015. <br><br> Health Canada and the Public Health Agency of Canada will consolidate many services, reducing what the government calls duplication, in order to achieve some of these savings. <br><br> The government will also eliminate Assisted Human Reproduction, a group involved in the study of potential uses for stem cells. <br><br> They also propose:<br> - Expanding GST/HST and income tax breaks for health care services.<br> - $51.2 million over two years to improve food safety. <br><br> (Alamy photo)

  • RESEARCH AND DEVELOPMENT

    The government is making an investment of more than $1 billion in science and technology. <br><br> Canada currently lags behind other similar economies in terms of private sector investment in R&D and overall innovation, according to the government. <br><br> Here are a few highlights of the spending:<br> - $400 million to help increase venture capital investment by businesses.<br> - $100 million for the Business Development Bank Of Canada for venture capital investment.<br> - $110 million per year for the Industrial Research Assistance Program.<br> - $105 million over two years help pay for innovation in the forestry sector.<br> - $500 million over five years for the Canada Foundation for Innovations to pay for new competitions. Funding will start in 2014-15.<br>

  • IMMIGRATION

    The government will revamp the immigration system by killing a backlog of 300,000 skilled foreign worker applicants by sending them their money and applications back. Up to $130 million will be spent refunding fees to skilled worker applicants who paid under outdated criteria. <br><br> The feds are planning to improve the system for the recognition of foreign credentials <br><br> The government will move to ensure businesses first look to domestic sources of labour before using the Temporary Foreign Worker Program. <br><br> <blockquote><strong>CORRECTION:</strong> A previous version of this story stated that the budget will kill a backlog of 460,000 skilled foreign worker applicants by sending them their money back. The actual number is 300,000. </blockquote> <br><br> (pwenzel on Flickr)

  • SECURITY

    The budget will implement the Beyond the Border security pact with the United States (The Action Plan on Perimeter Security and Economic Competitiveness and the Action Plan On Regulatory Cooperation). <br><br> But the coming changes don't mean the Canada Borders Service Agency will escape cuts. The department's budget will be reduced by $143.4 million by 2014-2015 <br><br> It will also seek to streamline for the process of bringing goods home from abroad by increasing the dollar amount exempted from tariffs for travellers. <br><br> (Photo by Bill Pugliano/Getty Images)

  • FOREIGN AFFAIRS

    The budget seeks to continue the government's work to expand Canada's international trading relationships. <br><br> "Our government is undertaking the most ambitious trade expansion plan in Canadian history," said Flaherty. <br><br> In his speech, Flaherty also signals that, while the U.S. will remain our largest trading partner, Canada needs to open its export economy to emerging economies. China, India and the Trans-Pacific Partnership are mentioned by name. <br><br> However, there will be cuts. <br><br> The International Assistance Envelope, which includes the Canadian International Development Agency, Foreign Affairs and International Trade Canada, the International Development Research Centre the Royal Canadian Mounted Police and Natural Resources Canada, will be cut by $377.6 million by 2014-2015. <br><br> Most of that money will come from The Canadian International Development Agency -- $319.2 million. <br><br> Foreign Affairs and International Trade Canada will be cut by $29.1 million. <br><br> The federal government also plans to find $80 million in saving by selling official residences abroad. <br><br> (Israeli Prime Minister Benjamin Netanyahu meets with Prime Minister Stephen Harper March 2, 2012 in Ottawa -- Amos Ben Gershom/GPO via Getty Images)

  • DEFENCE

    The budget touts the government's progress in modernizing the Canadian Forces through major investment. However, the Defence budget is about to fall substantially. <br><br> Some of this reduction will come from improvements in efficiency, but much will come from the end of the combat mission in Afghanistan.<br><br> The cuts will amount to roughly $1.12 billion by 2014-2015. According to Armine Yalnizyan, of the Canadian Centre for Policy Alternatives, these cuts are over and above the roughly half a billion announced during a previous round of strategic review. <br><br> The size of the military will not shrink but it won't grow either. The regular Canadian Forces will remain at 68,000 members and the reserve force at 27,000. <br><br> Veterans Affairs will also be on the receiving end of cuts - $66.7 million by 2014-2015. <br><br> The budget will also provide $5.2 billion for the Coast Guard over the next 11 years. <br><br> (Canadian soldiers prepare to leave Kandahar military base in southern Afghanistan on July 17, 2011 -- ROMEO GACAD/AFP/Getty Images)

