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ANNUAL REPORT
FOR THE FISCAL YEAR ENDING MARCH 31, 2004


TABLE OF CONTENTS

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April 26, 2004

The Honourable Ralph E. Goodale, P.C., M.P.
Minister of Finance
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Minister:

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 Tribunal's annual report for the fiscal year ending March 31, 2004.

Yours sincerely,

Pierre Gosselin
Chairman

 

CHAPTER I

 

HIGHLIGHTS

Members

On September 15, 2003, Mr. James Angus Ogilvy was re-appointed to the position of Member of the Canadian International Trade Tribunal (the Tribunal). Prior to his appointment in 1999, Mr. Ogilvy served in the trade section of the Alberta Department of International and Intergovernmental Relations, where his work involved negotiation, dispute management and policy development. He was a member of the Alberta delegation that negotiated the Agreement on Internal Trade (AIT) and, subsequently, served as Alberta's Internal Trade Representative. From 1986 to 1993, he served on the Alberta Liquor Control Board, where, as Director of Planning and Policy, he represented Alberta in GATT disputes involving wine, spirits and beer.

Mr. Ogilvy's prior work in the private sector includes the position of Senior Editor, Humanities, for the landmark original edition of The Canadian Encyclopedia. He taught at Bishop's University and the University of Toronto. He has a B.A. from the University of Calgary and an M.A. and a Ph.D. from the University of Toronto.

   

Senior Staff

On February 19, 2004, Mr. John A. Greig was appointed Director General of the Research Branch in replacement of Mr. Ronald W. Erdmann. The Tribunal would like to take this opportunity to recognize Mr. Erdmann's important contribution over the last 15 years in developing and refining the Tribunal's investigative and fact-finding processes.

   

Dumping and Subsidizing Inquiries and Reviews

In the fiscal year, the Tribunal issued six preliminary determinations of injury under subsection 37.1(1) of the Special Import Measures Act (SIMA). The Tribunal also issued three findings following injury inquiries under section 42 and three orders following reviews under section 76.03. The Tribunal issued four orders following interim reviews pursuant to section 76.01. At the end of the year, there were three expiry reviews in progress.

During the fiscal year, the Tribunal issued a publication entitled Guide to Making Requests for Product Exclusions to facilitate the filing of requests for specific product exclusions in Tribunal inquiries and reviews and to ensure that the parties and the Tribunal have all the relevant information needed to address the request in advance of a public hearing or of a decision whether to commence an interim review.

   

Request for a Ruling on the Identity of the Importer

The Commissioner of the Canada Customs and Revenue Agency (CCRA) (now the President of the Canada Border Services Agency [CBSA]) requested the Tribunal to rule, pursuant to subsection 89(1) of SIMA, on the identity of the importer in Canada of bicycles originating in or exported from Chinese Taipei and the People's Republic of China (China) that were subject to the order issued by the Tribunal on December 9, 2002, in Expiry Review No. RR-2002-001.

   

Procurement Review

This year marks the 15th year of Canada's independent bid challenge mechanism. On January 1, 1989, the Procurement Review Board, which reported to Parliament through the then Minister of Consumer and Corporate Affairs, began work as an independent quasi-judicial tribunal that resolved complaints relating to federal government procurements covered by the Canada-United States Free Trade Agreement. In January 1994, the Tribunal, which reports to Parliament through the Minister of Finance, took over the mandate with the implementation of the North American Free Trade Agreement (NAFTA). Since January 1, 1994, 588 complaints about procurements undertaken by various federal entities have been received by the Tribunal.

The Tribunal received 83 complaints during the fiscal year. The Tribunal issued 31 written determinations of its findings and recommendations (excluding the 3 cases that were dismissed). Thirteen of these determinations related to cases that were in progress at the end of fiscal year 2002-2003. Three determinations were remanded back to the Tribunal.

During the fiscal year, the Tribunal revised its publication entitled Procurement Review: A Descriptive Guide. It also revised, further to consultations with stakeholders, the Procurement Cost Guidelines that have been re-issued under the title Guideline for Fixing Costs in Procurement Complaint Proceedings. The new guideline applies to procurement complaints filed after January 31, 2004.

   

Trade and Tariff Reference

 

Textile Reference

During the fiscal year, the Tribunal issued eight reports to the Minister of Finance concerning seven requests for tariff relief and one review of a tariff relief order. At the end of the year, one request for tariff relief was under investigation, and there were three requests for which investigations had not yet been initiated.

   

Safeguard Inquiry

On March 21, 2002, the Tribunal was directed by the Governor in Council, on the recommendation of the Minister of Finance and the Minister for International Trade, pursuant to paragraph 20(a) of the Canadian International Trade Tribunal Act (CITT Act), to inquire into and report on the importation of certain steel goods. The Tribunal was also asked to provide recommendations on remedies where appropriate.

As directed by the Governor in Council, the Tribunal submitted its report and recommendations on August 19, 2002. The government announced in the summer of 2003 that it would not implement the Tribunal's recommendations.

   

Appeals

The Tribunal issued decisions on 89 appeals from decisions of the CCRA made under the Customs Act, the Excise Tax Act and SIMA.

   

Access to Tribunal Notices, Decisions and Publications

The Tribunal's Web site provides an exhaustive repository of all Tribunal notices, decisions and publications, as well as other information relating to the Tribunal's current activities. The Tribunal offers a subscriber alert service that notifies subscribers of each new posting on the Tribunal's Web site. Subscribers can choose their areas of interest. The service also allows subscribers to register and deregister on-line. This service is available free of charge.

Tribunal notices and decisions are also published in the Canada Gazette. Those relating to procurement complaints are also published on MERX (Canada's electronic tendering service).

   

Meeting Statutory Deadlines (Timeliness)

All the Tribunal's inquiries were completed on time, and decisions were issued within the statutory deadlines. For appeals of customs and excise 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.

Caseload

 

Cases Brought Forward from Previous Fiscal Year

Cases Received in Fiscal Year

Total

Decisions/ Reports Issued

Cases Withdrawn/ Not Initiated/ Dismissed

Cases Outstanding (March 31, 2004)

SIMA ACTIVITIES

           

Preliminary Injury Inquiries

-

6

6

6

-

-

Inquiries

1

3

4

3

-

1

Public Interest Inquiries

-

-

-

-

-

-

Requests for Interim Review

3

1

4

4

-

-

Expiries

-

1

1

1

-

-

Expiry Reviews

4

4

8

4

-

4

APPEALS

           

Customs Act

109

44

153

78

27

48

Excise Tax Act

90

13

103

10

5

88

SIMA

  3

 -

  3

 1

 -

  2

Total

202

57

259

89

32

138

ECONOMIC, TRADE, TARIFF AND SAFEGUARD INQUIRIES

           

Textile Reference

           

Requests for Tariff Relief

9

4

13

8

1

4

Expiries

-

-

-

-

-

-

Reviews

-

1

1

1

-

-

Requests for Reconsideration

1

1

2

1

-

1

Economic, Trade and Tariff-related Matters

-

-

-

-

-

-

Safeguard Inquiries

           

Global

-

-

-

-

-

-

Imports from China

-

-

-

-

-

-

PROCUREMENT REVIEW ACTIVITIES

           

Complaints

15

86*

101

31**

59

11

* Includes three cases that were remanded by the Federal Court of Canada.
** Includes decisions on two cases that had been remanded by the Federal Court of Canada.

 

CHAPTER II

 

MANDATE, ORGANIZATION AND ACTIVITIES

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, SIMA, the Customs Act, the Excise Tax Act, the CITT Regulations, the CITT Procurement Inquiry Regulations and the CITT Rules (Rules).

   

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 from decisions of the CBSA made under the Customs Act and SIMA or of the Minister of National Revenue (the Minister) under the Excise Tax Act;

· conduct inquiries into complaints by potential suppliers concerning federal government procurement that is covered by NAFTA, the AIT, the Agreement on Government Procurement (AGP) and the Canada-Korea Agreement on the Procurement of Telecommunications Equipment;

· conduct investigations into requests from Canadian producers for tariff relief on imported textile inputs that they use in production operations;

· conduct global safeguard inquiries into complaints by domestic producers that increased imports are causing, or threatening to cause, serious injury to domestic producers;

· conduct safeguard inquiries with respect to increased imports from China; 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 Operation

In carrying out most of its responsibilities, the Tribunal conducts inquiries with hearings that are open to the public. These are normally held at the Tribunal's offices in Ottawa, Ontario, although hearings may also be held elsewhere in Canada, in person or through videoconferencing. 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, generally conducted 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 for the protection of confidential information. Only independent counsel who have filed declarations and confidentiality undertakings may have access to confidential information. Protecting commercially sensitive information against unauthorized disclosure has been, and continues to be, of paramount importance to the Tribunal. In this context, the Tribunal, further to consultations with stakeholders, has issued a revised guideline on this matter entitled Designation, Protection and Use of 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 U.S. and/or Mexican interests in SIMA. Governments that are members of the World Trade Organization (WTO) may challenge some of the Tribunal's decisions before 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 Chairperson and two Vice-Chairpersons, who are appointed by the Governor in Council for a term of up to five years that is renewable once. A maximum of five additional members may be temporarily appointed. The Chairperson 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

There are currently 7 Tribunal members assisted by a permanent staff of 87 persons. Its principal officers are the Secretary, responsible for corporate management, public relations, dealings with other government departments and other governments, and the court registry functions of the Tribunal; the Director General of the Research Branch responsible for the investigative portion of inquiries, 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.

   

Consultations

Through the Tribunal/Canadian Bar Association Bench and Bar Committee, the Tribunal provides a forum to promote discussion with the bar on issues of importance. The committee also includes representatives from the trade consulting community. The Tribunal consults with bar associations, representatives of industries and others that appear or 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. The Tribunal also briefs federal government departments and trade associations on its procedures.

   

Judicial Review and Appeals to the Federal Court of Canada

Any person affected by Tribunal findings or orders under section 43, 44 or 76 of SIMA can request judicial review by the Federal Court of Canada, for instance, on grounds of alleged denial of natural justice and error of fact or law. Similarly, any person affected by Tribunal procurement orders or determinations under the CITT Act can request judicial review by the Federal Court of Canada. Lastly, Tribunal appeal orders and decisions, under the Customs Act, SIMA or the Excise Tax Act, can be appealed to the Federal Court of Canada.

   

Judicial Review to NAFTA Binational Panel

Tribunal findings, orders or recommendations under section 43, 44 or 76 of SIMA involving goods from the United States and Mexico may be reviewed by a NAFTA binational panel.

   

WTO Dispute Resolution

Governments that are members of the WTO may challenge Tribunal injury findings or orders in dumping and countervailing duty cases before the WTO dispute settlement bodies. This is initiated by intergovernmental consultations.

   

Organization

CHAIRPERSON

Pierre Gosselin

VICE-CHAIRPERSONS

Patricia M. Close
Richard Lafontaine

MEMBERS

Zdenek Kvarda
James A. Ogilvy
Ellen Fry
Meriel V. M. Bradford

SECRETARIAT

Secretary
Michel P. Granger

RESEARCH BRANCH

Executive Director of Research
Ronald W. Erdmann*

Director General
John A. Greig

LEGAL SERVICES BRANCH

General Counsel
Reagan Walker

* Special assignment.

Legislative Mandate

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

Safeguard Measures

30.11

Complaints by Potential Suppliers in Respect of Designated Contracts

30.21 to 30.26

Safeguard Inquires Concerning Market Disruption, Trade Diversion and Market Disruption Extension regarding Goods Originating in the People's Republic of China at the Request of either the Government or a Domestic Producer

SIMA

33 and 37

Advice Regarding Reference to the Tribunal

34(2) and 35(3)

Preliminary Injury Inquiry

37.1

Preliminary Determination of Injury

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

Public Interest

46

Advice to the CBSA

61

Appeals of Re-determinations of the CBSA 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 CBSA or Other Interested Persons

76.01

Interim Reviews of Orders by the Tribunal

76.02

Reviews of Orders by the Tribunal on Referral Back and Re-hearing

76.03

Expiry Reviews

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

60.2

Application for an extension of time to request a re-determination or a further re-determination

67

Appeals of Decisions of the CBSA Concerning Value for Duty and Origin and Classification of Imported Goods

67.1

Requests for Time Extension to File Notices of Appeal

68

Appeals to the Federal Court of Canada

70

References of the CBSA Relating to the Tariff Classification or Value for Duty of Goods

Excise Tax Act

81.19, 81.21, 81.22,
81.23, 81.25 and 81.33

Appeals of Assessments and Determinations of the Minister

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

Energy Administration Act

13

Declarations Concerning the Amount of Oil Export Charge

 

CHAPTER III

 

DUMPING AND SUBSIDIZING INJURY INQUIRIES AND REVIEWS

Process

Under SIMA, the CBSA may impose anti-dumping and countervailing duties if domestic producers are injured by imports of goods into Canada:

· at prices lower than sales in the home market or lower than the cost of production (dumping), or

· that have benefited from certain types of government grants or other assistance (subsidizing).

The determination of dumping and subsidizing is the responsibility of the CBSA. 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.

