The Honourable Paul M. Martin, P.C., M.P.
Minister of Finance
House of Commons
Ottawa, Ontario
K1A 0A6
I have the honour of transmitting to you, for tabling in the
House of Commons, pursuant to section 41 of the Canadian
International Trade Tribunal Act, the Annual Report of the
Canadian International Trade Tribunal for the fiscal year ending
March 31, 1999.
| |
CHAPTER I
|
| |
TRIBUNAL HIGHLIGHTS IN
FISCAL YEAR 1998-99
|
Members
|
On April 6, 1998, Mr. Richard Lafontaine was appointed to the
position of Member of the Canadian International Trade Tribunal
(the Tribunal). Prior to his appointment, Mr. Lafontaine was Chair
of the Standards Council of Canada. Mr. Lafontaine has also
held senior positions with Warnock Hersey Professional Services
Ltd., Lavalin and its successor, SNC - Lavalin, and Inchcape
Testing Services.
During the fiscal year, the terms of Messrs. Robert C. Coates,
Q.C., Arthur B. Trudeau and Charles A. Gracey as Members
of the Tribunal expired. The Tribunal takes this opportunity to
thank these Members for their valuable contribution to the
Tribunal's work.
|
| |
|
Bill C-35 Amending the
Special Import Measures Act and the Canadian
International Trade Tribunal Act
|
On March 25, 1999, Bill C-35 that amends the Special Import
Measures Act (SIMA) and the Canadian International Trade
Tribunal Act (the CITT Act) received Royal Assent. The date of
implementation will be established by Order in Council.
The main changes in SIMA are a re-allocation of responsibilities
between the Tribunal and the Department of National Revenue
(Revenue Canada) with respect to preliminary injury determinations
and expiry reviews. The amendments also clarify the public interest
provisions of section 45 of SIMA. In addition, a change in the CITT
Act will give experts access to confidential information in
Tribunal inquiries, subject to certain conditions. Chapter II
provides more information on the legislative changes affecting the
Tribunal.
|
| |
|
Dumping and Subsidizing
Inquiries and Reviews
|
In fiscal year 1998-99, the Tribunal issued two findings
following injury inquiries under section 42 of SIMA. At the end of
the fiscal year, three inquiries were in progress. During the
fiscal year, the Tribunal also issued five orders following reviews
under section 76. At the end of the year, there were
five reviews in progress.
|
| |
|
Public Interest
Investigation
|
On April 29, 1998, the Tribunal, under subsection 43(1) of SIMA
found that the dumping in Canada of certain prepared baby foods
originating in or exported from the United States (Inquiry No.
NQ-97-002) had caused material injury to the domestic industry.
Having received representations on the question of public interest,
the Tribunal decided to initiate a public interest investigation
under section 45 of SIMA. On November 30, 1998, the Tribunal
issued its report to the Minister of Finance recommending a
reduction in the anti-dumping duties on certain prepared baby foods
from the United States.
|
| |
|
Trade and Tariff
References
|
|
|
Dairy Blends
|
On June 30, 1998, the Tribunal submitted to the Government its
report on the importation of dairy product blends outside the
coverage of Canada's tariff-rate quotas. The inquiry was referred
to the Tribunal on December 17, 1997, by the Governor in Council on
the recommendation of the Minister of Finance, the Minister of
Agriculture and Agri-Food and the Minister for International
Trade.
|
| |
|
|
Textiles
|
During fiscal year 1998-99, the Tribunal issued 12 reports
to the Minister of Finance concerning requests for tariff relief.
In addition, the Tribunal's fourth annual status report on the
investigation process was submitted to the Minister of Finance on
February 11, 1999.
|
| |
|
Appeals of Revenue
Canada Decisions
|
The Tribunal issued decisions on 90 appeals from Revenue Canada
decisions made under the Customs Act, the Excise Tax
Act and SIMA.
Pursuant to a reference from the Deputy Minister of National
Revenue (the Deputy Minister) (Reference No. AP-98-055) under
section 70 of the Customs Act, the Tribunal rendered its
decision with respect to the tariff classification of butteroil
blends, comprising less than 50 percent butteroil and more than 50
percent sugar (sucrose), and the tariff classification of blends of
butteroil and glucose. With respect to the tariff classification of
blends of butteroil and processing solids, the Tribunal was of the
view that it was not possible to reach a definitive view on the
classification, in light of the indeterminate and variable nature
of ingredients which may go to make up the processing solids
portion of such blends.
|
| |
|
Procurement
Review
|
The Tribunal received 55 new complaints during the fiscal year.
The Tribunal issued 21 written determinations of its findings and
recommendations. Ten of these determinations related to cases that
were in progress at the end of fiscal year 1997-98. In 9 of
the 21 written determinations, the complaints were determined to be
valid or valid in part.
|
| |
|
Inquiry Process and
SIMA
|
For a number of years, the Tribunal has reported in the Annual
Report on its efforts to improve the inquiry process under SIMA.
This year's annual report includes a chapter that describes, in
more detail, initiatives that have been implemented to improve the
Tribunal's inquiry process.
|
| |
|
Access to Tribunal
Notices, Decisions and Publications
|
Tribunal notices and decisions are published in the Canada
Gazette. Those relating to procurement complaints are also
published in Government Business Opportunities.
The Tribunal's Web site (www.citt-tcce.gc.ca) provides an
exhaustive repository of all Tribunal decisions, as well as other
information relating to the Tribunal's current activities.
|
| |
|
Rules of
Procedure
|
The Tribunal is pursuing its extensive review of the Canadian
International Trade Tribunal Rules (Tribunal's Rules of
Procedure) in order to eliminate unnecessary rules, increase
efficiency and transparency and preserve fairness. The proposed
amendments will facilitate procedures arising from technological
changes. The changes to SIMA and the CITT Act also require the
Tribunal to amend its rules in order to respond to these
changes.
|
| |
|
Meeting Statutory
Deadlines (Timeliness)
|
All of the Tribunal inquiries were completed on time, and
decisions were issued within the statutory deadlines. For appeals
of Revenue Canada decisions that are not subject to statutory
deadlines, the Tribunal usually issues, within 120 days of the
hearing, a decision on the matter in dispute, including the reasons
for its decision.
|
| |
|
New Information
Brochures
|
The Tribunal published two new information sheets entitled
"Information on Import Safeguard Inquiries and Measures" and
"Information on Economic, Trade and Tariff Inquiries." Both can be
accessed on the Tribunal's Web site.
|
1. As a result of a different method of reporting expiries, the
first column refers to expiries for which decisions on whether or
not to review had not been made prior to the end of the previous
fiscal year. The fourth column refers to decisions to review.
2. The Tribunal actually issued 12 reports to the Minister of
Finance which related to 17 requests for tariff relief.
3. The Tribunal actually issued 21 written determinations which
related to 24 procurement complaints.
| |
CHAPTER II
|
| |
MANDATE, ORGANIZATION
AND ACTIVITIES OF THE TRIBUNAL
|
Introduction
|
The Tribunal is an administrative tribunal operating within
Canada's trade remedies system. It is an independent quasi-judicial
body that carries out its statutory responsibilities in an
autonomous and impartial manner and reports to Parliament through
the Minister of Finance.
The main legislation governing the work of the Tribunal is the
CITT Act, the Canadian International Trade Tribunal
Regulations (the CITT Regulations), the Canadian
International Trade Tribunal Procurement Inquiry Regulations,
the Tribunal's Rules of Procedure, SIMA, the Customs Act and
the Excise Tax Act.
|
| |
|
Mandate
|
The Tribunal's primary mandate is to:
· conduct inquiries into whether dumped or subsidized imports
have caused, or are threatening to cause, material injury to a
domestic industry;
· hear appeals of Revenue Canada decisions made under the
Customs Act, the Excise Tax Act and SIMA;
· conduct inquiries into complaints by potential suppliers
concerning federal government procurement that is covered by the
North American Free Trade Agreement (NAFTA), the
Agreement on Internal Trade (the AIT) and the World Trade
Organization (WTO) Agreement on Government Procurement (the
AGP);
· conduct investigations into requests from Canadian producers for
tariff relief on imported textile inputs that they use in their
production operations;
· conduct safeguard inquiries into complaints by domestic producers
that increased imports are causing, or threatening to cause,
serious injury to domestic producers; and
· conduct inquiries and provide advice on such economic, trade and
tariff issues as are referred to the Tribunal by the Governor in
Council or the Minister of Finance.
|
| |
|
Method of
Operations
|
In carrying out most of its responsibilities, the Tribunal
conducts inquiries with hearings that are open to the public. These
are normally held in Ottawa, Ontario, the location of the
Tribunal's offices, although hearings may also be held elsewhere in
Canada in person or through videoconferencing facilities. The
Tribunal has rules and procedures similar to those of a court of
law, but not quite as formal or strict. The CITT Act states that
hearings, conducted generally by a panel of three members, should
be carried out as "informally and expeditiously" as the
circumstances and considerations of fairness permit. The Tribunal
has the power to subpoena witnesses and require parties to submit
information. The CITT Act contains provisions that strictly
control access to confidential information.
The Tribunal's decisions may be reviewed by or appealed to, as
appropriate, the Federal Court of Canada and, ultimately, the
Supreme Court of Canada, or a binational panel under NAFTA, in the
case of a decision affecting US and/or Mexican interests in SIMA.
Governments that are members of the WTO may challenge some of the
Tribunal's decisions to a dispute settlement panel under the
WTO Understanding on Rules and Procedures Governing the
Settlement of Disputes.
|
| |
|
Membership
|
The Tribunal may be composed of nine full-time members,
including a Chairman and two Vice-Chairs, who are appointed by the
Governor in Council for a term of up to five years that is
renewable one time. A maximum of five additional members may
be temporarily appointed. The Chairman is the Chief Executive
Officer responsible for the assignment of members and for the
management of the Tribunal's work. Members come from a variety of
educational backgrounds, careers and regions of the country.
|
| |
|
Organization
|
Members of the Tribunal, currently 6 in number, are supported by
a permanent staff of 86 people. Its principal officers are the
Secretary, responsible for administration, relations with the
public, dealings with other government departments and other
governments, and the court registrar functions of the Tribunal; the
Executive Director, Research, responsible for the investigative
portion of the inquiry, for the economic and financial analysis of
firms and industries and for other fact finding required for
Tribunal inquiries; and the General Counsel, responsible for the
provision of legal services to the Tribunal.
|
| |
|
Consultations
|
The Tribunal, through the Tribunal/Canadian Bar Association
Bench and Bar Committee, provides a forum to promote discussion on
issues of importance with the bar. The committee also includes
representatives from the trade consulting community. The Tribunal
holds meetings with the bar and representatives of industries and
others that appear or that are likely to appear before the Tribunal
to exchange views on new procedures being considered by the
Tribunal prior to their distribution as guidelines or practice
notices.
|
| |
|
Bill C-35 Amending
SIMA and the CITT Act
|
One of the main thrusts of the SIMA amendments is a
re-allocation of responsibilities between the Tribunal and Revenue
Canada for each to focus on its respective expertise in injury and
in dumping and subsidizing. The Tribunal, instead of the Deputy
Minister, will make the preliminary determination of injury. A new
60-day preliminary inquiry is created for this purpose. Domestic
producers will continue to file their complaints of alleged
injurious dumping with the Deputy Minister. The Tribunal's
preliminary inquiry will commence when the Deputy Minister
initiates a dumping or subsidizing investigation.
The Deputy Minister will make the determination of likelihood of
continuation or resumption of dumping or subsidizing that the
Tribunal now makes in expiry reviews. The Tribunal will continue to
make the determination regarding the likelihood of material injury.
Parties will also continue to make submissions to the Tribunal
supporting or opposing an expiry review, and the Tribunal will
continue to decide if a review is warranted and if a finding or
order should be rescinded or continued, with or without amendment.
The amendments also clarify section 76 of SIMA, establishing
separate "interim" and "expiry" reviews. In the new interim review,
the Tribunal will be able to review certain aspects of a finding or
order, without having to consider whether to rescind or continue
the finding or order for an additional period of five years.
The other significant change to SIMA affecting the Tribunal is a
clarification of the public interest provisions under section 45.
The Tribunal will determine, on the basis of requests by interested
persons, whether there are reasonable grounds for initiating a
public interest inquiry. The legislation also provides for the
Special Import Measures Regulations (the SIMA Regulations)
to set out the factors that the Tribunal may consider in
determining if a reduction or elimination of duties would be in the
public interest. The amendments introduce a change in what
recommendations the Tribunal may make under section 45. Under the
current regime, the Tribunal may only recommend the elimination or
reduction of duties. Under the amended section 45, it also has the
option of recommending a price or prices that are "adequate to
eliminate injury ... to the domestic industry."
There are several other amendments to SIMA, most of which will
affect Revenue Canada. However, a number of amendments will change,
to some degree, the manner in which the Tribunal conducts injury
inquiries and reviews. In addition, amendments to the CITT Act will
give experts "acting under the direction and control of counsel"
access to confidential information in Tribunal proceedings, except
in appeals. These same amendments create penalty provisions for any
violation of confidentiality undertakings that counsel and experts
may make.
The implementation of the legislative changes will be
accompanied by new and revised SIMA Regulations and CITT
Regulations, Tribunal Rules of Procedure and Tribunal guidelines on
the conduct of preliminary injury inquiries, reviews and public
interest inquiries and on access to confidential information by
experts. The proposed processes and timetables for preliminary
injury inquiries and expiry reviews are appended to this
chapter.
|
|
Section
|
Authority
|
|
CITT Act
|
|
| 18 |
Inquiries on Economic, Trade or Commercial Interests of Canada
by Reference from the Governor in Council
|
| 19 |
Inquiries Into Tariff-related Matters by Reference from the
Minister of Finance
|
| 19.01 |
Safeguard Inquiries Concerning Goods Imported from the United
States and Mexico
|
| 19.02 |
Mid-term Reviews of Safeguard Measures and Report
|
| 20 |
Safeguard Inquiries Concerning Goods Imported Into Canada and
Inquiries Into the Provision, by Persons Normally Resident Outside
Canada, of Services in Canada
|
| 23 |
Safeguard Complaints by Domestic Producers
|
|
23(1.01) and (1.02)
|
Safeguard Complaints by Domestic Producers Concerning Goods
Imported from the United States and Mexico
|
|
30.08 and 30.09
|
Extension Inquiries of Safeguard Measures and Report
|
| 30.11 |
Complaints by Potential Suppliers in Respect of Designated
Contracts
|
|
SIMA (Anti-dumping and Countervailing Duties)
|
|
33, 34, 35 and 37
|
Advice to Deputy Minister
|
| 42 |
Inquiries With Respect to Injury Caused by the Dumping and
Subsidizing of Goods
|
| 43 |
Findings of the Tribunal Concerning Injury
|
| 44 |
Recommencement of Inquiry (on Remand from the Federal Court of
Canada or a Binational Panel)
|
| 45 |
Advice on Public Interest Considerations
|
| 61 |
Appeals of Re-determinations of the Deputy Minister Made
Pursuant to Section 59 Concerning Whether Imported Goods are Goods
of the Same Description as Goods to which a Tribunal Finding
Applies, Normal Values and Export Prices or Subsidies
|
| 76 |
Reviews of Findings of Injury Initiated by the Tribunal or at
the Request of the Deputy Minister or Other Interested Persons
|
| 76.1 |
Reviews of Findings of Injury Initiated at the Request of the
Minister of Finance
|
| 89 |
Rulings on Who is the Importer
|
|
Customs Act
|
| 67 |
Appeals of Decisions of the Deputy Minister Concerning Value for
Duty and Origin and Classification of Imported Goods
|
| 68 |
New Hearings on Remand from the Federal Court of Canada
|
| 70 |
References of the Deputy Minister Relating to the Tariff
Classification or Value for Duty of Goods
|
|
Excise Tax Act
|
|
81.19, 81.21, 81.22,
81.23 and 81.33
|
Appeals of Assessments and Determinations of the Minister of
National Revenue
|
| 81.32 |
Requests for Extension of Time for Objection or Appeal
|
|
Softwood Lumber Products Export Charge Act
|
| 18 |
Appeals of Assessments and Determinations of the Minister of
National Revenue
|
|
Energy Administration Act
|
| 13 |
Declarations Concerning the Amount of Oil Export Charge
|
Note: No Tribunal questionnaires or oral hearing, except in
exceptional circumstances.
