Annual Report March 31, 2011- Chapter III

Process

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

• that are sold 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 “injury” or “retardation” or is threatening to cause 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 a preliminary injury 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 Canadian producers comprise the domestic industry. In most cases, it does not issue questionnaires or hold a public hearing. The Tribunal completes its inquiry and renders its determination 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 for its decision not later than 15 days after its determination.

Preliminary Injury Inquiry Activities

Preliminary Injury Inquiries Completed in Fiscal Year and in Progress at the End of the Fiscal Year

As illustrated in the above table, the Tribunal completed two preliminary injury inquiries in the fiscal year. There were no preliminary injury inquiries in progress at the end of 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 its investigation until a final determination of dumping or subsidizing is made.

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 Canadian producers, importers, purchasers, foreign producers and exporters. Based primarily on questionnaire responses, the Tribunal's staff prepares a report that focuses on the factors that the Tribunal must consider in arriving at its decision on injury or retardation or threat of 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 present 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 must consider in its determination of whether the dumping or subsidizing of goods has caused injury or retardation or is threatening to cause 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 domestic production, sales, market share, profits, employment and utilization of domestic production capacity.

The Tribunal holds a public hearing about 90 days after the commencement of the inquiry, i.e. after the CBSA has made a final determination of dumping or subsidizing. At the public hearing, Canadian producers attempt to persuade the Tribunal that the dumping or subsidizing of goods has caused injury or retardation or is threatening to cause injury to a domestic industry. Importers, foreign producers and exporters may challenge the Canadian 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 of the industry and market in question. Parties may also seek the exclusion of certain goods from the scope of a Tribunal finding.

The Tribunal must issue its finding within 120 days from the date of the preliminary determination of dumping and/or subsidizing by the CBSA. It has an additional 15 days to issue a statement of reasons supporting the finding. A Tribunal finding of injury or retardation or threat of injury to a domestic industry is required for the imposition of anti-dumping or countervailing duties by the CBSA.

Final Injury Inquiry Activities

Final Injury Inquiries Completed in the Fiscal Year

As illustrated in the above table, the Tribunal completed two final injury inquiries in the fiscal year. One final injury inquiry was still in progress at the end of the fiscal year. The two completed inquiries concerned polyiso insulation board and greenhouse bell peppers. In 2009, the estimated values of the Canadian market for the goods were, respectively, $130 million and $264 million. The following summaries were prepared for general information purposes only and are of no legal effect.

NQ-2009-005—Polyiso Insulation Board

This inquiry concerned dumped imports from the United States.

The Tribunal sent detailed questionnaires to 3 known domestic producers, 11 of the largest importers, 29 purchasers of polyiso insulation board and 24 foreign producers and exporters of the subject goods. Of the 67 questionnaires sent, 39 responses were used in the Tribunal's analysis. There were 9 participants in the inquiry, with 12 witnesses appearing before the Tribunal during 3 days of public hearing. The official record consisted of 318 exhibits, totalling 8,180 pages of documents.

The Tribunal first determined that polyiso insulation board produced in Canada was like goods in relation to the subject goods and constituted a single class of goods. The Tribunal then determined that the domestic industry was comprised solely of the complainant because the other two domestic producers were related to exporters of the subject goods.

The Tribunal found that the dumping of the subject goods did not cause injury to the domestic industry. Imports of the subject goods decreased over the period of inquiry and their prices were, for the most part, higher than the domestic industry's prices. With regard to the domestic industry's submission that it would have been materially better off “but for” the dumping, the Tribunal found that any price increase and the share of any incremental volume that could have reasonably been captured in the absence of dumping would yield a less than material effect to the domestic industry's net margin.

Likewise, the Tribunal determined that the evidence on record did not support a conclusion of threat of injury by the dumping of the subject goods. In the Tribunal's view, a substantial increase in dumped imports in Canada in the near to medium term was not likely, especially since demand and capacity utilization levels in the United States were expected to increase in the near future. Furthermore, import prices would not likely undercut or suppress Canadian prices in the near to medium term. As well, the potential for product shifting was low and there were no clearly foreseen and imminent negative effects of continued dumped imports on existing development and production efforts in Canada.

NQ-2010-001—Greenhouse Bell Peppers

This inquiry concerned dumped imports from the Netherlands.

