Wednesday, June 19, 2019

The Standing Senate Committee on National Finance has the honour to table its

FORTY-SECOND REPORT

Your committee, which was authorized to examine the subject matter of Bill C-101, An Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act, has, in obedience to the order of reference of Tuesday, June 18, 2019, examined the said subject-matter and now reports as follows:

On June 18, 2019, the Senate referred the subject matter of Bill C-101, An Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act, to the committee for pre-study.

On June 19, 2019, your committee held one meeting on the bill with three witnesses representing the Department of Finance Canada and Global Affairs Canada.

Where there is evidence that an increase in fairly traded imports has caused or is threatening to cause serious injury to domestic producers, under the Customs Tariff the Government of Canada may impose safeguard measures. Based on a report by the Minister of Finance, an import surtax can be imposed on a provisional basis for a period of up to 200 days, subject to a review by the Canadian International Trade Tribunal (CITT). The Customs Tariff currently prevents the re-imposition of safeguard measures on products that were subject to previous safeguards for a period of two years following their last imposition.

In October 2018, the Government of Canada imposed an import surtax on seven steel product categories: heavy plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, and wire rod, and referred the safeguards to the CITT for review. In April 2019, the CITT ruled that safeguard measures were warranted on two of the seven categories: heavy plate and stainless steel wire.

Bill C-101 would amend the Customs Tariff to temporarily repeal the two-year prohibition on the imposition of safeguard measures on products that have already been subject to safeguards. These amendments would only remain in effect for two years after receiving Royal Assent. Consequential amendments would also be made to the Canadian International Trade Tribunal Act.

Officials informed us that the amendments would provide the government flexibility, should the need arise during the two-year period, to respond quickly and appropriately by imposing safeguards where a substantiated surge of fairly traded imports harms or could harm Canadian producers and workers.

Officials assured us that the legislation is consistent with our World Trade Organization (WTO) obligations in the sense that there’s no requirement to have a moratorium on new measures.

However, if Canada were to impose another measure within the two-year period, your committee is concerned that other WTO members could have questions about how such actions would be consistent with WTO rules and regulations.

Respectfully submitted,