CANADA VOLUME 135 S NUMBER 126 S 1st SESSION S 36th PARLIAMENT OFFICIAL REPORT (HANSARD) Friday, September 25, 1998 Speaker: The Honourable Gilbert Parent CONTENTS (Table of Contents appears at back of this issue.) All parliamentary publications are available on the ``Parliamentary Internet Parlementaire'' at the following address: http://www.parl.gc.ca 8385 HOUSE OF COMMONS Friday, September 25, 1998 The House met at 10 a.m. Two federal government departments and one independent tribu- nal are directly involved under SIMA. As actions taken under _______________ SIMA result in the imposition of duties on imported goods, the Minister of Finance is responsible for the legislation. Prayers Revenue Canada and the Canadian International Trade Tribunal _______________ share responsibility for investigations under the law and Revenue Canada enforces anti-dumping and countervailing duties at the border. GOVERNMENT ORDERS With respect to international implications and negotiations, it is foreign affairs and finance which work together on trade remedy D (1000) policy to co-ordinate Canada’s import and export interests and develop our international trade negotiating positions. [English] Before discussing the merits of Bill C-35, I would like to provide SPECIAL IMPORT MEASURES ACT some background as to why these amendments are being proposed. Hon. Diane Marleau (for the Minister of Finance, Lib.) Canada has a long history in the use of trade remedies. In fact in moved that Bill C-35, an act to amend the Special Import Measures 1904 Canada introduced the world’s first anti-dumping legislation. Act and the Canadian International Trade Tribunal Act, be read the second time and referred to a committee. Since then our trade remedy system has undergone various refinements due to changing economic conditions and the evolu- D (1005 ) tion of international trade rules. These international rules are Mr. Tony Valeri (Parliamentary Secretary to Minister of governed by the World Trade Organization, or the WTO, which sets Finance, Lib.): Madam Speaker, today it is certainly a privilege out detailed rights and obligations of member countries in adminis- for me to begin debate on Bill C-35. tering trade and remedy protection. Essentially this bill contains amendments to Canada’s anti- As the imposition of anti-dumping or countervailing duties dumping and countervailing duty law, known as the Special Import represents an exception from a country’s WTO commitments not to Measures Act, or SIMA. It responds directly to the recommenda- raise tariffs and not to discriminate in its treatment of imports, the tions contained in a 1996 parliamentary report on Canada’s trade right to impose these special duties is carefully circumscribed. remedy system. In general, the Canadian SIMA system is comparable to the These amendments will fine-tune the law by rationalizing the systems of other major users such as the United States and the investigative process, increasing transparency and procedural fair- European Union. The WTO does, however, provide some latitude ness, and in fact enhancing the system’s ability to consider in the administration of trade remedy laws. As a result, there are representations from various segments of Canadian business. some variations between systems, largely reflecting differing legal cultures and economic circumstances. The bill also includes certain technical changes that clarify existing provisions and practices under SIMA and the Canadian There are, of course, important domestic interests on both sides International Trade Tribunal Act. of the trade remedies equation. SIMA is an important component of Canada’s trade remedy One of the key challenges associated with the Special Import legislation. It authorizes the federal government to impose anti- Measures Act was to strike the right balance between the interests dumping and countervailing duties to offset injury to domestic of industries seeking trade remedy action and the interests of firms caused by foreign dumping and subsidies. In this regard it consumers and other manufacturers who may be negatively af- implements Canada’s rights and obligations under the World Trade fected by the imposition of anti-dumping or countervailing duties Organization agreements on subsidies and anti-dumping. on imported goods. 8386 COMMONS DEBATES September 25, 1998 Government Orders D (1010 ) Generally, the recommendations represented adjustments to the SIMA investigation process that allow the system to more ade- quately consider the views of various parties which have a stake in First and foremost, this law is intended to assist Canadian this law. enterprises by offsetting the injurious economic effects resulting from dumping or underpricing practices of foreign exporters, or in the case of subsidies, to remedy the injurious effects of the subsidy I want to be clear that it was for this reason that the government practices of foreign governments. However, the downstream eco- supported virtually all of the subcommittees’ recommendations. nomic interests cannot be ignored. What we have before us today is Bill C-35, which essentially