The recent decision by the Canadian International Trade Tribunal (“CITT”) in Photovoltaic Modules and Laminates from China (CITT File Nbr. PI-2014-003), the “Solar Panels” case, has raised an apparent inconsistency in the Special Import Measures Act (“SIMA”), which begs the question whether it is time to review and amend the Act.
In its Decision, the CITT found that the evidence disclosed a reasonable indication that the dumping and subsidizing of solar panels from China “have caused or are threatening to cause injury to the domestic industry”. Having made that determination, the CITT noted, at paragraph 93 of its Statement of Reasons, that if the Canada Border Services Agency (“CBSA”) makes a preliminary determination that Chinese solar panels are dumped or subsidized, it will initiate an inquiry pursuant to SIMA Section 42 to determine whether the dumping or subsidization of the solar panels has caused or is threatening to cause injury to domestic producers in Canada.
The purpose of the Preliminary Injury Inquiry is to allow the CITT to determine whether there is sufficient evidence to justify proceeding to a full Injury Inquiry. The CITT applies the “reasonably discloses” threshold to determine whether the evidence presented by parties “reasonably discloses” that the imported subject goods caused or threatened to cause material injury to domestic producers in Canada. If the CITT makes this finding, it will proceed to a full Injury Inquiry to determine whether those products actually caused or threaten to cause injury. The “reasonably discloses” threshold applied in the Preliminary Injury Inquiry is significantly lower than the threshold applied in the Injury Inquiry and should be so; a complaint that is not supported by enough evidence to pass the “reasonably discloses” threshold could not meet the higher threshold applied in the Injury Inquiry. Assessing the evidence on the basis of this lower standard allows the Preliminary Injury Inquiry process to be used as a gatekeeper to control which cases proceed to an Injury Inquiry.
The apparent inconsistency raised by this case becomes obvious when we look behind the CITT’s Decision to the underlying findings set out in the CITT’s Statement of Reasons. At paragraph 79 of the Statement of Reasons the CITT concluded that the evidence presented did not disclose a reasonable indication that Chinese solar panels caused injury. At paragraph 91, the CITT concluded that the evidence did disclose a reasonable indication that the dumping and subsidizing of Chinese solar panels was threatening to cause injury to the domestic producers.
Since the CITT only found that threat of injury evidence met the “reasonable indication” threshold, one would expect that the CITT would limit the Injury Inquiry to the question of whether dumped or subsidized Chinese solar panels threaten to cause injury to domestic producers in Canada.
However, the CITT has already determined that the Injury Inquiry will not be limited to threat. As the CITT noted, at paragraph 93 of its Statement of Reasons, if the CBSA makes a preliminary determination that the subject goods are dumped or subsidized, it will inquire into whether the dumping or subsidizing has caused or is threatening to cause injury. Having made that statement, the CITT went on to state that, “[a]s a result of the statutory scheme, such an inquiry would not be restricted to determining whether there is a threat of injury.” Based on a review of SIMA Sections 37.1 and 42, the CITT is correct; if it finds either injury or threat of injury, in a Preliminary Injury Inquiry, but not the other, it must initiate an Injury Inquiry that considers both injury and threat of injury if the CBSA makes a preliminary determination of dumping or subsidization.
The result is that those parties who could not convince the CITT that the evidence disclosed a “reasonable indication” of injury on the basis of this relatively low threshold will now be given the opportunity to try to convince the CITT that Chinese solar panels have caused material injury on the basis of the higher test applied in an Injury Inquiry. This result seems to be at odds with the purpose of the Preliminary Injury Inquiry.
It appears then that the CITT’s Decision points to two problems with the SIMA. First, is there any point to having a Preliminary Injury Inquiry if it is not used to weed out deficient complaints? If Preliminary Injury Inquiries are intended to be used as gatekeepers, the SIMA should be amended to allow the CITT to limit Injury Inquiries to a consideration of either injury or threat of injury or both to reflect the CITT’s decision in a Preliminary Injury Inquiry. If Preliminary Injury Inquiries are not intended to be used as gatekeepers, then the SIMA should be amended to eliminate Preliminary Injury Inquiries altogether on the basis that they are an unnecessary step.
Second, the parties who argued in favour of an injury finding are likely now reviewing their evidence in light of the CITT’s analysis in the Statement of Reasons to determine how they can correct the deficiencies in their complaint through an Injury Inquiry. Regardless of whether this is possible in the context of the Solar Panels case, the Preliminary Injury Inquiry should not be used as a means of providing the parties with the CITT’s assessment of the evidence and any weakness in that evidence. If the Preliminary Injury Inquiry is to be used in this manner, then the SIMA should be amended to ensure that a different CITT panel hears the Injury Inquiry. This amendment would put the CITT on the same footing as other courts that offer pre-trial reviews or settlement hearings. In those courts, the pre-trial review or settlement conference is handled by a judge or court officer who will not hear the trial so that judicial independence can be preserved.
Therefore, it appears that the CITT’s Decision and Statement of Reasons in Solar Panels has identified fundamental problems with the SIMA that should be addressed.
