What you should know about dumping and subsidy investigations
This is an overview of Canada's anti-dumping and countervailing investigative processes. These are governed by the Special Import Measures Act (SIMA), which helps protect Canadian industry from material injury caused by the dumping and subsidizing of imported goods.
SIMA reflects Canada’s implementation of the World Trade Organization’s (WTO) Agreement on the implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Anti-Dumping Agreement) and the Agreement on Subsidies and Countervailing Measures. The Canada Border Services Agency (CBSA) and the Canadian International Trade Tribunal (CITT) are jointly responsible for administering SIMA.
What is dumping?
Dumping occurs when goods are sold to importers in Canada at prices that are lower than the selling price of comparable goods in the country of export or when goods are sold to Canada at unprofitable prices. The amount of dumping on imported goods may be offset by the application of "anti-dumping" duty.
What is subsidizing?
Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. The amount of subsidizing on imported goods may be offset by the application of "countervailing" duty.
Examples of subsidies:
- loans at preferential rates;
- tax incentives.
What is injury?
A critical factor is whether the dumped or subsidized imports are causing injury or retardation or are threatening to cause injury to the Canadian industry. Injury may be shown by:
- reduced prices;
- lost sales;
- lost market share;
- decreased profits; and
- other such difficulties.
When are anti-dumping or countervailing duty applied on imported goods?
The CITT is responsible for establishing if the dumping or subsidizing of imported goods is causing injury to Canadian industry. A positive injury decision by the CITT provides the authority for the CBSA to impose anti-dumping or countervailing duty on dumped or subsidized imports.
These duties offset the price advantage caused by dumping or subsidizing and give Canadian industry an opportunity to compete fairly with the imported goods.
How does the process work?
A Canadian producer of goods that are identical or similar to the competing imports can file a written complaint with the CBSA if it suspects that the imported goods are being dumped or subsidized and are causing injury to Canadian industry. An association of producers may also file a complaint on behalf of its members.
What type of information is provided in a complaint?
A written complaint must include information on the Canadian produced goods, the competing imports, the domestic industry and conditions in the Canadian market. Also, it must provide evidence relating to the dumping or subsidizing of the imported goods and the resulting injury to Canadian industry.
For more information on the preparation of a complaint, please consult the Guidelines for Preparing a Dumping or Subsidizing Complaint.
How do I obtain documents related to an investigative proceeding?
Documents related to a SIMA proceeding can be obtained through the SIMA Registry. Requests must be in writing and can be sent by email to email@example.com. Protected information will only be released to counsel who have been granted authorization for disclosure of information. Note that the release of information may be subject to a prescribed fee. For more information, please refer to the Guidelines on the Disclosure of Confidential Information.
What happens after a complaint is filed?
The CBSA will evaluate the complaint and may start a formal investigation to determine whether the goods imported into Canada are dumped or subsidized.
To ensure there is sufficient support by the Canadian industry for an investigation, producers representing at least 25 per cent of Canadian production must support the complaint. As well, there must be more support than opposition to the complaint within the Canadian industry.
If the CBSA determines that an investigation should be started, questionnaires will be sent to exporters, importers, and, in subsidy investigations, to the foreign government involved. The questionnaires are intended to collect detailed information on the alleged dumping or subsidizing of the imported goods and the CBSA will, as needed, meet directly with these parties to verify the information provided.
What is the role of the Canadian International Trade Tribunal (CITT)?
Following the decision to start an investigation, the CBSA sends a copy of the complaint to the CITT. The CITT, independent from the CBSA, assumes the responsibility for the question of injury to the Canadian industry and conducts an inquiry into this question. The CITT holds public hearings where interested parties are allowed to present their arguments and question witnesses. Interested parties generally include Canadian producers and importers, as well as foreign exporters.
For more information relating to the CITT, please refer to its Web site.
What is the investigative process and how long does it take?
The process takes about seven months from when the CBSA starts an investigation until the CITT makes a final decision on the injury matter. The CBSA's investigation and the CITT's inquiry are conducted separately but both are carried out during the same time period.
The investigation process includes both a preliminary and final decision on the dumping or subsidizing of the imported goods. The CITT's inquiry also includes a preliminary and a final decision. The CITT holds public hearings at the final stage of the investigation followed by its finding on the question of injury.
In order for an investigation to continue, the CITT must make a preliminary decision of injury and the CBSA must make a preliminary decision of dumping or subsidizing. Otherwise, all investigation will be terminated.
When are duties applied?
The CBSA can impose provisional duty on imports of dumped or subsidized goods following a preliminary decision of injury by the CITT and the CBSA’s preliminary decision of dumping or subsidizing; which is normally made within three months of the start of the investigation. This temporary duty is intended to protect Canadian producers until the CITT makes its final injury decision.
If the CITT issues a final injury decision, the CBSA impose anti-dumping or countervailing duties on all imports that are dumped or subsidized. This is generally imposed for a period of at least five years. Detailed information on how to properly declare and pay duties imposed under SIMA is provided in the Guide for Self-Assessing SIMA Duties.
More information on current SIMA measures in force can be found on the Web site.
What are undertakings?
An undertaking is a potential alternative to a full investigation. It involves a commitment by exporters or foreign governments to change their pricing or subsidizing practices to eliminate the harm to Canadian industry.
Generally, these agreements with the CBSA result in a suspension of the CBSA’s investigation and the CITT's inquiry. They provide a faster and less costly solution than the normal process. The CBSA does not collect temporary duties when an undertaking is in effect.
Are there specific measures to address non-market economy situations?
The SIMA provides measures to address situations where an investigation is initiated on goods produced or exported from a country where domestic prices are substantially determined by the government and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.
In such cases, the CBSA initiates a section 20 inquiry. Where it is determined that the situation described in Section 20 of the SIMA is applicable in a case, a different methodology will be used to determine the normal values of the goods originating in or exported from that country. As prescribed in SIMA, this may involve the determination of normal values using prices and costs of like goods in a third country (i.e. a "surrogate" country), or a determination made on the best information available.
How do I obtain more information?
Please consult the Contact Us Web page if you would like to obtain additional information about the SIMA investigative process.
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