reflects the subcommittees’ recommendations and the requirement that the subcommittees put forward in asking the government to As markets operate increasingly on a global basis, market review these recommendations and build them into legislation. openness becomes a critical factor in attracting investment and maintaining the competitiveness of our domestic firms. There are key changes in Bill C-35, the first being the rational- ization of investigative functions of Revenue Canada and the Canadian manufacturers often have to rely on imported inputs, Canadian International Trade Tribunal to better reflect their respec- for example, to meet specific quality and technical needs of their tive areas of expertise. customers. The second would enhance procedural fairness and transparency According to the OECD, the operations of Canadian manufactur- by bringing Revenue Canada’s treatment of confidential informa- ers rely more on imported inputs than their G-7 counterparts in the tion more in line with the tribunal’s practice respecting the U.S., France, Germany, Japan and the U.K. This reflects the disclosure of confidential information. relatively smaller size of the Canadian economy, as well as its high level of integration with the United States. The third would ensure that the tribunal, in its fact finding, would benefit more fully from expert evidence by permitting Given this, SIMA must represent a balancing act. It must provide expert witnesses to play a more effective role in tribunal inquiries. effective relief to Canadian firms injured by foreign dumping or subsidies while not imposing unnecessary or excessive burden on The fourth would establish new penalty provisions to deter any downstream producers or consumers. This was the key challenge unauthorized disclosure or misuse of confidential information by for lawmakers when SIMA was first developed in 1984 and it legal counsel or expert witnesses in the context of SIMA investiga- certainly remains the challenge today. tions. When the Minister of Finance requested the House of Commons D (1015 ) Standing Committees on Finance and Foreign Affairs and Interna- tional Trade to jointly review SIMA in 1996, he noted that The fifth would improve the provisions which allow the Deputy significant changes had taken place in the global trading environ- Minister of National Revenue to accept an undertaking from ment since 1984 and that it was time to reassess whether the law exporters to raise prices as an alternative to the imposition of continued to reflect the interests of Canadian producers. anti-dumping duties and to ensure that all interested persons are afforded an opportunity to provide views when undertakings are Two subcommittees were asked to undertake this review. They being considered. heard from a broad range of interests, including domestic produc- ers, importers, retailers, academics, trade practitioners and govern- The sixth would require the tribunal to cumulate the injurious ment officials. These parties gave evidence and submitted effects of dumping or subsidizing from more than one country proposals for changes based on their experience with the SIMA consistent with the single price effect in the Canadian market of system. such practices. It was based on these submissions and their deliberations that the The final change would clarify the conditions under which the subcommittees concluded in their report that Canada’s trade reme- tribunal can consider issues of broader public interest and the types dy system under SIMA continues to respond to the needs of of measures it may recommend in a public interest report. Canadian producers that seek protection under the law, while affording downstream producers and consumers an opportunity to The discussions that took place in the recent parliamentary have their interests considered. review of SIMA reflected the changes that have taken place in the structure of the Canadian economy since the law was established in They also identified areas where improvements could be made to 1984. These changes will ensure that the Special Import Measures the system to make it more efficient and more responsive to Act remains a strong trade instrument which truly protects Cana- Canada’s economic needs. dian producers injured by dumped or subsidized imports, while at September 25, 1998 COMMONS DEBATES 8387 Government Orders the same time allowing an opportunity for other producers and whatever commodities they can, including steel, and to sell to consumers to have their interests considered. countries like Canada and the U.S.A. in a desperate attempt to prop up their sagging economies at home. It certainly introduces important changes to Canada’s trade remedy system which take account of the interests of all stakehold- During the subcommittees’ hearings Canadian steel producers ers. It is for the reasons that I have outlined that I would urge all of wanted the Canadian government to get tough with American my colleagues to support its passage. producers. It is certainly within the power of the Canadian govern- ment to do so. It could make it more difficult and costly for U.S.