In this second edition of the Canadian Trade Law Year in Review, the team at CLK Canada has analyzed key judicial and administrative decisions from 2023 that will be of interest to trade practitioners.

These cases consist of decisions of Canada's Federal Courts reviewing findings of the Canadian International Trade Tribunal ("CITT") and Canada Border Services Agency ("CBSA"), determinations by the CITT and CBSA, and decisions from binational panels pursuant Canada's international trade agreements. These decisions are divided according to their subject area, with this year's review covering judicial decisions involving the Special Import Measures Act, the Customs Act, and Canada's free trade agreements. This review is intended to provide practitioners and users of Canada's international trade regime with a reference guide for jurisprudential developments across Canadian trade law.

THE SPECIAL IMPORT MEASURES ACT

This year featured three decisions from the Federal Court of Appeal ("FCA") dealing with Canada's trade remedies regime under the Special Import Measures Act ("SIMA"). Two consisted of applications for judicial review of decisions by the CBSA to terminate investigations of certain exporters, while the third was a decision from the CITT that the domestic industry neither had been injured nor faced the threat of injury. These decisions will be of interest of practitioners as they provide guidance on questions of procedural fairness in CBSA investigations, deal for the first time with the scope of analysis in Particular Market Situation ("PMS") determinations by the CBSA, and provide clarifications on the methodology for conducting injury and threat assessments before the CITT. Notably, all three decisions were dismissed by the FCA, suggesting that the Court continues to defer heavily to the expertise of the CBSA and CITT in international trade matters.

Canadian Hardwood Plywood and Veneer Association v Canada (Attorney General), 2023 FCA 74 [Plywood I]

In this first decision, the FCA considered the meaning of a PMS and whether the CBSA is required to disclose its anti-dumping calculation worksheets. Justice Rivoalen, in dismissing the application for judicial review, found the CBSA's decision to not disclose calculation worksheets was both procedurally fair and not unreasonable, and that the CBSA's determination that a PMS did not exist was reasonable. Note that the Court heard the application for judicial review in Algoma Steel Inc v Canada (Attorney General), 2023 FCA 164— which involved several similar issues—the following day, and that Court relied on its reasons in Plywood I for overlapping issues.

By way of background, the CBSA advised that it was terminating dumping and subsidizing investigations for certain exporters (the "Zero-Rated Exporters") with respect to decorative and other non-structural plywood from China (the "Final Determination"). The Canadian Hardwood Plywood and Veneer Association and other applicants ("CHPVA") sought judicial review of the notice of Final Determination of the President of the CBSA pursuant paragraph 96.1(1)(a) of the SIMA. The Applicants advanced arguments challenging the CBSA's decision to terminate the investigation into the Zero-Rated Exporters, one on procedural fairness grounds and two pertaining to the reasonableness of the Final Determination.

As a preliminary matter, the Court clarified that the decision under review in this type of proceeding is a combination of the Final Determination, the CBSA's Statement of Reasons, the confidential Dumping Memorandum supplied to the President of the CBSA by Agency officers, and a confidential PMS Memorandum prepared by Agency officers, with the latter three documents "extensively documenting" the reasoning behind the Final Determination. Thus, regard must be had to more than just the public Final Determination (effectively the public reasons) as these other documents supporting the Final Determination are highly relevant when reviewing the CBSA's decisions.

First, the Court found that the CBSA's practice of not including dumping calculation worksheets in the Statement of Reasons and not sharing them with domestic producers did not breach procedural fairness, despite the fact that they are disclosed on request to the respondent participating exporters. These worksheets contain the detailed calculations that underpin the final margin of dumping found by the CBSA. The Court reaffirmed that the duty of fairness owed by the CBSA in the SIMA context, is set to a low threshold for two reasons: first, because of the magnitude of the investigation and the legislated limitation on time; and second, because interested parties—including the Applicant domestic producers—may obtain access to information provided by the exporters to the CBSA and which is used by the CBSA in making their calculations. In any event, Justice Rivoalen noted the Court may only look at the evidence that was before the decision-maker in a judicial review. Given that the dumping calculations were not part of the record before the President of the CBSA, calculations could not have been relied upon in an application for judicial review going to the reasonableness of the Final Determination.

Second, the Court held that the failure on the part of the CBSA to provide the calculations to the President of the CBSA or to include the calculations in the Statement of Reasons does not render the Final Determination unreasonable. The Court noted that in most administrative tribunals the calculations or details of an investigation are not put before the decision-maker. Rather, the decision-maker is provided with a report summarizing the factual findings and the methodology used to determine an issue or reach a conclusion. Having found that the Final Determination must be read with the Statement of Reasons and the confidential Dumping Memorandum, the Court concluded that it was not unreasonable for the President of the CBSA to render a decision without the calculation worksheets. There is nothing in the SIMA that requires the President of the CBSA to have the calculations when making the preliminary and final determinations, and the absence of the calculation worksheets did not mean that the President could not provide adequate and intelligible reasons. Rather, the Court concluded that the President's discretion not to request the calculations was not arbitrary, and the Final Determination was based on an internally coherent and rational chain of analysis which is justified in relation to the facts.

Third, the Court found that it was not unreasonable for the President of the CBSA to conclude that a PMS did not exist. A PMS relates to provisions in the SIMA that allow the CBSA to disregard prices and costs and use alternative information in determining the margin of dumping because those prices and costs are distorted in the exporting market. Highlighting that neither the SIMA nor the Special Import Measures Regulations("SIMR")—nor any Canadian jurisprudence—defined the term PMS, the Court declined to provide a definition and merely observed that the determination of whether a PMS exists is a highly contextual and fact-intensive exercise. That said, it provided two points of guidance on PMS methodology that will be of interest to practitioners. First, it was not unreasonable for the President of the CBSA in considering government support programs in the context of a PMS, to consider only programs already assessed in a parallel subsidy investigation. Second, it was not unreasonable that the President of the CBSA declined to cumulatively consider the impacts of various market factors and instead considered such factors individually for the purpose of the PMS analysis.

Finally, the Court provided a number of residual observations that will be useful for trade practitioners in proceedings before the CBSA. First, the Court observed that the SIMA Handbook (an internal guidance document produced by the CBSA for officers conducting trade remedy proceedings) is a "policy document that does not bind the President of the CBSA" but is rather a useful guide for the CBSA and all parties involved. Second, the Court confirmed that the President of the CBSA is under no obligation to obtain or solicit additional information in making a finding on the existence of a PMS. While the Court acknowledged the CBSA's authority to request additional information or verify data, it held that the language of the SIMA means the CBSA has discretion over whether to engage in those further steps. The CBSA therefore did not act unreasonably in not requesting further information on the existence of a PMS or in not conducting supplemental comparative analysis on data submitted by the complainant.

Canadian Hardwood Plywood and Veneer Association v Canada (Attorney General), 2023 FCA 154 [Plywood II]

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