THE MINISTER OF FINANCE
REQUESTS FOR TARIFF RELIEF BY
LADCAL INVESTMENTS LTD. O/A PINTAR MANUFACTURING,
NOUR TRADING HOUSE INC. AND
T.S. SIMMS AND COMPANY LIMITED
WOVEN CUT PILE FABRICS
APRIL 14, 1999
TABLE OF CONTENTS
Request Nos. : TR-98-004, TR-98-005 and
Tribunal Member: Anita Szlazak, Presiding Member
Research Director: Réal Roy
Research Officer: Peter Rakowski
Counsel for the Tribunal: Philippe Cellard
Registration and Distribution
Officer: Claudette Friesen
Address all communications to:
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
On July 14, 1994, the Canadian International Trade Tribunal (the
Tribunal) received terms of reference  from the Minister of Finance (the Minister)
pursuant to section 19 of the Canadian International Trade
Tribunal Act. 
The Minister directed the Tribunal to investigate requests from
domestic producers for tariff relief on imported textile inputs for
use in their manufacturing operations and to make recommendations
in respect of those requests to the Minister.
Pursuant to the Minister’s reference, the Tribunal received, on
August 20, 1998, three requests for the removal, for an
indeterminate period of time, of the customs duty on importations
from all countries of woven cut pile fabrics for use in the
production of paint rollers. The requesters are Ladcal Investments
Ltd. O/A Pintar Manufacturing (Pintar), Nour Trading House Inc.
(Nour) and T.S. Simms and Company Limited (Simms).
On January 29, 1999, the Tribunal, being satisfied that the
requests were properly documented, consolidated them and issued a
notice of commencement of investigation, which was widely
distributed and published in the February 6, 1999, edition of the
Canada Gazette, Part I.  The fabrics under investigation were described in
the notice as narrow woven cut pile fabrics, predominantly of
man-made fibres, for use in the manufacture of paint rollers
(including paint roller refills) (the subject fabrics).
As part of the investigation, the Tribunal’s research staff sent
questionnaires to potential producers of fabrics identical to or
substitutable for the subject fabrics. A request for information
also was sent to potential importers of the subject fabrics. A
letter was sent to the Department of National Revenue (Revenue
Canada) requesting information on the tariff classification of the
subject fabrics, and samples were provided for laboratory analysis.
Letters were sent as well to a number of other government
departments requesting information and advice.
A staff investigation report was not necessary for the purposes
of this investigation, since potential producers of fabrics
identical to or substitutable for the subject fabrics did not
oppose the requests.
A public hearing was not held for this investigation.
The subject fabrics consist of man-made fibres (polyester), with
a woven-in cut pile of man-made fibres (acrylic, modacrylic and
nylon), which are coated on the non-pile side with a clear acrylic
polymer. Woven cut pile fabrics are used to produce lint-free paint
rollers that are in the high-end segment of the paint roller
Revenue Canada indicated that the subject fabrics are classified
under tariff item No. 5806.10.90  and are currently dutiable at 16 percent ad
valorem under the MFN tariff, at 10 percent ad valorem
under the Mexico tariff and the Chile tariff, and are duty free
under the US tariff.
Pintar, located in Toronto, Ontario, employs 57 people. It
submitted that, although it purchases knitted cut pile fabrics
domestically for rollers not requiring shed-resistant
characteristics, a woven cut pile fabric is preferred for
higher-quality shed-resistant rollers. Pintar alleged that it has
been unable to find a domestic producer of woven fabrics suitable
for “high-end” paint rollers. Pintar stated that tariff relief will
allow it to remain competitive with US manufacturers. Pintar also
submitted that its major purchasers prefer to deal with one
supplier, and it argued that, if tariff relief is not granted,
these purchasers will switch all their business to the most
Pintar argued that tariffs on the subject fabrics reduce its
competitiveness and eliminate any chance that it has of exporting
products made from the subject fabrics. It further argued that, if
these tariffs were not eliminated, it would be forced to reduce
capacity and employment or to move production to an area where
tariffs do not affect the cost of producing paint rollers.
Nour, located in Waterloo, Ontario, is a privately owned
corporation employing 81 people. Nour submitted that its most
successful line of products is made from a woven cut pile fabric
imported from the United States. These rollers often are referred
to in the market as “lint-free” roller products.