   

Preliminary Injury Inquiries

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 CBSA. If the CBSA initiates a dumping or subsidizing investigation, the Tribunal initiates a preliminary injury inquiry under subsection 34(2) of SIMA. The Tribunal seeks to make all interested parties aware of the inquiry. It issues a notice of commencement of preliminary injury inquiry that is published in the Canada Gazette and forwarded to all known interested persons.

In the inquiry, the Tribunal determines whether the evidence discloses a "reasonable indication" that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury. The primary evidence is the information received from the CBSA and submissions from parties. The Tribunal seeks the views of parties on what are the like goods and which domestic producers comprise the domestic industry. In most cases, it does not issue questionnaires or hold a public hearing. The Tribunal completes its inquiry within 60 days.

If the Tribunal finds that there is a reasonable indication that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury, it makes a determination to that effect, and the CBSA continues the dumping or subsidizing investigation. If there is no reasonable indication that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury, the Tribunal terminates the inquiry, and the CBSA terminates the dumping or subsidizing investigation. The Tribunal issues reasons no later than 15 days after its determination.

   

Preliminary Injury Inquiries Completed in the Fiscal Year

The Tribunal completed six preliminary injury inquiries in the fiscal year. In each inquiry, the Tribunal determined that there was a reasonable indication of material injury caused by dumped imports. In Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate (PI-2003-002) and Stainless Steel Wire (PI-2003-004), the Tribunal issued requests for information on matters to be addressed in the inquiry. In Inquiry No. PI-2003-002, the Tribunal also held a public hearing.

Table 1 summarizes the Tribunal's preliminary injury inquiry activities during the fiscal year.

   

Advice Given Under Section 37 of SIMA

When the CBSA decides not to initiate an investigation because the evidence does not disclose a reasonable indication that the dumping or subsidizing of the goods has caused injury or retardation, or threatens to cause injury, the CBSA 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 CBSA 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.

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 CBSA when the decision regarding initiation was reached.

There were no references under section 33 of SIMA during the fiscal year.

   

Final Injury Inquiries

If the CBSA makes a preliminary determination of dumping or subsidizing, the Tribunal commences a final injury inquiry under section 42 of SIMA. The CBSA may levy provisional duties on imports from the date of the preliminary determination. The CBSA continues his investigation to a final determination of dumping or subsidizing.

As in a preliminary injury inquiry, the Tribunal seeks to make all interested parties aware of its 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 final injury inquiries, the Tribunal requests information from interested parties, receives representations and holds public hearings. The Tribunal's staff carries out extensive research for each inquiry. The Tribunal sends questionnaires to domestic producers, importers, purchasers and foreign producers. Based primarily on questionnaire responses, the Tribunal's staff prepares a report that focuses 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 report becomes part of the case record and is made available to counsel and parties.

Parties participating in the proceedings may conduct their own cases or be represented by counsel. Confidential or business-sensitive information is protected in accordance with provisions of the CITT Act.

The Special Import Measures 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, usually starting just before the CBSA makes a 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 exporters challenge the domestic producers' case. After cross-examination by parties and questioning 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 CBSA. It 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 CBSA to impose anti-dumping or countervailing duties.

   

Final Injury Inquiries Completed in the Fiscal Year

The Tribunal completed three final injury inquiries in the fiscal year. They concerned Carbon Steel Pipe Nipples, Threaded Couplings and Adaptor Fittings (NQ-2002-004), Structural Tubing (NQ-2003-001) and Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate (NQ-2003-002). In 2002, the estimated values of the Canadian markets for these goods were, respectively, $20 million, $360 million and $450 million.

   

Carbon Steel Pipe Nipples, Threaded Couplings and Adaptor Fittings

NQ-2002-004

Finding: Injury
(July 16, 2003)

This inquiry concerned dumped imports from China. Canvil, A Division of Mueller Canada Ltd. (Canvil), constituted the domestic industry. The Tribunal found that pipe fittings produced by the domestic industry were "like goods" to the subject goods.

Between 2000 and 2002, there was a surge in the volume of imports of the subject goods from China. They increased more than fivefold, rising by a further 17 percent in the first quarter of 2003. Their market share increased fourfold, while the share of the market held by Canvil declined substantially and imports from non-subject countries were displaced. The Tribunal did not accept the proposition that Canvil did not sell or pursue direct sales to all segments of the market. The Tribunal found that the subject goods competed with Canvil's goods and displaced its sales at all trade levels.

The Tribunal found that, between 2000 and the first quarter of 2003, the average resale prices of the subject goods declined sharply, from 10 to 30 percent below Canvil's prices. Because of the prices of the subject goods, Canvil was unable to implement a surcharge to offset rising costs. In sum, the Tribunal found that the price of the dumped imports from China both undercut and suppressed the price of like goods by the domestic industry and that, although other factors may have made some contribution, price was the main driving factor behind the surge in imports from China.

The evidence showed that Canvil's production, sales volumes, sales revenues and market shares declined significantly between 2000 and 2002. Canvil operated at low and decreasing capacity utilization levels and began losing money on both a gross margin and net income basis after 2000. These losses increased continuously and significantly through the first quarter of 2003. Canvil's better financial results on its export sales to the United States, where prices were better than in Canada, further reinforced the Tribunal's view that Canvil's problems were caused by the surge in heavily dumped imports from China since 2000.

   

Structural Tubing

NQ-2003-001

Finding: Injury
(December 23, 2003)

This inquiry concerned dumped structural tubing from the Republic of Korea (Korea), the Republic of South Africa (South Africa) and the Republic of Turkey (Turkey). Atlas Tube Inc., Copperweld Corporation, Novamerican Steel Inc., Welded Tube of Canada, Bull Moose Tube Limited, IPSCO Inc. (IPSCO), Prudential Steel Ltd. and Bolton Steel Tube Co. Ltd. together accounted for all domestic production and constituted the domestic industry. The Tribunal found that the structural tubing produced by the domestic industry constituted like goods to the subject goods. The Tribunal was satisfied that, taking into account the conditions of competition, it was appropriate to make an assessment of the cumulative effect of the dumped goods from all the subject countries.

In 2000, only the subject imports from Korea were present in the domestic market, with a market share of 1 percent. From the second half of 2002, imports from South Africa and Turkey entered the market, and the volume of imports from Korea increased, resulting in a dramatic increase in the volume of subject imports and in their market share at the expense of the domestic industry. The Tribunal attributed part of the decline in domestic shipments to a modest slowdown in market demand and to advance purchasing by a large buyer in anticipation of rising prices for structural tubing in the second half of 2002. However, neither of these factors could explain the nature and extent of the market disruption that occurred. The Tribunal concluded that the surge in the volume of imports of the subject goods caused a significant decline in domestic production and sales.

The Tribunal noted that rising prices of hot-rolled steel in the first half of 2002 led to sharply higher prices for structural tubing. A growing spread had also developed between the prices of hot-rolled steel sheet/hollow structural sections in North America and those in Europe and Asia, causing some purchasers to turn to foreign sources of supply. As a consequence, the subject imports began arriving in substantial volumes in the second half of 2002 when domestic prices were peaking. The industry had little choice but to lower its prices. However, the prices of the subject imports fell even further. While recognizing that some of the price decline could be attributed to the market slowdown and declining prices for hot-rolled steel sheet, the Tribunal found that prices would not have declined as steeply and rapidly had it not been for the dumping. The Tribunal found that the prices of the dumped imports had undercut and suppressed the prices of the like goods.

The Tribunal noted that the industry was profitable in the years 2000 and 2001 when the subject imports were present in only small volumes. Although the industry had its most profitable year in 2002, the effect of the dumped imports became greater in the last three months of 2002. This downward trend accelerated in the first half of 2003 and, by the second quarter, all the major producers experienced losses in net income, as unit sales declined more rapidly than unit costs. The preponderance of evidence established that the subject imports were the main reason the industry performed so poorly. The Tribunal found that the injury suffered was material.

   

Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate

NQ-2003-002

Finding: Injury
(January 9, 2004)

This inquiry concerned dumped imports from Bulgaria, the Czech Republic and Romania. The domestic industry consisted of Algoma Steel Inc., Stelco Inc. (Stelco) and IPSCO. The Tribunal found that there was one class of like goods and that imports of the subject goods from the subject countries could be cumulated.

During the Tribunal's period of inquiry, the volume of dumped imports increased quickly, becoming a significant competitive factor. They quadrupled their share of the market between 2000 and 2002, declining somewhat in the first half of 2003 to the same market share that they had in the first half of 2002. In a shrinking market, the domestic industry's sales dropped at a faster rate than the overall market declined, and the domestic industry's market share fell from 73 percent in 2000 to 59 percent during the first half of 2003. Domestic production of plate dropped by nearly 21 percent over the period of inquiry. While domestic producers' prices were consistently higher than the average prices of the subject imports, they were never able to sell plate at a price that would deliver a positive return at the gross profit level. The financial performance of the domestic industry was negative throughout the Tribunal's period of inquiry. In this atmosphere of deteriorating prices and falling sales, Stelco decided, in the first quarter of 2003, to suspend its production of plate rather than continue to produce and sell at a loss.

In the Tribunal's view, the domestic industry's steady loss in sales volume and market share, accompanied by deteriorating financial performance, constituted material injury. The Tribunal concluded that the substantial volumes and very low prices of dumped plate from Bulgaria, the Czech Republic and Romania had caused material injury to the domestic producers in the form of price erosion, price suppression and reduced profitability.

The Tribunal reviewed the effects of other factors, such as world pricing, domestic market conditions and producer-customer relationships. The Tribunal found that part of the decline in prices could be attributable to these other factors, but concluded that it was the dumping of the subject goods that had caused material injury to the domestic industry. With regard to the growing volume of imports from the United States, the Tribunal noted that they were sold at or above Canadian prices and were not disruptive to the market.

The Tribunal granted a product exclusion for plate in thicknesses greater than 4 inches.

   

Final Injury Inquiries in Progress at the End of the Fiscal Year

There was one inquiry in progress at the end of the fiscal year: Wood Venetian Blinds and Slats (NQ-2003-003) respecting dumped imports from China and Mexico.

Table 2 summarizes the Tribunal's final injury inquiry activities during the fiscal year.

   

Public Interest Inquiry Under Section 45 of SIMA

Following a finding of injury, the Tribunal notifies all interested parties that any submissions requesting an inquiry must be filed within 45 days. It may initiate, either after a request from an interested person or on its own initiative, a public interest inquiry following a finding of injury caused by dumped or subsidized imports. It may decide that there are reasonable grounds to consider that the imposition of part or all of the duties may not be in the public interest. It then conducts a public interest inquiry pursuant to section 45 of SIMA. The result of this inquiry may be a report to the Minister of Finance recommending that the duties be reduced and by how much. The Tribunal received no requests for public interest inquiries during the fiscal year.

   

Importer Ruling

Under section 89 of SIMA, the CBSA 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 CBSA, it may reconsider its original finding of material injury under section 91.

There was one request for an importer ruling in the fiscal year. On July 25, 2003, the CCRA requested a ruling on the identity of an importer in Canada of bicycles that were subject to the Tribunal's order issued on December 9, 2002, in Review No. RR-2002-001. The Tribunal held a public hearing on October 27, 2003. On March 11, 2004, the Tribunal ruled that Kent International Inc. was the importer in Canada of the said goods.

   

Interim Reviews

The Tribunal may review its findings of injury or orders at any time, on its own initiative or at the request of the Minister of Finance, the CBSA or any other person or government (section 76.01 of SIMA). It commences an interim review where one is warranted and determines if the finding or order (or any aspect of it) should be rescinded or continued to its expiry date, with or without amendment.

An interim review may be warranted where there is a reasonable indication that new facts have arisen or that there has been a change in the circumstances that led to the finding or order. For example, since the finding or order, the domestic industry may have ceased production of like goods or foreign subsidies may have been terminated. An interim review may also be warranted where there are facts that, although in existence, were not put into evidence during the previous review or inquiry and were not discoverable by the exercise of reasonable diligence at that time.

The Tribunal received one request for an interim review during the fiscal year. It determined that a review was warranted. It also determined that reviews were warranted in the case of three requests for interim reviews that were under consideration at the end of the previous fiscal year.

   

Interim Reviews Completed in the Fiscal Year

The Tribunal completed four interim reviews in the fiscal year.

On November 28, 2003, the Tribunal completed interim reviews concerning Hot-rolled Carbon Steel Plate (RD-2002-006, RD-2002-007 and RD-2002-008) of: its order made on May 17, 1999, in Review No. RR-98-004, continuing its finding made on May 17, 1994, in Inquiry No. NQ-93-004; its orders made on January 10, 2003, in Review No. RR-2001-006, continuing its findings made on October 27, 1997, in Inquiry No. NQ-97-001; and its finding made on June 27, 2000, in Inquiry No. NQ-99-004. The applicant, Wirth Steel, A General Partnership, requested the interim reviews for the exclusion of thick steel plate. On May 7, 2003, the Tribunal determined that interim reviews were warranted. On November 28, 2003, the Tribunal decided not to amend the finding and orders to exclude the product for which an exclusion had been requested.

On November 19, 2003, the Tribunal received a request for an interim review of its order made on September 3, 2003, in Expiry Review Nos. RR-2002-003 and RR-2002-004 concerning Stainless Steel Round Bar Products. The applicant, Edro Speciality Steels Inc., requested the review for the exclusion of "RoyAlloy", a specialty product. On December 23, 2003, the Tribunal determined that an interim review was warranted. On January 26, 2004, it amended the order to exclude the product for which an exclusion had been requested, as well as any equivalent product.