Note: On day one of its likelihood of dumping/subsidizing
investigation, Revenue Canada will issue questionnaires to
producers, exporters and importers. Replies to these questionnaires
will be included in the file transferred to the Tribunal.
| |
CHAPTER
III
|
| |
DUMPING AND
SUBSIDIZING INQUIRIES AND REVIEWS
|
The
Process
|
Under SIMA, Canadian producers may have access to anti-dumping
and countervailing duties to offset unfair injurious competition
from goods exported to Canada:
(1) at prices lower than sales in the home market or lower than
the cost of production (dumping), or
(2) that have benefited from certain types of government grants
or other assistance (subsidizing).
The determination of dumping and subsidizing is the
responsibility of Revenue Canada. The Tribunal determines whether
such dumping or subsidizing has caused "material injury" or
"retardation" or is threatening to cause material injury to a
domestic industry.
A Canadian producer or an association of Canadian producers
begins the process of seeking relief from alleged injurious dumping
or subsidizing by making a complaint to the Deputy Minister. The
Deputy Minister may then initiate a dumping or subsidizing
investigation leading to a preliminary and then a final
determination of dumping or subsidizing. The Tribunal commences its
inquiry when the Deputy Minister issues a preliminary
determination. Revenue Canada levies provisional duties on imports
from the date of the preliminary determination.
|
| |
|
|
Inquiries
|
When it commences an inquiry, the Tribunal seeks to make all
interested parties aware of the inquiry. It issues a notice of
commencement of inquiry that is published in the Canada
Gazette and forwarded to all known interested parties.
In conducting inquiries, the Tribunal requests information from
interested parties, receives representations and holds public
hearings. Parties participating in these proceedings may conduct
their own cases or be represented by counsel. The Tribunal staff
carries out extensive research for each inquiry. The Tribunal sends
questionnaires to manufacturers, importers, purchasers and, in some
inquiries, exporters. Questionnaire responses are the primary
source of information for staff reports. These reports focus on the
factors that the Tribunal considers in arriving at decisions
regarding material injury or retardation or threat of material
injury to a domestic industry. The reports become part of the case
record and are made available to counsel and parties. Confidential
or business-sensitive information is protected in accordance with
provisions of the CITT Act. Only independent counsel who have filed
declarations and confidentiality undertakings may have access to
such confidential information.
The CITT Regulations prescribe factors that the Tribunal may
consider in its determination of whether the dumping or subsidizing
of goods has caused material injury or retardation or is
threatening to cause material injury to a domestic industry. These
factors include, among others, the volume of dumped or subsidized
goods, the effects of the dumped or subsidized goods on prices and
the impact of the dumped or subsidized goods on production, sales,
market shares, profits, employment and utilization of production
capacity.
The Tribunal holds a public hearing about 90 days after the
commencement of the inquiry following receipt of the Deputy
Minister's final determination of dumping or subsidizing. At the
public hearing, domestic producers attempt to persuade the Tribunal
that the dumping or subsidizing of goods has caused material injury
or retardation or is threatening to cause material injury to a
domestic industry. Importers and, sometimes, exporters and users of
the goods usually challenge the domestic producers' case. After
cross-examination by parties and then examination by the Tribunal,
each side has an opportunity to respond to the other's case and to
summarize its own. In many inquiries, the Tribunal calls witnesses
who are knowledgeable about the industry and market in question.
Parties may also seek exclusions from a Tribunal finding of
material injury or retardation or threat of material injury to a
domestic industry.
The Tribunal must issue its finding within 120 days from the
date of the preliminary determination by the Deputy Minister. The
Tribunal has an additional 15 days to issue a statement of
reasons explaining its finding. A Tribunal finding of material
injury or retardation or threat of material injury to a domestic
industry is the legal authority for the imposition of anti-dumping
or countervailing duties by Revenue Canada.
|
| |
|
|
Advice Given Under
Section 37 of SIMA
|
When the Deputy Minister decides not to initiate a dumping or
subsidizing investigation because there is insufficient evidence of
injury, the Deputy Minister or the complainant may, under section
33 of SIMA, refer the matter to the Tribunal for an opinion as to
whether or not the evidence before the Deputy Minister discloses a
reasonable indication that the dumping or subsidizing has caused
material injury or retardation or is threatening to cause material
injury to a domestic industry. When the Deputy Minister decides to
initiate an investigation, a similar recourse is available to
the Deputy Minister or any person or government under section 34 of
SIMA.
Section 37 of SIMA requires the Tribunal to render its advice
within 30 days. The Tribunal makes its decision, without holding a
public hearing, on the basis of the information before the Deputy
Minister when the decision regarding initiation was reached.
The Tribunal issued two advices during fiscal year 1998-99. They
concerned Certain Filter Tipped Cigarette Tubes (Reference
No. RE-98-001) and Certain Flat Hot-rolled Carbon and Alloy
Steel Sheet Products (Reference No. RE-98-002). In both cases,
the Tribunal concluded that the evidence before the Deputy Minister
disclosed a reasonable indication that the dumping had caused
material injury or was threatening to cause material injury to a
domestic industry. Both cases subsequently proceeded to inquiries
under section 42 of SIMA.
|
| |
|
|
Inquiries Completed
in 1998-99
|
The Tribunal completed two inquiries under section 42 of SIMA in
fiscal year 1998-99. Inquiry No. NQ-97-002 concerned
Certain Prepared Baby Foods, and Inquiry No. NQ-98-001
concerned Certain Stainless Steel Round Bar. In 1997,
the Canadian markets for these products were estimated to be
approximately $60 million and $30 million respectively.
|
| |
|
|
|
Certain Prepared Baby Foods
NQ-97-002
Finding:
Injury
(April 29, 1998)
|
The inquiry involved dumped imports of certain prepared baby
foods by Gerber Products Company (Gerber) of the United States.
H.J. Heinz Company of Canada Ltd. (Heinz) of Leamington, Ontario,
was the sole Canadian producer. The Director of Investigation and
Research, Competition Bureau, was also a party in the inquiry,
submitting that the dumping had not caused or threatened to cause
material injury. The Tribunal found that dumping from the United
States had caused material injury to a domestic industry.
The Tribunal found that Heinz' injury consisted of cost and
expense increases, volume losses, price erosion and suppression,
and reduced profits. The Tribunal determined that most, if not all,
of the increased costs and expenses and volume losses were
unrelated to dumping. In particular, the market had declined
because of factors such as switches to homemade baby food.
The Tribunal found that Heinz' financial statements for certain
prepared baby foods still showed several millions of dollars in
reduced operating profits caused by price erosion. The Tribunal
examined in depth the factors determining pricing in the grocery
and drug retail channels where Heinz and Gerber bid against each
other for market share. Several major retail chains, including
Loblaw Companies Limited and Shoppers Drug Mart Limited (Shoppers),
the largest customers of Heinz and Gerber respectively,
renegotiated their supply contracts during the inquiry period. The
evidence indicated that Gerber bid very aggressively for this
business and was successful in getting Shoppers' business,
including the portion that was previously supplied by Heinz.
The evidence also showed that Gerber's prices were almost always
lower than those of Heinz. The Tribunal found that the price
erosion experienced by Heinz was primarily due to dumping and that
none of the other factors examined, either individually or
collectively, satisfactorily explained the price erosion that
occurred. The Tribunal also found that the dumping prevented Heinz
from recouping some or all of its cost increases through higher
prices. Finally, it was evident that Heinz would have lost market
share to Gerber if it had not lowered prices to meet the
competition from dumping and that any loss of market share would
have had substantial consequences on Heinz' financial
performance.
|
| |
|
|
|
Certain Stainless Steel Round
Bar
NQ-98-001
Finding:
Injury
(September 4, 1998)
|
The inquiry concerned dumped imports of certain stainless steel
round bar from the Federal Republic of Germany, France, India,
Italy, Japan, Spain, Sweden, Taiwan and the United Kingdom. The
sole domestic producer was Atlas Specialty Steels, A Division of
Atlas Steels Inc. (Atlas) of Welland, Ontario. The Tribunal found
that the dumping had caused material injury to a domestic industry,
but excluded certain products from its finding.
Although the Deputy Minister found that exporters in each of the
nine named countries had dumped imports, he also determined that
the volume of dumped imports from each of four of the countries was
less than 3 percent of imports of certain stainless steel round bar
from all countries. However, the Deputy Minister determined that
the volume of dumped imports from the four countries was not
"negligible" because the total volume of dumped imports from the
four countries was greater than 7 percent of imports of certain
stainless steel round bar from all countries. The Tribunal examined
this issue in the inquiry and also concluded that the volume of
dumped imports from the four countries was not negligible.
Accordingly, the Tribunal analyzed the effects of the dumping from
all the named countries on a cumulative basis.
The Tribunal found that the material injury incurred by Atlas
during the inquiry period consisted of lost market share, lower
sales volumes and prices, revenue losses and lower profitability.
With the exception of imports from the Republic of Korea, the
Tribunal determined that imports from non-subject countries had not
been a significant factor in the injury incurred by Atlas. In the
Tribunal's view, the injury was caused primarily by dumping from
the subject countries. Their imports grew substantially in 1996 and
1997, and their market share surged by 54 percent in 1997.
Immediately after the Deputy Minister initiated a dumping
investigation, Atlas recovered a significant part of the market
share that it had previously lost.
The evidence also showed that Atlas's average selling price
dropped significantly in 1997. Atlas had reduced its prices by more
than 10 percent on average to meet competition from the dumped
imports. The data showed that average import prices declined before
domestic prices. There was also extensive evidence that the price
of imports from the subject countries was driving prices down at
particular accounts.
Lower selling prices and, to some extent, the inability to raise
prices, as well as lower sales volumes, had a major impact on
Atlas's financial results between 1995 and 1997. Sales revenues
dropped by 20 percent, while profits plunged by close to 50
percent. Over the period of inquiry, Atlas suffered diminished
revenue and profitability, amounting to several millions of
dollars, when measured against the levels achieved in 1995.
The Tribunal also concluded that there was evidence that certain
stainless steel round bar from the Republic of Korea was being
dumped in the Canadian market and that there was a reasonable
indication that such dumping threatened to cause injury. The
Tribunal advised the Deputy Minister under section 46 of SIMA.
|
| |
|
|
Inquiries in
Progress at the End of 1998-99
|
There were three inquiries in progress at the end of fiscal year
1998-99: Certain Filter Tipped Cigarette Tubes (Inquiry No.
NQ-98-002), Certain Stainless Steel Round Bar (Inquiry No.
NQ-98-003) and Certain Flat Hot-rolled Carbon and Alloy Steel
Sheet Products (Inquiry No. NQ-98-004). The inquiry on
cigarette tubes concerns dumped imports from France. The main
domestic producer is CTC Tube Company of Canada Inc. of Montréal,
Quebec, and the exporter is GIZEH Raucherbedarf GmbH of Germany.
The inquiry on stainless steel bar concerns imports from the
Republic of Korea. The sole domestic producer is Atlas Specialty
Steels, A Division of Atlas Steels Inc. The inquiry on hot-rolled
steel sheet concerns dumped imports from France, Romania, the
Russian Federation and the Slovak Republic. The domestic producers
are Stelco Inc. of Hamilton, Ontario; Dofasco Inc. of Hamilton;
Algoma Steel Inc. of Sault Ste. Marie, Ontario; Ipsco Inc. of
Regina, Saskatchewan; and Ispat Sidbec Inc. of Montréal. The
importers and exporters that are also parties in the inquiry are
Aciers Francosteel Canada Inc., Sollac, Aciers d'Usinor, Thyssen
Canada Limited, VSZ Holding, a.s. (East Slovak Iron and Steel
Works), Novolipetsk Iron & Steel Corporation, Joint Stock
Company "SeverStal" and Magnitogorsk Iron & Steel Works.
Table 1 summarizes the Tribunal's inquiry activities during the
fiscal year.
|
| |
|
|
Public Interest
Consideration Under Section 45 of SIMA
|
Where, after a finding of injury or threat of injury, the
Tribunal is of the opinion that the imposition of anti-dumping or
countervailing duties may not be in the public interest, it reports
this opinion to the Minister of Finance with a statement of the
facts and reasons that led to its conclusions and recommendations.
The Minister of Finance decides whether there should be a reduction
in duties.
During the injury inquiry, interested parties may make a request
to make representations to the Tribunal on the matter of public
interest. Representations may be made after the completion of the
inquiry. The Tribunal will then conduct a public interest
investigation if it considers that there is a public interest
concern worthy of further investigation.
During fiscal year 1998-99, the Tribunal completed a public
interest investigation with respect to its finding of material
injury in Certain Prepared Baby Foods (Inquiry No.
NQ-97-002). The Tribunal issued a report to the Minister of Finance
(Public Interest Investigation No. PB-98-001), in which it
recommended a reduction in the anti-dumping duties on certain
prepared baby foods from the United States. After considering all
the relevant interests and weighing the evidence before it, the
Tribunal concluded that the continued imposition of the
anti-dumping duties in the full amount was not in the public
interest and recommended that the duties be reduced. The Tribunal's
specific import pricing recommendations were contained in a
confidential appendix provided to the Minister of Finance. The
effect of the Tribunal's recommendation, if implemented by the
Minister of Finance, would be a reduction in the duties by about
two thirds.
|
| |
|
|
Importer
Ruling
|
Under section 90 of SIMA, the Deputy Minister may request the
Tribunal to rule on the question as to which of two or more persons
is the importer of goods on which anti-dumping or countervailing
duties are payable. If the Tribunal identifies as the importer a
person other than the one specified by the Deputy Minister, the
Tribunal may reconsider its original finding of material
injury.
In fiscal year 1998-99, the Tribunal conducted one inquiry
pursuant to section 90 of SIMA. It concerned a request by the
Deputy Minister on behalf of D & L Business Canada Ltd.
for a ruling on the question of which of two persons was the
importer in Canada of fresh garlic originating in or exported from
the People's Republic of China. The majority of the Tribunal ruled
that the importer in Canada of the said goods was D & L
Business Canada Ltd.
|
| |
|
|
Requests for
Review
|
The Tribunal may review its findings of injury or orders at any
time, on its own initiative or at the request of the Deputy
Minister or any other person or government (subsection 76(2) of
SIMA). However, the Tribunal will initiate a review only if it
determines that one is warranted, usually on the basis of changed
circumstances. In such a review, the Tribunal determines if the
changed circumstances are such that the finding or order remains
necessary. There were no requests for review in fiscal year
1998-99.
|
| |
|
|
Expiries and
Reviews
|
Subsection 76(5) of SIMA provides that a finding or order
expires after five years, unless a review has been initiated.
