Effective October 25, 2018, provisional safeguard measures apply to seven categories of steel products imported into Canada from most countries. These provisional safeguard measures take the form of tariff rate quotas (TRQs), with a 25% over access surtax that will apply to imports for 200 days from October 25, 2018, to May 13, 2019.
During this 200-day period, the Canadian International Trade Tribunal (CITT) will conduct a global steel safeguards inquiry. Following this inquiry, the CITT will report its recommendations to the Government of Canada, which will then decide whether or not to extend the application of safeguards for up to four years (to October 2022).
This update provides a quick reference to five basic questions about the provisional safeguards and CITT process:
If your projects or business are sensitive to the price of steel, you have one opportunity to oppose the imposition of safeguards by participating in the CITT inquiry. Time is of the essence because the deadline to participate in the CITT process is October 29, 2018.
Safeguards are exceptional measures intended to temporarily assist domestic producers that have suffered, or are threatened by, serious injury from increased imports of specific goods. In Canada, safeguard measures can take the form of: (i) an import surtax, or (ii) a restriction on import volumes, such an import quota or a TRQ system. The Governor-in-Council (i.e., the Federal Cabinet) has the authority to impose safeguards:
For more information, please see Bennett Jones’ Canadian Safeguard Measures Guide.
The seven categories of steel products subject to provisional safeguards are:
For the definitions of each of the seven steel product categories, see Annex A – Steel Products Subject to Provisional Safeguards on Finance Canada’s website.
The product category definitions should be reviewed closely. Some of the definitions exclude certain types of steel products that would otherwise fall within the product definition. While the product category definitions include code HS tariff codes, these should be read as illustrative only. The product descriptions, not the HS codes, are determinative of whether a steel product is subject to provisional safeguards.
Steel imported from any country except those listed below are subject to provisional safeguards:
As noted in Finance Canada’s news release, the provisional safeguards take the form of a TRQ system administered under the EIPA. Under this system, the Government has set a total access quantity (tonnes) for each category of steel product imported in the 200-day provisional safeguard period. The access quantity is based on the average volume of imports over a similar period covered by the provisional safeguard in the years 2015-2016, 2016-2017 and 2017-2018. Each access quantity is divided evenly into four 50-day periods, and administered in accordance with the following rules.
The CITT published a notice of initiation of its inquiry, according to which interested parties must file notices of appearance on or before Monday, October 29, 2018. As participants of the safeguard inquiry, domestic producers, importers and foreign producers of each class of goods must each complete and submit questionnaires to the CITT by Wednesday, October 31, 2018. A series of public hearings to take place from January 3 - 22, 2019.
In Canada, the authority tasked with conducting safeguard investigations is the CITT. The CITT also has the authority to conduct exclusion inquiries, mid-term reviews and extension inquiries in addition to safeguard inquiries, pursuant to the CITT Act, the CITT Regulations and the CITT Rules. In accordance with WTO requirements, the CITT conducts safeguard inquiries to determine if increased imports of goods into Canada are causing or are threatening to cause serious injury to domestic producers of like or directly competitive goods.
The CITT’s global safeguards inquiry will result in the Tribunal submitting its recommendations to the Minister of Finance about the imposition of safeguards and the form of those safeguard measures by April 3, 2019. The CITT published a notice of initiation of its inquiry, according to which interested parties must file notices of appearance on or before Monday, October 29, 2018. The Tribunal has published detailed questionnaires to be completed by domestic producers, importers and foreign producers of each category of goods by October 31, 2018. During the inquiry, parties who choose to participate also file evidence and legal argument, and attend a CITT hearing, usually held in Ottawa, Ontario. At the hearing, legal counsel for participants conduct cross-examinations of witnesses and make oral arguments.