No CrossRef data available.
Article contents
Anti-Dumping Duties in Canada
Published online by Cambridge University Press: 09 March 2016
Extract
The regulation of international price discrimination, commonly referred to as “dumping,” has been one of the most vexing technical problems to trouble international trade in this century. A favourite weapon of a firm or cartel bent on coercing or eliminating competition has been the price war — sales at below cost for the purpose of driving competitors into line or out of the market. This type of unfair trade practice is not limited by national boundaries, but the normal techniques of controlling it, through antitrust or anti-combines legislation, are largely confined to domestic economies as national governments lack authority to regulate competitors operating exclusively in foreign jurisdictions.
Canadian manufacturers have been particularly sensitive to dumping because of the presence next door of large and powerful American competitors and of the close economic proximity of the industries of Britain and continental Europe. Consequently, it is not surprising that Canada pioneered in the field of legislation against dumping, enacting the original provisions in 1904. At that time the government was under considerable pressure from Canadian industry to increase tariffs generally and the introduction of anti-dumping legislation was designed to pacify this group without resorting to an overall increase in customs duties.
- Type
- Articles
- Information
- Canadian Yearbook of International Law/Annuaire canadien de droit international , Volume 4 , 1966 , pp. 131 - 160
- Copyright
- Copyright © The Canadian Council on International Law / Conseil Canadien de Droit International, representing the Board of Editors, Canadian Yearbook of International Law / Comité de Rédaction, Annuaire Canadien de Droit International 1966
References
1 An Act to Amend the Customs Tariff, 1897, S.C. 1904, c11, s.19.
2 H.C. Deb. (Can.) 1904, Vol. III, at 4363–74; Viner, Jacob, Dumping: A Problem in International Trade 192–93 (Chicago 1923);Google Scholar Wilgress, L.D., Canada’s Approach to Trade Negotiations 59 (Montreal, 1963).Google Scholar
3 H.C. Deb. (Can.) 1904, Vol. III, at 4364–65.
4 It is rather ironic that the United Kingdom in recent years has been one of the most outspoken critics of the Canadian legislation.
5 The Customs Tariff, R.S.C. 1952, c.6o, s.6(i): “In the case of goods exported to Canada of a class or kind made or produced in Canada, if the export or actual selling price to an importer in Canada is less than the fair market value or the value for duty of the goods as determined under the provisions of the Customs Act, there shall, in addition to the duties otherwise established, be levied, collected and paid on such goods, on their importation into Canada, a special or dumping duty, equal to the difference between the said selling price of the goods for export and the said value for duty thereof; and such special or dumping duty shall be levied, collected and paid on such goods although not other wise dutiable.”
6 An Act to Amend the Customs Act, S.C. 1958, c.26, s.1, cl. 36.
7 The maximum amount of the duty is 50 per cent ad valorem: see R.S.C. 1952, c.60 s.6(2).
8 Goods of a class subject to duty under the Excise Act (generally liquor and tobacco) are exempt and other goods may be exempted by regulations or order of the Governor in Council. The Australian and New Zealand trade agreements exempt goods enumerated in schedule A of the agreements.
9 1921, 42 Stat, 11, s.201; as amended 19 U.S.C. s.160 (1965).
10 Hendrick, James P., “The United States Anti-dumping Act,” (1964) 58 Am. J. Int’l L. 914.CrossRefGoogle Scholar
11 R.S.C. 1952, c.6o, s.6(9).
12 R.S.C. 1952, c.58, S.44. For text of s.44(1) see note 81, infra.
13 S.C. 1958, C.26, s.45.
14 (1957–62) 2 T.B.R. 3, 4–5.
15 This may be offset to some extent by the factor of smaller Canadian production being required to supply made in Canada requirements of any particular class.
16 St. John Shipbuilding & Dry Dock Ltd. v. Dep. M.N.R. (Customs & Excise), (1964) T.B. Appeal No. 742. Affirmed Supreme Court, December 20, 1965.
17 Reference by the Dep. M.N.R. (Customs & Excise) Re Class or Kind of Underground Mining Dump Trucks (1957–62) 2 T.B.R. 230.
18 Ibid.
19 The Customs Tariff, R.S.C. 1952, c.60, Sch. A.
20 Reference by the Dep. M.N.R. (Customs & Excise) for the Opinion of the Tariff Board Regarding the Proper Tariff Classification of Power Cranes and Shovels, (1937–56) 1 T.B.R. 90.
21 (1937–56) 1 T.B.R. 140.
22 (1937–56) 1 T.B.R. 152.
23 Except perhaps the criterion advanced by Rand, J. in the Dominion Engineering Case , [1958] S.C.R. 652; 662–63;Google Scholar (1937–56) 1 T.B.R. 152, 159–60.
