Chapter 5 – Case Summaries and Judicial Reviews
The Tribunal hears well over a hundred 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 at www.citt-tcce.gc.ca.
Sample of Noteworthy Decisions Under the SIMA Mandate
Hot-rolled Carbon Steel Plate and High-strength Low-alloy Steel Plate – RR-2018-007 and RR-2019-001
Two of the expiry reviews conducted by the Tribunal in the fiscal year concerned findings in respect to imports of certain plate products from specified countries. In Expiry Reviews No. RR-2018-007 and RR-2019-001, the Tribunal concluded that the expiry of each finding would likely result in injury to the domestic industry. In its analysis of the likelihood of injury, the Tribunal considered the impact of the Canadian safeguard measures applicable to certain heavy plate imports, given that the scope of the safeguard measures overlapped, in part, with the scope of the findings in issue. In both expiry reviews, the Tribunal found that the effects of the final safeguard measures on the likely volumes and prices of the dumped goods would be limited for a number of reasons, including the fact that the safeguard measures covered only a subset of the goods subject to the findings in issue and the fact that the safeguard tariff rate quotas were designed to allow a significant volume of goods to which they apply to be imported without attracting any surtax. The Tribunal further stated, in Expiry Review No. RR-2019-001, that safeguard measures and anti-dumping and countervailing measures are different remedies, with different objectives and criteria, that intend to deal with different circumstances. While the purpose of the safeguard inquiry was to determine whether steel goods were being imported in such increased quantities and under such conditions as to be a principal cause of serious injury to domestic producers of like or directly competitive goods, anti-dumping measures, for their part, address material injury caused or threatened by an unfair trade practice, the dumping of goods, through their injurious price and volume. The Tribunal considered that these remedies can apply concurrently to the same product from the same origin where the respective requirements for the imposition of each type of measure are met pursuant to the applicable legislation and the WTO Anti-dumping Agreement.
In Expiry Review No. RR-2019-001, the Tribunal also dealt with the novel question whether to exclude, from its order continuing the finding, goods produced by an exporter who had been found by the CBSA to have an insignificant margin of dumping at the time of the original dumping investigation. The exporter submitted in the Tribunal’s expiry review that it could not remain subject to the finding in light of a 2016 panel report, adopted by the WTO Dispute Settlement Body (DSB), regarding anti-dumping measures on carbon steel welded pipe from Chinese Taipei, that found the Special Import Measures Act in force at the time to be inconsistent with the WTO Anti-dumping Agreement as it did not enable the CBSA to terminate dumping investigations against exporters with insignificant margins of dumping. The Tribunal determined that it did not have the power to grant an exclusion for this exporter pursuant to the relevant expiry review provision. In its analysis, the Tribunal concluded, inter alia, that the amendments made by Parliament in bringing the Act into compliance with the recommendations and rulings of the DSB showed its intent to implement them with respect to new investigations under the amended Special Import Measures Act, but to preserve the status quo with respect to pre-existing findings and the conduct of expiry reviews. The Tribunal further considered that Parliament left it to the discretion of the Minister of Finance to trigger a review of any pre-existing measures in light of these recommendations and rulings, pursuant to the Minister’s authority under section 76.1 of the Special Import Measures Act to request reviews by the CBSA and the Tribunal of their decisions where the Minister considers it necessary following the issuance of any recommendations or rulings of the WTO DSB.