Nour alleged that there are no domestic suppliers of woven cut
pile fabrics suitable for use in the paint application market. The
company alleged that, although there are domestically knitted cut
pile fabrics (sliver knit) used in other product lines, woven cut
pile fabrics are superior and are sold in Nour’s top of the line
Nour submitted that it began importing the subject fabrics in
the late 1980s after receiving samples from US manufacturers,
samples that met its high-quality standards. According to Nour,
Canadian manufacturers believed that they were importing a US-made
product which would be subject to NAFTA duty rates. However, Nour
indicated that it was recently determined that the fibres used in
making the subject fabrics do not originate in the United States
and, thus, it is required to pay substantial amounts of duty. Nour
argued that, if this situation is allowed to continue, Canadian
manufacturers risk losing significant market share to US
competitors that can export to Canada finished paint roller refills
duty free. Nour further argued that the loss of sales of this
particular product would result in a layoff of 60 percent of the
manufacturing staff, as well as support staff. In addition, Nour
alleged that, because customers prefer to buy from one supplier to
take advantage of rebates and allowances, there is a real risk that
it will lose sales in the knitted fabric lines as well. It
submitted that its roller sales represent 50 percent of total
company sales and that, in the absence of tariff relief, it may
have to relocate its paint roller manufacturing plant.
Simms manufactures brooms and paint applicators at its plant in
Saint John, New Brunswick. It sells its products worldwide and
employs 200 people.
Simms submitted that the subject fabrics are more
shed-resistant, produce a finer finish and splatter less. Simms
stated that tariff relief is being requested to maintain cost
parity with US manufacturers, which are not required to pay duty on
woven cut pile fabrics. Simms maintained that NAFTA certification
was withdrawn when a major supplier in the United States discovered
that the primary inputs used in woven paint roller fabric
originated outside North America and, consequently, no longer
qualified for duty-free entry.
According to Simms, Canadian manufacturers are required to pay
16 percent duty on woven cut pile fabrics, which represent up to 50
percent of the cost of the raw materials of a finished product.
Simms submitted that tariff relief will return it to the
competitive position that it held prior to the loss of duty-free
status for the subject fabrics. It alleged that, if it is required
to continue to pay duty, its products using the subject fabrics
will be 8 percent more expensive relative to US products. Simms
also alleged that woven fabric refills comprise a significant
portion of overall sales and that many customers will not deal with
a supplier that is not competitive on an entire line.
BMC Coaters Inc. was the only importer/user that communicated in
writing with the Tribunal regarding these requests. Although it did
not complete the Tribunal’s questionnaire, it indicated that it did
not have any interest in these requests.
Huntingdon Mills (Canada) Ltd. did not complete the Tribunal’s
questionnaire. However, it indicated that it did not oppose the
requests for tariff relief.
Glenoit Corporation of Canada did not complete the Tribunal’s
questionnaire, but stated that it had no interest in these
The Department of Foreign Affairs and International Trade
informed the Tribunal that Canada does not maintain quota
restraints on the subject fabrics classified under classification
No. 5806.10.90.90 and, accordingly, that these fabrics are not
subject to any quantitative import restrictions.
Revenue Canada has indicated that there would be no additional
costs, over and above those already incurred by it, to administer
the tariff relief requested for the subject fabrics.
The Minister’s terms of reference direct the Tribunal to assess
the economic impact on domestic textile and downstream producers of
reducing or removing a tariff and, in so doing, to take into
account all relevant factors, including the substitutability of an
imported fabric for a domestic fabric and the ability of domestic
producers to serve the Canadian downstream industries.
Consequently, the Tribunal’s decision to recommend tariff relief is
based on the extent to which it considers that such tariff relief
would provide net economic gains for Canada.
The requesters, Pintar, Nour and Simms, all claimed that there
is no domestic production of fabrics identical to or substitutable
for the subject fabrics. This claim was not contested by any
domestic fabric producers. Therefore, other than the corresponding
duty revenues forgone by the government, the Tribunal does not
believe that there would be any direct costs associated with the
removal of the customs duty on the subject fabrics.
On the basis of the information available to the Tribunal, the
granting of tariff relief would result in yearly benefits to the
requesters in excess of $400,000. In addition, tariff relief would
allow the requesters to remain competitive with US manufacturers
and maintain current production and employment levels in
In summary, the Tribunal finds that the granting of tariff
relief would provide net economic gains to Canada.
The Tribunal hereby recommends to the Minister that tariff
relief be granted, for an indeterminate period of time, on
importations from all countries of narrow woven cut pile fabrics,
predominantly of man-made fibres, of subheading No. 5806.10, for
use in the manufacture of paint rollers (including paint roller
1. On March 20 and
July 24, 1996, and on November 26, 1997, the Minister of Finance
revised the terms of reference.
2. R.S.C. 1985, c. 47
3. Vol. 133, No. 6 at
4. These fabrics
originally were classified under tariff item No. 5801.35.90.
However, on January 8, 1999, Revenue Canada advised the Tribunal
that these fabrics should be classified under tariff item No.
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Initial publication: April 13, 1999