The Tribunal sent detailed questionnaires to 40 known domestic growers, 33 marketers and agencies, 22 of the largest importers, 24 purchasers of greenhouse bell peppers and 25 foreign producers and exporters of the subject goods. Of the 144 questionnaires sent, 59 responses were used in the Tribunal's analysis. There were 6 participants in the inquiry. During the 4 days of public hearing, 10 witnesses appeared before the Tribunal. The official record consisted of 473 exhibits, totalling 7,402 pages of documents.

The Tribunal first determined that greenhouse bell peppers produced in Canada were like goods in relation to the subject goods. The Tribunal then concluded that field bell peppers produced in Canada were not like goods in relation to the subject goods. Finally, the Tribunal determined that the Ontario Greenhouse Vegetable Growers, which accounted for a major proportion of domestic production in and of itself, constituted the domestic industry.

The Tribunal observed that, despite a significant increase in the volume of imports of the subject goods, the domestic industry generally performed well and was able to increase production, capacity, sales volume, net income, gross margin, employment, wages and productivity, in addition to maintaining its rate of capacity utilization and market share. The only negative results were lower net returns, gross margin and net income observed in 2009. Accordingly, the Tribunal concluded that the dumping of the subject goods had not caused material injury to the domestic industry.

However, in its analysis, the Tribunal observed that the general trend in respect of increasing volumes of imports of subject goods observed during the period in inquiry was likely to continue in the near to medium term in the absence of anti-dumping duties. As there was no indication that the Dutch propensity to dump would disappear, the Tribunal considered that the renewed presence of dumped subject goods in the Canadian market was likely to transform the insignificant price depression that had occurred during isolated instances of the period of inquiry into significant price depression over the next two growing seasons. In the absence of anti-dumping duties, there would be increased pressure on other marketers to respond to Dutch lead prices, i.e. lower prices or risk losing business. The Tribunal therefore found that the clearly foreseen and imminent circumstances were such that the dumping of the subject goods was threatening to cause injury to the domestic industry.

The Tribunal received one product exclusion request concerning organic greenhouse bell peppers. The Tribunal was of the view that the domestic industry had provided sufficient evidence to demonstrate that it produced, or was capable of producing, organic greenhouse bell peppers. Therefore, the request was denied.

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

As already mentioned, there was one final injury inquiry in progress at the end of the fiscal year, Steel Grating (NQ-2010-002), which concerns dumped and subsidized imports from China.

Public Interest Inquiries Under Section 45 of SIMA

Following a finding of injury, the Tribunal notifies all interested parties that any submissions requesting a public interest 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, if it is of the opinion that there are reasonable grounds to consider that the imposition of all or part of the duties may not be in the public interest. If it is of this view, the Tribunal 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.

Following its injury finding of March 23, 2010, in Oil Country Tubular Goods (NQ-2009-004), the Tribunal received two requests from Apex Distribution for public interest inquiries (PB-2010-001 and PB-2010-002). The first request was withdrawn. With regard to the second request, an inquiry was not initiated, as the request was received beyond the prescribed 45-day time limit.

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). The Tribunal commences an interim review where one is warranted and it then 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 the time.

Interim Review Activities

Requests for Interim Reviews and Interim Reviews Completed in the Fiscal Year

As can be seen from the above table, the Tribunal ruled on one interim review received in the previous fiscal year (RD-2009-003). The Tribunal amended its order made on December 7, 2005, in Expiry Review No. RR-2004-008 to exclude certain dumped footwear from China on the basis that it was not likely to cause or threaten to cause injury to the domestic industry.

The Tribunal also received a request for an interim review during the fiscal year. Before the Tribunal could decide whether an interim review was warranted in Interim Review No. RD-2010-001, which concerned a request to exclude certain screws from China and Chinese Taipei from the Tribunal's order in Expiry Review No. RR-2009-001, dated January 6, 2010, the request was withdrawn.

Expiries

Subsection 76.03(1) of SIMA provides that a finding or order expires after five years, unless an expiry review has been initiated. Not later than 10 months before the expiry date of the order or finding, the Secretary of the Tribunal 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. If the Tribunal determines that an expiry review is not warranted, it issues an order with reasons for its decision. Otherwise, it initiates an expiry review.