Sample of Noteworthy Decisions Under the Appeals and Excise Mandate
AP-2018-005 (Mattel Canada Inc.): The goods in issue were the Fisher-Price “Roarin’ Rainforest Jumperoo”. The Tribunal had found in Mattel I ([10 July 2014], AP-2013-034 and AP-2013-040 [CITT]) that virtually identical goods were properly classified under tariff item No. 9503.00.90 as “other toys”. Following Mattel I, the CBSA sought an opinion from the World Customs Organization (WCO), which found that the goods were classifiable as seats of heading No. 94.01. In the current case, the CBSA argued that the Tribunal should apply the WCO classification rather than follow Mattel I. The Tribunal noted that, although it must have regard to WCO classification opinions, this does not mean it should apply them in all circumstances, particularly not when there are, in its view, errors in the description of the characteristics and essential purpose of the product under review or significant flaws in the analysis offered by the WCO. As such, classification opinions are only one element that the Tribunal must examine. The Tribunal found several elements in the rationale offered by the WCO in support of its opinion to be either legally or factually questionable, if not incorrect. The Tribunal therefore decided not to follow the WCO opinion in this case. The Tribunal noted that the CBSA’s course of action undermined the principles of certainty, predictability, finality and tribunal pre-eminence because it caused the relitigation of a matter that Mattel and other stakeholders had every reason to believe was settled. The issue of WCO classification opinions was similarly examined and treated in Best Buy (4 July 2019), AP-2016-027R (CITT).
AP-2019-002 (Landmark Trade Services): The goods in issue were various foodstuffs. At issue was whether Landmark was the “importer” of the goods in issue as this would impact (1) the application of General Import Permits and (2) the validity of the Detailed Adjustment Statements (DASs) issued to Landmark. The parties agreed that the Tribunal had jurisdiction to hear the appeal but disagreed on the basis of that jurisdiction. The Tribunal found that it had jurisdiction as the CBSA had made a decision pursuant to subsection 60(4) of the Customs Act and, therefore, that it had made an implied decision on the identity of the importer, particularly due to the potential application of General Import Permits. Consequently, the Tribunal’s decision on the identity of the importer would also impact the validity of the DASs. The Tribunal found that Landmark was not the importer: (1) it acted only as a paper intermediary; (2) it only facilitated the importation transaction; (3) it was not a properly authorized agent; and (4) the fact that it used its business number in customs documents was not relevant in the circumstances. The Tribunal therefore found that the CBSA could not issue the DASs to Landmark as the importer of the goods and remanded the matter to the CBSA to determine the proper importer and tariff classification.
AP-2018-017/018 (The Candy Spot and GPAE Trading Corp.): The goods in issue were various non-alcoholic beverages. The question in issue was whether they qualified as originating goods under the North American Free Trade Agreement (NAFTA) and, therefore, whether they were entitled to preferential tariff treatment at the United States Tariff (UST) rate. In order to qualify for the UST, the Customs Tariff requires that two conditions be met: (1) proof of origin must be given and (2) the goods must be entitled to the tariff treatment in accordance with any applicable regulations or order. Regarding condition (1), only a “certificate of origin” is required. Regarding condition (2), a good originates in the territory of a NAFTA country where the good is produced entirely in the territory of one or more NAFTA countries exclusively from originating materials (with exceptions), or where a good is made of non-originating materials but undergoes further transformation in a NAFTA country. The Tribunal found that this could be established other than by documentary evidence. Through the testimony that it heard, the Tribunal was satisfied that the appellants had met their burden on the balance of probabilities, establishing that the goods were bottled in the United States and, therefore, eligible to the UST rate. Evidence of manufacturing in the United States was also in issue in J. McElligott (8 July 2019), AP-2018-045 (CITT).
AP-2017-021 (Cavavin [2000] Inc.): The Tribunal determined that “refrigerators, household type” are not limited to appliances that refrigerate food items and stated that the fact that the good can be used in a commercial setting does not prevent classification as “household type”.
AP-2017-055 (Globe Union Canada): This case involved the wording of tariff item No. 9979.00.00 as it read prior to January 1, 2019. The Tribunal decided that tariff item No. 9979.00.00 is not meant to reward only the first inventor of a product, but rather that its goal is to ensure that goods intended and designed to assist persons with disabilities can enter Canada duty-free. A claimant need not demonstrate that it “invented the wheel”. The goods in issue were manufactured based on well-established disability standards.