It is Tribunal policy to notify parties nine months prior to the
expiry date of a finding or order. If a review is requested, the
Tribunal will initiate one if it determines that it is
warranted.
During fiscal year 1998-99, the Tribunal issued six notices of
expiry. The Tribunal decided that reviews were warranted in each
case and initiated reviews. In the case of a notice of expiry
issued in fiscal year 1997-98, Tillage Tools (Expiry No.
LE-97-007), the Tribunal decided that a review was not warranted.
The finding expired on November 22, 1998.
The purpose of a review is to determine if anti-dumping or
countervailing duties remain necessary. In the case of reviews upon
expiry, the Tribunal assesses whether dumping or subsidizing is
likely to continue or resume and, if so, whether the dumping or
subsidizing is likely to cause material injury to a domestic
industry. The Tribunal conducts reviews according to procedures
that are similar to those in an inquiry.
Upon completion of a review, the Tribunal issues an order with
reasons, pursuant to subsection 76(4) of SIMA. The Tribunal may
rescind or continue a finding or order with or without amendment.
If the Tribunal continues a finding or order, it remains in force
for a further five years unless a review has been initiated and the
finding or order is rescinded. If the finding or order is
rescinded, imports are no longer subject to anti-dumping or
countervailing duties.
|
| |
|
|
Reviews Completed
in 1998-99
|
In fiscal year 1998-99, the Tribunal completed five reviews.
The Tribunal continued its finding in Preformed Fibreglass
Pipe Insulation (Review No. RR-98-001) respecting dumped
imports from the United States. Manson Insulation Inc. of Brossard,
Quebec, the sole domestic producer, and three exporters from the
United States participated in the review.
The Tribunal rescinded its finding in Certain Hot-rolled
Carbon Steel Plate and High-strength Low-alloy Plate (Review
No. RR-97-006) respecting dumped imports from Belgium, the
Federative Republic of Brazil, the Czech Republic, Denmark, the
Federal Republic of Germany, Romania, the United Kingdom and the
former Yugoslav Republic of Macedonia. Algoma Steel Inc., Stelco
Inc. and IPSCO Inc., domestic producers accounting for most of
Canadian production, and several importers, as well as exporters
from the Federative Republic of Brazil, the Czech Republic, the
Federal Republic of Germany and Romania, participated in the
review.
The Tribunal rescinded its findings in Certain Cold-rolled
Steel Sheet (Review No. RR-97-007) respecting dumped imports
from the Federal Republic of Germany, France, Italy, the United
Kingdom and the United States. Stelco Inc., Dofasco Inc., Algoma
Steel Inc. and Ispat Sidbec Inc., the domestic producers, and
several importers, as well as exporters from the United States,
France and the Federal Republic of Germany, participated in the
review.
The Tribunal rescinded its finding in Certain Copper Pipe
Fittings (Review No. RR-97-008) respecting dumped imports by
certain exporters in the United States. Cello Products Inc. of
Cambridge, Ontario, and Bow Metallics Inc. of Montréal, domestic
producers seeking a continuation of the finding, and Streamline
Copper & Brass Ltd. of Strathroy, Ontario, a domestic producer
seeking the rescission of the finding, as well as two of the US
exporters, participated in the review.
The Tribunal rescinded its order in Paint Brushes and
Heads (Review No. RR-98-002) respecting dumped imports
from the People's Republic of China. T.S. Simms & Co. Limited
of Saint John, New Brunswick, Nour Trading House Inc. of Waterloo,
Ontario, and Pintar Manufacturing, Division of Ladcal Investments
Limited of Toronto, Ontario, all supported the continuation of the
order.
|
| |
|
|
Reviews in Progress
at the End of 1998-99
|
Five reviews were in progress at the end of the fiscal year.
They were the findings in: (1) Synthetic Baler Twine (Review
No. RR-98-003) respecting dumped imports from the United States;
(2) Certain Hot-rolled Carbon Steel Plate and High-strength
Low-alloy Plate (Review No. RR-98-004) respecting dumped
imports from Italy, the Republic of Korea, Spain and the Ukraine;
(3) 12-gauge Shotshells (Review No. RR-98-005)
respecting dumped imports from the Czech Republic and the Republic
of Hungary; (4) Black Granite Memorials and Black Granite
Slabs (Review No. RR-98-006) respecting dumped and subsidized
imports from India; and (5) Certain Corrosion-resistant Steel
Sheet Products (Review No. RR-98-007) respecting dumped imports
from Australia, the Federative Republic of Brazil, France, the
Federal Republic of Germany, Japan, the Republic of Korea, New
Zealand, Spain, Sweden, the United Kingdom and the United
States.
Table 2 summarizes the Tribunal's review activities during the
fiscal year. Table 3 lists Tribunal findings and orders in force as
of March 31, 1999.
|
| |
|
|
Judicial or Panel
Review of SIMA Decisions
|
Any person affected by Tribunal findings or orders can request
judicial review by the Federal Court of Canada on grounds of
alleged denial of natural justice and error of fact or law. In
cases involving goods from the United States and Mexico, requests
may be made for judicial review by the Federal Court of Canada or
for panel review by a binational panel. Table 4 lists the
Tribunal's decisions under section 43, 44 or 76 of SIMA that were
before the Federal Court of Canada for judicial review or a
binational panel for panel review in fiscal year 1998-99.
During the fiscal year, a binational panel affirmed the
Tribunal's finding of injury (United States) in the case of
Concrete Panels (Inquiry No. NQ-96-004).
At the end of the fiscal year, the Federal Court of Canada had
not yet heard applications to review the Tribunal's finding of
injury in Certain Stainless Steel Round Bar (Inquiry No.
NQ-98-001) and its orders in Certain Hot-rolled Carbon Steel
Plate (Review No. RR-97-006) and in Certain Cold-rolled
Steel Sheet (Review No. RR-97-007). Also at the end of the
fiscal year, binational panels had not yet heard the applications
to review the Tribunal's finding of injury (United States) in
Certain Prepared Baby Foods (Inquiry No. NQ-97-002) and its
orders (United States) in Certain Cold-rolled Steel Sheet
(Review No. RR-97-007) and in Certain Copper Pipe Fittings
(Review No. RR-97-008). Finally, a binational panel had not issued
its decision in the application to review the Tribunal's finding of
threat of injury (Mexico) in Certain Hot-rolled Carbon Steel
Plate (Inquiry No. NQ-97-001).
|
| |
|
|
WTO Dispute
Resolution
|
Governments that are members of the WTO may challenge Tribunal
injury findings or orders in dumping and countervailing cases to
the WTO dispute settlement bodies. This is initiated by
inter-governmental consultations. There are no Tribunal findings or
orders before the dispute settlement bodies of the WTO.
|
|
Review No. or Expiry No.
|
Product
|
Country
|
Date of Order
|
Order
|
|
RR-97-006
|
Certain Hot-rolled Carbon Steel Plate and High-strength
Low-alloy Plate
|
Belgium, Federative Republic of Brazil, Czech Republic, Denmark,
Federal Republic of Germany, Romania, United Kingdom and Former
Yugoslav Republic of Macedonia
|
May 5, 1998
|
Finding rescinded
|
|
RR-97-007
|
Certain Cold-rolled Steel Sheet
|
Federal Republic of Germany, France, Italy, United Kingdom and
United States
|
July 28, 1998
|
Findings rescinded
|
|
RR-97-008
|
Certain Copper Pipe Fittings
|
United States
|
October 16, 1998
|
Finding rescinded
|
|
RR-98-001
|
Preformed Fibreglass Pipe Insulation
|
United States
|
November 18, 1998
|
Finding continued
|
|
RR-98-002
|
Paint Brushes and Heads
|
People's Republic of China
|
January 18, 1999
|
Order rescinded
|
|
LE-97-007
|
Tillage Tools
|
Federative Republic of Brazil
|
June 22, 1998
|
Review not warranted
|
|
RR-98-003
|
Synthetic Baler Twine
|
United States
|
In progress
|
|
|
RR-98-004
|
Certain Hot-rolled Carbon Steel Plate and High-strength
Low-alloy Plate
|
Italy, Republic of Korea, Spain and Ukraine
|
In progress
|
|
|
RR-98-005
|
12-gauge Shotshells
|
Czech Republic and Republic of Hungary
|
In progress
|
|
|
RR-98-006
|
Black Granite Memorials and Black Granite Slabs
|
India
|
In progress
|
|
|
RR-98-007
|
Certain Corrosion-resistant Steel Sheet Products
|
Australia, Federative Republic of Brazil, France, Federal
Republic of Germany, Japan, Republic of Korea, New Zealand, Spain,
Sweden, United Kingdom and United States
|
In progress
|
|
|
Review No. or
Inquiry No.
|
Date of Decision
|
Product
|
Country
|
Earlier Decision No.
and Date
|
|
NQ-93-003
|
April 22, 1994
|
Synthetic Baler Twine
|
United States
|
|
|
NQ-93-004
|
May 17, 1994
|
Hot-rolled Carbon Steel Plate and High-strength Low-alloy
Plate
|
Italy, Republic of Korea, Spain and Ukraine
|
|
|
NQ-93-005
|
June 22, 1994
|
12-gauge Shotshells
|
Czech Republic and Republic of Hungary
|
|
|
NQ-93-006
|
July 20, 1994
|
Black Granite Memorials and Black Granite Slabs
|
India
|
|
|
NQ-93-007
|
July 29, 1994
|
Corrosion-resistant Steel Sheet Products
|
Australia, Federative Republic of Brazil, France, Federal
Republic of Germany, Japan, Republic of Korea, New Zealand, Spain,
Sweden, United Kingdom and United States
|
|
|
NQ-94-001
|
February 9, 1995
|
Delicious and Red Delicious Apples
|
United States
|
|
|
RR-94-002
|
March 21, 1995
|
Canned Ham and Canned Pork-based Luncheon Meat
|
Denmark, Netherlands and European Union
|
GIC-1-84
(August 7, 1984)
RR-89-003
(March 16, 1990)
|
|
RR-94-003
|
May 2, 1995
|
Women's Footwear
|
People's Republic of China
|
NQ-89-003
(May 3, 1990)
|
|
RR-94-004
|
June 5, 1995
|
Carbon Steel Welded Pipe
|
Republic of Korea
|
ADT-6-83
(June 28, 1983)
RR-89-008
(June 5, 1990)
|
|
RR-94-005
|
July 5, 1995
|
Refill Paper
|
Federative Republic of Brazil
|
NQ-89-004
(July 6, 1990)
|
|
RR-94-006
|
August 25, 1995
|
Photo Albums with Self-adhesive Leaves and Self-adhesive
Leaves
|
Republic of Korea, People's Republic of China, Singapore,
Malaysia, Taiwan, Indonesia, Thailand, Philippines and Hong Kong,
China
|
ADT-4-74
(January 24, 1975)
R-3-84
(August 24, 1984)
CIT-18-84
(April 26, 1985)
CIT-10-85
(February 14, 1986)
CIT-5-87
(November 3, 1987)
RR-89-012
(September 4, 1990)
NQ-90-003
(January 2, 1991)
|
|
RR-94-007
|
September 14, 1995
|
Whole Potatoes
|
United States
|
ADT-4-84
(June 4, 1984)
CIT-16-85
(April 18, 1986)
RR-89-010
(September 14, 1990)
|
|
NQ-95-001
|
October 20, 1995
|
Caps, Lids and Jars
|
United States
|
|
|
NQ-95-002
|
November 6, 1995
|
Refined Sugar
|
United States, Denmark, Federal Republic of Germany,
Netherlands, United Kingdom and European Union
|
|
|
RR-95-001
|
July 5, 1996
|
Oil and Gas Well Casing
|
Republic of Korea and United States
|
CIT-15-85
(April 17, 1986)
R-7-86
(November 6, 1986)
RR-90-005
(June 10, 1991)
|
|
RR-95-002
|
July 25, 1996
|
Carbon Steel Welded Pipe
|
Argentina, India, Romania, Taiwan, Thailand, Venezuela and
Federative Republic of Brazil
|
NQ-90-005
(July 26, 1991)
NQ-91-003
(January 23, 1992)
|
|
RR-96-001
|
September 12, 1996
|
Stainless Steel Welded Pipe
|
Taiwan
|
NQ-91-001
(September 5, 1991)
|
|
NQ-96-002
|
March 21, 1997
|
Fresh Garlic
|
People's Republic of China
|
|
|
NQ-96-003
|
April 11, 1997
|
Polyiso Insulation Board
|
United States
|
|
|
RR-96-004
|
April 21, 1997
|
Machine Tufted Carpeting
|
United States
|
NQ-91-006
(April 21, 1992)
|
|
NQ-96-004
|
June 27, 1997
|
Concrete Panels
|
United States
|
|
|
RR-97-001
|
October 20, 1997
|
Waterproof Rubber Footwear
|
People's Republic of China
|
ADT-2-82
(April 23, 1982)
R-7-87
(October 22, 1987)
RR-92-001
(October 21, 1992)
|
|
NQ-97-001
|
October 27, 1997
|
Certain Hot-rolled Carbon Steel Plate
|
Mexico, People's Republic of China, Republic of South Africa and
Russian Federation
|
|
|
RR-97-002
|
November 28, 1997
|
Fresh Iceberg (Head) Lettuce
|
United States
|
NQ-92-001
(November 30, 1992)
|
|
RR-97-003
|
December 10, 1997
|
Bicycles and Frames
|
Taiwan and People's Republic of China
|
NQ-92-002
(December 11, 1992)
|
|
NQ-97-002
|
April 29, 1998
|
Certain Prepared Baby Foods
|
United States
|
|
|
RR-98-001
|
November 18, 1998
|
Preformed Fibreglass Pipe Insulation
|
United States
|
NQ-93-002
(November 19, 1993)
|
|
NQ-98-001
|
September 4, 1998
|
Certain Stainless Steel Round Bar
|
Federal Republic of Germany, France, India, Italy, Japan, Spain,
Sweden, Taiwan and United Kingdom
|
|
1. This table shows the findings and orders in force. To
determine the precise product coverage, refer to the Review No. or
Inquiry No. as identified in the first column of the table.
| |
CHAPTER IV
|
| |
APPEALS
|
Introduction
|
The Tribunal, among its other duties, hears appeals from
decisions of the Deputy Minister under the Customs Act and
SIMA or of the Minister of National Revenue (the Minister) under
the Excise Tax Act. The Tribunal hears appeals relating to
the tariff classification and value for duty of goods imported into
Canada and relating to the origin of goods imported from the United
States and Mexico under the Customs Act. The Tribunal also
hears and decides appeals concerning the application, to imported
goods, of a Tribunal finding or order concerning dumping or
subsidizing and the normal value or export price or subsidy of
imported goods under SIMA. Under the Excise Tax Act, a
person may appeal to the Tribunal the decision of the Minister
about an assessment or determination of federal sales tax or excise
tax.
Although the Tribunal strives to be informal and accessible,
there are certain procedures and time constraints that are imposed
by law and by the Tribunal itself in order to provide quality
service to the public in an efficient manner. For example, the
appeal process is set in motion with a notice (or letter) of
appeal, in writing, sent to the Secretary of the Tribunal within
the time limit specified in the act under which the appeal is
made.
|
| |
|
Rules of
Procedure
|
Under the Tribunal's Rules of Procedure, the person launching
the appeal (the appellant) normally has 60 days to submit to
the Tribunal a document called a "brief." Generally, the brief
states under which act the appeal is launched, gives an indication
of the points at issue between the appellant and the Minister or
Deputy Minister (in legal terminology, the Minister or the Deputy
Minister is called the respondent) and states why the appellant
believes that the respondent's decision is incorrect. A copy of the
brief must also be given to the respondent.