Expiry Activities

As illustrated in the above table, the Tribunal decided to commence one expiry review in the fiscal year.

On the basis of submissions from interested parties, the Tribunal was of the view that an expiry review was warranted and initiated Expiry Review No. RR-2010-001 respecting flat hot-rolled carbon and alloy steel sheet and strip.

Expiry Reviews

When the Tribunal initiates a review of an order, it issues a notice of expiry 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.

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 there is no likelihood of resumed dumping or subsidizing 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 an interim review is 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 Review Activities

Expiry Reviews Completed in the Fiscal Year

As illustrated in the above chart, during the fiscal year, the Tribunal completed two expiry reviews.

RR-2009-002—Whole Potatoes

This review concerned the dumping of whole potatoes originating in or exported from the United States.

The Tribunal sent detailed questionnaires to the 6 known domestic producers and commissions representing domestic producers, 148 of the largest importers and 200 foreign producers of the subject goods in the United States. Of the 354 questionnaires sent, 21 responses were used in the Tribunal's analysis. There were 2 participants in the expiry review, with 11 witnesses appearing before the Tribunal during 3 days of public hearing. The official record consisted of 489 exhibits, totalling 9,100 pages of documents.

On September 10, 2010, the Tribunal continued its order made on September 12, 2005, in Expiry Review No. RR-2004-006 in respect of whole potatoes imported from the United States for use or consumption in the province of British Columbia.

RR-2009-003—Refined Sugar

This review concerned the dumping of refined sugar originating in or exported from the United States, Denmark, Germany, the Netherlands and the United Kingdom and the subsidizing of refined sugar originating in or exported from the European Union.

The Tribunal sent detailed questionnaires to 2 known domestic producers, 66 of the largest importers and 35 foreign manufacturers of the subject goods in the named countries. Of the 103 questionnaires sent, 12 responses were used in the Tribunal's analysis. There were 5 participants in the expiry review, with 13 witnesses appearing before the Tribunal during 4 days of public hearing. The official record consisted of 293 exhibits, totalling 11,875 pages of documents.

On November 1, 2010, the Tribunal continued its order in respect of refined sugar from the United States. The Tribunal rescinded its order in respect of refined sugar from Denmark, Germany, the Netherlands, the United Kingdom and the European Union.

Expiry Reviews in Progress at the End of the Fiscal Year

As illustrated above, there was one expiry review in progress at the end of the fiscal year.

RR-2010-001—Flat hot-rolled carbon and alloy steel sheet and strip

This is a review of the order made on August 16, 2006, in Expiry Review No. RR-2005-002 concerning the dumping of flat hot-rolled carbon and alloy steel sheet and strip from Brazil, China, Chinese Taipei, India, South Africa and Ukraine and the subsidizing of flat hot-rolled carbon and alloy steel sheet and strip from India.

Judicial or Panel Reviews of SIMA Decisions

On February 16, 2010, the Federal Court of Appeal heard the application for judicial review filed by MAAX Bath Inc. (MAAX) and, on February 24, 2010, allowed the application in part. The Federal Court of Appeal set aside the Tribunal's decision to deny the requests for product exclusions for certain aluminum extrusions used in the assembly of shower enclosures submitted by MAAX in Inquiry No. NQ-2008-003 and referred the matter back to the Tribunal for reconsideration and re-determination in conformity with its reasons. With respect to those grounds of review that pertained directly to the Tribunal's injury findings, the Federal Court of Appeal stated that the Tribunal's conclusions had not been shown to be unreasonable and that it could detect no error in the Tribunal's reasoning. On February 10, 2011, the Tribunal determined that MAAX was entitled to the exclusions.

The following table lists Tribunal decisions under sections 43 and 76 of SIMA that were before the Federal Court of Appeal in the fiscal year.

Summary of Judicial or Panel Reviews

 

WTO Dispute Resolutions

There were no Tribunal findings or orders before the WTO Dispute Settlement Body during the fiscal year.

SIMA Findings and Orders in Force as of March 31, 2011

During calendar year 2010, there were 20 SIMA findings and orders in force, affecting approximately 0.3 percent of Canadian imports, 2.3 percent of Canadian shipments and 0.8 percent of Canadian employment.

Summary of Findings and Orders in Force