24 A. B. Wing Limited v. Dep. M.N.R. (Customs & Excise), supra note 31. Norton Company v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 127.
25 Canadian Lift Truck Co. Ltd. et al. v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 54; Laurion Equipment Limited v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 321.
26 Canadian Lift Truck Co. Ltd. v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 113; Davison Chemical Co. Ltd. v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 138; Ellett Copper & Brass Co. Ltd. v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 323.
27 East End Car. Co. Ltd. v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 111; Whites Hardware Limited v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 30.
28 Canadian Hansen Van Winkle Company Limited v. Dep. M.N.R. (Customs & Excise), (1937–56) 1 T.B.R. 126.
29 S.C. 1958, c.26, s.2(1).
30 Supra note 23.
31 Note, however, Lyman Tube & Bearings Limited v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 3, where the reverse situation would be true. In this case, ball bearings of different sizes were placed in the same class, even though not capable of being substituted for each other.
32 MacMillan and Bloedel (Alberni) Ltd. v. Dep. M.N.R. (Customs & Excise), (1965), 50 D.L.R. (2d) 1; J. M. Fortin Inc. v. Dep. M.N.R. (Customs & Excise), [1965] Ex. C.R. 31, 34–35 (Exchequer Ct.); John Bertram & Sons Ltd. v. John Inglis Co. Ltd. et al., (1957) 1 T.B.R. 185 (Exchequer Ct.).
33 (1937–56), 1 T.B.R. 152, 155.
34 In this respect contrast classification in the A. B. Wing case, supra note 21, with that in the Laurion Equipment case, supra note 25.
35 P.C. 1618 (1955) ; S.O.R. Vol. 1, at 793.
36 Lyman Tube & Bearing Ltd. v. Dep. M.N.R. (Customs & Excise), supra note 31.
37 (1963) T.B. Appeal No. 664.
38 MacMillan and Bloedel (Alberni) Ltd. v. Dep. M.N.R. (Customs & Excise), supra note 32, at 4.
39 Accessory Machinery Ltd. v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 238; Lyman Tube & Bearing Ltd. v. Dep. M.N.R. (Customs & Excise), supra note 31; John Bertram and Sons Ltd. v. John Inglis Co. Ltd. et al., supra note 32 (Exchequer Court).
40 Masson, Francis and English, H. Edward, Invisible Trade Barriers Between Canada and the United States 19 (Washington, 1963).Google Scholar
41 MacMillan and Bloedel (Alberni) Ltd. v. Dep. M.N.R. (Customs & Excise), supra note 32.
42 Per Senator Choquette introducing the bill into the Senate: Sen. Deb. (Can.), 1960–61, at 564.
43 Sen. Deb. (Can.), 1960–61, at 576. The tone of the debate is illustrated by the following remarks of Senator W. Ross MacDonald, the Liberal leader in the Senate: “Surely those of us who voted for the Bill of Rights cannot sit idly by and accept this legislation in its present form. I say to you, let us unite in denying these arbitrary powers to a minister, let us leave Parliament with the right to tax and let us leave our citizens with the right of appeal, not to a minister of the Grown, but to the courts of the land.”
44 Infra note 51.
45 An Act to Amend the Customs Act, S.C. 1958, c.26. This definition is qualified by sections 36(2) and 36(3) as follows:
36(2) The following rules apply in the application of subsection (1):
-
(a)
(a) if there were no sales at the time when the goods were shipped to Canada, there shall be substituted therefor the most recent sales prior to the time of shipment that fairly reflect the market value of the goods at the time of shipment;
-
(b)
(b) if there were no purchasers located at the place from which the goods were shipped to Canada, there shall be substituted therefor sales to the purchasers located nearest thereto;
-
(c)
(c) where goods imported into Canada and goods sold for home consumption are like goods except only that the goods sold for home consumption have applied to them a trade mark, as defined in the Trade Marks Act, that is not applied to the goods imported into Canada, and goods like the goods imported are not sold for home consumption, the goods imported and the goods sold for home consumption shall be deemed to be like goods for the purposes of this section, if, in the opinion of the Minister,
-
(i)
(i) the goods are being imported into Canada without that trade mark applied to them in order to avoid the operation of subsection (1), and
-
(ii)
(ii) it is probable that there will be applied to the goods, subsequent to their importation into Canada, that trade mark or any other mark so closely resembling that trade mark that it is likely to be taken therefor;
-
(d)
(d) regard shall not be had to a sale for home consumption to a purchaser by a vendor who did not, at the same or substantially the same time, sell like goods in the ordinary course of trade to other persons in the country of export, not controlled by or in control of or otherwise related to the purchaser; and
-
(e)
(e) where goods were not sold in the same or substantially the same quantities for home consumption
-
(i)
(i) if the quantity shipped to Canada is larger than the largest quantity sold for home consumption, those quantities shall be deemed to be the same quantities,
-
(ii)
(ii) if the quantity shipped to Canada is smaller than the smallest quantity sold for home consumption, the value for duty shall be based on the amount for which, in the opinion of the Minister, having regard to that trade, such smaller quantities would have been sold if they had been sold for home consumption.