The respondent must also comply with time and procedural
constraints. Normally, within 60 days after having received the
appellant's brief, the respondent must provide the Tribunal and the
appellant with a brief setting forth Revenue Canada's position.
Once these formalities are out of the way, the Secretary of the
Tribunal contacts both parties in order to schedule a hearing.
Hearings are generally conducted in public, before Tribunal
members. Taking into account the complexity and precedential nature
of the matter at issue, certain appeals, especially those under the
Customs Act, can be heard before one member of the
Tribunal.
|
| |
|
Hearings
|
An individual may present a case before the Tribunal in person,
or be represented by legal counsel or by any other representative.
The respondent is generally represented by counsel from the
Department of Justice.
Hearing procedures are designed to ensure that the appellant and
the respondent are given a full opportunity to make their case.
They also enable the Tribunal to have the best information possible
to make a decision. As in a court, the appellant and the respondent
can call witnesses, and these witnesses are questioned under oath
or affirmation by the opposing parties, as well as by Tribunal
members, in order to test the validity of their evidence. When all
the evidence is gathered, parties may present arguments in support
of their respective position.
The option of a file hearing is also offered to the appellant.
Where a hearing is not required, the Tribunal may dispose of the
matter on the basis of the written documentation before it. Rule 25
of the Tribunal's Rules of Procedure allows the Tribunal to proceed
in this manner. Before deciding to proceed in this manner, the
Tribunal requires that the appellant and respondent consent to
disposing of the appeal by way of a file hearing and file with the
Tribunal an agreed statement of facts in addition to their
submissions. The Tribunal then publishes a notice of the file
hearing in the Canada Gazette so that other interested
persons can make their own views known.
The Tribunal also hears appeals by way of electronic
transmission, either by teleconference or videoconference.
Teleconference hearings are used mainly to dispose of
preliminary motions and jurisdictional issues where witnesses are
not required to attend or give evidence.
Videoconference hearings are used as an alternative to holding
hearings in remote locations across Canada or requiring parties
from outside Ontario or Quebec to present themselves at the
Tribunal's premises in Ottawa. This option of a videoconference
hearing is generally used where there are no issues of credibility.
The procedures are very similar to hearings held before the
Tribunal at its premises. However, the Tribunal requires that
written materials, exhibits, aids to arguments, etc., be filed with
the Tribunal prior to the videoconference hearing.
Usually, within 120 days of the hearing, the Tribunal issues a
decision on the matters in dispute, including the reasons for its
decision.
If the appellant, the respondent or an intervener disagrees with
the Tribunal's decision, the decision can be appealed to the
Federal Court of Canada.
|
| |
|
Appeals
Considered in the Last Fiscal Year
|
During fiscal year 1998-99, the Tribunal heard 48 appeals of
which 44 related to the Customs Act, 3 to the Excise Tax
Act and 1 to SIMA. Decisions were issued in 90 cases, of which
30 were heard during fiscal year 1998-99.
|
| |
|
| |
Decisions on Appeals*
|
| |
Act
|
Allowed
|
Allowed
in Part
|
Dismissed
|
Dismissed
in Part
|
Total
|
| |
Customs Act
|
26 |
27 |
23 |
1 |
77 |
| |
Excise Tax Act
|
2 |
-
|
9 |
-
|
11 |
| |
SIMA
|
-
|
-
|
1 |
-
|
1 |
| |
* Reference No. AP-98-055 is excluded.
|
| |
|
| |
Table 1 of this chapter lists the appeal decisions rendered in
fiscal year 1998-99.
|
| |
|
Summary of
Selected Decisions
|
The following are summaries of a representative sample of
significant decisions in appeals under section 67 of the Customs
Act. These summaries have been prepared for general information
purposes only and have no legal status.
|
| |
|
|
Honda Canada Inc. v. The Deputy
Minister of National Revenue
AP-97-111
Decision:
Appeal dismissed
(January 11, 1999)
|
This was an appeal pursuant to subsection 67(1) of the
Customs Act involving the tariff classification of Honda
H2013SC lawn tractors manufactured by Honda Inc. in the United
States and imported by the appellant, a wholly owned subsidiary of
Honda Inc.
The goods in issue originally entered as tractors under tariff
item No. 8701.90.19 of Schedule I to the Customs
Tariff. The Tribunal considered whether the goods in issue were
properly classified under tariff item No. 8433.11.00 as
powered mowers for lawns, parks or sports grounds, with the cutting
device rotating in a horizontal plane, as determined by the
respondent, or should have been classified under tariff item No.
8701.90.19 as other tractors, as claimed by the appellant. There
was one intervener in this case, MTD Products Ltd. (MTD), which
appeared in support of the respondent.
The appeal was dismissed. The Tribunal was of the view that the
evidence showed that the goods in issue are constructed essentially
for use with mower decks for mowing lawns. The Tribunal was also of
the view that the goods in issue came within the wording of heading
No. 84.33 and the relevant Section and Chapter Notes.
In arriving at its conclusion, the Tribunal found it useful to
compare the goods in issue with those in Steen Hansen
Motorcycles Ltd. v. The Deputy Minister of National
Revenue in which the Tribunal concluded that various models of
lawn tractors manufactured by The Murray Ohio Manufacturing Co. are
not constructed essentially for pushing many different types of
implements, but rather are constructed essentially for use with
mower decks for cutting grass and come within the wording of
heading No. 84.33 and the relevant Section and Chapter Notes. This
comparison showed that the goods share very similar characteristics
in terms of, for instance, weight, horsepower and tire size. While
these characteristics may allow the goods in issue to operate, to
some degree, with a snowblower attachment, this does not establish
that they were constructed essentially for such a purpose.
Furthermore, the Tribunal was of the view that characteristics of
the goods in issue referenced above are quite different from those
of the commercial machines that it considered in Marubeni Canada
Ltd. v. The Deputy Minister of National Revenue and
Ford New Holland Canada Ltd. v. The Deputy Minister of
National Revenue in terms of, for instance, size, weight,
horsepower and the market segment to which they are sold. Moreover,
the manner in which appliances are put on and taken off the goods
in issue contrasts greatly with the easy front-end hitch mechanism
used in the commercial tractors considered by the Tribunal in
Marubeni and Ford New Holland. In addition, the
evidence submitted by other producers about their sales of
snowblowers used with similar machines did not show significant use
of those machines for purposes other than mowing lawns. In any
event, the evidence about use did not approach the amount of use of
different appliances reflected in Marubeni or Ford New
Holland.
|
| |
|
|
Rigel Shipping Canada Inc. v. The
Deputy Minister of National Revenue
AP-97-045
Decision:
Appeal allowed in part
(September 15, 1998)
|
This was an appeal under section 67 of the Customs Act in
which the Tribunal considered the appraisal of the value for duty
on three vessels, the Emsstern and the Elbestern
which, when ordered in 1991, cost US$18,238,460 each, and the
Jadestern which, when ordered later in 1991, cost
US$19,140,460.
The vessels were built by MTW Schiffswerft GmbH (MTW) of Wismar,
Germany, and delivered in 1992 (the Emsstern and the
Elbestern) and early 1993 (the Jadestern) to Ultramar
Ltd. (Ultramar), a Canadian refiner and marketer of petroleum
products, primarily in Eastern Canada. In order to move its
products from the refinery to the market, it requires access to
tanker ships that have the capacity and ability to carry petroleum
products in the St. Lawrence River and along Canada's east coast.
In 1992, Ultramar contacted a ship broker and gave him instructions
to search the world market to find tankers which would be suitable
for its needs. He identified three chemical and petroleum tankers
under construction by MTW (the Rigel vessels).
The ship broker met with representatives from Revenue Canada to
decide upon the method of calculating the value for duty. Following
a series of communications, it was agreed that the usual method for
calculating the value for duty, i.e. the transaction value method
in section 48 of the Customs Act, would not be appropriate
because, as the vessels were coming into Canada pursuant to a
charter party agreement, there was no sale for export to Canada.
Consequently, Revenue Canada decided, and the appellant agreed, to
use the residual method found in section 53 of the Customs
Act. In order to determine this value, Revenue Canada directed
Ultramar to average the values indicated by two appraisals of the
Rigel vessels. The two appraisals were averaged, and duty was paid
on the amount of US$11,280,000 for the Emsstern and the
Elbestern, which were imported into Canada in November 1993,
and on the amount of US$12,150,000 for the Jadestern, which
was imported into Canada in March 1994.
Following receipt of a complaint by the Canadian Shipowners
Association, Revenue Canada re-appraised the value of the Rigel
vessels. On April 14, 1997, the respondent issued re-appraised
values of the vessels pursuant to subsection 63(3) of the
Customs Act in the following amounts: US$15,370,000 each for
the Emsstern and the Elbestern; and US$15,760,000 for
the Jadestern.
The appeal was allowed in part. The Tribunal concluded that the
respondent's calculation of the value for duty of the Rigel vessels
was, in part, incorrect. The Tribunal was of the view that section
67 of the Customs Act allows it to substitute what it
believes to be the correct value for duty and that it is not simply
limited to accepting or rejecting the respondent's determination.
Taking into account all of the evidence, the Tribunal concluded
that the correct values on the date of importation were
US$14,860,926 each for the Emsstern and the Elbestern
and US$14,807,000 for the Jadestern. It was these amounts on
which the applicable duty should have been paid.
|
| |
|
|
Atomic Ski Canada Inc. and Wilson Sports
Canada v. The Deputy Minister of National
Revenue
AP-97-030 and AP-97-031
Decision:
Appeals allowed
(June 8, 1998)
|
These were appeals under section 67 of the Customs Act in
which the Tribunal considered the tariff classification of plastic
shells for in-line skates. The issue in these appeals was whether
the plastic shells for in-line skates were properly classified
under tariff item No. 9506.70.12 as roller skates or,
alternatively, under tariff item No. 6402.19.90 as other sports
footwear, as determined by the respondent, or should have been
classified under tariff item No. 6406.99.90 as other parts of
footwear, as claimed by the appellants.
In allowing the appeals, the Tribunal concluded that, if it was
possible to find that, absent the skates, a product could still be
considered to have the essential character of roller skates and,
therefore, be classified in heading No. 95.06 as roller skates, as
argued by the respondent, the Explanatory Notes would not expressly
exclude from that heading roller skates without the skates
attached.
The Tribunal accepted that the goods in issue are committed for
use as components in skating boots and, in turn, in-line skates.
However, the Tribunal concluded that the goods in issue, presented
on their own, without linings or buckles, lacked one of the
principal features of footwear, that is, the ability to be worn as
a covering for the foot and part of the leg, and could not be
classified, pursuant to Rule 2 (a) of the General Rules for the
Interpretation of the Harmonized System, as unassembled
footwear with outer soles and uppers of rubber or plastics or, in
this case, as unassembled skating boots, having the essential
character of such footwear. As a result, the Tribunal was not
persuaded that the goods in issue could be classified under tariff
item No. 6402.19.90 as other sports footwear. Having determined
that the goods in issue did not have the essential character of
skating boots and could not, therefore, be classified under tariff
item No. 6402.19.90, the Tribunal had further to determine whether
the goods in issue could be classified under tariff item No.
6406.99.90 as other parts of footwear, as claimed by the
appellants. The Tribunal was persuaded that both the skating boots,
absent the skates, and the finished in-line skates met the
definitions of "footwear." It observed that the Explanatory Notes
to heading No. 64.05 provide that the heading "excludes
assemblies of parts (e.g., uppers, whether or not affixed to an
inner sole) not yet constituting nor having the essential character
of footwear as described in headings 64.01 to 64.05 (heading
64.06)." The Tribunal interpreted the Explanatory Notes to mean
that, if the Tribunal found that the goods in issue were parts of
the finished skating boots, which are covered by heading No. 64.02,
then they should be classified in heading No. 64.06.
In considering whether the goods in issue constituted parts of
skating boots or in-line skates, the Tribunal observed that there
was no universal test for determining whether a product was a part,
and each case had to be determined on its own merits. The Tribunal
noted that, in the past, it has considered that the following
factors typically applied in the assessment of whether a product is
a part: (1) whether the product is essential to the operation
of another product; (2) whether the product is a necessary and
integral component of the other product; (3) whether the product is
installed in the other product; and (4) common trade usage and
practice applied to the goods in issue. In the Tribunal's view, the
goods in issue were essential to and necessary and integral
components of in-line skating boots. As such, the Tribunal was
satisfied that the goods in issue should be classified under tariff
item No. 6406.99.90 as other parts of footwear, namely, skating
boots.
|
| |
|
Reference under
Section 70 of the Customs Act
|
On August 10, 1998, the Deputy Minister, pursuant to section 70
of the Customs Act, asked the Tribunal to render an opinion
with respect to:
· the tariff classification of butteroil blends comprising less
than 50 percent butteroil and more than 50 percent sugar (sucrose);
and
· the tariff classification of blends of butteroil and glucose and
blends of butteroil and processing solids, containing less than 50
percent by weight of dairy content.
The Tribunal issued a notice of review (Reference No. AP-98-055)
of the tariff classification of butteroil blends on August 18,
1998.
Briefs were filed by parties in favour of a change in the tariff
classification of the goods in issue, as well as by those opposed
to a change in the tariff classification. A public hearing relating
to this reference was held from January 26 to 29, 1999.
In the context of this reference, the Tribunal dealt with the
preliminary issue of whether, in a reference under section 70 of
the Customs Act, the Tribunal's disposition is a non-binding
opinion, which the Deputy Minister may elect to follow or not, or a
decision with the same force and effect as a decision made in an
appeal under section 67. The Tribunal came to the view that
proceedings which come to it by way of a reference pursuant to
section 70 are in the nature of an appeal and that it has
jurisdiction to issue an order, finding or declaration with the
full force and effect of any other decision that it issues in an
appeal under section 67.