   

Interim Reviews in Progress at the End of the Fiscal Year

There were no interim reviews in progress at the end of the fiscal year.

Table 3 summarizes the Tribunal's interim review activities during the fiscal year.

   

Expiry Reviews

Subsection 76.03(1) of SIMA provides that a finding or order expires after five years, unless an expiry review has been initiated. No later than 10 months before the expiry date of the order or finding, the Secretary publishes a notice of expiry in the Canada Gazette. The notice invites persons and governments to submit their views on whether the order or finding should be reviewed and gives direction on the issues that should be addressed in the submissions. The Tribunal initiates a review of the order or finding, as requested, if it determines that such a review is warranted. It then issues a notice of review and notifies the CBSA of its decision. The notice of expiry review is published in the Canada Gazette and forwarded to all known interested parties.

During the fiscal year, the Tribunal issued seven notices of expiry. It decided that expiry reviews were warranted in four cases and initiated reviews.

In Expiry No. LE-2003-002, 12-Gauge Shotshells, the Tribunal decided that a review was not warranted of its order made on June 22, 1999, in Review No. RR-98-005, continuing its finding made on June 22, 1994, in Inquiry No. NQ-93-005. The order is scheduled to expire on June 21, 2004.

In Expiry No. LE-2003-004, Black Granite Memorials, the Tribunal received no request for a review of its order made on July 19, 1999, continuing its finding made on July 20, 1994, in Inquiry No. NQ-93-006. The Tribunal decided not to initiate a review, and the order is scheduled to expire on July 18, 2004.

In Expiry No. LE-2003-007, Concrete Reinforcing Bar, the Tribunal had not yet decided, at the end of the fiscal year, if a review was warranted of its finding made on January 12, 2000, in Inquiry No. NQ-99-002.

The purpose of an expiry review is to determine whether anti-dumping or countervailing duties remain necessary. There are two phases in an expiry review. The first phase is the investigation by the CBSA to determine whether there is a likelihood of resumed or continued dumping or subsidizing if the finding or order expires. If the CBSA determines that such likelihood exists with respect to any of the goods, the second phase is the Tribunal's inquiry into the likelihood of injury or retardation. If the CBSA determines that such likelihood does not exist for any of the goods, the Tribunal does not consider those goods in its subsequent determination of the likelihood of injury and issues an order rescinding the order or finding with respect to those goods.

The Tribunal's procedures in expiry reviews are similar to those in final injury inquiries.

Upon completion of an expiry review, the Tribunal issues an order with reasons, rescinding or continuing a finding or order, with or without amendment. If a finding or order is continued, 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.

   

Expiry Reviews Completed in the Fiscal Year

In the fiscal year, the Tribunal completed three expiry reviews, all of which had been commenced in the previous fiscal year.

On April 28, 2003 the Tribunal rescinded its finding in Prepared Baby Foods (RR-2002-002) respecting dumped imports from the United States.

On September 3, 2003, the Tribunal continued, with amendment, its finding in Stainless Steel Round Bar (RR-2002-003 and RR-2002-004) respecting dumped imports from the Federal Republic of Germany (Germany), France, India, Italy, Japan, Spain, Sweden, Chinese Taipei and the United Kingdom, and its finding made on June 18, 1999, in Inquiry No. NQ-98-003, respecting dumped imports from Korea.

On November 17, 2003, the Tribunal rescinded its order in Preformed Fibreglass Pipe Insulation (RR-2002-005) respecting dumped imports from the United States.

   

Expiry Reviews in Progress at the End of the Fiscal Year

Four expiry reviews were in progress at the end of the fiscal year. They were reviews of the findings or orders in: Carbon Steel Plate (RR-2003-001) respecting dumped imports from Italy, Korea, Spain and Ukraine; Flat Hot-rolled Carbon and Alloy Steel Sheet Products (RR-2003-002) respecting dumped imports from France, Romania, the Russian Federation and the Slovak Republic (the CBSA determined on January 22, 2004, that there was no likelihood of continued or resumed dumping from France); Corrosion-resistant Steel Sheet Products (RR-2003-003) respecting dumped imports from Brazil, Germany, Japan, Korea and the United States; and Cold-rolled Steel Sheet Products (RR-2003-004) respecting dumped imports from Belgium, the Russian Federation, the Slovak Republic and Turkey.

Table 4 summarizes the Tribunal's expiry review activities during the fiscal year. Table 5 lists Tribunal findings and orders in force as of March 31, 2004.

   

Judicial or Panel Review of SIMA Decisions

Table 6 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 for review by a binational panel in the fiscal year.

   

WTO Dispute Resolution

There are no Tribunal findings or orders before the dispute settlement bodies of the WTO.

TABLE 1

Preliminary Determinations of Injury Issued Under Subsection 37.1(1) of SIMA

Preliminary Injury Inquiry No.

Product

Country

Date of Determination

Determination

PI-2003-001

Structural Tubing

Korea, South Africa and Turkey

July 21, 2003

Injury

PI-2003-002

Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate

Bulgaria, Czech Republic and Romania

August 12, 2003

Injury

PI-2003-003

Wood Venetian Blinds and Slats

Mexico and China

January 20, 2004

Injury

PI-2003-004

Stainless Steel Wire

Chinese Taipei, India, Korea, Switzerland and United States

January 20, 2004

Injury

PI-2003-005

Steel Fuel Tanks

China and Chinese Taipei

February 17, 2004

Injury

PI-2003-006

Frozen Self-rising Pizza

United States

March 2, 2004

Injury

TABLE 2

Findings Issued Under Section 43 of SIMA and Inquiries Under Section 42 of SIMA in Progress at Year-end

Inquiry No.

Product

Country

Date of Finding

Finding

NQ-2002-004

Carbon Steel Pipe Nipples, Threaded Couplings and Adaptor Fittings

China

July 16, 2003

Injury

NQ-2003-001

Structural Tubing

Korea, South Africa and Turkey

December 23, 2003

Injury

NQ-2003-002

Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate

Bulgaria, Czech Republic and Romania

January 9, 2004

Injury

NQ-2003-003

Wood Venetian Blinds and Slats

China and Mexico

   

TABLE 3

Orders Issued Under Section 76.01 of SIMA

Review or Request No.

Product

Country

Date of Order/Decision

Order/Decision

RD-2002-006

Hot-rolled Carbon Steel Plate

Italy, Korea, Spain and Ukraine

November 28, 2003

Order continued

RD-2002-007

Hot-rolled Carbon Steel Plate

China, South Africa and Russian Federation

November 28, 2003

Orders continued

RD-2002-008

Hot-rolled Carbon Steel Plate

Brazil, Finland, India, Indonesia, Thailand and Ukraine

November 28, 2003

Finding continued

RD-2003-001

Stainless Steel Round Bar Products

Germany, France, India, Italy, Japan, Spain, Sweden, Chinese Taipei, United Kingdom and Korea

January 26, 2004

Order amended

TABLE 4

Orders Issued Under Section 76.03 of SIMA and Expiry Reviews in Progress at Year-end

Review No.

Product

Country

Date of Order

Order

RR-2002-002

Prepared Baby Foods

United States

April 28, 2003

Finding rescinded

RR-2002-003

Stainless Steel Round Bar

Germany, France, India, Italy, Japan, Spain, Sweden, Chinese Taipei and United Kingdom

September 3, 2003

Finding continued, with amendment

RR-2002-004

Stainless Steel Round Bar

Korea

September 3, 2003

Finding continued, with amendment

RR-2002-005

Preformed Fibreglass Pipe Insulation

United States

November 17, 2003

Order rescinded

LE-2003-002

12-gauge Shotshells

Czech Republic and Hungary

August 29, 2003

Review not warranted

RR-2003-001

Carbon Steel Plate

Italy, Korea, Spain and Ukraine

   

RR-2003-002

Flat Hot-rolled Carbon and Alloy Steel Sheet Products

France, Romania, Russian Federation and Slovak Republic

   

RR-2003-003

Corrosion-resistant Steel Sheet Products

Brazil, Germany, Japan, Korea and United States

   

RR-2003-004

Cold-rolled Steel Sheet Products

Belgium, Russian Federation, Slovak Republic and Turkey

   

TABLE 5

SIMA Findings and Orders in Force as of March 31, 2004

Review No. or
Inquiry No.

Date of Decision

Product1

Country

Related Decision No.
and Date

RR-98-004

May 17, 1999

Hot-rolled Carbon Steel Plate and High-strength Low-alloy Plate

Italy, Korea, Spain and Ukraine

NQ-93-004
(May 17, 1994)

RR-98-005

June 22, 1999

12-gauge Shotshells

Czech Republic and Hungary

NQ-93-005
(June 22, 1994)

NQ-98-004

July 2, 1999

Flat Hot-rolled Carbon and Alloy Steel Sheet Products

France, Romania, Russian Federation and Slovak Republic

RD-2002-003
(January 17, 2003)

RR-98-006

July 19, 1999

Black Granite Memorials and Black Granite Slabs

India

NQ-93-006
(July 20, 1994)

RR-98-007

July 28, 1999

Corrosion-resistant Steel Sheet Products

Brazil, Germany, Japan, Korea and United States

NQ-93-007
(July 29, 1994)

NQ-99-001

August 27, 1999

Cold-rolled Steel Sheet Products

Belgium, Russian Federation, Slovak Republic and Turkey

 

NQ-99-002

January 12, 2000

Concrete Reinforcing Bar

Cuba, Korea and Turkey

 

RR-99-002

March 20, 2000

Subsidized Canned Ham

Denmark and Netherlands

RR-94-002
(March 21, 1995)
RR-89-003
(March 16, 1990)
GIC-1-84
(August 7, 1984)

NQ-99-003

May 1, 2000

Iodinated Contrast Media

United States (including the Commonwealth of Puerto Rico)

 

RR-99-003

May 1, 2000

Women's Boots

China

RR-94-003
(May 2, 1995)
NQ-89-003
(May 3, 1990)

RR-99-004

June 5, 2000

Carbon Steel Welded Pipe

Korea

RR-94-004
(June 5, 1995)
RR-89-008
(June 5, 1990)
ADT-6-83
(June 28, 1983)

NQ-99-004

June 27, 2000

Carbon Steel Plate

Brazil, Finland, India, Indonesia, Thailand and Ukraine

 

NQ-2000-001

August 1, 2000

Dishwashers and Dryers

United States (WCI and Whirlpool)

RD-2002-005
(March 19, 2003)

RR-99-005

September 13, 2000

Whole Potatoes

United States

RR-94-007
(September 14, 1995)
RR-89-010
(September 14, 1990)
CIT-16-85
(April 18, 1986)
ADT-4-84
(June 4, 1984)

NQ-2000-002

October 27, 2000

Stainless Steel Round Bar

Brazil and India

 

RR-99-006

November 3, 2000

Refined Sugar

United States, Denmark, Germany, Netherlands, United Kingdom and European Union

NQ-95-002
(November 6, 1995)

NQ-2000-004

December 8, 2000

Waterproof Footwear and Bottoms

China

 

NQ-2000-006

May 2, 2001

Garlic, Fresh or Frozen

China and Vietnam

 

NQ-2000-007

June 1, 2001

Concrete Reinforcing Bar

Indonesia, Japan, Latvia, Republic of Moldova, Poland, Chinese Taipei and Ukraine

 

RR-2000-002

July 24, 2001

Carbon Steel Welded Pipe

Argentina, India, Romania, Chinese Taipei, Thailand and Brazil

RR-95-002
(July 25, 1996)
NQ-91-003
(January 23, 1992)
NQ-90-005
(July 26, 1991)

NQ-2001-001

August 17, 2001

Flat Hot-rolled Steel Sheet and Strip

Brazil, Bulgaria, China, Chinese Taipei, India, Macedonia, South Africa, Ukraine and Yugoslavia

 

NQ-2001-003

December 27, 2001

Leather Footwear with Metal Toe Caps

China

 

RR-2001-001

March 20, 2002

Fresh Garlic

China

NQ-96-002
(March 21, 1997)

RR-2001-005

October 18, 2002

Waterproof Rubber Footwear

China

RR-97-001
(October 20, 1997)
RR-92-001
(October 21, 1992)
R-7-87
(October 22, 1987)
ADT-2-82
(April 23, 1982)
ADT-4-79
(May 25, 1979)

RR-2001-006

January 10, 2003

Hot-rolled Carbon Steel Plate

Mexico, China, South Africa and Russian Federation

NQ-97-001
(October 27, 1997)

RR-2002-001

December 9, 2002

Bicycles and Frames

Chinese Taipei and China

RR-97-003
(December 10, 1997)
NQ-92-002
(December 11, 1992)

NQ-2002-003

March 4, 2003

Xanthates

China

 

NQ-2002-004

July 16, 2003

Carbon Steel Pipe Nipples, Threaded Couplings and Adaptor Fittings

China

 

NQ-2003-001

December 23, 2003

Structural Tubing

Korea, South Africa and Turkey

 

NQ-2003-002

January 9, 2004

Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate

Bulgaria, Czech Republic and Romania

 

RR-2002-003 and RR-2002-004

September 3, 2003

Stainless Steel Round Bar

Germany, France, India, Italy, Japan, Spain, Sweden, Chinese Taipei United Kingdom and Korea

RD-2003-001
(January 26, 2004)
NQ-98-003
(June 18, 1999)
NQ-98-001
(September 4, 1998)

1. For a complete product description, refer to the most recent finding or order.

TABLE 6

SIMA Cases Before the Federal Court of Canada

Case No.

