Posted by on Jul 13, 2016

The Department of Finance is currently conducting a review of the Special Import Measures Act (“SIMA”), the basis of Canada’s anti-dumping and countervailing duty system, and issued an Invitation to Interested Parties to submit their views on a “focused set of potential changes.” Although the SIMA review is intended to take all stakeholder interests into consideration, the issues raised in the Invitation focus on increased protection for domestic producers. For example, the Department has asked whether the current system provides sufficient protection to domestic producers and has proposed establishing scope and anti-circumvention inquiries and further restricting the CITT’s discretion to issue product exclusions; all of which will benefit domestic producers at the expense of other stakeholders.

Periodic review of legislation is important, but legislation should only be amended when the amendments are necessary. In our view, amending SIMA to increase protection for domestic producers is questionable because they are well protected by the current system. That domestic producers benefit from the SIMA is clear from recent decisions which show that injury and threat of injury findings are made in the vast majority of cases, injury findings are generally extended following expiry reviews and the number of product exclusions granted is relatively low. Because domestic producers already receive more than sufficient protection from Canadian authorities, any additional protection is unnecessary and will raise trade barriers to the detriment of other stakeholders including other Canadian manufacturers, end-users and consumers and to the detriment of the Canadian economy overall.

Because we believe that the proposed amendments to the SIMA would unnecessarily harm other Canadian stakeholders (i.e., manufacturers, importers, distributors, end-users and consumers) without providing any actual additional protection to domestic producers, we filed a submission in response to the Invitation to make the following points:

i) We argued that the SIMA should not be amended to provide greater protection to domestic producers.

ii) We argued that the proposed scope ruling process, which would allow parties to request an inquiry to determine whether an imported good is subject to an anti-dumping/countervailing duty finding, is not necessary. But, if the Department decides to institute this process, it should not be applied in a manner that would violate Canada’s international trade obligations, it should strictly apply the product definition used in the relevant injury finding and it should ensure that all interested parties have the ability to fully participate in the process.

iii) We argued that the proposed anti-circumvention process should be rejected because it violates Canada’s international trade obligations. However, if the Department decides to introduce any type of anti-circumvention mechanism, it should also ensure that all interested parties have the ability to fully participate in the process.

A copy of the Woods, LaFortune Submission is available on our firm website.

Because the following amendments could be made without affecting the level of protection afforded to domestic producers, we also proposed that:

i) the requirement that importers pay amounts demanded by CBSA as a prerequisite of seeking a review of the decision be eliminated in the SIMA and the Customs Act; and

ii) the time allowed to interested parties to file a Request for a Public Interest Inquiry following an Injury Inquiry be increased.

We recognize that domestic producers have a right to be protected from unfair import competition, but this protection has to be reasonable and should not come at the expense of all other stakeholders. Therefore, to ensure that the SIMA better reflects the interests of all stakeholders, we proposed amendments that we believe recognize and balance the interests of all stakeholders. If you agree with our view, we encourage you to write to the Department of Finance to lend your support.