On March 26, 1999, the Tribunal rendered its majority decision
that butteroil blends comprising less than 50 percent butteroil and
more than 50 percent sugar (sucrose) are classifiable under tariff
item No. 2106.90.95 and that blends comprising less than 50 percent
butteroil and more than 50 percent glucose are also classifiable
under tariff item No. 2106.90.95. As for the classification of
blends of butteroil and processing solids, the Tribunal came to the
view that it was not possible to reach a definitive view on the
classification, in light of the indeterminate and variable nature
of ingredients which may go to make up the processing solids
portion of such blends.
|
|
Appeal No.
|
Appellant
|
Date of Decision
|
Decision
|
|
Customs Act
|
|
AP-97-073
|
Atlas Alloys, Division of Rio Algom Limited
|
April 23, 1998
|
Dismissed
|
|
AP-97-059
|
Canadian Fracmaster Ltd.
|
May 29, 1998
|
Dismissed
|
|
AP-97-030 and
AP-97-031
|
Atomic Ski Canada Inc. and Wilson Sports Canada
|
June 8, 1998
|
Allowed
|
|
AP-93-392, AP-93-393, AP-94-001, AP-94-002, AP-94-007,
AP-94-019, AP-94-020, AP-94-026, AP-94-028, AP-94-030, AP-94-033,
AP-94-043, AP-94-055, AP-94-060, AP-94-064, AP-94-068, AP-94-077,
AP-94-079, AP-94-097 and AP-96-118
|
Asea Brown Boveri Inc.
|
June 10, 1998
|
Allowed in part
|
|
AP-96-228
|
Hibernia Management and Development
Company Ltd.
|
June 10, 1998
|
Allowed in part
|
|
AP-97-083 and
AP-97-101
|
Nailor Industries Inc.
|
July 13, 1998
|
Dismissed
|
|
AP-97-013
|
General Mills Canada, Inc.
|
July 21, 1998
|
Allowed
|
|
AP-97-002
|
Flora Manufacturing & Distributing Ltd.
|
July 24, 1998
|
Allowed
|
|
AP-97-012
|
General Mills Canada, Inc.
|
July 24, 1998
|
Dismissed
|
|
AP-95-182
|
Leeds Neckwear Inc. and Leeds International Inc.
|
July 28, 1998
|
Allowed
|
|
AP-96-096 to
AP-96-103
|
Style-Kraft Sportswear Limited
|
July 28, 1998
|
Allowed
|
|
AP-97-056
|
P & S Filtration Inc.
|
July 29, 1998
|
Allowed
|
|
AP-97-057
|
Zellers Inc.
|
July 29, 1998
|
Allowed
|
|
AP-97-110 and
AP-97-113
|
Nicholson Equipment Ltd.
|
September 2, 1998
|
Allowed
|
|
AP-97-017, AP-97-053,
AP-97-102 and
AP-97-118
|
Pet Valu Canada Inc.
|
September 14, 1998
|
Allowed in part
|
|
AP-97-045
|
Rigel Shipping Canada Inc.
|
September 15, 1998
|
Allowed in part
|
|
AP-97-052
|
Flora Manufacturing & Distributing Ltd.
|
September 24, 1998
|
Dismissed
|
|
AP-97-058
|
Flora Manufacturing & Distributing Ltd.
|
September 24, 1998
|
Allowed
|
|
AP-96-079, AP-96-087 and AP-96-095
|
Advance Engineered Products Ltd.
|
September 25, 1998
|
Dismissed
|
|
AP-97-010
|
Hilary's Distribution Ltd.
|
September 25, 1998
|
Allowed
|
|
AP-97-038
|
Fonora Textile Inc.
|
September 25, 1998
|
Allowed
|
|
AP-97-048, AP-97-081 and AP-97-082
|
Cooper Industries (Canada) Inc. and Cooper
Cameron Ltd.
|
September 25, 1998
|
Allowed
|
|
AP-97-029
|
Entrelec Inc.
|
September 28, 1998
|
Dismissed
|
|
AP-97-078
|
Jonic International Inc.
|
September 28, 1998
|
Dismissed
|
|
AP-97-122
|
Canadian Tire Corporation, Limited
|
September 29, 1998
|
Dismissed
|
|
AP-97-140
|
Manju Bhogal
|
October 7, 1998
|
Dismissed
|
|
AP-97-116
|
Gillette Canada Inc.
|
November 20, 1998
|
Dismissed
|
|
AP-97-033
|
Technical Glass Products
|
November 25, 1998
|
Dismissed
|
|
AP-97-100
|
Brother International Corporation (Canada) Ltd.
|
November 27, 1998
|
Dismissed in part
|
|
AP-97-117
|
Sanofi Canada Inc.
|
December 18, 1998
|
Dismissed
|
|
AP-97-070
|
Les Industries et Équipements Laliberté Ltée
|
December 23, 1998
|
Dismissed
|
|
AP-98-006
|
Burlodge Canada Ltd.
|
January 7, 1999
|
Allowed
|
|
AP-97-111
|
Honda Canada Inc.
|
January 11, 1999
|
Dismissed
|
|
AP-97-043
|
Douglas Anderson and Creed Evans
|
January 13, 1999
|
Dismissed
|
|
AP-97-062
|
Zellers Limited
|
February 8, 1999
|
Allowed
|
|
AP-98-007 and AP-98-010
|
Richards Packaging Inc. and Duopac Packaging Inc.
|
February 10, 1999
|
Dismissed
|
|
AP-95-097
|
Flextube Inc.
|
February 19, 1999
|
Allowed in part
|
|
AP-96-057
|
Catherine Roozen
|
March 1, 1999
|
Dismissed
|
|
AP-97-104
|
Transilwrap of Canada, Ltd.
|
March 3, 1999
|
Dismissed
|
|
AP-98-049
|
Soprema Inc.
|
March 5, 1999
|
Allowed
|
|
Excise Tax Act
|
|
AP-94-352
|
Raymond Rioux Distribution
|
June 15, 1998
|
Dismissed
|
|
AP-96-217
|
Hi-Grove Holdings Ltd.
|
July 27, 1998
|
Allowed
|
|
AP-95-130
|
United Power Ltd.
|
August 25, 1998
|
Dismissed
|
|
AP-97-072
|
Kellogg Canada Inc.
|
August 28, 1998
|
Dismissed
|
|
AP-97-027
|
Movado Group of Canada, Inc.
|
August 31, 1998
|
Allowed
|
|
AP-90-156, AP-90-157 and AP-91-037 to
AP-91-040
|
North American Steel Equipment Company Ltd.
|
September 25, 1998
|
Dismissed
|
|
Special Import Measures Act
|
|
AP-96-083
|
Jarvis Imports and Sales Ltd.
|
December 7, 1998
|
Dismissed
|
1. The Tribunal has made reasonable efforts to ensure that the
information listed is complete. However, since the Tribunal does
not participate in appeals to the Federal Court of Canada, it is
unable to confirm that the list contains all Tribunal decisions
appealed to the Federal Court of Canada between April 1, 1998, and
March 31, 1999.
1. The Tribunal has made reasonable efforts to ensure that the
information listed is complete. However, since the Tribunal does
not participate in appeals to the Federal Court of Canada, it is
unable to confirm that the list contains all appeals that were
decided between April 1, 1998, and March 31, 1999.
| |
CHAPTER
V
|
| |
ECONOMIC, TRADE,
TARIFF AND SAFEGUARD INQUIRIES
|
Introduction
|
The CITT Act contains broad provisions under which the
government or the Minister of Finance may ask the Tribunal to
conduct an inquiry on any economic, trade, tariff or commercial
matter. In an inquiry, the Tribunal acts in an advisory capacity,
with powers to conduct research, receive submissions and
representations, find facts, hold public hearings and report, with
recommendations as required, to the Government or the Minister of
Finance.
|
| |
|
Dairy
Blends
|
On June 30, 1998, the Tribunal submitted to the Government its
report on the importation of dairy product blends outside the
coverage of Canada's tariff-rate quotas. The report completed a
public inquiry which was referred to the Tribunal on December 17,
1997, by the Governor in Council on the recommendation of the
Minister of Finance, the Minister of Agriculture and Agri-Food and
the Minister for International Trade.
The initiative for the inquiry came from increasing concerns of
Canadian dairy farmers about imports of dairy product blends.
Industry representatives requested that the Government of Canada
address their particular concerns relating to butteroil/sugar
blends.
In 1995, when Canada implemented its WTO commitments arising out
of the Uruguay Round of multilateral trade negotiations, import
quotas in support of supply management were converted into
tariff-rate quotas. The butteroil blends which were at the centre
of the Tribunal's inquiry were not covered by the former import
quotas and were not subject to tariff-rate quotas.
The Tribunal noted that there were a number of factors that
influenced the demand for imported dairy product blends in the
domestic market. The most important of these factors was the cost
savings that producers of ice cream and processed cheese achieve by
using imported butteroil blends. Other factors included the
security of supply, competition in the ice cream industry and
certain technical benefits.
The Tribunal observed that the use of butteroil blends increased
rapidly in the period from 1994 to 1996 and then almost doubled in
1997. In 1997, about 6.3 million kilograms of the imported
butteroil blends were used in the manufacture of ice cream and
processed cheese. This corresponded to approximately 3.1 million
kilograms of butterfat. Expressed as a percentage of overall milk
production in Canada in 1997, the imports were equivalent to
about 1 percent of the butterfat produced for the fluid
and industrial milk markets.
The Tribunal expected that the use of imported butteroil blends,
to replace domestic butterfat, would increase in the years ahead,
although at a slower pace than in recent years. Compared to a 1997
replacement level of 12 percent, the Tribunal considered that up to
a maximum of 25 percent of the butterfat in ice cream and the
replaceable butterfat in processed cheese could be supplied by
imported butteroil blends.
As requested in its terms of reference, the Tribunal examined
the domestic market for imports of dairy product blends, as well as
their impact on the Canadian dairy industry. It also reviewed the
legal, technical, regulatory and commercial considerations relevant
to these imports. Finally, it identified options for the dairy
farmers and the Government to deal with any problems raised by
imports of butteroil blends. The Tribunal found that the following
options, in addition to the status quo, were consistent with
Canada's international rights and obligations:
· an appeal to the Tribunal by the dairy farmers of the
classification of butteroil blends;
· a safeguard inquiry by the Tribunal pursuant to a complaint by
the dairy farmers or a government reference;
· a special class price for butterfat for ice cream and processed
cheese;
· a special class price for butterfat for domestic butteroil
blends;
· compensation of the dairy farmers for their income losses;
and
· a new tariff item for butteroil blends with a different tariff
treatment.
The Tribunal came to the conclusion that none of the options
available for addressing any problems raised by imports of
butteroil blends were without cost, either to the dairy farmers or
the Government. There are economic consequences for the dairy
farmers of an open border for butteroil blends. The types of action
available to the Government and the dairy farmers, however, are
constrained by the rules of international trade. These same rules,
which apply equally to all Members of the WTO, provide dairy
farmers with increased certainty and protection. As well, the rules
provide several avenues by which dairy farmers may seek relief from
the effects of imported butteroil blends.
|
| |
|
Textile
Reference
|
Pursuant to a reference from the Minister of Finance dated July
6, 1994, as amended on March 20 and July 24, 1996, and on
November 26, 1997, the Tribunal was directed 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
of Finance.
|
| |
|
|
Scope of the Reference
|
A domestic producer may apply for tariff relief on an imported
textile input used, or proposed to be used, in its manufacturing
operations. The textile inputs for which tariff relief may be
requested are the fibres, yarns and fabrics of Chapters 51, 52, 53,
54, 55, 56, 58, 59 and 60; certain monofilaments or strips and
textile and plastic combinations of Chapter 39; rubber thread and
textile and rubber combinations of Chapter 40; and products of
textile glass fibres of Chapter 70 of the schedule to the
Customs Tariff. Since July 24, 1996, and at least until July
1, 1999, the following yarns are not included in the textile
reference:
Knitting yarns, solely of cotton or solely of cotton and
polyester staple fibres, measuring more than 190 decitex, of
Chapter 52 or subheading No. 5509.53 other than those used to
make sweaters, having a horizontal self-starting finished edge and
the outer surfaces of which are constructed essentially with 9
or fewer stitches per 2 centimetres (12 or fewer stitches
per inch) measured in the horizontal direction.
|
| |
|
|
Types of Relief Available
|
The tariff relief that may be recommended by the Tribunal to the
Minister of Finance ranges from the removal or reduction of tariffs
on one or several, partial or complete, tariff lines, textile-
and/or end-use-specific tariff provisions. In the case of requests
for tariff relief on textile inputs used in the manufacture of
women's swimsuits, co-ordinated beachwear and co-ordinated
accessories only, the recommendation could include company-specific
relief. The recommendation could be for tariff relief for either a
specific or an indeterminate period of time. However, the Tribunal
will only recommend tariff relief that is administrable on a
cost-effective basis.
|
| |
|
|
Process
|
Domestic producers seeking tariff relief must file a request
with the Tribunal. Producers must file with the request either
samples of the textile input for which tariff relief is being
sought or a National Customs Ruling from Revenue Canada covering
the input. If the Tribunal determines that the request is properly
documented, it will conduct an investigation to determine if it
should recommend tariff relief.
|
| |
|
|
Filing and Notification of a Request
|
Upon receipt of a request for tariff relief, and before
commencement of an investigation, the Tribunal issues a brief
electronic notice on its Web site announcing the request. The
minimum period of time for the notification of a request before an
investigation is commenced is 30 days.
This notification is designed to increase transparency, identify
potential deficiencies in the request, avoid unnecessary
investigations, provide an opportunity for the domestic textile
industry to contact the requester and agree on a reasonable
domestic source of supply, inform other users of identical or
substitutable textile inputs, prepare the domestic industry to
respond to subsequent investigation questionnaires and give
associations advance time for planning and consultation with their
members.
|
| |
|
|
Investigations
|
When the Tribunal is satisfied that a request is properly
documented, it commences an investigation. A notice of commencement
of investigation is sent to the requester, all known interested
parties and any appropriate government department or agency, such
as Revenue Canada, the Department of Foreign Affairs and
International Trade, the Department of Industry and the Department
of Finance. The notice is also published in the Canada
Gazette.
In any investigation, interested parties include domestic
producers, certain associations and other persons who are entitled
to be heard by the Tribunal because their rights or pecuniary
interests may be affected by the Tribunal's recommendations.
Interested parties are given notice of the request and can
participate in the investigation. Interested parties include
competitors of the requester, suppliers of goods that are identical
to or substitutable for the textile input and downstream users of
goods produced from the textile input.
To prepare a staff investigation report, the Tribunal staff
gathers information through such means as plant visits or
questionnaires. Information is obtained from the requester and
interested parties, such as a domestic supplier of the textile
input, for the purpose of providing a basis for determining whether
the tariff relief sought will maximize net economic gains for
Canada.
In normal circumstances, a public hearing is not required, and
the Tribunal will dispose of the matter on the basis of the full
written record, including the request, the staff investigation
report and all submissions and evidence filed with the
Tribunal.
The procedures developed for the conduct of the Tribunal's
investigations envisage the full participation of the requester and
all interested parties. A party, other than the requester, may file
submissions, including evidence, in response to the properly
documented request, the staff investigation report and any
information provided by a government department or agency. The
requester may subsequently file submissions with the Tribunal in
response to the staff investigation report and any information
provided by a government department or agency or other party.
Where confidential information is provided to the Tribunal, such
information falls within the protection of the CITT Act.
Accordingly, the Tribunal will only distribute confidential
information to counsel who are acting on behalf of a party and who
have filed a declaration and undertaking.
|
| |
|
|
Recommendations to the Minister
|
The Tribunal will normally issue its recommendations, with
reasons, to the Minister of Finance within 120 days from the date
of commencement of the investigation. In exceptional cases, where
the Tribunal determines that critical circumstances exist, the
Tribunal will issue its recommendations within an earlier specified
time frame which the Tribunal determines to be appropriate. The
Tribunal will recommend the reduction or removal of customs duties
on a textile input where it will maximize net economic gains for
Canada.
|
| |
|
|
Request for Review
|
Where the Minister of Finance has made an order for tariff
relief pursuant to a recommendation of the Tribunal, certain
domestic producers may make a request to the Tribunal to commence
an investigation for the purpose of recommending the renewal,
amendment or termination of the order. A request for the amendment
or termination of the order should specify what changed
circumstances justify such a request.
|
| |
|
|
Review on Expiry
|
Where the Minister of Finance has made an order for tariff
relief subject to a scheduled expiry date, the Tribunal will,
before the expiry date, issue a formal notice that the tariff
relief provided by the order will expire unless the Tribunal issues
a recommendation that tariff relief should be continued and the
Minister of Finance implements the recommendation. The notice
invites interested parties to file submissions for or against
continuation of tariff relief.
