Annual report March 31, 2019- Chapter 5

Chapter 5 - Case Summaries and Judicial Reviews

The Tribunal hears hundreds of cases per fiscal year. Of the cases inquired into by the Tribunal, certain decisions stand out. Brief summaries of a representative sample of these cases are included below. These summaries have been prepared for general information purposes only. For more information on cases and decisions, please visit the Tribunal’s website.

Sample of a Noteworthy Decision Under the SIMA Mandate

PI-2018-003 – Gypsum Board

This preliminary inquiry was a result of CertainTeed Gypsum Canada Inc.’s (CTG) complaint which submitted that there was evidence that disclosed a reasonable indication that CTG had suffered material retardation, i.e. that it was unable to establish production of 54-inch gypsum board (wide board) due to the dumping of the subject goods. The complainant submitted that it had a substantial commitment to establish such production but was unable to so with a sufficient return on sales from such production as a result of the low prices of the subject goods for sale in the regional market. Preliminarily, the Tribunal noted (i) that the complaint followed a finding of injury in the 48-inch gypsum board case (Gypsum Board (4 January 2017), NQ-2016-002 (CITT)), and (ii) there had not been a material retardation finding in Canada since 1972.

The decision found as follows:

  1. There was a three-part test for material retardation, i.e.:
    • there is no domestic industry producing like goods.
    • the complainant has a substantial commitment to establish a domestic industry. A plan to begin production is not enough. The commitment usually has the following elements: production will begin in the near future; the venture is commercially feasible; there is an assurance that the plan will be implemented.
    • the efforts to establish a domestic industry are adversely affected to a material degree by the dumping.
  2. In this inquiry, with respect to the second part of the above test, there was little evidence that CTG would commence production in the near future, and there was no firm assurance that it would ever produce like goods even if anti-dumping duties are imposed.

The Tribunal determined that the evidence did not disclose a reasonable indication that the dumping of the subject goods has caused injury or retardation or is threatening to cause injury to the domestic industry.

Sample of Noteworthy Decisions Under the Appeals and Excise Mandate

Of the many appeals heard by the Tribunal, several that were decided during the fiscal year stand out, either because of the particular nature of the product in issue or because of the legal significance of the cae. Brief summaries of a representative sample of such decisions follow. These summaries have been prepared for general information purposes only.

AP-2017-004 – Nouveau Americana DBA Nuevo Americana

This appeal was the lead case of a number of cases pending before the Tribunal and involving the tariff classification of furniture. At issue in this appeal was the tariff classification of several models of chairs, stools and benches. The parties disagreed as to the correct classification at the tariff item level, namely whether the goods are various types of furniture “for domestic purposes”, as submitted by the CBSA, or “for other purposes”, as submitted by the appellant.

The Tribunal, confirming its previously established test, held that goods would be “for other purposes” if it could be established that the goods in issue were either equally intended for domestic and non-domestic purposes, or primarily intended for non-domestic purposes. The Tribunal stated that, in order to determine the intended use of the goods in issue, it would consider factors such as the design, characteristics, marketing and pricing of the goods, but that these represented a non-exhaustive illustrative guideline. The Tribunal noted that, although it would expect to see at least some traces of a corroborating historical paper trail, relevant testimonial evidence can also help establish whether goods are intended for a dual purpose.

Based on the evidence and witness testimony before it, the Tribunal found that the goods in issue were equally intended for domestic and non-domestic purposes.

Accordingly, the appeal was allowed.

AP-2017-020 – Le Groupe Bugatti Inc.

This case presented an opportunity for the Tribunal to examine aspects of the General Rules for the Interpretation of the Harmonized System that rarely arise in tariff classification appeals, including the application of Rules 4 and 5 of the General Rules.

The goods in issue were models of writing cases with various pockets and compartments to hold and organize different items, such as pens, notepads and calculators. At the time of importation, the goods included a notepad and some also included a calculator. The CBSA argued that the goods were properly classified as writing cases, whereas the appellant argued that the goods were properly classified as notepads.

