Safeguard inquiry guidelines

Canada, like many trading nations, has legislation that allows the application of safeguard measures to assist domestic producers that have suffered or are threatened by serious injury from increased levels of fairly traded imports. This legislation implements Canada’s rights and obligations under the World Trade Organization (WTO) Agreement on Safeguards for global safeguard inquiries and measures. In a global safeguard inquiry, the Tribunal looks at the impact of imports of goods from all countries on domestic producers of like or directly competitive goods.

The Tribunal may conduct global safeguard inquiries, exclusion inquiries, mid-term reviews and extension inquiries pursuant to the Canadian International Trade Tribunal Act (CITT Act), the Canadian International Trade Tribunal Regulations (CITT Regulations) and the Canadian International Trade Tribunal Rules (CITT Rules). The Government may apply safeguard measures in the form of an import surtax pursuant to the Customs Tariff or in the form of a restriction (import quota or tariff-rate quota) pursuant to the Export and Import Permits Act.

The CITT Act also has provisions relating to safeguard inquiries under various bilateral free trade agreements to which Canada is a signatory. These inquiries are referred to as “bilateral safeguard inquiries”. In a bilateral safeguard inquiry, the Tribunal considers the effect of goods imported from one of the countries with which Canada has entered into a bilateral free trade agreement. In principle, the object is to determine whether, as a result of the tariff reductions provided for in the bilateral free trade agreement, goods are imported from the country in question in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic producers of like or directly competitive goods. In a bilateral safeguard inquiry, safeguard measures, if applied, are limited to the temporary suspension of tariff reductions or restoration of the most-favoured-nation tariff rates. Measures may be applied for up to three years, followed, in some cases, by a one-year phasing-out period.

The safeguard inquiry process starts when a complainant (i.e. any domestic producer of goods that are like or directly competitive with goods being imported into Canada, or any person or association acting on behalf of such domestic producer, or a trade union whose members are engaged in the Canadian production of like or directly competitive goods) files a written complaint with the Tribunal alleging that the imported goods are being imported in such increased quantities and under such conditions as to be a principal cause of serious injury, or threat thereof, to domestic producers of like or directly competitive goods.

Filing of a written complaint

A complaint of serious injury must be filed with the Tribunal and must include the information prescribed by subsections 23(2) and (3) of the CITT Act, as well as the information specified by the Tribunal in Appendix 2. For example, the complainant must state in reasonable detail the facts that support its serious injury allegations, and provide supporting evidence and documentation. Furthermore, the Tribunal can require the complainant to provide additional information in its written complaint relating to any relationships between domestic producers and exporters or importers, as prescribed by subrule 83(2) of the CITT Rules.

The complainant should endeavour to base its written complaint exclusively on public information. However, it may file confidential information relevant to the issues with the Tribunal, if necessary. In the latter case, the complainant must provide a public summary or redacted version of that confidential information and comply with the requirements of subsection 46(1) of the CITT Act. Further information regarding the treatment of confidential information in proceedings before the Tribunal can be found in its Confidentiality Guidelines.

Decision on whether a written complaint is properly documented

The day following the receipt of a written complaint of serious injury, the Tribunal acknowledges receipt of the complaint. The Tribunal reviews the complaint to ensure that it complies with the requirements set out in Appendix 2.

The Tribunal has 21 days to render its decision as to whether the written complaint of serious injury is properly documented. If the Tribunal determines that the complaint is properly documented, it notifies the complainant as well as other persons and governments that may have an interest in the matter.

If the Tribunal determines that the written complaint of serious injury is not properly documented, it may ask the complainant to provide additional information within the 21-day time frame. After examining the additional information provided by the complainant, the Tribunal can either determine that the complaint is properly documented or terminate the safeguard inquiry process. If the Tribunal determines that the complaint is not properly documented, the Tribunal notifies the complainant of its decision and provides it with reasons for its decision.

The Tribunal also publishes a notice of decision in the Canada Gazette and posts its decision and reasons on its website.

Decision on whether to initiate a safeguard inquiry

After the Tribunal decides a complaint of serious injury is properly documented, it must determine if the initiation of a safeguard inquiry is warranted on the basis of the information provided in the complaint. The Tribunal has to render its decision on Day 51, which is no later than 30 days after determining that the complaint is properly documented.

To initiate a safeguard inquiry, the Tribunal needs to be satisfied that the following three conditions in by subsection 26(1) of the CITT Act are met:

• Reasonable indication of serious injury – the Tribunal must be satisfied that there is a reasonable indication that the goods are being imported in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic producers of like or directly competitive goods.
• Standing – the complaint is made by, or with the support of, domestic producers who produce a major proportion of domestic production of the like or directly competitive goods.
• No recent similar cases – the Tribunal cannot initiate a safeguard inquiry if it has completed or terminated a safeguard inquiry related to the same goods in the two years before the receipt of a complaint.