If no opposition to the continuation of tariff relief is
received, upon receipt of submissions and information supporting
the request for continuation of tariff relief, the Tribunal may
decide to recommend the continuation of tariff relief. Conversely,
if no request for continuation of tariff relief is submitted, the
Tribunal may decide to recommend the termination of tariff relief.
If it appears that a more complete review is warranted, the
Tribunal will conduct an investigation to consider whether all
relevant factors which led it to recommend tariff relief continue
to apply and whether extending tariff relief under such conditions
would continue to provide net economic benefits for Canada.
|
| |
|
|
Annual Status Report
|
In accordance with the terms of reference received by the
Tribunal directing it to conduct investigations into requests from
Canadian producers for tariff relief on imported textile inputs
that they use in their manufacturing operations, the Tribunal
provided the Minister of Finance, on February 11, 1999, with its
fourth annual status report on the investigation process. The
status report covered the period from October 1, 1997, to September
30, 1998.
|
| |
|
|
Recommendations Submitted
During 1998-99
|
During fiscal year 1998-99, the Tribunal issued 12 reports to
the Minister of Finance which related to 17 requests for tariff
relief. In addition, the Tribunal issued 3 reports further to
reviews of recommendations that were previously issued. At year
end, 15 requests were outstanding, of which investigations had been
commenced in respect of 5 requests. Table 1 at the end of this
chapter summarizes these activities.
|
| |
|
|
Recommendations in Place
|
By the end of fiscal year 1998-99, the Government had
implemented 59 recommendations by the Tribunal, of which 53
are still subject to tariff relief orders. Table 4 provides a
summary of recommendations currently implemented.
The implementation of Tribunal recommendations is made by adding
new tariff items to the Customs Tariff. During 1998-99,
these tariff items covered imports worth $180 million (estimated)
and provided tariff relief worth $25 million (estimated),
representing an increase of approximately 30 percent over
1997-98.
A summary of a representative sample of Tribunal recommendations
issued during the fiscal year follows.
|
| |
|
|
Phantom Industries Inc.
TR-97-005
Recommendation:
Tariff relief not granted
(May 8, 1998)
|
The Tribunal recommended to the Minister of Finance that tariff
relief on importations of gimped yarns, consisting of a
five-filament nylon yarn not greater than 15 decitex wound spirally
around an elastomeric yarn (spandex), for use in the manufacture of
women's hosiery, not be granted. In its report, the Tribunal
indicated that there was no disagreement among the parties that
there was production in Canada of gimped yarns that were identical,
in terms of yarn construction, to those for which tariff relief was
requested and that the debate centered on the performance problems
of the yarns supplied by the domestic producer, Rubyco (1987) Inc.
(Rubyco), to Phantom Industries Inc. (Phantom) and on the efforts
that Phantom made to communicate these problems to Rubyco. The
Tribunal found that, while there may well have been some operating
differences between the domestic and the imported gimped yarns,
Phantom had not demonstrated that sufficient efforts had been made
to obtain domestic supply, nor that domestic yarns could not be
substituted for the imported yarns. Under the circumstances, the
Tribunal was unable to find that granting tariff relief would
provide net economic gains to Canada.
|
| |
|
|
Doubletex
TR-95-013A
Recommendation:
Indeterminate tariff relief
(December 21, 1998)
|
The Tribunal recommended to the Minister of Finance that tariff
relief on importations of woven fabric of 100 percent cotton,
unbleached, bleached for dyeing only, of yarns with a twist of
1,050 turns per metre or more in the warp and/or the weft, for use
by textile converters only to produce a dyed and finished fabric
for the apparel industry, be granted for an indeterminate period of
time. In its report, the Tribunal noted that Consoltex Inc.
was the sole domestic producer opposed to the request and that the
samples that it submitted were not fully substitutable for the
finished fabrics made by Doubletex. The Tribunal concluded that,
while some costs would be incurred by Consoltex Inc. should tariff
relief be granted, these costs would be far outweighed by the
benefits that would accrue to domestic converters, such as
Doubletex.
|
| |
|
|
Distex Inc.
TR-98-002
Recommendation:
Indeterminate tariff relief
(February 8, 1999)
|
The Tribunal recommended to the Minister of Finance that tariff
relief on importations of fabric, solely of 2-ply cotton yarns of
different colours, having a decitex not exceeding 180 per single
yarn, of a weight of 100 g/m² or more but not exceeding 200 g/m²,
certified by the exporter to have been knit on a Jacquard circular
weft-knitting machine and to have been "double mercerized" (i.e.
the yarns have been mercerized, knit into a fabric and subjected to
a second mercerization process), for use in the manufacture of golf
jerseys, be granted for an indeterminate period of time. The
Tribunal noted that, based on the information available, there was
no domestic production of identical or substitutable fabrics and
that, consequently, there should be no economic cost to producers
from granting the tariff relief requested. The Tribunal concluded
that, considering the benefits to Distex Inc., granting the tariff
relief requested would result in net economic benefits to
Canada.
|
|
Request No.
|
Requester
|
Textile Input
|
Date of Disposition
|
Status/Recommendations
|
|
TR-95-013A
(previously TR-95-013)
|
Doubletex
|
Fabric
|
December 21, 1998
|
Indeterminate tariff relief
|
|
TR-96-014
|
Peerless Clothing Inc.
|
Fabric
|
January 28, 1999
|
Request withdrawn
|
|
TR-97-004, TR-97-007, TR-97-008 and TR-97-010
|
Blue Bird Dress of Toronto Ltd.
|
Fabric
|
July 23, 1998
|
Indeterminate tariff relief
|
|
TR-97-005
|
Phantom Industries Inc.
|
Yarn
|
May 8, 1998
|
Tariff relief not granted
|
|
TR-97-006
|
Peerless Clothing Inc.
|
Fabric and nonwoven
|
October 29, 1998
|
Indeterminate tariff relief
|
|
TR-97-011
|
Australian Outback Collection (Canada) Ltd.
|
Fabric
|
October 30, 1998
|
Indeterminate tariff relief
|
|
TR-97-012
|
Ballin Inc.
|
Fabric
|
In progress
|
|
|
TR-97-013
|
Blue Bird Dress of Toronto Ltd.
|
Fabric
|
April 24, 1998
|
File closed
|
|
TR-97-014
|
Lenrod Industries Ltd.
|
Nonwoven
|
November 10, 1998
|
Indeterminate tariff relief
|
|
TR-97-015, TR-97-016 and TR-97-020
|
Helly Hansen Canada Limited
|
Fabric
|
March 19, 1999
|
Indeterminate tariff relief
|
|
TR-97-017
|
Helly Hansen Canada Limited
|
Fabric
|
December 22, 1998
|
Request withdrawn
|
|
TR-97-018
|
Helly Hansen Canada Limited
|
Fabric
|
December 22, 1998
|
Request withdrawn
|
|
TR-97-019
|
Helly Hansen Canada Limited
|
Fabric
|
December 22, 1998
|
Request withdrawn
|
|
TR-97-021
|
Wire Rope Industries Limited
|
Sisal core
|
January 5, 1999
|
Tariff relief not granted
|
|
TR-98-001
|
Cambridge Industries
|
Netting
|
February 12, 1999
|
Indeterminate tariff relief
|
|
TR-98-002
|
Distex Inc.
|
Fabric
|
February 8, 1999
|
Indeterminate tariff relief
|
|
TR-98-003
|
Zenobia Collections Inc.
|
Fabric
|
December 1, 1998
|
File closed
|
|
TR-98-004, TR-98-005 and TR-98-006
|
Ladcal Investments Ltd., O/A Pintar Manufacturing, Nour Trading
House Inc. and T.S. Simms and Company Limited
|
Fabric
|
In progress
|
|
|
TR-98-007
|
Caulfeild Apparel Group Ltd.
|
Fabric
|
March 31, 1999
|
Indeterminate tariff relief
|
|
TR-98-008
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-009
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-010
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-011
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-012
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-013
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-014
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-015
|
Zenobia Collection Inc.
|
Fabric
|
Not yet initiated
|
|
|
TR-98-016
|
Peerless Clothing Inc.
|
Fabric
|
March 24, 1999
|
Indeterminate tariff relief
|
|
TR-98-017
|
Jones Apparel Group Canada Inc.
|
Fabric
|
In progress
|
|
|
TR-98-018
|
Utex Corporation
|
Fabric
|
Not yet initiated
|
|
|
TR-98-019
|
Tribal Sportswear Inc.
|
Fabric
|
Not yet initiated
|
|
|
Request No./
Review No.
|
Requester/Textile Input
|
Tariff Item(s)/Order in Council
|
Duration
|
|
TR-94-001
|
Canatex Industries (Division of Richelieu
Knitting Inc.)
|
5402.41.12 |
Indeterminate tariff relief
|
|
TR-94-002 and TR-94-002A
|
Kute-Knit Mfg. Inc.
|
5205.14.20
5205.15.20
5205.24.20
5205.26.20
5205.27.20
5205.28.20
5205.35.20
5205.46.20
5205.47.20
5205.48.20
5206.14.10
5206.15.10
5206.24.10
5206.25.10
5509.53.10
P.C. 1996-1089
|
Three-year tariff relief
|
|
TR-94-004
|
Woods Canada Limited
|
5208.52.10 |
Indeterminate tariff relief
|
|
TR-94-010
|
Palliser Furniture Ltd.
|
5806.20.10 |
Indeterminate tariff relief
|
|
TR-94-012
|
Peerless Clothing Inc.
|
5309.29.20 |
Indeterminate tariff relief
|
|
TR-94-013 and TR-94-016
|
MWG Apparel Corp.
|
5208.42.20
5208.43.20
5208.49.20
5513.31.10
5513.32.10
5513.33.10
|
Indeterminate tariff relief
|
|
TR-94-017 and TR-94-018
|
Elite Counter & Supplies
|
9943.00.00 |
Indeterminate tariff relief
|
|
TR-95-003
|
Landes Canada Inc.
|
5603.11.20
5603.12.20
5603.13.20
5603.14.20
5603.91.20
5603.92.20
5603.93.20
5603.94.20
|
Indeterminate tariff relief
|
|
TR-95-004
|
Lingerie Bright Sleepwear (1991) Inc.
|
5208.12.20
5208.52.20
|
Indeterminate tariff relief
|
|
TR-95-005
|
Lingerie Bright Sleepwear (1991) Inc.
|
5513.11.10
5513.41.10
|
Indeterminate tariff relief
|
|
TR-95-009
|
Peerless Clothing Inc.
|
5408.21.10
5408.21.20
5408.22.21
5408.22.30
|
Indeterminate tariff relief
|
|
TR-95-010 and TR-95-034
|
Freed & Freed International Ltd. and
Fen-nelli Fashions Inc.
|
5111.19.10
5111.19.20
|
Indeterminate tariff relief
|
|
TR-95-011
|
Louben Sportswear Inc.
|
5408.31.10
5408.32.20
|
Indeterminate tariff relief
|
|
TR-95-012
|
Perfect Dyeing Canada Inc.
|
5509.32.10 |
Indeterminate tariff relief
|
|
TR-95-013A (previously TR-95-013)
|
Doubletex
|
5208.11.30
5208.12.40
5208.13.20
5208.19.30
5208.21.40
5208.22.20
5208.23.10
5208.29.20
5209.11.30
5209.12.20
5209.19.30
5209.21.20
5209.22.10
5209.29.20
|
Indeterminate tariff relief
|
|
TR-95-036
|
Canadian Mill Supply Co. Ltd.
|
5208.21.20 |
Indeterminate tariff relief
|
|
TR-95-037
|
Paris Star Knitting Mills Inc.
|
5408.24.11
5408.24.91
5408.34.10
5516.14.10
5516.24.10
|
Indeterminate tariff relief
|
|
TR-95-051
|
Camp Mate Limited
|
5407.41.10
5407.42.10
5407.42.20
5903.20.22
|
Indeterminate tariff relief
|
|
TR-95-053 and TR-95-059
|
Majestic Industries (Canada) Ltd. and
Caulfeild Apparel Group Ltd.
|
5802.11.10
5802.19.10
5802.19.20
|
Indeterminate tariff relief
|
|
TR-95-056
|
Sealy Canada Ltd.
|
3921.19.10
5407.69.10
5407.73.10
5407.94.10
5516.23.10
5903.90.21
6002.43.20
|
Indeterminate tariff relief
|
|
TR-95-057 and TR-95-058
|
Doubletex
|
5407.51.10
5407.61.92
5407.69.10
5515.11.10
5516.21.10
5516.91.10
|
Indeterminate tariff relief
|
|
TR-95-060
|
Triple M Fiberglass Mfg. Ltd.
|
7019.59.10 |
Indeterminate tariff relief
|
|
TR-95-061
|
Camp Mate Limited
|
6002.43.30 |
Indeterminate tariff relief
|
|
TR-95-064 and
TR-95-065
|
Lady Americana Sleep Products Inc. and
el ran Furniture Ltd.
|
6002.43.10 |
Indeterminate tariff relief
|
|
TR-96-003
|
Venture III Industries Inc.
|
5407.61.92 |
Indeterminate tariff relief
|
|
TR-96-004
|
Acton International Inc.
|
5906.99.21 |
Indeterminate tariff relief
|
|
TR-96-006
|
Alpine Joe Sportswear Ltd.
|
P.C. 1998-1118
|
Six-year tariff relief
|
|
TR-96-008,
TR-96-010 to
TR-96-013
|
Les Collections Shan Inc.
|
P.C. 1997-1668
|
Five-year tariff relief
|
|
TR-97-001
|
Jones Apparel Group Canada Inc.
|
5407.91.10
5407.92.20
5407.93.10
5408.21.30
5408.22.40
5408.23.20
5408.31.30
5408.32.40
5408.33.10
|
Indeterminate tariff relief
|
|
TR-97-002 and
TR-97-003
|
Universal Manufacturing Inc.
|
5208.43.30
5513.41.20
|
Indeterminate tariff relief
|
|
TR-97-006
|
Peerless Clothing Inc.
|
5407.51.30
5903.90.22
5903.90.23
5903.90.24
6002.43.40
6002.43.50
|
Indeterminate tariff relief
|
|
TR-97-004, TR-97-007, TR-97-008 and
TR-97-010
|
Blue Bird Dress of Toronto Ltd.
|
5407.51.20
5407.52.20
5407.61.94
5407.69.20
|
Indeterminate tariff relief
|
|
TR-97-011
|
Australian Outback Collection (Canada) Ltd.
|
5209.31.20
5907.00.16
|
Indeterminate tariff relief
|
|
TR-97-014
|
Lenrod Industries Ltd.
|
5603.93.40 |
Indeterminate tariff relief
|
|
TR-98-001
|
Cambridge Industries
|
5608.19.20 |
Indeterminate tariff relief
|
|
TA-98-001
|
Certain dyed woven fabrics of rayon and polyester
|
5408.31.20
5408.32.30
|
Indeterminate tariff relief
|
|
TA-98-002
|
Vinex FR-9B fabric
|
5512.99.10 |
Indeterminate tariff relief
|
|
TA-98-003
|
Woven cut warp pile fabrics
|
5801.35.10 |
Indeterminate tariff relief
|
| |
CHAPTER
VI
|
| |
PROCUREMENT
REVIEW
|
Introduction
|
Suppliers may challenge federal government procurement decisions
that they believe have not been made in accordance with the
requirements of the following: Chapter Ten of NAFTA, Chapter Five
of the AIT or the AGP. The bid challenge portions of these
agreements came into force on January 1, 1994, July 1, 1995, and
January 1, 1996, respectively.