  • KATIMAVIK

    The government is eliminating the Trudeau-era youth program Katimavik, as The Huffington Post Canada first reported. <br><br> The federal government says the program benefits a very small number at an excessive cost per person. <br><br> (CP photo)

  • FISHERIES AND OCEANS

    The budget reduces spending on Fisheries and Oceans by $79.3 million by 2014-2015 <br><br> The department will undergo a substantial restructuring. Services will be consolidated and the size of its motor vehicle fleet will be cut. It will also focus less on research, relying more on academia. <br><br> (AFP/Getty Images)

  • ABORIGINAL EDUCATION

    The government will spend $275 million over three years on First Nations education.<br><br> The money is budgeted for the building and renovation of schools on reserves. <br><br> Ottawa is also set to spend $27 million over two years on the Urban Aboriginal Strategy. <br><br> $330.8 million will also be provided over two years to build and expand water infrastructure on reserves. <br><br> (CP)

  • MP PENSIONS

    Coming changes to MP Pensions are not outlined in the budget. Finance Minister Jim Flaherty said the changes he wants to make, increasing pension contributions by the MPs themselves and raising the age of eligibility will have to be discussed. <br><br> (Alamy photo)

  • Employment Insurance

    The government is making a number of changes to Employment Insurance (EI) it says are aimed at creating a more efficient program.<br><br> -$387 million over two years for matching benefit amounts to wages in different local labour markets. Depending on the unemployment rate in the region, claimants will need between 14 and 22 weeks to qualify for EI. <br><br> -$74 million over two years to help make sure claimants benefit from getting a job. EI claimants will be able to keep 50 per cent of their earnings without getting their benefits clawed back. <br><br> - Limiting premium increases to no more than 5 cents per year. <br><br> - $21 million over two years to improve the content and timeliness of information provided to job seekers. <br><br> (Alamy photo)

Ottawa now plans to take tariffs off selected items to see if it can put downward pressure on prices in Canada, he said.

“This is an important test. We are going to take a few items, baby clothes, hockey equipment, other sporting equipment, golf clubs, a few other things like that and we are going to take the tariffs off, and we are going to see what happens to prices in Canada, and we’ll see if we actually see a reduction in prices,” Flaherty told reporters Thursday. “This is a test case for us.”

Baby clothing and ice skates currently incur an 18 per cent tariff when they are imported to the country. Various pieces of hockey equipment have tariffs ranging between 2.5 per cent and 18 per cent, while skis and snowboards have tariffs of 6.5 per cent to 20 per cent and tariffs on golf clubs range from 2.5 per cent to 7 per cent.

Scrapping the tariffs completely comes with the understanding that wholesalers, distributors and retailers will pass the savings on to consumers, the government said. It plans to monitor the impact of the cuts on Canadian prices, and if prices drop into line with those in the United States, the tariffs on other goods might also drop.

The measure is expected to cost the federal treasury $76 million, but the government plans to recoup that cost by eliminating the preferential excise duty for manufactured tobacco, bringing it in line with cigarette prices.

The change, which will come into effect Friday, means taxes will jump to $5.31 from $2.89 for each 50 grams of chewing tobacco and fine-cut tobacco used for roll-your-own cigarettes. The measure is expected to increase federal revenue by $75 million in 2013-2014 and $65 million in 2014-2015.

“A key component of the Government’s health strategy is to tax tobacco products at a high and sustainable level to discourage their consumption,” the government wrote in Budget 2013.

Gregory Thomas, the federal director of the Canadian Taxpayers Federation, told HuffPost that scrapping the preferential excise duty is unlikely to have much of an effect because most people who use those products tend to buy them on the black-market or on First Nations reserves.

“The kind of people who roll their own smokes are the kind of people who go across the border, who buy them on First Nations reserves …so it will probably drive that much more activity underground,” Thomas said.

As far as baby clothes and golf clubs go, Thomas said, it is not a bad move.