Product

Country of Origin

Forum

File No./Status

RR-2002-002

Baby Food

United States

FC

A-280-03

GC-2001-001

Steel Goods

Global Safeguard

FC

A-458-02
Appeal discontinued
(November 7, 2003)

Notes: FC - Federal Court of Canada

 

CHAPTER IV

 

APPEALS

Introduction

The Tribunal hears appeals from decisions of the CBSA under the Customs Act and SIMA or of the Minister under the Excise Tax Act. It 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, Mexico and Chile under the Customs Act. It 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 Minister's decision about an assessment or determination of federal sales tax or excise tax.

The Tribunal strives to be informal and accessible. However, there are certain procedures and time constraints that are imposed by law and by the Tribunal. 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.

   

Application for an Extension of Time

A person may make an application to the CBSA for an extension of the prescribed time period to request a re-determination or further re-determination of origin, tariff classification, value for duty or marking of any goods under section 60 of the Customs Act. If the CBSA refuses the application, or if 90 days have elapsed after the application was made and the CBSA has not notified the person of its decision, the person may apply to the Tribunal to have the application granted.

Table 1 of this chapter lists the decisions concerning such applications rendered in the fiscal year.

   

Rules

Under the Rules, 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 a description of the goods in issue and an indication of the points at issue between the appellant and the Minister or the CBSA (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 his position. The Secretary of the Tribunal then contacts both parties in order to schedule a hearing. Hearings are generally conducted before Tribunal members in public. The Tribunal publishes a notice of the hearing in the Canada Gazette to allow other interested persons to attend. Depending on the complexity and precedential nature of the matter at issue, appeals will be heard by a panel of one or three members. Persons may intervene in an appeal by specifying the nature of their interest in the appeal and by indicating the reason for intervening and how they may assist the Tribunal in the resolution of the appeal.

   

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 Tribunal, on its own initiative or on the request of the appellant or the respondent, may decide to hold a hearing by way of written submissions. In that case, it publishes a notice of the hearing in the Canada Gazette to allow other interested persons to participate. In the notice, the Tribunal establishes the manner and timing for filing the submissions and the requirement, if appropriate, for the parties to file an agreed statement of facts.

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 locations across Canada or requiring parties from outside Ontario or Quebec to present themselves at the Tribunal's premises in Ottawa. The procedures are very similar to hearings held before the Tribunal at its premises. However, the Tribunal requires that written materials, exhibits, aids to argument, 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

During the fiscal year, the Tribunal heard 80 appeals, of which 77 related to the Customs Act and 3 to the Excise Tax Act. Decisions were issued in 89 cases, of which 74 were heard during the fiscal year.

     
   

Decisions on Appeals

 

Act

Allowed

Allowed
in Part

Dismissed

Total

 

Customs Act

61

1

16

78

 

Excise Tax Act

1

-

9

10

 

SIMA

1

-

-

1

   
 

Table 2 of this chapter lists the appeal decisions rendered in the fiscal year.

   

Summary of Selected Decisions

Of the many cases heard by the Tribunal in carrying out its appeal functions, several decisions stand out, either because of the particular nature of the product in issue or because of the legal significance of the case. Brief summaries of a representative sample of such appeals follow, two of which were heard under the Customs Act, one under SIMA and one under the Excise Tax Act. These summaries have been prepared for general information purposes only and have no legal status.

   

Simms Sigal & Co. Ltd.
v.
Commissioner of the CCRA

AP-2001-016

Decision:
Appeal allowed
(May 27, 2003)

This was an appeal under section 67 of the Customs Act from a re-determination of the CCRA dated June 21, 2001. The issue in this appeal was whether payments made by the importer of women's clothing, Simms Sigal & Co. Ltd. (Simms Sigal), pursuant to a distribution agreement with the U.S. vendor were part of the transaction value of the goods for the purposes of determining their value for duty.

Simms Sigal argued that the distribution fee paid to the producer in the United States should not be added to the selling price of the goods. The President of Simms Sigal testified that, in the event that the U.S. vendor was unable to provide a specific service at any time, Simms Sigal was not obliged to pay the distribution fee. He also testified that the distribution fee was treated as a marketing expense and not a cost of sales and, therefore, should be excluded from the transaction value of the goods.

The CCRA argued that Simms Sigal would not have been able to purchase the imported goods in the absence of the distribution agreement and, hence, the payment of the distribution fee was a condition of sale that was inseparable from the purchase agreement. In the alternative, the CCRA argued that the distribution fee constituted proceeds of a subsequent resale of the goods and had to therefore be added to the "price paid or payable" in accordance with subparagraph 48(5)(a)(v) of the Customs Act.

The Tribunal found that the distribution fee was not part of the price paid or payable for the goods. The evidence indicated that the price that Simms Sigal paid for the imported goods included all amounts in respect of the goods. The distribution fee was not a payment made in respect of the goods, as it related to rights and services of value to Simms Sigal that were separate from the purchase price of the goods.

Similarly, the Tribunal found that the distribution fee was not to be added to the transaction value of the goods according to subparagraph 48(5)(a)(v) of the Customs Act. The fact that the distribution fee was calculated as a percentage of net sales did not mean that the vendor had a right to receive any part of the proceeds of the resale of the goods as payment for those goods.

For these reasons, the appeal was allowed.

   

M & M Footwear Inc.
v.
Commissioner of the CCRA

AP-2001-070

Decision:
Appeal allowed
(May 8, 2003)

This was an appeal under section 61 of SIMA from a series of re-determinations of the CCRA that women's waterproof boots imported by M & M Footwear Inc. (M & M) from China were of the same description as the goods to which the Tribunal's findings in Inquiry No. NQ-89-003.

In Inquiry No. NQ-89-003, the Tribunal ordered the imposition of anti-dumping duties on women's boots from China, except for plastic footwear with uppers not fixed to the sole nor assembled by stitching or with tops assembled by stitching if the upper is moulded near the ankle and is free of stitching or fastenings below that level.

The issue in this appeal was whether footwear with outer soles and stitched uppers made of exterior nylon that covered a polyvinyl chloride layer and was attached by injection moulding were goods of the same description.

M & M contended that the requirement that the outer soles and uppers be made of rubber or plastic was met, as the uppers were made of nylon, which is a plastic. The CCRA argued that, as the nylon had been further manufactured into textile form, it excluded the goods in issue from the definition.

M & M also argued that the part of the definition that excluded footwear with tops assembled by stitching if the upper is moulded in the vicinity of the ankle and is free of stitching below that level applied to two-piece boots with a stitched upper attached to the sole by injection moulding. It submitted that the requirement not to have stitching must be linked to the intent of the exclusion not to cover waterproof plastic footwear. In the case of the goods in issue, M & M submitted that the stitching did not impair the waterproof quality.

The Tribunal determined that nylon is a plastic. The fact that it had been further transformed into a textile was, in the Tribunal's view, irrelevant.

Moreover, the Tribunal found that the fact that parts of the uppers of the goods in issue were assembled together by stitching did not preclude them from meeting the requirements of the definition. In the Tribunal's view, there was indication that the Tribunal, in Inquiry No. NQ-89-003, had intended to exclude the goods in issue from the scope of its definition. Furthermore, the Tribunal found that it was not relevant that the goods in issue were not free of stitching below the ankle level because that part of the definition concerned a different type of waterproof plastic footwear within the overall ambit of the definition.

Consequently, the Tribunal found that the goods met the definition set out in Inquiry No. NQ-89-003 and, consequently, were excluded from the findings.

For these reasons, the appeal was allowed.

   

Praxair Canada Inc.
v.
Minister of National Revenue

AP-2002-104

Decision:
Appeal dismissed
(September 23, 2003)

This was an appeal under section 81.19 of the Excise Tax Act from a decision of the Minister dated March 7, 2002. In that decision, a claim by Praxair Canada Inc. (Praxair) for a refund of federal sales tax attributable to co-operative advertising allowances was denied, on the ground that the issue was not raised in Determination No. TOR-57201 within the limitation period and that, therefore, Praxair was statute-barred from filing the appeal. The parties requested a preliminary ruling by the Tribunal on this issue, which was considered in accordance with sections 6 and 23.1 of the Rules.

Although it did not file a notice of objection explicitly mentioning Determination No. TOR-60848, Praxair submitted that it was not statute-barred from filing the appeal, arguing that the notice of objection that it served on the Minister in relation to Determination No. TOR-57201 was sufficient to cover the co-operative advertising allowances that were the subject of the appeal.

According to the Tribunal, the Excise Tax Act sets out very precise steps to be followed by a taxpayer when claiming a refund. The right of appeal to the Tribunal is available to a party when, following a notice of determination, a notice of objection is served. In this instance, the evidence on record showed that Praxair did not serve a notice of objection to Determination No. TOR-60848. The Tribunal was of the view that Determination No. TOR-57201, which dealt with performance allowances, did not address the issue of deductibility of co-operative performance allowances, which was the issue that Praxair was seeking to have examined by the Tribunal.

The Tribunal was of the view that Praxair could not claim that the inclusion of the abbreviation "etc." in its notice of objection to Determination No. TOR-57201 in any way constituted an objection to something that was decided by an entirely different determination, i.e. Determination No. TOR-60848. The Tribunal also noted that Praxair's notice of objection mentioned only Determination No. TOR-57201 and made no reference whatsoever to Determination No. TOR-60848. Parliament had not given the Tribunal the power to remedy this deficiency.

Consequently, the appeal was dismissed.

   

Bernard Chaus Inc.

EP-2003-001

Order:
Application granted
(December 4, 2003)

This was the first time that the Tribunal handled an application made under section 60.2 of the Customs Act for an extension of time to make an application to the CCRA for a further re-determination of origin, tariff classification or value for duty.

The CCRA had made a re-determination of the value for duty on clothing imported by Bernard Chaus Inc. (Chaus), which resulted in a higher assessment. Chaus filed a letter with the CCRA with a view to appealing, but the formal request for a further re-determination was not made until two days after the 90-day time limit. The CCRA refused the application for being late and also refused a subsequent application under section 60.1 of the Customs Act for an extension of time to make a request for a further re-determination as it had not been made as soon as circumstances permitted. Chaus then applied for an extension of time to the Tribunal under section 60.2.

The Tribunal considered whether Claus met all four tests for the application to succeed.

Firstly, the Tribunal noted that the application had been made within one year of the time allowed to make a request under section 60.1, thus meeting the requirement of paragraph 60.2(4)(a).

Secondly, the Tribunal accepted Mr. Chaus's letter and authorization to the CCRA as evidence of his bona fide intention to make a request for re-determination within the 90-day period prescribed under subparagraph 60.2(4)(b)(i).

Thirdly, the Tribunal found that it would be just and equitable under subparagraph 60.2(4)(b)(ii) to grant the application because Claus demonstrated that it would be unfair for it to potentially pay a much higher assessment as a result of missing the deadline by only two days. According to the Tribunal, this was "a minor, technical breach of the Act" that called for relief, especially in light of the fact that the CCRA took a long time, i.e. three years, to make the initial re-determination.

Lastly, the Tribunal was satisfied that Chaus's application to the CCRA was made as soon as circumstances permitted within the meaning of subparagraph 60.2(4)(b)(iii). During the 92 days that elapsed between the CCRA's re-determination and Claus's application to the CCRA for an extension of time, Chaus ceased Canadian operations, sought professional advice, notified the CCRA of the grounds for its request for a further re-determination, carefully reconsidered the strategy proposed by its advisors and sought a second opinion. For the Tribunal, in the circumstances, Chaus demonstrated that it had prepared the application and presented it to the CCRA as early as it could reasonably be expected.

Therefore, the Tribunal granted the application.

TABLE 1

Decisions Rendered Under Section 60.2 of the Customs Act

Application No.

Applicant

Date of Decision

Decision

EP-2003-001

Bernard Chaus Inc.

December 4, 2003

Application granted

EP-2003-002

Agripack

February 16, 2004

Application granted

EP-2003-005

Codd Import Export (7) Inc.

February 18, 2004

Application denied

EP-2003-006

Ingram Micro Inc.

March 31, 2004

Application granted

EP-2003-007

Gordon Grandison

March 31, 2004

Application granted

TABLE 2

Appeal Decisions Rendered Under Section 67 of the Customs Act, Section 81.19 of the Excise Tax Act and Section 61 of SIMA

Appeal No.

Appellant

Date of Decision

Decision

Customs Act

AP-99-114, AP-99-115 and AP-2000-008

Suzuki Canada Inc. and Canadian Kawasaki Motors Inc.

May 2, 2002

Appeals allowed

AP-2002-004

Asea Brown Boveri Inc.

May 16, 2003

Appeal dismissed

AP-2001-095

Supertek Canada Inc.

May 21, 2003

Appeal dismissed

AP-2001-016

Simms Sigal & Co. Ltd.

May 27, 2003

Appeal allowed

AP-2001-094

AAi.FosterGrant of Canada Co.