-
(3)
(3) Where the value for duty cannot be determined under subsections (1) and (2) for the reason that
-
(a)
(a) there were no purchasers in the country of export (in this subsection called “home purchasers”) who were at the same or substantially the same trade level as the importer, or
-
(b)
(b) although there were home purchasers who were at the same or substantially the same trade level as the importer, there were no sales to them in the circumstances described in subsections (1) and (2),
the home purchasers, if any, at the trade level nearest and subsequent to that of the importer to whom sales were made in the circumstances described in subsections (1) and (2) shall, for the purposes of those subsections, be deemed to have been at the same trade level as the importer.
Section 40A(i) of the Customs Act provides that in no case shall value for duty be less than the import price, subject to any decline in value between the date of sale and the date of entry.
46 R.S.C. 1952, c.60, s.6(3).
47 Ibid., s.6(4).
48 S.O.R. 1955, vol. 1, 794.
49 Ibid., 793.
50 S.C. 1958, c.26, s.37: “Subject to section 38, where like goods were not sold for home consumption, or were not sold for home consumption in the circumstances described in section 36, but similar goods were so sold, the value for duty shall, notwithstanding any invoice or affidavit to the contrary, be the aggregate of
-
(a)
(a) the cost of production of the goods imported; and
-
(b)
(b) an amount that is the same percentage of the cost of production of the goods imported as the gross profit on the similar goods is of the cost of production of the similar goods.”
51 Ibid., s.38: “Where in any case or class of cases
-
(a)
(a) the value for duty cannot be determined under section 36 or 37 for the reason that like or similar goods are not sold in the country of export or are not sold in such country in the circumstances described in those sections,
-
(b)
(b) the goods imported
-
(i)
(i) are intended to be assembled, packaged or further manufactured in Canada or are intended to enter into the course of manufacture in Canada,
-
(ii)
(ii) are used or obsolete goods,
-
(iii)
(iii) are not prime quality goods as known in the trade, or are known in the trade as remnants, close-outs or discontinued lines or are surplus goods,
-
(iv)
(iv) constitute a job lot, or
-
(v)
(v) are intended to be used directly in the process of manufacture or production of goods and like goods are not sold in the country of export,
-
(c)
(c) like goods are leased but not sold in the country of export, or
-
(d)
(d) the Minister is of opinion that by reason of unusual circumstances the application of sections 36 and 37 is impracticable,
the value for duty shall be determined in such manner as the Minister prescribes.”
52 Singer Manufacturing Co. v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 301, 306, followed in Valley Textiles Agencies Corp. Ltd. v. Dep. M.N.R. (Customs & Excise), (1964) T.B. Appeal No. 749.
53 One member of the Board, Mr. Elliott, suggested this inequitable result could be avoided by using the retail price as evidence of value only rather than as value per se, thereby permitting an adjustment for the difference in circumstances.
54 Canadian Admiral Corp. Ltd. v. Dep. M.N.R. (Customs & Excise), (1957–62) 2 T.B.R. 60.
55 (1957–62) 2 T.B.R. 75.
56 An Act to Amend the Customs Act, S.C. 1965, c.16, s.3.
57 The comparable British provision contained in section 7, of the Customs Duties (Dumping and Subsidies) Act, 1957, 5 & 6 Eliz. 2, c.18 (U.K.), provides for adjustments in price “whether for differences in conditions and terms of sale, for differences in taxation or otherwise, which may be required for the purpose of ensuring that the comparison between the fair market price and the export price is effectively a comparison between the prices on two similar sales.”
58 S.C. 1958, c.26, s.37.
59 S.C. 1958, c.26, s.35.
60 The terminology is “such or similar merchandise”: 19 U.S.C, s.164 (1960).
6l Hearings Before the House Committee on Ways and Means on H.R. 6006, 6007, and 5120, Bills to Amend Certain Provisions of the Antidumping Act of 1921, 85th Cong, 1st Sess. 12 (1957).