If the Tribunal decides that the initiation of a safeguard inquiry is warranted, it issues a decision and reasons to the complainant as well as other interested persons and governments that were notified of the properly documented written complaint of serious injury. The Tribunal publishes a notice of decision in the Canada Gazette and posts its decision and reasons on its website. The Tribunal also sends to the Government a copy of the properly documented complaint and any information accompanying the complaint. This starts the investigation phase of the safeguard inquiry process.

If the Tribunal decides that the initiation of a safeguard inquiry is not warranted, it notifies the complainant as well as other interested persons and governments of its decision and provides them with reasons for decision. The Tribunal publishes a notice of decision in the Canada Gazette and posts its decision and reasons on its website. This terminates the safeguard inquiry process.

Furthermore, the Tribunal will not consider initiating a safeguard inquiry following a new complaint of serious injury respecting the same goods, unless the complainant can demonstrate that there has been a change in circumstances since the Tribunal rejected the first complaint. The Tribunal will neither consider initiating a safeguard inquiry if it is of the opinion that the injury caused to the domestic producers is caused by the dumping and/or subsidizing of imports. In such a case, the Tribunal suspends its proceedings and refers the matter to the Canada Border Services Agency (CBSA). The Tribunal can also make this decision during the conduct of a safeguard inquiry. However, if the CBSA does not act upon or terminates its investigation into dumping and/or subsidizing, the Tribunal may initiate or resume the safeguard inquiry, if requested by the complainant.

Notice of safeguard inquiry

The Tribunal initiates a safeguard inquiry after determining that such an inquiry is warranted or after the Government directly orders it to do so. If the Tribunal receives a safeguard inquiry referral order from the Government, it must issue a notice of commencement of safeguard inquiry and notify interested persons and governments. The Tribunal also publishes the notice of commencement of safeguard inquiry in the Canada Gazette and posts it on its website.

The notice of safeguard inquiry describes the product, including its tariff classification, and outlines the general rules for parties wishing to participate in the safeguard inquiry. It also gives information on the dates for parties to file their written submissions and information requested by the Tribunal, as well as the date and location of the hearing. Detailed information on the contents of the notice is prescribed by rule 85 of the CITT Rules.

Schedule for the conduct of a safeguard inquiry

The Tribunal has 180 days to conduct a standard safeguard inquiry. However, that statutory deadline can be extended to 270 days in complex cases where the scope of the safeguard inquiry is much larger than usual (e.g., there are several products or several industries producing several products) or when a hearing of several weeks is anticipated due to a large number of parties.

The Tribunal’s statutory deadline is also extended to 270 days when the Government directs the Tribunal to examine other matters, including most appropriate safeguard measures to apply in the event of a decision of serious injury or threat thereof. The Government can direct the Tribunal to recommend safeguard measures, either during the conduct of a safeguard inquiry or after receipt of the Tribunal’s report.

The following table provides an example schedule of the key events in the conduct of a safeguard inquiry. As long as the statutory deadline for issuance of the report is met, other deadlines can be modified slightly and key events can be added to the schedule, if the circumstances warrant it.

Notices of participation and representation, and declarations and undertakings of confidentiality

Any person or government wishing to participate as a party in a safeguard inquiry must file Form I—Notice of Participation (Party) within the deadline identified. Each counsel who intends to represent a party in a safeguard inquiry must file Form II—Notice of Representation (Counsel of Record), and to obtain access to confidential information, must also file Form III—Declaration and Undertaking (Counsel of Record) within the deadline identified.

A party is not required to be represented by counsel; however, only counsel is able to obtain disclosure of any confidential information on the record. The Tribunal ensures that a public version of any confidential information is available to parties not represented by counsel. 

Questionnaires

At the start of a safeguard inquiry, the Tribunal posts on its website questionnaires to be completed by the complainant, other domestic producers, foreign producers, purchasers and other known interested parties. In these questionnaires, the Tribunal requests information that can cover up to the last five calendar years of activities. These questionnaires seek, among other things, information on the volume and value of imports, domestic production and sales, as well as financial results of domestic producers.

The content of the questionnaires is subject to modifications on a case-by-case basis. 

Respondents have approximately one month to complete their questionnaires and must send their replies to the Tribunal no later than Day 30.

Tribunal’s investigation report

The Tribunal prepares an investigation report (public and confidential) based on the information it has collected in the responses to the questionnaires and other relevant information on the official record. The report also sets out the information relating to the factors that the Tribunal must examine to arrive at its decision. The report forms part of the record and is distributed to parties.

Distribution of Tribunal’s record

On Day 70, the Tribunal distributes the information on the record.

On the distribution date, the Tribunal’s record consists of:

• the written complaint and any other information accompanying the complaint;
• replies to Tribunal questionnaires;
• investigation report;
• other factual information on domestic production, imports, and domestic and world markets collected from reliable sources; and
• other information collected from various sources that could improve the evidentiary basis of the safeguard inquiry.