June 13, 2003

Appeal dismissed

AP-2002-091

Asea Brown Boveri Inc.

July 2, 2003

Appeal dismissed

AP-2002-022

Power Twins Performance Parts Ltd.

July 15, 2003

Appeal dismissed

AP-2002-099

FHP/Atlantic Inc.

July 18, 2003

Appeal dismissed

AP-2002-092

Richard Rusyn

August 5, 2003

Appeal dismissed

AP-2001-073, AP-2001-074 and AP-2001-084

Nokia Products Limited and Primecell Communications Inc.

August 5, 2003

AP-2001-074 and AP-2001-084 dismissed; AP-2001-073 allowed

AP-2002-103

Mon-Tex Mills Ltd.

September 23, 2003

Appeal dismissed

AP-2002-009

Don L. Mills

September 26, 2003

Appeal dismissed

AP-2002-038 to AP-2002-090

Pfizer Canada Inc.

October 9, 2003

Appeals allowed

AP-2002-095

Conair Consumer Products Inc.

October 20, 2003

Appeal dismissed

AP-2001-097

Sony of Canada Ltd.

February 3, 2004

Appeal allowed in part

AP-2002-096

Browns Shoe Shops Inc.

February 11, 2004

Appeal allowed

AP-2003-007

Black & Decker Canada Inc.

February 12, 2004

Appeal allowed

AP-2002-117

Puratos Canada Inc.

February 13, 2004

Appeal dismissed

AP-2003-008

PartyLite Gifts Ltd.

February 16, 2004

Appeal dismissed

AP-2002-111

BIOnova Medical Inc.

February 24, 2004

Appeal dismissed

AP-2003-013

Franklin Mint Inc.

March 3, 2004

Appeal dismissed

AP-2002-023

Buffalo Inc.

March 11, 2004

Appeal allowed

Excise Tax Act

AP-2002-006

Gray O'Rourke Sussman Advertising Inc.

April 1, 2003

Appeal dismissed

AP-2002-007

King West Communications Inc.

April 1, 2003

Appeal dismissed

AP-2002-008

The Russo Group Inc.

April 1, 2003

Appeal dismissed

AP-2002-010

Corlab Inc.

April 1, 2003

Appeal dismissed

AP-2002-005

P.L.B. Graphique Inc.

April 10, 2003

Appeal dismissed

AP-2001-004

Staz Communications Inc.

May 22, 2003

Appeal dismissed

AP-2002-104

Praxair Canada Inc.

September 23, 2003

Appeal dismissed

AP-2001-041

Atlantic Promotions Inc.

December 17, 2003

Appeal dismissed

AP-2002-094

Consbec Inc.

February 24, 2004

Appeal allowed

AP-2003-006

Les Produits de Tabac Tremblay Inc.

March 31, 2004

Appeal dismissed

SIMA

AP-2001-070

M & M Footwear Inc.

May 8, 2003

Appeal allowed

TABLE 3 (REVISED)

Appeal Cases Before the Federal Court of Canada1

Appeal No.

Appellant

File No./Status

AP-90-117

Artec Design Inc.

T-2066-94

AP-91-141

The Sheldon L. Kates Design Group Limited

T-2957-94
Application dismissed
(January 28, 2003)

AP-93-123

W. Ralston (Canada) Inc.

T-2112-95
Application dismissed
(June 3, 2002)

AP-96-046 and
AP-96-074

GFT Mode Canada Inc.

A-659-00,
A-498-00
Applications discontinued
(July 22, 2002)

AP-97-137

Asea Brown Boveri Inc.

A-171-00
Application discontinued
(May 1, 2001)

AP-98-093 and AP-98-094

Cast Terminals Inc.

T-1951-00
Application allowed
(April 30, 2003)

AP-99-039 and
AP-99-058

Prolith Inc.

T-168-03
Application discontinued
(March 11, 2004)

AP-99-062

Barney Printing Limited

T-1627-01

AP-99-114, AP-99-115 and AP-2000-008

Suzuki Canada Inc. and Canadian Kawasaki Motors Inc.

A-358-03

AP-2000-034

Scott Paper Limited

T-1270-02

AP-2000-040

Sable Offshore Energy Incorporated

A-361-02
Application allowed
(May 14, 2003)

AP-2000-051

Entrelec Inc.

A-270-03

AP-2001-004

Staz Communications Inc.

T-1529-03

AP-2001-007 to
AP-2001-010

Star Choice Television Network Incorporated

A-67-03,
A-68-03,
A-69-03,
A-70-03

AP-2001-070

M & M Footwear Inc.

A-339-03

AP-2001-071

Brecknell, Willis & Co.

A-93-03
Application dismissed
(February 27, 2004)

AP-2001-081

Wilton Industries Canada Limited

A-713-02
Application dismissed
(September 23, 2003)

AP-2001-088

Wilton Industries Canada Limited

A-66-03
Application dismissed
(January 21, 2004)

AP-2001-094

Aai FosterGrants of Canada Co.

A-396-03

AP-2002-005

P.L.B. Graphique Inc.

T-1331-03

AP-2002-006

Gray O'Rourke Sussmann Advertising Inc.

T-1334-03

AP-2002-007

King West Communications Inc.

T-1335-03

AP-2002-008

The Russo Group Inc.

T-1332-03

AP-2002-010

Corlab Inc.

T-1333-03

AP-2002-034 to AP-2002-037

Pierre Roy et Associés Inc. (Pierre Roy), for Lithochrome (1974) Inc. (in Bankruptcy), Le Groupe Lithochrome Inc. (in Bankruptcy), Filmographie P.F. Inc. (in Bankruptcy) and Opticouleur Inc. (in Bankruptcy)

A-88-04

AP-2002-095

Conair Consumer Products Inc.

A-557-03

AP-2002-103

Mon-Tex Mills Ltd.

A-579-03

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 before the Federal Court of Canada.

 

CHAPTER V

 

ECONOMIC, TRADE AND TARIFF REFERENCES AND SAFEGUARD INQUIRIES

ECONOMIC, TRADE AND TARIFF REFERENCES

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.

   

SAFEGUARD INQUIRIES

Another responsibility of the Tribunal is to conduct inquiries to determine if Canadian producers are being seriously injured by increased imports of goods into Canada. The Tribunal may initiate import safeguard inquiries following a complaint by domestic producers. The Government may also direct the Tribunal to conduct import safeguard inquiries. Pursuant to an inquiry where the Tribunal determines that increased imports of the goods have caused, or are threatening to cause, serious injury to Canadian producers of like or directly competitive goods, the Government may apply import safeguard measures to assist those domestic producers.

The Government may also direct the Tribunal to conduct inquiries to determine if the provision, by persons normally resident outside Canada, of services in Canada is causing or threatens to cause injury to or retards the provision of any services in Canada by persons normally resident in Canada.

   

Safeguard Inquiries-Imports from China

The Tribunal may conduct inquiries to determine if increased imports of goods from China are causing or threatening to cause market disruption to domestic producers. It may also conduct inquiries to determine if any action affecting imports of goods from China into the market of another WTO country causes, or threatens to cause, a significant diversion of trade into Canada. It may initiate market disruption or trade diversion inquiries following a complaint by domestic producers. The Government may also direct the Tribunal to conduct market disruption or trade diversion inquiries. Pursuant to an inquiry where the Tribunal makes determinations of market disruption or trade diversion, the Government may apply import safeguard measures to assist domestic producers.

 

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 agreements: Chapter Ten of NAFTA, Chapter Five of the AIT, the AGP, or the Canada-Korea Agreement on the Procurement of Telecommunications Equipment. The bid challenge portions of these agreements came into force on January 1, 1994, July 1, 1995, January 1, 1996, and September 1, 2001, 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 attempt to resolve the issue first with the government institution responsible for the procurement. If this process is not successful or a supplier wishes 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. Complainants may utilize the on-line procurement complaint form that can be found on the Tribunal's Web site under "Forms".

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 the 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 and a copy of the complaint itself. An official notice of the complaint is also published on MERX and in 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 contrary to 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 and any intervener are sent a copy of the GIR and then have the opportunity to submit comments. Any comments made are forwarded to the government institution and other parties to the inquiry.

Copies of any other submissions or reports prepared for the inquiry are also circulated to all parties for their comments. Once this phase of the inquiry is completed, the Tribunal reviews the information collected and decides if a public hearing is necessary or if the case can be decided on the basis of the information on the record.

The Tribunal then determines whether the complaint is valid. If the complaint is found to be valid, the Tribunal may make recommendations to the government institution (such as re-tendering, re-evaluating or providing compensation). 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, by statute, to be implemented to the greatest extent possible.

The Tribunal may also award reasonable costs to the complainant or the responding government institution depending on the nature and circumstances of the case. The Tribunal recently published, on its Web site, a guideline for further streamlining the review process by recommending standard complaint costs to be awarded to either side, depending on the relative complexity of the case.

     
   

Summary of Activities

   

2002-2003

2003-2004

 

NUMBER OF COMPLAINTS

   
 

Carried Over from Previous Fiscal Year

17

15

 

Received in Fiscal Year

74

83

 

Remanded

3

3

 

Total

94

101

 

CASES RESOLVED

   
 

Withdrawn or Resolved by the Parties

11

8

 

Abandoned While Filing

1

-

 

Subtotal

12

8

 

INQUIRIES NOT INITIATED

   
 

Lack of Jurisdiction

3

7

 

Late or Improper Filing

10

14

 

No Valid Basis/No Reasonable Indication of a Breach/Premature

19

27

 

Subtotal

32

48

 

INQUIRY RESULTS

   
 

Dismissed

4

3

 

Complaint Not Valid

11

14

 

Complaint Valid or Valid in Part

20

15

 

Remand Decisions

1

2

 

Subtotal

35

34

 

OUTSTANDING AT END OF FISCAL YEAR

15

11

   

Summary of Selected Determinations

During the fiscal year, the Tribunal issued 31 written determinations of its findings and recommendations (excluding the 3 cases that were dismissed), which related to 29 procurement complaints and 2 decisions that had been remanded to the Tribunal by the Federal Court of Canada. In 15 of the 29 non-remand written determinations, the complaints were determined to be valid or valid in part. Eleven cases were in progress or being filed at year-end. Table 1 at the end of this chapter summarizes these activities.

Of the cases investigated by the Tribunal in carrying out its procurement review functions, certain decisions stand out because of the legal significance of the cases. Brief summaries of a representative sample of such cases have been prepared for general information purposes only and have no legal status.

   

Montage-DMC eBusiness Services, A Division of AT&T Canada

PR-2003-013

Determination:
Compliant Not Valid
(September 12, 2003)

The Tribunal made a determination with respect to a complaint filed by Montage-DMC eBusiness Services, A Division of AT&T Canada (Montage) concerning a procurement by the CCRA for the provision of a licensing and support arrangement for business intelligence software.

Montage submitted that the CCRA violated the provisions of the AIT, NAFTA and the AGP by failing to properly apply the published evaluation criteria; including language in the evaluation criteria that was ambiguous or which allowed more than one reasonable interpretation; failing to follow the sequenced evaluation process identified in the tender documents; and conducting the evaluation in a manner that failed to ensure equal access to the procurement for all Canadian suppliers.

Montage requested that the awarded contract be terminated and that the bids be re-evaluated and, if its proposal was the highest-rated, that it be awarded the contract. In the alternative, Montage requested that it be compensated by an amount equal to its lost profit and lost opportunity and requested its bid preparation costs, as well as its costs relating to complaint proceedings.

Having examined the evidence presented by the parties and considered the provisions of the AIT, NAFTA and the AGP, the Tribunal determined that the complaint was not valid. The Tribunal found no evidence that the CCRA failed to properly apply the evaluation criteria or that the criteria were ambiguous. The Tribunal found that the CCRA did follow the appropriate evaluation process and was unable to find any details pertaining to the allegation of not ensuring equal access to all Canadian suppliers. The Tribunal awarded the CCRA its reasonable costs incurred in relation to responding to the complaint.

   

Dollco Printing (Dollco Corporation)

PR-2003-016

Determination:

Compliant Valid
(August 5, 2003)

The Tribunal made a determination with respect to a complaint filed by Dollco Printing (Dollco Corporation) (Dollco) concerning a Request for a Supply Arrangement (RFSA) by the Department of Canadian Heritage (CH) for the supply of various printing services.

The Tribunal accepted only two of the five grounds for inquiry originally alleged by Dollco, namely: that CH improperly disqualified Dollco for inclusion in the supply arrangement; and that CH improperly interpreted the "Conflict of Interest Guidelines" used to support its decision to disqualify Dollco.

Dollco requested, as a remedy, that the bid that it submitted in response to the RFSA be evaluated and ranked on its merits.

Having examined the evidence presented by the parties and considered the provisions of the AIT, the Tribunal determined that the complaint was valid. The Tribunal found that the RFSA failed to incorporate directly or by reference any clause relating to conflict of interest. In the absence of any definition of conflict of interest, CH left the RFSA with no explicit means of making suppliers aware of what CH considered to be a conflict of interest. It was, therefore, impossible for the Tribunal to determine what CH's intention was at the time that the RFSA was issued with respect to conflict of interest. CH's decision to disqualify Dollco was based on a criterion that was not clearly identified in the tender documents and, therefore, was in violation of the AIT. The Tribunal recommended that CH reinstate Dollco's proposal and complete the evaluation process. In the alternative, the Tribunal recommended that any supply arrangements that had been awarded be cancelled and that the solicitation process be restarted with the appropriate instructions relating to conflict of interest. The Tribunal awarded Dollco its reasonable costs incurred in preparing and proceeding with the complaint.