AP-2018-037 (Philips Electronics Ltd.): The terms “instruments and appliances used in medical, surgical, dental or veterinary sciences” that appear in heading No. 90.18 inform tariff item No. 9977.00.00 where those words also appear (note 4 to Chapter 99 of the schedule to the Customs Tariff). The Tribunal ought to have regard to the notes to heading No. 90.18 unless there is a sound reason to do otherwise. Goods must be sufficiently dedicated to science to qualify for tariff item No. 9977.00.00. Here tooth brushes for use in electric toothbrushes did not qualify for duty relief.
AP-2018-038 (Cardinal Health Canada Inc.): Before proposing an expert in linguistics, parties should carefully consider whether such testimony would infringe upon the Tribunal’s prerogative of statutory interpretation.
AP-2018-065 (Casa Cubana [Spike Marks Inc.]): The Tribunal stated that payments to “middlemen” for “grey market” purchases should not be included in the value for duty of the goods: (1) they are not commissions/brokerage fees since they are not sufficiently related to what is paid for the goods (as the price of the goods normally consists of production/acquisition costs, administrative/marketing overhead, and a profit margin); (2) the payments are in any event exempted as a fee paid by the purchaser to its agent; and (3) the payments do not form part of the “price paid or payable” as defined by the Customs Act.
AP-2019-004 (Cool King Refrigeration Ltd.): The Tribunal found that the appreciation of whether a food preparation is “based on” milk or dairy products is a question of “essentiality”: if milk or dairy are more essential to the purpose and function of the goods in issue than any of the other ingredients, the goods in issue can be said to be “based on” milk or dairy products. It was not the case for the goods in issue. In AFOD Ltd. (13 November 2019), AP-2018-034 (CITT), the Tribunal decided that goods containing more than 5 percent milk solids cannot be considered ice sherbets.
Sample of Noteworthy Decisions Under the Procurement Review Mandate
PR-2019-048 (Seigniory Chemical Products Limited, trading as SCP SCIENCE): A complainant who mistakenly sought recourse at the Office of the Procurement Ombudsman before filing a complaint with the Tribunal was not excused from its lateness, given that it had received sufficient information from the government institution to discern that its complaint was within the jurisdiction of the Tribunal. However, the Tribunal remarked that the government institution should have provided the complainant with information about recourse mechanisms much sooner than it did. Consequently, the Tribunal queried whether, in future cases, the time frame for calculating the ten-day deadlines of section 6 of the Procurement Inquiry Regulations ought to properly start from the day on which a government institution provides a denial of relief that includes information about recourse mechanisms. In PR-2019-047 (Kaméléons & cie Solutions Design inc.), the Tribunal again had occasion to remind government institutions that they must inform suppliers of recourse mechanisms in regret letters.
PR-2019-029 (Heddle Marine Service Inc. v. Department of Public Works and Government Services): The solicitation at issue was designed to pre-qualify shipyards to construct up to six icebreakers for the Canadian Coast Guard. The complainant alleged that the government institution had engaged in closed consultations with one bidder and that the solicitation was structured to exclude other bidders. In its decision to conduct an inquiry into the complaint, the Tribunal noted that the solicitation invoked a national security exception to exclude the procurement from the requirements of any otherwise applicable trade agreements. However, given that there was no information on file that would allow the Tribunal to verify that a national security exception was properly invoked as per the requirements of subsection 10(3) of the Procurement Inquiry Regulations, the Tribunal commenced an inquiry. The government institution brought a motion to dismiss the complaint on the grounds that the national security exception had been properly invoked. However, after the complaint was withdrawn, the Tribunal ceased its inquiry and declared the government institution’s motion to be moot.