The Tribunal found that the goods could not be conclusively classified in accordance with Rule 1 and that Rule 2 of the General Rules did not apply in the circumstances. The Tribunal therefore considered Rules 3, 4 and 5. The Tribunal noted that the classification analysis with respect to these rules required a determination on what gives the goods their “essential character” and found, on the evidence, that the writing case gave the whole its essential character. As a result, the Tribunal held that Rule 5 does not apply, as one of the criteria for classification under this rule is that the container must not give the whole its essential character.

The Tribunal turned to Rule 3 and found that the goods were a set composed of several different articles classifiable under Rule 3(b) according to the component that gives the whole its essential character, i.e. the writing case. In doing so, the Tribunal noted that it would have reached the same conclusion under Rule 4, which requires that goods that cannot be classified according to Rules 1 through 3 are classified in the heading appropriate to the goods to which they are most akin. The Tribunal found that the goods were more akin to writing cases of heading No. 42.02 than memorandum pads of heading No. 48.20.

Accordingly, the appeal was dismissed.

EP-2018-001 – Full Bore Marketing Inc.

This application considered the circumstances in which it is just and equitable to grant an extension of time to request a re-determination under subsection 60(1) of the Customs Act. The applicant applied to the Tribunal for an extension of time, pursuant to subsection 60.2(1) of the Act, after the President of the CBSA denied the application. The parties agreed that the applicant met three of the four conditions set out in subsection 60.2(4) necessary to grant an extension. At issue was whether the applicant demonstrated that it would be just and equitable to grant the application, as required under paragraph 60.2(4)(b)(ii).

The Tribunal considered the length of the delay, the consequences to the applicant if the application is not granted, the potential unfairness faced by other importers if the application is granted, and the reasons for the delay. In this case, the applicant had missed the deadline by 5 days due to its representative’s overseas absence and an administrative error.

On the evidence, the Tribunal found that the applicant made an honest mistake which it promptly attempted to rectify. The Tribunal also found that the full harm to the applicant in denying the application would be significant, whereas granting the application in the circumstances of a short delay would not negatively affect other importers or place undue burden on the CBSA. The Tribunal held that in such circumstances, it would be just and equitable to grant the extension.

Accordingly, the application was granted.

Judicial or Panel Reviews of Tribunal Decisions

Any person affected by Tribunal findings or orders under section 43, 44, 76.01, 76.02 or 76.03 of SIMA can apply for judicial review by the Federal Court of Appeal on grounds of, for instance, denial of natural justice or error of law. Any person affected by Tribunal procurement findings and recommendations under the CITT Act can similarly request judicial review by the Federal Court of Appeal under sections 18.1 and 28 of the Federal Courts Act. Lastly, Tribunal orders and decisions made pursuant to the Customs Act can be appealed under that act to the Federal Court of Appeal or, under the Excise Tax Act, to the Federal Court.

Judicial Review of SIMA Cases

During the reporting period, there were two Tribunal decisions that were brought forth before the Federal Court of Appeal under section 76 of SIMA in the fiscal year.

Judicial Review of Procurement Cases

There were eight Procurement decisions that were brought forth before the Federal Court of Appeal in the fiscal year.

Judicial Review of Appeals Cases

There were three Tribunal decisions under the Customs Appeals and Excise Tax mandate that were brought forth to the Federal Court of Appeal during the reporting period.

Judicial Review by NAFTA Binational Panel

Tribunal findings or orders under sections 43, 44, 76.01, 76.02 and 76.03 of SIMA involving goods from the United States and Mexico may be reviewed by a binational panel established under NAFTA. A request for a binational panel from the preceding year was withdrawn during the past year and no new requests were made.

WTO Dispute Resolution

Governments that are members of the WTO may challenge the Government of Canada in respect of Tribunal injury findings or orders in dumping and countervailing duty cases before the WTO Dispute Settlement Body (DSB). This is initiated by intergovernmental consultations under the WTO Dispute Settlement Understanding. During the last fiscal year, no Tribunal matters were before the DSB.