   

Goodfellow Cleaners

PR-2003-039

Determination:
Complaint Valid
(November 12, 2003)

The Tribunal made a determination with respect to a complaint filed by Goodfellow Cleaners (Goodfellow) concerning a procurement by the Department of Public Works and Government Services (PWGSC), on behalf of the Department of National Defence (DND), for the provision of dry cleaning and laundry services.

Goodfellow alleged that PWGSC had improperly re-tendered the procurement, contrary to the provisions of the AIT. It submitted that, prior to any contract award and before the solicitation process was formally cancelled, PWGSC had sought additional bids without cancelling the original requirement.

As a remedy, Goodfellow requested that PWGSC cancel the standing offer that was issued and that it be awarded instead to Goodfellow based upon its response to the Request for a Standing Offer (RFSO). It also requested its costs incurred in preparing and proceeding with the complaint.

Having examined the evidence presented by the parties and considered the provisions of the AIT, the Tribunal determined that the complaint was valid. The Tribunal found that the RFSO did not provide for the cancellation and re-tender of the initial solicitation, nor did it clearly identify "fair value to the Crown" as a criterion that would be used in the evaluation of offers or the methods by which fair value to the Crown would be evaluated. The Tribunal recommended that PWGSC cancel the standing offer and issue it instead to Goodfellow based on its response to the initial solicitation. The Tribunal awarded Goodfellow its reasonable costs incurred in preparing and proceeding with the complaint.

   

Marcomm Inc.

PR-2003-051

Determination:
Compliant Valid in Part
(February 11, 2004)

The Tribunal made a determination with respect to a complaint filed by Marcomm Inc. (Marcomm) concerning a procurement by PWGSC for the supply and installation of cable distribution systems for voice and data in buildings occupied by DND within the National Capital Region.

Marcomm alleged that the winning bidder was not compliant with the mandatory criteria of the RFSO. It submitted that only its installation and design personnel had the required familiarity and experience with all the products specified in the Statement of Work (SOW) and that, therefore, PWGSC improperly awarded the standing offer to another company.

As a remedy, Marcomm requested that the standing offer be cancelled and issued instead to Marcomm. Alternatively, it requested that it be awarded costs for lost profit or lost opportunity for being denied the opportunity to perform the contract. Marcomm further requested its bid preparation costs and its costs incurred in relation to preparing and proceeding with the complaint.

Having examined the evidence presented by the parties and considered the provisions of the AIT, the Tribunal determined that the complaint was valid in part. The Tribunal found that the RFSO clearly required that installation personnel be familiar with all the products listed in the SOW. The Tribunal also found that the RFSO did not require the proposed installers and designers to have experience with all the products listed in the SOW, as was alleged by Marcomm. The Tribunal noted that PWGSC evaluated all proposals consistently, albeit not according to the requirements of the RFSO, and that both companies, Marcomm and the winning bidder, had passed the mandatory and rated criteria portion of the RFSO. As this was the third attempt by the Crown to contract for this work, the Tribunal decided not to require PWGSC to re-tender the requirement. Instead, the Tribunal recommended that PWGSC offer Marcomm one half of the work, by value, that was to be performed under the solicitation. If PWGSC decided that this would not be feasible, the Tribunal recommended that Marcomm be compensated by an amount equal to one half of the profit that it would have reasonably earned, had it been the sole holder of a standing offer in the solicitation. As the complaint was only valid in part, the Tribunal was of the view that both parties should be responsible for their own costs.

   

Judicial Review of Procurement Decisions

Table 2 lists the procurement decisions that were appealed to and/or decided by the Federal Court of Canada during the fiscal year.

TABLE 1

Disposition of Procurement Complaints

File No.

Complainant

Date of Receipt of
Complaint

Status/Decision

PR-2001-067R

Georgian College of Applied Arts and Technology

March 6, 2002

Decision rendered on November 3, 2003
Tribunal re-affirmed its original decision

PR-2002-015R

ZENON Environmental Inc.

July 12, 2002

Decision rendered on June 10, 2003
Remedy

PR-2002-069R

EDS Canada Ltd.

March 17, 2003

Remanded to the Tribunal

PR-2003-002R

EDUCOM TS Inc. and RAND IT Solutions

April 7 , 2003

Remanded to the Tribunal

PR-2002-040

IBM Canada Limited, PricewaterhouseCoopers LLP and the Centre for Trade Policy and Law at Carleton University

November 26, 2002

Decision rendered on April 10, 2003
Complaint not valid

PR-2002-047

Brisk Corporation

December 10, 2002

Decision rendered on April 28, 2003
Complaint valid in part

PR-2002-051

Antian Professional Services Inc.

December 27, 2002

Decision rendered on April 2, 2003
Complaint not valid

PR-2002-055

Questcom Consulting Inc.

January 23, 2003

Decision rendered on April 14, 2003
Complaint dismissed

PR-2002-057

WorkLogic Corporation

January 28, 2003

Decision rendered on June 12, 2003
Complaint not valid

PR-2002-059

Panavidéo Inc.

February 7, 2003

Decision rendered on May 13, 2003
Complaint not valid

PR-2002-060

Polaris Inflatable Boats (Canada) Ltd.

February 7, 2003

Decision rendered on June 23, 2003
Complaint not valid

PR-2002-063

FELLFAB Limited

February 14, 2003

Decision rendered on June 13, 2003
Complaint dismissed

PR-2002-065

1252198 Ontario/Elite Painting

February 18, 2003

Decision rendered on April 10, 2003
Complaint dismissed

PR-2002-066

Berlitz Canada Inc.

February 25, 2003

Decision rendered on July 18, 2003
Complaint valid in part

PR-2002-069

EDS Canada Ltd.

March 17, 2003

Decision rendered on July 30, 2003
Complaint not valid

PR-2002-070

Prudential Relocation Canada Ltd.

March 17, 2003

Decision rendered on July 30, 2003
Complaint valid in part

PR-2002-073

Symbiotic International Consulting Services

March 27, 2003

Not accepted for inquiry, not a designated contract

PR-2002-074

Consortium Genivar - M3E - Université d'Ottawa

March 27, 2003

Decision rendered on August 11, 2003
Complaint valid

PR-2003-001

Bajai Inc.

April 7, 2003

Decision rendered on July 7, 2003
Complaint not valid

PR-2003-002

EDUCOM TS Inc. and RAND IT Solutions

April 7, 2003

Decision rendered on August 12, 2003
Complaint not valid

PR-2003-003

Dycor Technologies Ltd.

April 8, 2003

Not accepted for inquiry, late filing

PR-2003-004

Virtuel-Âge International Inc.

April 9, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-005

Ready John Inc.

April 9, 2003

Decision rendered on July 14, 2003
Complaint not valid

PR-2003-006

G. DiGiacomo Consulting Services

April 14, 2003

Not accepted for inquiry, not a designated contract

PR-2003-007

Port Weller Dry Docks, a division of Canadian Shipbuilding & Engineering Ltd.

April 14, 2003

Decision rendered on July 14, 2003
Complaint not valid

PR-2003-008

LanStar Cable Networks Inc.

April 16, 2003

Not accepted for inquiry, not a potential supplier

PR-2003-009

Global Upholstery Co. Inc.

April 16, 2003

Complaint withdrawn

PR-2003-010

Bajai Inc.

April 17, 2003

Decision rendered on July 16, 2003
Complaint valid

PR-2003-011

Canadian Waste Services Inc.

April 22, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-012

WorkDynamics Technologies Incorporated

April 25, 2003

Complaint withdrawn

PR-2003-013

Montage-DMC eBusiness Services, A Division of AT&T Canada

April 30, 2003

Decision rendered on September 12, 2003
Complaint not valid

PR-2003-014

MHPM Project Managers Inc.

May 2, 2003

Not accepted for inquiry, premature

PR-2003-015

Patlon Aircraft & Industries Limited

May 2, 2003

Decision rendered on July 31, 2003
Complaint valid

PR-2003-016

Dollco Printing (Dollco Corporation)

May 5, 2003

Decision rendered on August 5, 2003
Complaint valid

PR-2003-017

Celtic Tree Specialists Inc.

May 6, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-018

Victoria Shipyards Co. Ltd.

May 14, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-019

Sirius Consulting Group Inc.

May 20, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-020

L & C Canada Coastal Aviation Inc.

May 23, 2003

Not accepted for inquiry, premature

PR-2003-021

L & C Canada Coastal Aviation Inc.

June 6, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-022

Travers Food Service Ltd.

June 6, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-023

MHPM Project Managers Inc.

June 6, 2003

Complaint withdrawn

PR-2003-024

Victoria Shipyards Co. Ltd.

June 11, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-025

St. Joseph Digital Solutions, a St. Joseph Corporation Company

June 17, 2003

Not accepted for inquiry, late filing

PR-2003-026

Peter Cameron & Associates

June 19, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-027

Comprehensive Management Group Ltd.

June 19, 2003

Not accepted for inquiry, late filing

PR-2003-028

Elytra Enterprises Inc.

June 20, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-029

Human Resource Systems Group Ltd.

June 27, 2003

Not accepted for inquiry, late filing

PR-2003-030

Lemmex Group Inc.

June 27, 2003

Decision rendered on September 24, 2003
Complaint not valid

PR-2003-031

Lemmex Group Inc.

June 30, 2003

Not accepted for inquiry, late filing

PR-2003-032

Polar Bear Corporate Education Solutions

July 9, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-033

Pro-Drive Marine Services

July 23, 2003

Not accepted for inquiry, late filing

PR-2003-034

Acquaint Financial

July 24, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-035

Virtual Wave Inc.

July 25, 2003

Decision rendered on October 23, 2003
Complaint not valid

PR-2003-036

Virtual Wave Inc.

July 25, 2003

Not accepted for inquiry, not a designated contract

PR-2003-037

IT/net Ottawa Inc.

July 29, 2003

Decision rendered on December 11, 2003
Complaint not valid

PR-2003-038

Marcomm Inc.

August 1, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-039

Goodfellow Cleaners

August 8, 2003

Decision rendered on November 12, 2003
Complaint valid

PR-2003-040

Koprash Investment Inc.,
O/A Sunlite Floor Cleaners

August 25, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-041

Atlantic Body Armor

August 27, 2003

Not accepted for inquiry, premature

PR-2003-042

Sanexen Services environmentaux Inc.

September 2, 2003

Not accepted for inquiry, late filing

PR-2003-043

1091847 Ontario Limited

September 3, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-044

Gelder, Gingras & Associates Inc.

September 10, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-045

Marathon Management Company

September 15, 2003

Complaint withdrawn

PR-2003-046

Earthwrite

September 17, 2003

Not accepted for inquiry, not a designated contract

PR-2003-047

Southern California Safety Institute, Inc.

September 19, 2003

Decision rendered on December 22, 2003
Complaint valid in part

PR-2003-048

W.E. Canning Inc.

September 24, 2003

Not accepted for inquiry, late filing

PR-2003-049

Halifax Shipyard

September 25, 2003

Complaint withdrawn

PR-2003-050

Advanced Business Interiors Inc.

September 26, 2003

Not accepted for inquiry, late filing

PR-2003-051

Marcomm Inc.

September 29, 2003

Decision rendered on February 11, 2004
Complaint valid in part

PR-2003-052

Indeck Power Equipment Company

October 1, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-053

Haworth Ltd.

October 6, 2003

Not accepted for inquiry, late filing

PR-2003-054

Ottawa Business Interiors Ltd.

October 8, 2003

Not accepted for inquiry, late filing

PR-2003-055

K-W Leather Products Ltd.

October 10, 2003

Decision rendered on November 24, 2003
Complaint valid

PR-2003-056

DAC Aviation International Ltée

October 14, 2003

Not accepted for inquiry, late filing

PR-2003-057

1091847 Ontario Ltd.

October 15, 2003

Not accepted for inquiry, not a potential supplier

PR-2003-058

Hike Metal Products Ltd.

October 23, 2003

Not accepted for inquiry, premature

PR-2003-059

Carsen Group Inc.

November 4, 2003

Not accepted for inquiry, late filing

PR-2003-060

Inland Technologies Canada

November 7, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-061

Hike Metal Products Ltd.

November 10, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-062

Fisher, Folta IRM Inc.

November 10, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-063

AME International

November 10, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-064

Winchester Division - Olin Corporation

November 19, 2003

Accepted for inquiry, case in progress

PR-2003-065

The Powell Group - TPG Technology Consulting Ltd.

November 20, 2003

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-066

Market Research Associates Ltd.

November 27, 2003

Complaint withdrawn

PR-2003-067

IHS Solutions Limited

December 8, 2003

Decision rendered on March 8, 2004
Complaint valid

PR-2003-068

COFCO Credit Company LLC

December 11, 2003

Complaint withdrawn

PR-2003-069

AppDepot Web Services Inc.

December 18, 2003

Decision rendered on March 8, 2004
Complaint valid in part

PR-2003-070

CSI Consulting Inc.