Any potential suppliers who believe that they may have been
unfairly treated during the solicitation or evaluation of bids, or
in the awarding of contracts on a designated procurement, may lodge
a formal complaint with the Tribunal. A potential supplier
with an objection is encouraged to resolve the issue first with the
government institution responsible for the procurement. When this
process is not successful or a supplier wants to deal directly with
the Tribunal, the complainant may ask the Tribunal to consider the
case by filing a complaint within the prescribed time limit.
When the Tribunal receives a complaint, it reviews the
submission against the criteria for filing. If there are
deficiencies, the complainant is given an opportunity to correct
these within a specified time limit. If the Tribunal decides to
conduct an inquiry, the government institution and all other
interested parties are sent a formal notification of the complaint.
An official notice of the complaint is also published in
Government Business Opportunities and the Canada
Gazette. If the contract in question has not been awarded, the
Tribunal may order the government institution to postpone awarding
any contract pending the disposition of the complaint by the
Tribunal, unless the government institution certifies that the
procurement is urgent or that the delay would be against the public
interest.
After receipt of its copy of the complaint, the government
institution responsible for the procurement files a Government
Institution Report (GIR) responding to the allegations.
The complainant is then sent a copy of the GIR and has seven
days to submit comments. These are forwarded to the government
institution and any interveners.
A staff investigation, which can include interviewing
individuals and examining files and documents, may be conducted and
result in the production of a Staff Investigation Report. This
report is circulated to the parties for their comments. Once this
phase of the inquiry is completed, the Tribunal reviews the
information collected and decides whether a hearing should be
held.
The Tribunal then makes a determination, which may consist of
recommendations to the government institution (such as
re-tendering, re-evaluating or providing compensation) and the
award of reasonable costs to a prevailing complainant for filing
and proceeding with the bid challenge and/or costs for preparing
the bid. The government institution, as well as all other parties
and interested persons, is notified of the Tribunal's decision.
Recommendations made by the Tribunal in its determination are to be
implemented to the greatest extent possible.
|
| |
|
| |
Summary of Procurement Review
Activities
|
| |
|
1997-98
|
1998-99
|
| |
CASES RESOLVED BY OR BETWEEN PARTIES
|
|
|
| |
Resolved Between Parties
|
1 |
-
|
| |
Withdrawn
|
9 |
6 |
| |
Abandoned While Filing
|
2
|
4
|
| |
Subtotal
|
12 |
10 |
| |
INQUIRIES NOT INITIATED OR CONTINUED ON PROCEDURAL
GROUNDS
|
|
|
| |
Lack of Jurisdiction
|
8 |
6 |
| |
Late Filing
|
4 |
7 |
| |
No Valid Basis
|
12
|
4
|
| |
Subtotal
|
24 |
17 |
| |
CASES DETERMINED ON MERIT
|
|
|
| |
Complaint not Valid
|
9 |
14 |
| |
Complaint Valid
|
7
|
10
|
| |
Subtotal
|
16 |
24*
|
| |
IN PROGRESS
|
11
|
15
|
| |
TOTAL
|
63 |
66 |
| |
* The Tribunal actually issued 21 written determinations which
related to 24 procurement complaints.
|
| |
|
Summary of
Selected Determinations
|
During fiscal year 1998-99, the Tribunal issued 21 written
determinations of its findings and recommendations which related to
24 procurement complaints. In 9 of the 21 written
determinations, the complaints were determined to be valid or valid
in part. In these cases, various remedies were granted in the form
of cost awards or recommendations. Twelve other cases were in
progress at year end, and two cases were being filed. Table 1 at
the end of this chapter summarizes these activities, as well as
those cases resolved by or between parties.
Of the cases heard by the Tribunal in carrying out its
procurement review functions, certain decisions stand out from
among the others because of the legal significance of the cases. A
brief résumé of a representative sample of such cases follows.
These summaries have been prepared for general information purposes
only and have no legal status.
|
| |
|
|
Frontec Corporation
PR-97-035
Determination:
Complaint dismissed/
Complaint not valid
(May 6, 1998)
|
The Tribunal made a determination with respect to a complaint
filed by Frontec Corporation (Frontec) concerning a solicitation of
the Department of Public Works and Government Services (the
Department). The solicitation was for operation and maintenance
services for the 5-Wing Goose Bay military airfield, Newfoundland,
for the Department of National Defence.
Frontec alleged that, contrary to the provisions of the AIT, its
proposal was unfairly and improperly excluded from the subject
solicitation because of an unfair, improper or inconsistent
evaluation by the Department.
Having examined the evidence and arguments presented by the
parties and considered the subject matter of the complaint, the
Tribunal determined that the complaint was not valid.
|
| |
|
|
Lotus Development Canada Limited, Novell
Canada, Ltd. and Netscape Communications Canada Inc.
PR-98-005, PR-98-006 and PR-98-009
Determination:
Complaints dismissed/
Lack of jurisdiction
(August 14, 1998)
|
The Tribunal made a determination with respect to complaints
filed by Lotus Development Canada Limited, Novell Canada, Ltd. and
Netscape Communications Canada Inc. (the complainants) concerning a
solicitation of the Department of Public Works and Government
Services (the Department) for the procurement of a Microsoft NT
server, a BackOffice server and BackOffice client access licences
for the Department of Foreign Affairs and International Trade. The
Department proceeded on a limited tender basis due to the urgency
of the requirement and for national security reasons.
The complainants alleged that the procurement process was flawed
because more than one supplier was capable of supplying the
requirement.
After careful consideration of the applicable legislation, the
requirements of NAFTA, the AGP and the AIT and the positions of the
parties, the Tribunal determined that it did not have jurisdiction
to continue its inquiries into these complaints, and the complaints
were dismissed.
|
| |
|
|
Jastram Technologies Inc.
PR-98-008
Determination:
Inquiry not initiated/
Late filing
(June 17, 1998)
|
The Tribunal made a decision with respect to a complaint filed
by Jastram Technologies Inc. (Jastram) concerning a solicitation of
the Department of Public Works and Government Services (the
Department) for specialized batteries, on behalf of the Department
of National Defence.
Jastram alleged that the Department failed to clearly identify
how equivalency would be determined.
Having examined the evidence contained in the complaint, the
Tribunal decided not to initiate an inquiry into this complaint
because it was not filed within the time limits for filing a
complaint set out in section 6 of the Canadian International
Trade Tribunal Procurement Inquiry Regulations. Jastram has
appealed this decision to the Federal Court of Canada.
|
| |
|
|
Corel Corporation
PR-98-012 and PR-98-014
Determination:
Complaints valid
(October 26, 1998)
|
The Tribunal made a determination with respect to two complaints
filed by Corel Corporation (Corel) concerning a solicitation of the
Department of Public Works and Government Services (the
Department). The solicitation was for an enterprise licence for an
office automation suite for Revenue Canada.
Corel alleged that the Department created an evaluation
framework for the Request for Proposal that was biased in favour of
the incumbent, Microsoft Corporation.
Having examined the evidence and arguments presented by the
parties and considered the subject matter of the complaint, the
Tribunal determined that the procurement was not conducted
according to NAFTA, the AGP and the AIT and that, therefore, the
complaints were valid.
The Tribunal recommended, as a remedy, that the Department issue
a new solicitation for the procurement or, in the alternative, that
the Department develop jointly with Corel a proposal for
compensation.
The Department has appealed the Tribunal's determination to the
Federal Court of Canada.
|
| |
|
Judicial
Reviews of Procurement Decisions
|
The Federal Court of Canada dismissed applications by both the
Attorney General of Canada (on behalf of Defence Construction
Canada) and I.C.S. International Code Fire Services Inc. to review
a decision by the Tribunal in File No. PR-97-008, Symtron
Systems Inc.
On September 28, 1998, the Federal Court of Canada made a
decision (Court File No. T-944-98) relating to a Tribunal case
(File No. PR-97-034, Wang Canada Limited) in which the
Department of Public Works and Government Services decided not to
implement the Tribunal's recommendation to award the contract at
issue to Wang Canada Limited. The Federal Court of Canada quashed
the decision not to implement and ordered the Department to follow
the Tribunal's recommendation.
Table 2 lists the procurement decisions that were appealed to or
decided by the Federal Court of Canada during fiscal year
1998-99.
|
|
File No.
|
Complainant
|
Date of Receipt of
Complaint
|
Status/Decision
|
|
PR-97-033
|
IBM Canada Ltd.
|
December 11, 1997
|
Decision issued April 24, 1998
Complaint valid
|
|
PR-97-035
|
Frontec Corporation
|
December 22, 1997
|
Decision issued May 6, 1998
Complaint not valid
|
|
PR-97-036
|
Novus Incorporated
|
December 29, 1997
|
Complaint withdrawn
|
|
PR-97-037
|
Tactical Technologies Inc.
|
December 31, 1997
|
Decision issued April 30, 1998
Complaint valid in part
|
|
PR-97-040
|
Société de coopération pour le développement international
|
January 22, 1998
|
Decision issued April 9, 1998
Complaint not valid
|
|
PR-97-041
|
Mirtech International Security Inc.
|
January 28, 1998
|
Decision issued May 15, 1998
Complaint not valid
|
|
PR-97-045
|
Flolite Industries
|
February 6, 1998
|
Decision issued May 8, 1998
Complaint not valid
|
|
PR-97-047
|
Valcom Ltd.
|
February 12, 1998
|
Order issued April 21, 1998
Complaint dismissed/Late filing
|
|
PR-97-051
|
Safety Projects International Inc.
|
March 12, 1998
|
Decision issued June 18, 1998
Complaint not valid
|
|
PR-97-052
|
PeopleSoft Canada Company Limited
|
March 16, 1998
|
Complaint withdrawn
|
|
PR-97-054
|
Bell Canada
|
March 27, 1998
|
Decision issued July 13, 1998
Complaint valid
|
|
PR-98-001
|
SHL Systemhouse
|
April 29, 1998
|
Complaint withdrawn
|
|
PR-98-002
|
Installation Globale Normand Morin & Fils Inc.
|
May 1, 1998
|
Decision issued August 21, 1998
Complaint valid
|
|
PR-98-003
|
Premium DataScan Services, Inc.
|
May 8, 1998
|
Decision issued August 12, 1998
Complaint not valid
|
|
PR-98-004
|
Rogers Enterprises Ltd.
|
May 11, 1998
|
Not accepted for inquiry/No reasonable indication of a
breach
|
|
PR-98-005, PR-98-006 and PR-98-009
|
Lotus Development Canada Limited, Novell Canada, Ltd. and
Netscape Communications Canada Inc.
|
May 25 and 26 and June 1, 1998
|
Decision issued August 14, 1998
Complaints dismissed
|
|
PR-98-007
|
Safety Projects International Inc.
|
May 26, 1998
|
Decision issued August 24, 1998
Complaint not valid
|
|
PR-98-008
|
Jastram Technologies Inc.
|
June 1, 1998
|
Not accepted for inquiry/Late filing
|
|
PR-98-010
|
M.E.C. Systems Inc.
|
June 4, 1998
|
Not accepted for inquiry/Late filing
|
|
PR-98-011
|
Evans
|
June 5, 1998
|
Abandoned while filing
|
|
PR-98-012 and
PR-98-014
|
Corel Corporation
|
June 12 and July 14, 1998
|
Decision issued October 26, 1998
Complaints valid
|
|
PR-98-013
|
E.W. Consulting Services Corp.
|
July 9, 1998
|
Not accepted for inquiry/Not a designated entity
|
|
PR-98-015
|
3M Canada Company
|
July 21, 1998
|
Not accepted for inquiry/Not a potential supplier
|
|
PR-98-016
|
Teknion Furniture System
|
July 29, 1998
|
Complaint withdrawn
|
|
PR-98-017
|
3M Canada Company
|
August 7, 1998
|
Not accepted for inquiry/Not a designated contract
|
|
PR-98-018
|
Ferriby Marine
|
August 26, 1998
|
Not accepted for inquiry/Late filing
|
|
PR-98-019
|
Amdahl
|
August 28, 1998
|
Complaint withdrawn
|
|
PR-98-020
|
Giga-Tron Associates Ltd.
|
August 28, 1998
|
Not accepted for inquiry/Late filing
|
|
PR-98-021
|
Transpolar Technology Corporation
|
September 10, 1998
|
Not accepted for inquiry/Not a designated contract
|
|
PR-98-022
|
SHL Systemhouse
|
September 17, 1998
|
Not accepted for inquiry/No denial of relief
|
|
PR-98-023
|
Marcomm Fibre Optics Inc.
|
September 24, 1998
|
Decision issued December 7, 1998
Complaint not valid
|
|
PR-98-024
|
Atlantic Safety Centre
|
September 25, 1998
|
Abandoned while filing
|
|
PR-98-025
|
M.D. Heat Techs Inc.
|
September 28, 1998
|
Decision issued December 3, 1998
Complaint not valid
|
|
PR-98-026
|
Krista Dunlop & Associates
|
October 9, 1998
|
Not accepted for inquiry/Late filing
|
|
PR-98-027
|
Service Star Building Cleaning Inc.
|
October 23, 1998
|
Decision issued January 22, 1999
Complaint valid
|
|
PR-98-028
|
Spacesaver Corporation
|
October 27, 1998
|
Decision issued January 11, 1999
Complaint valid
|
|
PR-98-029
|
Doran Canadian Expo Consortium
|
November 2, 1998
|
Decision issued February 12, 1999
Complaint not valid
|
|
PR-98-030
|
Valcom Ltd.
|
November 6, 1998
|
Not accepted for inquiry/No reasonable indication of a
breach
|
|
PR-98-031
|
Service Star Building Cleaning Inc.
|
November 17, 1998
|
Decision issued February 12, 1999
Complaint not valid
|
|
PR-98-032
|
Polaris Inflatable Boats Canada Inc.
|
November 19, 1998
|
Decision issued March 8, 1999
Complaint valid
|
|
PR-98-033
|
Polaris Inflatable Boats Canada Inc.
|
November 19, 1998
|
Decision issued March 8, 1999
Complaint valid
|
|
PR-98-034
|
Keystone Supplies Company
|
December 1, 1998
|
Accepted for inquiry
|
|
PR-98-035
|
Keystone Supplies Company
|
December 1, 1998
|
Accepted for inquiry
|
|
PR-98-036
|
Colebrand Limited
|
December 7, 1998
|
Not accepted for inquiry/Not a designated contract
|
|
PR-98-037
|
ITS Electronics
|
January 4, 1999
|
Accepted for inquiry
|
|
PR-98-038
|
MIL Systems
|
January 5, 1999
|
Accepted for inquiry
|
|
PR-98-039
|
Wescam Inc.
|
January 19, 1999
|
Accepted for inquiry
|
|
PR-98-040
|
Cougar Aviation Limited
|
January 22, 1999
|
Accepted for inquiry
|
|
PR-98-041
|
Energy and Environmental Analysis, Inc.
|
January 28, 1999
|
Complaint withdrawn
|
|
PR-98-042
|
Discover Training Inc.
|
February 1, 1999
|
Accepted for inquiry
|
|
PR-98-043
|
NFC Canada Limited
|
February 2, 1999
|
Not accepted for inquiry/No reasonable indication of a
breach
|
|
PR-98-044
|
Ultimatrol Technologies Inc.
|
February 2, 1999
|
Not accepted for inquiry/No reasonable indication of a
breach
|
|
PR-98-045
|
Ruiter Construction Ltd.
|
February 5, 1999
|
Accepted for inquiry
|
|
PR-98-046
|
Deloitte & Touche Consulting Group
|
February 8, 1999
|
Accepted for inquiry
|
|
PR-98-047
|
Novell Canada, Ltd.
|
February 11, 1999
|
Accepted for inquiry
|
|
PR-98-048
|
Service Star Building Cleaning Inc.
|
February 16, 1999
|
Abandoned while filing
|
|
PR-98-049
|
Malatest & Associates Ltd.
|
February 25, 1999
|
Abandoned while filing
|
|
PR-98-050
|
Douglas Barlett Associates Inc.
|
March 1, 1999
|
Accepted for inquiry
|
|
PR-98-051
|
National Airmotive Corporation
|
March 10, 1999
|
Accepted for inquiry
|
|
PR-98-052
|
Marathon Management Company
|
March 11, 1999
|
Accepted for inquiry
|
|
PR-98-053
|
KPMG Consulting Services
|
March 17, 1999
|
Not accepted for inquiry/Late filing
|
|
PR-98-054
|
Mediascan
|
March 22, 1999
|
Being filed
|
|
PR-98-055
|
MxI Technologies Ltd.
|
March 31, 1999
|
Being filed
|
| |
CHAPTER
VII
|
| |
FINDING THE
RIGHT PROCEDURAL BALANCE IN SIMA INQUIRIES
|
Introduction
|
The Tribunal is a quasi-judicial body which has rules and
procedures similar to those of a court of law, but they are not
quite as strict or formal. It is constituted in this way as a court
of easy access, in part, so that large and small companies alike
may readily and effectively avail themselves of the rights that
they have under SIMA to take and respond to trade action involving
dumped and subsidized imports.