62 Elliott, G.A. Tariff Procedures and Trade Barriers 187 (1955).Google Scholar
63 S.C. 1948, c.42.
64 S.C. 1955, c.32, 8.35(4) & (5).
65 Ibid., s.35(6) & (7).
66 S.C. 1958, c.26, s.37.
67 S.C. 1930 (2nd Sess.), c.2, s.1, cl.4.
68 S.C. 1958 c.26, s.40A(7c) : “Notwithstanding anything in this Act,
(c) where at any time it appears to the satisfaction of the Governor in Council on a report from the Minister that goods of any kind not entitled to entry under the British Preferential tariff or any lower tariff are being imported into Canada under such conditions as prejudicially or injuriously to affect the interests of Canadian producers or manufacturers, the Governor in Council may authorize the Minister to determine the value for duty of any class or kind of such goods, imported into such region or part of Canada and during such period as the Minister may specify, or may authorize the Minister to prescribe the manner in which such value for duty shall be determined, and the value so determined shall be deemed to be fair market value of such goods.”
69 76 Stat. 883 (1962), s.301, 302, 351; 19 U.S.C. s.1901, 1902, 1981 (1965).
70 S.O.R. 1957, 564.
71 S.O.R. 1958, 214; revoked S.O.R. 1959, 525.
72 S.O.R. 1964, 602; extended with amendments, S.O.R. 1965, 1655.
73 S.O.R. 1965, 6.
74 S.O.R. 1965, 756.
75 S.C. 1958, c.26, s.40A(7a): “Notwithstanding anything in this Act,
(a) where the market price of any manufactured goods in the country of export has, as the result of the advance of the season or the marketing period, declined to levels that do not reflect in the opinion of the Minister their normal price, the value for duty shall be the amount determined and declared by the Minister to be the average price, weighted as to quantity, at which the like or similar goods were sold for consumption in the country of export during a reasonable period, having regard to that trade, immediately preceding the date of shipment of the goods to Canada.…”
76 S.C. 1958, c.26, s.40A(7b): “Notwithstanding anything in this Act,
(b)where the market price in the country of export of any fresh fruit or vegetable of a class or kind produced in Canada has, as a result of the advance of the season or the marketing period, declined to levels that do not reflect in the opinion of the Minister their normal price, the value for duty of such fresh fruit or vegetable, when imported into such region or part of Canada and during such period as the Minister may specify, shall be the amount determined and declared by him to be the average value, weighted as to quantity, at which like fresh fruits or vegetables were imported during the three-year period immediately preceding the date of shipment to Canada.…”
77 S.C. 1958, c.26, s.38. Supra note 51.
78 See the statement of Hon. Nowlan, George, Minister of National Revenue, in Deb, H.G.. (Can.) 1958, vol. 4, at 4665–66Google Scholar and particularly at 4666: “When this Bill becomes law, we will be able to assist employment in the various industries in Canada, and will be able to resist the greater spread of unemployment in these industries.”
79 H. Bedos and Co. (Canada) Inc. v. Dep. M.N.R. (Customs & Excise), (1957–63) 2 T.B.R. 264.
80 R.S.C. 1952, c.58, ss.43–45; S.C. 1955, c.32, s.43, and S.C. 1962, c.27, s.43.
81 Ibid., s.44(1): “A person who deems himself aggrieved by a decision of the Deputy Minister
(a) as to tariff classification or value for duty,
may appeal from the decision to the Tariff Board by filing a notice of appeal in writing with the secretary of the Tariff Board within sixty days from the day on which the decision was made.”
82 S.38(d) delegates a very wide discretion but even here it is submitted that there must be some evidence of “unusual circumstances” before the Minister can properly invoke the subsection.
83 S.39 and s.40A(7c).
84 S.38(d) ands.40A(7a) and (7b).
85 (1945) Ex. CR. 97, 105, affirmed [1946] S.CR. 499.
86 S.43 (2b) and (4e).
87 S.46(4); M.N.R. v. Taylor, (1961) 61 D.T.C 1139; M.N.R. v. Appleby, (1964) 64 D.T.C. 5199; M.N.R. v. Foot, (1964) 64 D.T.C. 5196.
88 R.S.C 1952, c.58, s.265.
89 Weddell Limited v. The King, supra note 85.
90 19 U.S.G. section 1501 (1960).
91 19 U.S.C, section 160 (1960).
92 Except for the Departmental “class or kind” memoranda.
93 These statistics are based on figures received from the Department of National Revenue.
94 Elliott, supra note 62, at 188.
95 Young, John J., Canadian Commercial Policy 138–39 (Toronto, 1957).Google Scholar
96 Masson, supra note 40, at 19.
97 R.S.C. 1952, c.60, s.6(6).
98 Supra note 10, at 933.
99 The automatic practice was copied by New Zealand, Customs Amendment Act 1921, N.Z. Statutes Reprint (1908–1937) vol. 3, no. 19, s.12.
100 Article VI “1. The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry.…”
The absence of an injury requirement in Canada is the most glaring inconsistency with Article VI.