December 19, 2003

Accepted for inquiry, case in progress

PR-2003-071

Hickling Arthurs Low Corporation

December 22, 2003

Decision rendered on March 31, 2004
Complaint valid

PR-2003-072

1112076 Ontario Ltd. O/A Micro Market Business Centre

January 5, 2004

Complaint withdrawn

PR-2003-073

Canadyne Technologies Inc.

January 16, 2004

Accepted for inquiry, case in progress

PR-2003-074

CSI Consulting Inc.

January 21, 2004

Not accepted for inquiry, late filing

PR-2003-075

Fleetway Inc.

January 22, 2004

Accepted for inquiry, case in progress

PR-2003-076

Bosik Vehicle Barriers Ltd.

February 6, 2004

Decision rendered on March 29, 2004
Complaint valid

PR-2003-077

StenoTran Services Inc.

February 11, 2004

Accepted for inquiry, case in progress

PR-2003-078

Laerdal Medical Canada Ltd.

February 17, 2004

Accepted for inquiry, case in progress

PR-2003-079

Foundry Networks Inc.

February 19, 2004

Accepted for inquiry, case in progress

PR-2003-080

Forestell & Associates Human Resources Consulting

February 25, 2004

Not accepted for inquiry, not a designated contract

PR-2003-081

Mitel Networks

March 10, 2004

Not accepted for inquiry, no reasonable indication of a breach

PR-2003-082

Bosik Vehicle Barriers Ltd.

March 22, 2004

Accepted for inquiry, case in progress

PR-2003-083

Bell Helicopters Textron Canada Limited

March 26, 2004

Being filed

TABLE 2 (REVISED)

Procurement Cases Before the Federal Court of Canada

File No.

Complainant

Applicant

File No./Status

PR-2000-018R

Xwave Solutions Inc.

Xwave Solutions Inc.

A-494-02
Application dismissed
(September 20, 2003)

PR-2001-029

John Chandioux experts-conseils inc.

John Chandioux experts-conseils inc.

A-50-02
Application dismissed
(March 23, 2004)

PR-2001-053

Fritz Starber Inc.

Fritz Starber Inc.

A-048-02
Application discontinued
(May 6, 2003)

PR-2001-059

MaxSys Professionals & Solutions Inc.

Department of Public Works and Government Services

A-366-02
Application dismissed
(May 7, 2003)

PR-2001-067

Georgian College of Applied Arts and Technology

Attorney General of Canada

A-505-02
Application allowed
Referred back to Tribunal
(May 2, 2003)

PR-2002-017

Cognos Incorporated and Core Software Corp.

Attorney General of Canada

A-720-02
Application dismissed
(October 29, 2003)

PR-2002-020

InBusiness Systems Inc.

Attorney General of Canada

A-719-02
Application discontinued
(August 5, 2003)

PR-2002-040

IBM Canada Limited, PricewaterhouseCoopers LLP and the Centre for Trade Policy and Law at Carleton University

IBM Canada Limited, PricewaterhouseCoopers LLP and the Centre for Trade Policy and Law at Carleton University

A-223-03
Application discontinued
(July 7, 2003)

PR-2002-046

Installation Globale Normand Morin et Fils Inc.

Installation Globale Normand Morin et Fils Inc.

A-42-03
Application withdrawn
(May 16, 2003)

PR-2002-050

Verint Technology Inc.

Verint Technology Inc.

A-1-03
Application discontinued
(July 31, 2003)

PR-2002-053

Entreprise Marissa Inc.

Entreprise Marissa Inc.

A-101-03

PR-2002-057

WorkLogic Corporation

Attorney General of Canada

A-333-03
Application withdrawn
(January 14, 2004)

PR-2002-060

Polaris Inflatable Boats (Canada) Ltd.

Attorney General of Canada

A-334-03

PR-2002-069

EDS Canada Ltd.

Attorney General of Canada

A-316-03
Application allowed
(March 24, 2004)

PR-2002-070

Prudential Relocation Canada Ltd.

Royal LePage Relocation Services Limited

A-395-03
Application discontinued
(September 29, 2003)

PR-2003-002

EDUCOM TS Inc. and RAND IT Solutions

Attorney General of Canada

A-391-03
Application allowed
(March 29, 2004)

PR-2003-005

Ready John Inc.

Ready John Inc./Department of Public Works and Government Services

A-372-03
A-433-03

PR-2003-007

Port Weller Dry Docks, a division of Canada Shipbuilding & Engineering Ltd.

Attorney General of Canada

A-458-03

PR-2003-015

Patlon Aircraft & Industries Limited

Attorney General of Canada

A-390-03

PR-2003-050

Advanced Business Interiors Inc.

Advanced Business Interiors Inc.

A-544-03

PR-2003-051

Marcomm Inc.

Marcomm Inc.

A-139-04

PR-2003-053

Haworth Ltd.

Haworth Ltd.

A-545-03

PR-2003-055

K-W Leather Products Ltd.

Attorney General of Canada

A-601-03

 

CHAPTER VII

 

TEXTILE REFERENCE

Introduction

Pursuant to a reference from the Minister of Finance dated July 6, 1994, as last amended on January 13, 2004, the Tribunal is 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, that would maximize net economic gains to Canada.

The terms of reference call for the Tribunal to provide to the Minister of Finance an annual status report on the investigation process. This chapter reports on the Tribunal's activities under the textile reference. Since 2003, it also serves to meet the requirement of an annual status report.

   

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 on 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. 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.

   

Process

Domestic producers seeking tariff relief must file a request with the Tribunal. Along with their request, producers must file either samples of the textile input for which tariff relief is being sought or a National Customs Ruling from the CBSA 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 the start of an investigation 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 the Department of International Trade, the Department of Industry, the Department of Finance and the CBSA. The notice is also published in the Canada Gazette.

Interested parties include all persons whose 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.

To prepare a staff investigation report, the Tribunal's staff gathers information through such means as questionnaires and plant visits. Information is obtained from the requester and interested parties to determine whether the tariff relief sought will maximize net economic gains for Canada.

In most cases, 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. In cases where the written record is not sufficient to dispose of the matter, a public hearing is held.

The procedures for the conduct of the Tribunal's investigation 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, agency or other party.

   

Recommendations to the Minister of Finance

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, it will issue its recommendations within an earlier specified time frame.

   

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 ask 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 the 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.

     

Summary of Activities

 

New Requests

   

2002-2003

2003-2004

 

Requests

   
 

Received

10

4

 

Withdrawn

1

1

 

Awaiting Initiation of Investigation

4

3

 

Investigations Completed During the Year

2

8

 

Investigations in Progress at Year-end

5

1

 

Recommendations to Minister of Finance

   
 

Tariff Relief

2

7

 

No Tariff Relief

0

1

 

Reports to Minister of Finance

2

8

 

Cumulative Totals (since 1994)

   
 

Requests Received

170

174

 

Recommendations to Minister of Finance

   
 

Tariff Relief

94

101

 

No Tariff Relief

48

49

   
 

During the fiscal year, the Tribunal issued eight reports to the Minister of Finance that related to eight requests for tariff relief. At year-end, one request was under investigation, and three requests where the decision to initiate investigations was pending. Table 1 at the end of this chapter summarizes these activities.

In addition, during the period, the Tribunal issued one report to the Minister of Finance with respect to one review of an order for tariff relief. Table 2 provides information on this review.

The Tribunal also conducted two investigations for the purpose of reconsidering previously issued recommendations for tariff relief. At year-end, one of these investigations was still in progress. Table 3 provides information on these investigations.

   

Effects

The implementation of Tribunal recommendations is made by adding new tariff items to the Customs Tariff or by issuing specific customs duty remission orders. Table 4 provides a summary of recommendations currently implemented by the Government. During the period from January 1 to December 31, 2003, the Tribunal estimates that these tariff items and remission orders covered imports worth about $195 million and provided tariff relief worth about $25 million; for the comparable period in 2002, these amounts were about $235 million and about $31 million respectively.

As stated earlier, textile inputs on which tariff relief may be requested are limited to 12 chapters of the Customs Tariff. From January 1 to December 31, 2003, tariff relief principally affected textile inputs falling in 4 chapters: Chapter 51 ("Wool, fine or coarse animal hair; horsehair yarn and woven fabric"); Chapter 52 ("Cotton"); Chapter 53 ("Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn"); and Chapter 54 ("Man-made filaments"). The percentage of total imports accounted for by the imports benefiting from tariff relief, falling in these 12 chapters, ranged from 0 to 20 percent. Overall, slightly less than 1 percent of total imports falling in the 12 chapters benefit from tariff relief. The following table provides a distribution of the imports, for calendar year 2003, benefiting from tariff relief, by Customs Tariff chapter.

     
   

Distribution of Imports by Customs Tariff Chapter

 

Chapter

Percentage

 

39

0.01

 

40

0.00

 

51

19.81

 

52

9.42

 

53

3.99

 

54

5.72

 

55

2.61

 

56

0.39

 

58

2.05

 

59

0.88

 

60

1.91

 

70

0.08

 

Weighted Average

0.83

 


Source: Statistics Canada.

   

Program Review

At the end of fiscal year 2003-2004, the Tribunal was in the final stages of updating the Textile Reference Guide, which was last amended in 1996, and developing procedures for the electronic filing of requests for tariff relief.

   

Summary of Selected Recommendations

A summary of some of the Tribunal's recommendations issued during the fiscal year follows.

   

Ring-spun Yarns

TA-2003-001

Recommendation:
Indeterminate tariff relief
(November 3, 2003)

The Tribunal recommended to the Minister of Finance that tariff relief as provided for ring-spun yarns by tariff item Nos. 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, 5509.53.20, 5509.53.30 and 5509.53.40, be continued for an indeterminate period.

The Tribunal held a hearing for this review to obtain further evidence and hear arguments in respect of two separate issues: (1) the availability of identical or substitutable ring-spun yarns from domestic producers and their comparability with the subject yarns; and (2) the impact on operations (i.e. the effects on sales, prices, profitability and employment) should the tariff relief be renewed.

With respect to the availability of identical or substitutable carded ring-spun yarns measuring 190 decitex or less (31s and finer), the Tribunal determined that Atlantic Fine Yarns Inc. (Atlantic) was not yet in a position to provide carded ring-spun yarns in the finer counts of 32/1 and above. As far as the availability of identical or substitutable combed ring-spun yarns was concerned, the Tribunal noted that, based on the evidence, Atlantic was not in a position to supply such yarns, including those in the coarser range, i.e. 12s, 18s, 24s, required for use in the manufacture of children's knitted wear.

Turning to the question of substitutability, the Tribunal was not convinced that carded ring-spun yarns were substitutable for combed ring-spun yarns. It concluded that Atlantic was not, as yet, able to respond to the specific requirements of the knitting industry for the subject yarns covered by the tariff relief order.

In terms of impact on their operations, importers and users of the subject yarns argued that, should duties be re-imposed, their operations would be adversely affected, since they would not be able to pass on this extra expense to their customers in a competitive environment where the price, the biggest issue, is "king".

On the basis of the information available, the Tribunal believed that tariff relief would continue to provide a degree of stability for users of the subject yarns and benefits in the form of reduced costs, thereby enabling them to maintain their competitive position in a very price-sensitive marketplace. It recommended to the Minister of Finance that the tariff relief, as provided for ring-spun yarns by the above tariff item numbers, be continued beyond December 31, 2003, for an indeterminate period.

   

Peerless Clothing Inc.

TR-2002-005

Recommendation:
No tariff relief
(September 30, 2003)

The Tribunal recommended to the Minister of Finance that tariff relief not be granted on importations, from all countries, of dyed, woven fabrics of polyester filament yarns, mixed with single yarns of polyester and cotton, of a weight not exceeding 170 g/m2, of subheading No. 5407.82, for use as pocketing in the manufacture of men's and boys' suits, jackets, blazers, vests (waistcoats) and trousers; and dyed, woven fabrics of polyester staple fibres, mixed solely with cotton, of a weight not exceeding 170 g/m2, of subheading No. 5513.21, for use as pocketing in the manufacture of men's and boys' suits, jackets, blazers, vests (waistcoats) and trousers.

In its analysis, the Tribunal took into consideration the fact that the subject fabrics are used as pocketing and do not demand the degree of sophistication required in producing fashion fabrics. In this context, the Tribunal was of the view that low volumes of production and sales of alleged identical or substitutable fabrics were not an overriding consideration in addressing the issue of the domestic industry's capability of producing pocketing. The Tribunal believed that Consoltex Inc. (Consoltex) had the required technology and skills to provide pocketing according to the requirements of Peerless Clothing Inc. (Peerless). With regard to Doubletex, the Tribunal found that it had provided sufficient evidence to demonstrate that it produces and distributes a wide variety of fabrics used as pocketing for all segments of the Canadian apparel industry, including the men's and boys' tailored clothing market.

In summary, the Tribunal found that the domestic textile industry produces fabrics substitutable for the subject fabrics and that the economic costs of granting tariff relief would be greater than the economic benefits of granting relief to Peerless and other importers of the subject fabrics. Because the removal of duties would result in tangible costs to the domestic textile industry, the Tribunal believed that tariff relief would not provide net economic gains for Canada. Therefore, the Tribunal recommended that tariff relief not be granted.

   

C.S. Brooks Inc.