Indeed, the size and complexity of cases which come before the
Tribunal vary widely. There are cases brought by large, well-known
Canadian firms, involving hundreds of millions of dollars in
international trade, and cases brought by small, privately held
firms, involving no more than a few hundred thousand dollars in
trade. The former cases typically involve numerous parties, with
each represented by legal teams from some of the largest firms in
the country. The smaller cases typically involve few parties, not
all of which may be represented by counsel.
Clearly, the Tribunal's stakeholders have widely different
levels of understanding of the complexities of trade law and widely
different levels of financial resources to apply to the exercise of
their legal rights. The challenge for the Tribunal, from a
procedural standpoint, is to put in place a process that responds
fairly, efficiently and effectively to the different needs and
circumstances of all of its stakeholders.
This procedural challenge requires the Tribunal to strike a
balance between often conflicting pressures. For example, while the
Tribunal may strive to streamline its procedures, to keep them
simple and understandable and to keep costs down, the requirements
of fairness and natural justice impose certain minimum requirements
that some stakeholders may perceive as legalistic, complex and
costly. Moreover, while the Tribunal strives to conduct an open and
transparent process, it must at the same time ensure that there is
no public disclosure of any party's confidential information which
could cause that party commercial harm.
Achieving a proper balance of these opposing procedural demands
requires constant vigilance and monitoring by the Tribunal. In this
context, over the past several years, the Tribunal has used a
variety of consultative processes to obtain the views of its
stakeholders on its existing procedures and proposed changes to
those procedures. These include holding bi-annual meetings between
the trade bar and the Tribunal; conducting surveys of stakeholders
to obtain their views and opinions on procedural matters; and
organizing workshops for stakeholders on specific procedural
issues.
Following feedback from its stakeholders, the Tribunal has made
several adjustments to its inquiry procedures over the past few
years. Generally speaking, the thrust of these changes was to
improve the quality and flow of information that is collected and
exchanged by the Tribunal and the parties in the period leading up
to the hearings in inquiries and reviews. The following section
will describe the initiatives which the Tribunal has undertaken,
the specific changes which have been made and the reasons for those
changes.
|
| |
|
Adapting to a
Changing Environment
|
The Tribunal was established in 1989, as part of a
reorganization of Canada's trade institutions. Specifically, the
Tribunal replaced and took over the responsibilities of the
Canadian Import Tribunal, the Tariff Board and the Textile and
Clothing Board. The Tribunal's creation also coincided with the
implementation of the Canada-United States Free Trade
Agreement (the FTA) along with its unique and novel approach to
trade dispute resolution - the binational panel appeal process.
Under the binational panel appeal process, Tribunal decisions in
SIMA cases, which were reviewable by the Federal Court of Canada,
could alternatively be appealed, by Canadian or US companies, to a
binational panel of trade specialists. The binational panel
mechanism was, of course, subsequently brought forward into NAFTA
when the FTA was expanded to include Mexico.
The new binational panel appeal process took little time to make
its presence felt, as counsel were eager to test it out as an
alternative appeal route. By the early 1990s, binational
panels had rendered several major decisions on appeals of Tribunal
anti-dumping and countervailing decisions. It was apparent from
these early decisions that the binational panel appeal process had
placed Canadian anti-dumping/countervailing inquiries under a
heightened degree of scrutiny and oversight. At about the same
time, the Tribunal's inquiries were becoming more litigious, as
parties, through their counsel, sought to assert their claims and
rights more aggressively than in the past. This increased
litigation may have been prompted, at least to some extent, by the
evolution of charter cases and other developments in Canadian
administrative law.
All of these developments contributed to altering the Tribunal's
operational environment in a way that tended to foster an increase
in the length and complexity of Tribunal hearings, a growth in the
information burden on parties and a corresponding expansion in the
size and complexity of the Tribunal's inquiry record. In turn,
these changes were accompanied by increasing costs for all
participants. By 1994, the Tribunal recognized that the increasing
costs and complexity of its inquiries, if not stemmed or reversed,
could undermine the kind of accessibility that the Canadian
anti-dumping/countervailing regime was intended to provide. While
the concern over costs and complexity applied to all stakeholders,
smaller companies with limited resources seemed especially
vulnerable. Accordingly, in the fall of 1994, the Tribunal
established an internal committee to conduct a full review of
Tribunal procedures in SIMA inquiries and reviews with a view to
proposing ways and means of making the process less costly and more
efficient, without compromising the principles of fairness and
transparency.
Over the next two years, the Tribunal prepared a number of
discussion papers on proposed changes which were circulated to and
discussed with stakeholders. In the fall of 1996, the Tribunal
implemented a number of significant changes, ranging from those
relating to scheduling and time management to those which addressed
the way in which information is collected, exchanged and recorded
in the Tribunal's inquiries and reviews.
In terms of scheduling and time management, the Tribunal decided
that the key dates for the filing and distribution of information
would be advanced so that parties would have more time to review
material in advance of the hearing. New procedures were also
announced for more strictly enforcing filing deadlines for
questionnaires and submissions. The Tribunal also decided that
hearing schedules should be subject to shorter and stricter time
limits. Beyond these scheduling and time management issues, there
were other substantive changes relating to information collection
and distribution, and protection of confidential information which
are elaborated below.
|
| |
|
|
Information Issues
Questionnaires
|
A first important change dealt with expanding the investigative
activities of the Tribunal. More specifically, it was decided that
the Tribunal would formally seek the input of parties in the design
of the various manufacturer, importer, exporter and purchaser
questionnaires which it used to gather key statistical and other
information in SIMA inquiries and reviews. Although the Tribunal
had sometimes, on an ad hoc basis, sought the views of
parties in the past, the consultations which took place were
generally limited to a specified narrow range of questionnaire
issues.
In formalizing and broadening the consultation process, the
objective was to enable the Tribunal to customize its
questionnaires to the particular issues and information
requirements of each case, having regard to the capabilities of the
parties to provide the necessary information, in a timely manner,
without undue burden. Consultations would also tend to reduce the
likelihood of collecting redundant and unnecessary information.
Moreover, it was felt that, in many instances where parties
required information that would assist in the Tribunal's inquiry or
review, it would be more effective and efficient and, hence, less
costly for the overall process if the Tribunal assumed
responsibility, through its questionnaires, for gathering the
information.
|
| |
|
|
Requests for Information
|
A second significant change involved establishing a process for
the orderly exchange of requests for information (RFIs) between
parties prior to a hearing. Under the previous procedures, parties
had usually sought additional information from each other in the
period leading up to the hearing, but there were no set time frames
or rules for these exchanges. As a consequence, there tended to be
a continual, but unscheduled, flow of requests for information
between parties throughout the inquiry. Furthermore, the problems
which inevitably arose in connection with these exchanges had to be
adjudicated by the Tribunal on an ad hoc basis. These
exchanges and the related problems often spilled into hearings,
disrupting and prolonging them.
Under the proposed RFI procedures, specific time frames for the
process were established, providing for the process to be completed
well before the hearing. Specific rules were also created to govern
the exchanges, including the manner and time frames within which
the Tribunal would dispose of parties' objections to RFIs. The
proposals thus incorporated the RFI process into the Tribunal's
formal inquiry schedule in a way which, it was hoped, would improve
the information base for the inquiry and, at the same, encourage
shorter, more focused and less costly hearings.
|
| |
|
|
Fine Tuning
|
The above procedures were implemented by the Tribunal with the
understanding that their effectiveness would be subject to ongoing
monitoring and further consultation with stakeholders. After the
new procedures were applied in the first few cases, it became
apparent that there were certain problems which needed to be
addressed. In particular, the Tribunal noted that the new RFI
procedure had resulted almost immediately in a substantial increase
in the scope and volume of information requests. Responding to
these requests represented a substantial additional burden on
parties. Moreover, while some of the information generated through
the RFI process was useful, a significant proportion was of
marginal or no relevance, in the Tribunal's estimation.
Following discussions with stakeholders, the Tribunal concluded
that the RFI process, as originally conceived, was too open ended
and unsupervised in terms of the scope and nature of the
information that parties could request from each other.
Accordingly, the Tribunal decided to control excessive requests by
requiring parties to submit their questions first to the Tribunal
for its consideration, together with an explanation as to why the
question was relevant. Only those questions whose relevance the
Tribunal accepted would be forwarded to parties for response,
subject to any objections that parties might have, according to a
specified objection procedure. In the cases heard subsequent to
these amendments, the RFI process seems to have worked well in
generating useful information without undue costs and burden on the
parties, both in the Tribunal's estimation and that of stakeholders
that have provided feedback to the Tribunal.
|
| |
|
|
Confidentiality Issues
|
As often happens, changes in one area may have unintended or
unanticipated effects in other areas. For example, while the RFI
process enhanced the information base for inquiries, it also raised
concerns about the confidentiality of some of the information
provided. This was particularly true with respect to documents such
as future-oriented company business plans and forecasts. These
documents contained strategic information that parties felt could
be extremely damaging to their commercial interests if they were
disclosed to their competitors.
As a result of these and other related confidentiality concerns,
the Tribunal re-examined its confidentiality procedures, over the
past year, in consultation with its stakeholders. This
re-examination will culminate with the issuing of a guideline and
practice notice, in 1999, on the designation and use of
confidential information in Tribunal proceedings. Currently, this
guideline is under discussion with stakeholders.
This guideline reaffirms the Tribunal's commitment to conducting
transparent inquiries with as much information as possible on the
public record. At the same time, it reiterates the importance which
the Tribunal has always accorded to the protection of commercially
sensitive information and summarizes the measures which are already
in place to safeguard the legitimate confidentiality concerns of
its stakeholders. However, the Tribunal recognizes that there is a
need to adjust the existing balance between the opposing
requirements of transparency and confidentiality. To this end, the
draft guideline contains a number of initiatives.
|
| |
|
|
Filing of Partial Documents
|
A Tribunal questionnaire or an RFI may sometimes ask parties to
produce voluminous documents, including highly sensitive business
plans and forecasts. In consultations with stakeholders,
concerns were expressed not only over the risks of disclosure of
commercially sensitive information but also over the costs and
burdens of having to produce entire sets of documents, whether
confidential or not, when only a small number of pages may be
relevant or necessary in a particular case.
Accordingly, to address the issues of risk, burden and costs,
the draft guideline announces a procedure whereby counsel who is
being asked to provide information on a client's behalf could
request that counsel seeking the information view the material
before filing, at an agreed upon location, to determine which, if
any, of it is needed. The procedure envisages that parties will, at
least initially, attempt to work out an agreement amongst
themselves on the viewing and filing of documents. However, where
such agreement is not possible, the Tribunal, at a party's request,
will decide whether and how a viewing should take place before any
documents are filed.
|
| |
|
|
Restricted Access to Experts
|
To further safeguard confidential documents, the draft guideline
also reiterates that, in certain circumstances, the Tribunal will
agree to restrict access to the confidential file by certain
persons, such as independent economic and financial experts.
Without such restrictions, such persons, when retained by counsel
to assist in case preparations, would be granted access to the full
confidential file where they had given the required declarations
and undertakings not to disclose confidential information. Where
such restrictions were granted, the Tribunal would limit experts'
access to the confidential record only to that portion which is
necessary for them to provide their advice and analysis.
|
| |
|
|
Designation of Confidential Information
|
At the same time as announcing these new confidentiality
safeguards, the draft guideline also contains a draft practice
notice which conveys the Tribunal's concerns about an increase in
the amount of information being designated as confidential in some
of its inquiries. This has affected the Tribunal's ability to put
information on the public record and conduct hearings open to the
public. It also undermines the Tribunal's ability to issue reasons
for decision which publicly disclose all relevant information
relied upon by it when coming to its decisions.
Accordingly, the draft practice notice reminds parties of their
obligation to provide non-confidential summaries of information
that they wish to designate as confidential. It also notes the
Tribunal's authority to disregard such information where parties
are unable, if challenged, to show that the confidentiality
designation is justified. To assist persons and counsel in deciding
what information can be designated confidential, the notice goes on
to provide a non-exhaustive list of the type of information that
has typically been considered to be public.
|
| |
|
|
Selective Disclosure of Account-Specific Injury
Allegations
|
The draft practice notice also addresses the issue of
account-specific injury allegations which frequently contain
sensitive information. While recognizing the confidential nature of
these allegations, the Tribunal indicates that the requirements of
fairness and natural justice oblige a certain minimum amount of
information to be disclosed to the person against whom the
allegation is made, in order for that person to respond
effectively. This information includes the name of the account or
customer, the product in issue, the date of the event and the
source of the product. The notice advises parties that failure to
make such disclosure could result in the Tribunal not taking the
injury allegation into account or giving less weight to the
allegation.
|
| |
|
Conclusion
|
Over the past few years, the Tribunal has made numerous
adjustments to its SIMA inquiry and review procedures in close
consultation with stakeholders. The changes made reflect the
Tribunal's commitment to facilitating access to the system for all
stakeholders by reducing costs, burden and complexity without
compromising fairness. As well, they embody the Tribunal's
determination to ensure confidence and security in the system
through effective protection of confidential information, while
still maintaining the highest possible degree of openness and
transparency in its inquiries and reviews.
The next two years also promise to be a period of transition, as
the SIMA legislative changes outlined in Chapter II are
implemented. In addition to the amendments made to the Tribunal's
Rules of Procedure, this will require further amendments to
existing procedures. The Tribunal will apply the changes in the
same spirit of cooperation with stakeholders that has characterized
past changes. Some of the changes arising from the legislative
amendments will allow the Tribunal to be more efficient in its
operations. Others will pose a challenge to ensure that they do not
increase the cost of proceedings. The Tribunal is confident that
the procedural framework that it now has in place will enable it to
meet this challenge effectively and maintain a cost-effective
access to SIMA proceedings. Moreover, the Tribunal will carry
forward the same degree of commitment and determination to the
principles of access, fairness, security and transparency that have
been, and will remain, the hallmarks of its procedures.
|
