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SEALY CANADA LTD.

Investigations


REFERENCE FROM THE MINISTER OF FINANCE PURSUANT TO SECTION 19 OF THE CANADIAN INTERNATIONAL TRADE TRIBUNAL ACT CONCERNING CERTAIN WARP-KNIT FABRICS
REQUEST NO. TR-95-056A
MARCH 17, 1997

TABLE OF CONTENTS


On June 28, 1996, following an investigation into a request for tariff relief filed by Sealy Canada Ltd. (Sealy), the Canadian International Trade Tribunal (the Tribunal) issued its recommendation to the Minister of Finance (the Minister) with respect to certain woven and knitted fabrics for use as ticking in the production of mattresses (the subject fabrics). Taking into account that recommendation, Code 4402 [1] was enacted pursuant to Order in Council P.C. 1996-1554 of October 8, 1996, Registration No. SOR/96-461.

Subsequent to that action, officials of the Department of National Revenue (Revenue Canada) informed officials of the Department of Finance that one of the classification numbers originally provided by Revenue Canada and cited in the Tribunal’s recommendation relating to the subject fabrics may not have covered all of the fabrics for which Sealy was requesting tariff relief. As a consequence, some textile inputs imported by Sealy, on which it had requested tariff relief, do not qualify for the tariff relief cited above.

More specifically, in reviewing samples recently submitted to it by Sealy in connection with a number of adjustment requests, Revenue Canada concluded that the fabrics are classified under tariff item No. 5903.90.20 of Schedule I to the Customs Tariff. [2] However, the samples of similar fabrics provided in respect of the Tribunal’s investigation in Request No. TR-95-056 were classified by Revenue Canada under tariff item No. 3921.19.90, and imports under that tariff item were granted tariff relief. Accordingly, the tariff relief granted pursuant to Order in Council P.C. 1996-1554 did not cover fabrics classified under tariff item No. 5903.90.20, as Sealy had requested in its original request to the Tribunal.

On January 22, 1997, in light of the foregoing, and pursuant to section 19 of the Canadian International Trade Tribunal Act, [3] the Minister requested the Tribunal to inquire into whether tariff relief should be granted in respect of fabrics imported by Sealy that may be covered by tariff item No. 5903.90.20 and provide recommendations as to the appropriateness of adding tariff item No. 5903.90.20 to Code 4402.

On January 31, 1997, in response to the above-noted reference, the Tribunal issued a notice of commencement of investigation. The notice was distributed to all parties to the original investigation in Request No. TR-95-056 and was published in the February 8, 1997, edition of the Canada Gazette, Part I. [4]

Two domestic users of the subject fabrics filed notices of appearance to participate in the Tribunal’s investigation. Both users, Sealy and Simmons Canada Inc., supported the extension of tariff relief to fabrics classified under tariff item No. 5903.90.20. No domestic producers filed notices of appearance or opposed the extension of tariff relief to fabrics classified under tariff item No. 5903.90.20.

Revenue Canada, the Department of Foreign Affairs and International Trade and the Department of Industry provided information to the Tribunal in connection with its original investigation in Request No. TR-95-056. None of those departments made supplementary submissions in connection with Request No. TR-95-056A.

In the circumstances, a staff investigation report was not issued. The Tribunal concluded that there would be benefits resulting from the extension of tariff relief to fabrics classified under tariff item No. 5903.90.20 and that there would be no costs incurred by domestic textile producers. Accordingly, the Tribunal believes that there would be net economic gains to Canada resulting from the proposed tariff relief.

In light of the foregoing, the Tribunal hereby recommends that tariff item No. 5903.90.20 be added to Code 4402.

Arthur B. Trudeau
_________________________
Arthur B. Trudeau
Presiding Member


Lyle M. Russell
_________________________
Lyle M. Russell
Member


Charles A. Gracey
_________________________
Charles A. Gracey
Member


1. Under the terms of that code, duties were removed on the following for use as ticking in the manufacture of mattresses and mattress supports: “[s]titch-bonded, warp knit fabrics, solely of polyesters, coated on one side with a cellular acrylic polymer, of tariff item No. 3921.19.90.”

2. R.S.C 1985, c. 41 (3rd Supp.).

3. R.S.C. 1985, c. 47 (4th Supp.).

4. Vol. 131, No. 6 at 338.


[Table of Contents]

Initial publication: March 14, 1997

Case Number(s)

TR-95-056A

Attachment(s)

Status

Publication Date

Friday, March 14, 1997

Modification Date

Tuesday, January 20, 2004