TR-2002-006

Recommendation:
Indeterminate tariff relief
(January 21, 2004)

The Tribunal recommended to the Minister of Finance that tariff relief be granted, for an indeterminate period of time, on importations from all countries of plain woven fabrics, unbleached or bleached, containing 65 percent or more by weight of polyester fibres mixed solely with cotton, of a weight not exceeding 100 g/m2 and a width of 183 cm or greater, of subheading No. 5407.91 or 5513.11, to be dyed or printed, for use in the manufacture of the following bedding products: comforters, duvets, pillow shams and bed skirts.

In response to concerns raised by Consoltex, the Tribunal noted that none of the four fabrics submitted as samples had any cotton content and, therefore, these fabrics did not conform to the definition of the subject fabrics. It further noted that Consoltex was not likely to lose sales if tariff relief was granted. Therefore, the Tribunal was of the view that any potential risk to Consoltex would be minimal.

Turning to the fabric samples provided by Sunshine Mills Inc. (Sunshine), the Tribunal noted that, based on the analysis carried out by the CCRA, they did not conform to the definition of the subject fabrics, in that they did not contain 65 percent or more of polyester fibres. However, slight changes in the composition of some of these fabrics would result in them falling within the scope of the definition of the subject fabrics. This led the Tribunal to believe that Sunshine had some capability of producing a substitutable product. On the other hand, Sunshine had not provided any evidence to support a conclusion of imminent production or potential to supply commercial quantities of fabrics in the Canadian marketplace that would be acceptable to C.S. Brooks Inc. (Brooks) and other potential buyers. Therefore, the Tribunal concluded that Sunshine had not demonstrated, to the Tribunal's satisfaction, that it would be able, in the foreseeable future, to supply identical or substitutable fabrics to Brooks and other potential buyers.

With regard to Les Tissages Sherbrooke Inc. (TSI), the Tribunal found that TSI had provided sufficient evidence to demonstrate that its production of 50P/50C fabrics that are used in the manufacture of sheets or pillowcases could be at risk, should tariff relief be granted. The Tribunal noted that Brooks was willing to accept a final product description that excluded sheets from the end-use provision. Given that TSI had the ability to supply 50P/50C fabrics and had shown, to the Tribunal's satisfaction, that it currently supplied such fabrics to the Canadian market, the Tribunal was of the view that tariff relief should not be provided for the subject fabrics for use in the manufacture of sheets and pillowcases.

With regard to the issue of net economic impact, the Tribunal saw no direct commercial costs as a result of the tariff relief requested by Brooks. On the basis of the information available to the Tribunal, tariff relief would provide yearly benefits of approximately $1 million to Brooks and other users of the subject fabrics. In addition, tariff relief would provide benefits to Brooks and other users in the form of reduced costs, which would enable them to better position themselves vis-à-vis imports of finished goods from Bangladesh, China, India and Pakistan. Tariff relief could also translate into benefits to the consumer in terms of lower prices.

TABLE 1

Disposition of Requests for Tariff Relief

Request No.

Requester

Textile Input

Date of Disposition

Status/Recommendations

TR-2002-001

Richlu Manufacturing Ltd.

Fabric

September 9, 2003

Indeterminate tariff relief

TR-2002-002

Peerless Clothing Inc.

Fabric

May 5, 2003

Indeterminate tariff relief

TR-2002-004

Cavalier Specialty Yarn Inc.

Fibre

May 28, 2003

Request withdrawn

TR-2002-005

Peerless Clothing Inc.

Fabric

September 30, 2003

No tariff relief

TR-2002-006

C.S. Brooks Inc.

Fabric

January 21, 2004

Indeterminate tariff relief

TR-2002-007

Peerless Clothing Inc.

Fabric

February 11, 2004

Indeterminate tariff relief

TR-2002-008

Tribal Sportswear Inc.

Fabric

October 20, 2003

Indeterminate tariff relief

TR-2002-009

Peerless Clothing Inc.

Fabric

Not yet initiated

 

TR-2002-010

Ballin Inc.

Fabric

January 15, 2004

Indeterminate tariff relief

TR-2003-001

Tribal Sportswear Inc.

Fabric

February 18, 2004

Indeterminate tariff relief

TR-2003-002

Sunshine Mills Inc.

Yarn

Under investigation

 

TR-2003-003

Peeless Clothing Inc.

Nonwoven

Not yet initiated

 

TR-2003-004

Peeless Clothing Inc.

Fabric

Not yet initiated

 

TABLE 2

Disposition of a Review of a Tariff Relief Order

Review No.

Expiry No.
(Original Request No.)

Textile Input

Original Requester

Date of Disposition

Status/Recommendations

TA-2003-001

TE-2003-001
(TR-94-002)

Yarn

Kute-Knit Mfg. Inc.

November 3, 2003

Continuation of tariff relief

TABLE 3

Disposition of Requests for Reconsideration

Review No.

Original Review No.

Textile Input

Original Requester

Date of Disposition

Status/Recommendations

TA-2002-001A

TA-2002-001

Fabric
Tulle
Ribbons
Padding

Les Collections Shan Inc.

May 26, 2003

Recommendation reaffirmed

TR-2002-010A

TR-2002-010

Fabric

Ballin Inc.

Under investigation

 

TABLE 4

Tariff Relief Recommendations in Place

Request No./
Review No.

Expiry No.
(Original Request No.)

Requester/Textile Input

Tariff Item No./Order in Council

Duration

TR-94-001

 

Canatex Industries (Division of Richelieu Knitting Inc.)

5402.41.12

Indeterminate

TR-94-004

 

Woods Canada Limited

5208.52.10

Indeterminate

TR-94-010

 

Palliser Furniture Ltd.

5806.20.10

Indeterminate

TR-94-012

 

Peerless Clothing Inc.

5309.29.20

Indeterminate

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

TR-94-017 and
TR-94-018

 

Elite Counter & Supplies

9943.00.00

Indeterminate

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

TR-95-004

 

Lingerie Bright Sleepwear (1991) Inc.

5208.12.20
5208.52.20

Indeterminate

TR-95-005

 

Lingerie Bright Sleepwear (1991) Inc.

5513.11.10
5513.41.10

Indeterminate

TR-95-009

 

Peerless Clothing Inc.

5408.21.10
5408.21.20
5408.22.21
5408.22.30

Indeterminate

TR-95-010 and
TR-95-034

 

Freed & Freed International Ltd. and
Fen-nelli Fashions Inc.

5111.19.10
5111.19.20

Indeterminate

TR-95-011

 

Louben Sportswear Inc.

5408.31.10
5408.32.20

Indeterminate

TR-95-012

 

Perfect Dyeing Canada Inc.

5509.32.10

Indeterminate

TR-95-013A

 

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

TR-95-036

 

Canadian Mill Supply Co. Ltd.

5208.21.20

Indeterminate

TR-95-037

 

Paris Star Knitting Mills Inc.

5408.24.11
5408.24.91
5408.34.10
5516.14.10
5516.24.10

Indeterminate

TR-95-051

 

Camp Mate Limited

5407.41.10
5407.42.10
5407.42.20
5903.20.22

Indeterminate

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

TR-95-056

 

Sealy Canada Ltd.

3921.19.10
5407.69.10
5407.73.10
5407.94.10
5516.23.10
5903.90.21
6005.34.20

Indeterminate

TR-95-057 and
TR-95-058

 

Doubletex

5407.51.10
5407.61.95
5407.61.96
5407.69.10
5515.11.10
5516.21.10
5516.91.10

Indeterminate

TR-95-060

 

Triple M Fiberglass Mfg. Ltd.

7019.59.10

Indeterminate

TR-95-061

 

Camp Mate Limited

6005.31.20
6005.32.20
6005.33.20
6005.34.30

Indeterminate

TR-95-064 and
TR-95-065

 

Lady Americana Sleep Products Inc. and el ran Furniture Ltd.

6005.34.60
6005.44.20

Indeterminate

TR-96-003

 

Venture III Industries Inc.

5407.61.95
5407.61.96

Indeterminate

TR-96-004

 

Acton International Inc.

5906.99.21

Indeterminate

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

TR-97-002 and
TR-97-003

 

Universal Manufacturing Inc.

5208.43.30
5513.41.20

Indeterminate

TR-97-006

 

Peerless Clothing Inc.

5407.51.30
5903.90.22
5903.90.23
5903.90.24
6005.31.30
6005.31.40
6005.32.30
6005.32.40
6005.33.30
6005.33.40
6005.34.40
6005.34.50

Indeterminate

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

TR-97-011

 

Australian Outback Collection (Canada) Ltd.

5209.31.20
5907.00.16

Indeterminate

TR-97-012

 

Ballin Inc.

5407.93.30
5516.23.20

Indeterminate

TR-97-014

 

Lenrod Industries Ltd.

5603.93.40

Indeterminate

TR-97-015,
TR-97-016 and
TR-97-020

 

Helly Hansen Canada Ltd.

5903.20.24

Indeterminate

TR-98-001

 

Cambridge Industries

5608.19.20

Indeterminate

TR-98-002

 

Distex Inc.

6006.23.10

Indeterminate

TR-98-004,
TR-98-005 and
TR-98-006

 

Ladcal Investments Ltd., O/A Pintar Manufacturing
Nour Trading House and
T.S. Simms and Company Limited

5806.10.20

Indeterminate

TR-98-007

 

Caulfeild Apparel Group Ltd.

5208.43.30

Indeterminate

TR-98-016

 

Peerless Clothing Inc.

5407.93.20

Indeterminate

TR-98-017

 

Jones Apparel Group Canada Inc.

5408.32.50
5408.33.20
5408.34.20

Indeterminate

TR-98-019

 

Tribal Sportswear Inc.

5209.12.30
5209.22.20
5209.32.10

Indeterminate

TR-99-002

 

Albany International Canada Inc.

5404.10.20

Indeterminate

TR-99-003/003A

 

Western Glove Works Ltd.

5209.31.30
5209.32.30

Indeterminate

TR-99-004

 

Peerless Clothing Inc.

5112.11.20
5112.11.30
5112.19.20
5112.19.30

Indeterminate

TR-99-005

 

Distex Inc.

6006.22.20

Indeterminate

TR-99-006

 

Coloridé Inc.

5402.41.15

Indeterminate

TR-99-008

 

JMJ Fashions Inc.

5407.61.20

Indeterminate

TR-2000-001

 

Peerless Clothing Inc.

5408.22.22

Indeterminate

TR-2000-002

 

Majestic Industries (Canada) Ltd.

5802.19.30

Indeterminate

TR-2000-003

 

Tantalum Mining Corporation of Canada Limited

5911.40.10

Indeterminate

TR-2000-004

 

Ballin Inc.

5516.23.30
5516.93.20

Indeterminate

TR-2000-005

 

Peerless Clothing Inc.

5112.11.40
5112.19.40

Indeterminate

TR-2000-006

 

Doubletex

5512.11.30
5512.19.20
5513.11.20
5513.12.10
5513.13.10
5513.19.10
5514.11.10
5514.12.10
5514.13.10
5514.19.10
9997.00.00

Indeterminate

TR-2000-007 and
TR-2000-008

 

Scapa Tapes North America Ltd.

5208.21.50
5208.31.20

Indeterminate

TR-2001-001

 

Gibson Textile Dyers

5512.29.10

Indeterminate

TR-2001-002

 

Beco Industries Ltd.

5513.41.30

Indeterminate

TR-2002-001

 

Richlu Manufacturing Ltd.

5209.39.10

Indeterminate

TR-2002-002

 

Peerless Clothing Inc.

5602.10.20

Indeterminate

TR-2002-008

 

Tribal Sportswear Inc.

5515.11.20

Indeterminate

TA-98-001

TE-97-004
(TR-95-009)

Dyed woven fabrics of rayon and polyester

5408.31.20
5408.32.30

Indeterminate

TA-98-002

TE-97-003
(TR-94-009)

Vinex FR-9B fabric

5512.99.10

Indeterminate

TA-98-003

TE-98-001
(TR-95-014)

Woven cut warp pile fabrics

5801.35.10

Indeterminate

TA-2003-001

TE-2003-001
TE-2001-001
TE-98-002
(TR-94-002 and TR-94-002A)

Ring-spun yarns

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
5509.53.20
5509.53.30
5509.53.40

Indeterminate

PUBLICATIONS

June 2003

Annual Report for the Fiscal Year Ending March 31, 2003

June 2003

Bulletin-Vol. 15, No. 1*

September 2003

Bulletin-Vol. 15, No. 2*

October 2003

Departmental Performance Report for the Period Ending March 31, 2003

November 2003

Designation, Protection and Use of Confidential Information

November 2003

Guide to Making Requests for Product Exclusions

November 2003

Canadian Imports Affected by Anti-dumping and Countervailing Measures 1995-2002

December 2003

Bulletin-Vol. 15, No. 3*

January 2004

Guideline for Fixing Costs in Procurement Complaint Proceedings

February 2004

Trade Actions Database

March 2004

Procurement Review Process: A Descriptive Guide

March 2004

Bulletin-Vol. 15, No. 4*

 

* Available only on the Tribunal's Web site.

Publications can be obtained by contacting the Secretary, Canadian International Trade Tribunal, Standard Life Centre, 333 Laurier Avenue West, Ottawa, Ontario K1A 0G7 (613) 993-3595, or they can be accessed on the Tribunal's Web site.



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