Written case briefs or submissions

From Day 85 to Day 110, parties are given the opportunity to submit case briefs or submissions, and witness statements in support of, or in opposition to, a determination of serious injury or threat thereof.

Written submissions typically contain documentary evidence in the form of a written summary of the case to be made at the hearing, statements of evidence by witnesses who will testify at the hearing and exhibits on which parties will rely in their presentation of the evidence.

Hearing

On Day 120, a hearing normally starts. A hearing, held before a panel of three members (the decision-makers), can consist of both public sessions and, when the information discussed is of a sensitive or confidential nature, in-camera (private) sessions. It is usually held in the Tribunal’s premises in Ottawa, Ontario, or by videoconference, and can last anywhere from a few days to a few weeks, depending on the complexity of the case and the number of participants.

At the hearing, the domestic producers normally provide evidence that goods being imported into Canada are in such increased quantities and under such conditions that it is the principal cause of serious injury or threat thereof. The domestic producers’ evidence may cover such factors as loss of sales to imports, price undercutting, depression or suppression, as well as declines in market share, profitability, return on investments, cash flow, growth, ability to raise capital and employment. Importers or foreign producers, and sometimes users of the goods, typically challenge the domestic producers’ case. They may submit evidence that the particular variety of goods that they are bringing into Canada is not contributing to any serious injury that may be suffered by domestic producers. After cross examination and questions from the Tribunal, each party has an opportunity to summarize its case and respond to the other parties’ cases in final argument.

Submission of Tribunal’s report to the Government

On Day 180 of a standard case, or on Day 270 of a complex case, the Tribunal issues a report to the Government setting out its determination as to whether the goods subject to the safeguard inquiry are being imported into Canada in such increased quantities and under such conditions as to be a principal cause of serious injury, or thereat thereof, to domestic producers of like or directly competitive goods.

When the Government directs the Tribunal to recommend the most appropriate safeguard measures in the event of an affirmative determination of serious injury or threat thereof, the Tribunal has until Day 270 to submit its report with recommendations to the Government.

The Tribunal distributes its report, with recommendations, if applicable, to the complainant as well as other interested persons and governments. The Tribunal also posts the report, with recommendations, if applicable, on its website. Notice of the submission of the report is published in the Canada Gazette. If the Government has requested the safeguard inquiry, the Tribunal submits the report, with recommendations, if applicable, to Parliament.

The Government may apply safeguard measures on imports from a country with which Canada has entered into a bilateral free trade agreement that was previously excluded from global safeguard measures, if the Tribunal determines, after a complaint by a domestic producer, that a surge in imports from this country is undermining the effectiveness of global safeguard measures.

The Tribunal must decide within 30 days of receipt of a complaint if it will conduct an inquiry. It must report to the Government within 60 days of initiating an inquiry. Notice of the report is given to the complainant, and other interested persons and governments, published in the Canada Gazette and posted on the Tribunal’s website.

The Tribunal may conduct an extension inquiry to determine if a safeguard measure that is due to expire is still necessary. It issues a notice of expiry eight months before a global safeguard measure is scheduled to expire. The notice is provided to all interested parties and governments, published in the Canada Gazette and posted on the Tribunal’s website.

Domestic producers and trade unions whose members are engaged in the Canadian production of like or directly competitive goods may file a request for an extension inquiry by providing information specified by the Tribunal, including facts on the proportion of domestic production accounted for by domestic producers making or supporting the request. If the Tribunal determines that the request is properly documented, it notifies the requester and other interested parties and governments. The Tribunal initiates an extension inquiry within 30 days if it is satisfied that the information provided by the requester and any other information discloses a reasonable indication that the measure is still necessary to prevent or remedy the serious injury, or threat thereof, to domestic producers of like or directly competitive goods and that the request is made on behalf of, or with the support of, domestic producers accounting for a major proportion of domestic production.

Extension inquiry process

The extension inquiry is similar to the initial safeguard inquiry. The Tribunal issues a notice, informs interested parties, governments and the Minister of Finance, obtains information through questionnaires, calls for written submissions and may hold a hearing. The Tribunal must submit its report to the Government no later than 45 days before the date of expiry of the measure.

As in an initial safeguard inquiry, the Government may ask the Tribunal to examine and report on any other matter relating to the request for an extension inquiry.

Notice of the Tribunal’s report is given to interested parties and governments, published in the Canada Gazette and posted on the Tribunal’s website. If the Tribunal determines that the measures remain necessary to prevent or remedy the serious injury or threat thereof and that there is evidence that the domestic producers are adjusting to import competition, the Government may extend the safeguard measures.

Foreign governments affected by a safeguard inquiry and measures may seek consultation and dispute resolution from the WTO’s Dispute Settlement Body for review.