PR-2019-020 and PR-2019-025 (Heiltsuk Horizon Maritime Services Ltd. and Horizon Maritime Services Ltd. v. Department of Public Works and Government Services): The complainants challenged the results of a re-evaluation that the Tribunal had previously recommended in PR-2018-023. The solicitation was for the services of two emergency towing vessels on a time charter basis for use by the Department of Fisheries and Oceans. The Tribunal found that the re-evaluation was not consistent with the language of the mandatory criterion at issue and the Tribunal’s previous decision. The Tribunal recommended a second re-evaluation instead of recommending a successful bidder, noting that it reviews on a deferential standard of reasonableness and that it lacked the technical expertise needed to re-evaluate bids. The Tribunal rejected the complainants’ allegations of bias, as the evidence was insufficient and there was no indication that the presence of the same team leader in both evaluations was inappropriate. The Tribunal declined to award costs to the complainant in one of the two matters, despite its partial success, because its bias allegations were inappropriate and had unnecessarily complicated the proceedings.
PR-2019-026 (Hurricane Services Inc. v. Department of Public Works and Government Services): The Tribunal terminated its inquiry on the ground that the complaint was not in respect of a procurement by a government institution that is subject to the trade agreements. The procurement was for equipment used by a training unit of the British Armed Forces at a Canadian Forces base. Canada acted as an agent, administering the contract and recovering all costs from the British Armed Forces. The Tribunal acknowledged the unusual situation that procurements such as this represent when identifying the proper venue for a complaint, but found that this is not a factor in determining whether the Tribunal has jurisdiction to inquire into the complaint.
PR-2019-045 (AJL Consulting v. Department of Agriculture and Agri‑Food): The Tribunal confirmed that the principles for reasonableness review newly set out by the Supreme Court in Vavilov v. Canada (Citizenship and Immigration) apply—with the necessary adaptations—to the Tribunal’s review of procurement evaluations.
PR-2019-009 (Rock Networks Inc. v. Department of Canadian Heritage): The Tribunal declined to award costs to the government institution despite its success in the matter, because its response to the complainant’s question had been unnecessarily vague and did not respond to the question posed.
PR-2019-004 (Terragon Envrionmental Technologies Inc.): The Tribunal reiterated that its jurisdiction is limited to inquiring into breaches of specific chapters of the trade agreements listed in section 7 of the Procurement Inquiry Regulations. Specifically, the Tribunal found that it could not inquire into whether a solicitation breached chapters 1 and 6 of the Canadian Free Trade Agreement or Canada’s climate change obligations under the Paris Agreement.
PR-2019-038 (Avro Bourdeau Aerospace Corp.): A bidder who did not pre-qualify for a suppliers list at the first stage of a two-part solicitation process is not a “potential supplier” under paragraph 7(1)(a) of the Procurement Inquiry Regulations and may not complain about the second stage of the process. The Tribunal noted that the solicitation had invoked a national security exception to exclude the procurement from the requirements of any otherwise applicable trade agreement; however, given that the requirements of sections 6 and 7 of the Procurement Inquiry Regulations had not been met, the Tribunal did not determine whether the national security exception had been properly invoked.
PR-2018-042 (Kileel Developments Ltd. v. Department of Public Works and Government Services): The Tribunal does not have jurisdiction over procurements of real estate leasing under the Canadian Free Trade Agreement (it did under its predecessor, the Agreement on Internal Trade); however, real estate leasing is a “service” that is covered under the Revised Agreement on Government Procurement and under the North American Free Trade Agreement.
PR-2019-017 (Pacific Northwest Raptors Ltd. v. Department of Public Works and Government Services): The Tribunal found that the evaluators had relied upon an undisclosed criterion, which had unforeseeably prejudiced bidders for proposing certain techniques. The complainant would not have won the contract, but it was nonetheless awarded bid preparation costs because it did not receive the evaluation it could reasonably have expected.
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, no Tribunal decision was brought forth before the Federal Court of Appeal under section 76 of SIMA in the fiscal year.
Judicial Review of Procurement Cases
There were five Procurement decisions that were brought forth before the Federal Court of Appeal in the fiscal year.
Customs and Excise Tax decisions appealed to the Federal Court of Appeal
There were 12 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. No new requests were made for review by a binational panel.
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.