“It’s like the (elimination of the) penny last year. There is no harm in it, but we would have liked to see them relax a whole range of tariff barriers, especially when there are no Canadian businesses who are truly going to be affected.”

MORE ON THE FEDERAL BUDGET

Earlier on HuffPost:

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  • 2013 BUDGET HIGHLIGHTS

    Revenues for 2013-14 forecast at $263.9 billion, spending at $282.6 billion, deficit at $18.7 billion. Deficit projected to drop to $6.6 billion in 2014-15 and become an $800-million surplus in 2015-16. With files from Althia Raj and The Canadian Press.

  • Tackling The Skills Gap

    The Tories plan to create a Canada Job Grant that will provide $15,000 or more per person -- up to $5,000 provided by the federal government, the rest matched by the province/territory and the employer. Nearly 130,000 Canadians are expected to benefit when the new grant is fully implemented in 2017-2018. Essentially, this is the government saying it is taking training out of the hands of provincial governments because it hasn’t worked and placing it in the hands of individuals. The Canada Job Grant will replace the Labour Market Agreements the feds signed with the provinces, which expire in 2014.

  • Helping Manufacturers

    Manufacturing and small business get tax-credits introduced in past budgets extended to help spur investment and growth. There will be $1.4 billion in tax relief for manufacturers by extending the temporary accelerated capital cost allowance for new investment in machinery and equipment. And hundreds of millions for small business owners.

  • Infrastructure Spending

    The government has pledged more than $53 billion in infrastructure spending, including $47 billion in new funding over 10 years. This includes $32.2 billion over 10 years for a “Community Improvement Fund” to build roads and public transit as well as recreational facilities and other community infrastructure projects. The Fund will consist of an index Gas Tax Fund and the incremental GST Rebate for Municipalities.

  • Military Spending

    Military spending will be re-jigged that it is modeled on the ship building strategy and aimed at creating more jobs in Canada and key domestic capabilities with an eye towards exports.

  • Foreign Affairs - Aid Agency Cancelled

    The budget has cancelled the Canadian International Development Agency, the primary agency responsible for foreign aid. Its duties will be merged into the Department of Foreign Affairs.

  • Tax Evasion Snitch Line

    The government says it is aggressively going after tax avoiders/and closing tax loopholes. They are launching a “Stop International Tax Evasion Program” where the Canada Revenue Agency will pay individuals with knowledge of “major international tax non-compliance” a percentage of the tax collected as a result of information provided. The CRA will only pay a reward if the information results in total additional assessments exceeding $100,000 in federal tax.

  • Public Service Cuts

    Two departments -- Canada Revenue Agency and the Department of Fisheries and Oceans -- will see big cuts. Departments will see a 5 per cent cut in their travel budgets. The government also says in the budget it intends to work with the public sector unions to “further align overall compensation with other public and private sector employers.”

  • Border Security

    The federal budget says new projects related to Canada's perimeter security deal with the United States will go ahead as planned, despite budget woes south of the border. The federal budget has given the green light to almost a dozen information-sharing and infrastructure projects related to the Beyond the Border initiative between the two countries. The vaunted deal was announced with fanfare by Prime Minister Stephen Harper and U.S. President Barack Obama in December 2011 at the White House. The plan aims to speed the flow of goods and people across the 49th parallel while protecting the continent from a terrorist attack.

  • Tobacco Prices Going Up

    The government wants to reduce import tariffs on a number of goods including baby clothing, skis, snowboards and gold clubs. But it plans to offset the $76-million revenue loss from that by hiking excise taxes on chewing tobacco and other manufactured tobaccos, to bring them in line with cigarette taxes.

  • Affordable Housing

    Finance Minister Jim Flaherty's spring budget commits Ottawa to five more years of funding through the Investment in Affordable Housing program. The level of commitment is the same as in the past: $253 million a year over five years, which needs to be matched by the provinces and territories and can be spent on new construction, renovation, home ownership assistance, rent supplements, shelters and homes for battered spouses. But there's a new twist to the funding. Home construction in the program will support the use of apprentices so that newcomers to the construction trades can build up crucial experience. The budget also commits $100 million over two years to build 250 more units of affordable housing in Nunavut, where homes are so crowded that illness spreads easily and poverty abounds.

MORE ON THE FEDERAL BUDGET