Large Diameter Line Pipe Anti-dumping Duty Remission Order, 2023: SOR/2023-43
Canada Gazette, Part II, Volume 157, Number 7
Registration
SOR/2023-43 March 9, 2023
CUSTOMS TARIFF
P.C. 2023-188 March 9, 2023
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, under section 115footnote a of the Customs Tariff footnote b, makes the annexed Large Diameter Line Pipe Anti-dumping Duty Remission Order, 2023.
Large Diameter Line Pipe Anti-dumping Duty Remission Order, 2023
Definition of large diameter line pipe
1 For the purposes of this Order, large diameter line pipe means the “subject goods” as defined in paragraph 4 of the statement of reasons of the Canadian International Trade Tribunal issued on November 4, 2016 in Inquiry Number NQ-2016-001.
Remission
2 (1) Subject to subsection (2), remission is granted of the anti-dumping duties that were paid under the Special Import Measures Act in respect of large diameter line pipe that was imported for the purpose of use by or on behalf of a company set out in column 1 of the schedule and recorded under a transaction number (B3-3 Form) set out in column 2.
Conditions
(2) Remission is granted on the following conditions:
- (a) a claim for remission is made to the Minister of Public Safety and Emergency Preparedness within two years after the day on which this Order comes into force; and
- (b) on request of the Canada Border Services Agency, the claimant files all evidence that is required by the Agency to determine eligibility for remission.
Coming into force
3 This Order comes into force on the day on which it is registered.
SCHEDULE
| Item | Column 1 Company |
Column 2 Transaction Number (B3-3 Form) |
|---|---|---|
| 1 | Coastal GasLink Pipeline Limited Partnership |
|
| 2 | NOVA Gas Transmission Ltd. |
|
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issues
Anti-dumping duties on imports of large diameter line pipe from Japan have been in place since October 2016. Anti-dumping duties can be imposed under the provisions of the Special Import Measures Act (SIMA) in order to protect the Canadian industry from unfair trading practices. Subsequent to this, Coastal GasLink Pipeline Limited Partnership (Coastal GasLink) and NOVA Gas Transmission Ltd. (NOVA) sourced large diameter line pipe from Japan and paid anti-dumping duties. These companies requested remission of the duties paid with respect to certain projects because, at the time of importation, they were unable to source specific dimensions of this product from domestic suppliers. To refund the amounts paid, a remission order is needed, as provided for under section 115 of the Customs Tariff.
Background
Anti-dumping duties address instances where unfair trade is injuring Canadian producers. Dumping occurs when a manufacturer exports a product to another country at a price either below the price charged in its home market or below its cost of production. Anti-dumping duties increase the prices of imported goods to a level that reflects non-dumped prices. In Canada, anti-dumping duties may be imposed pursuant to SIMA following investigations by the Canada Border Services Agency (CBSA) and the Canadian International Trade Tribunal (CITT), which are conducted in an independent, impartial, and transparent manner.
In February 2016, the sole Canadian producer of large diameter line pipe filed a complaint with the CBSA alleging that large diameter line pipe from Japan was dumped and was causing injury to the Canadian industry. In September 2016, the CBSA found that large diameter line pipe from Japan was dumped and the amount by which it was dumped, also called the margin of dumping, ranged from 22.1% to 95.0%, depending on the exporter. In October 2016, the CITT found that these imports of large diameter line pipe from Japan caused injury to the Canadian domestic industry. After the CITT’s decision, the CBSA began assessing duties equal to the margin of dumping on all large diameter line pipe from Japan entering Canada. These duties are currently set to expire on August 3, 2027.
The remission of duties is being provided for importations related to specific natural gas pipeline projects to reflect that, at the time these products were purchased, no Canadian producer of large diameter line pipe was able to supply the specific dimensions of the products that were needed for certain portions of the projects. While anti-dumping duties are intended to prevent injury to Canadian industry, Canadian industry was unable to supply the projects at that time and, as such, the remission of duties would not undermine the protection afforded by SIMA.
While the remission authority under section 115 of the Customs Tariff is broad, it is not used to override the legislated intent of SIMA, which is to remedy the injury caused by dumped goods to domestic producers of competing goods. Remission of anti-dumping duties is typically only granted in extraordinary circumstances, such as pursuant to a public interest inquiry by the CITT (where it has been determined that application of the duties in their full amount would not be in the public interest) or if there was short supply domestically at the time of importation.
Given the short supply circumstances surrounding the requests for remission of duties made by Coastal GasLink and NOVA, remitting the anti-dumping duties would not undermine their protective effect in this case.
Objective
The Large Diameter Line Pipe Anti-dumping Duty Remission Order (2023) [the Order] provides a remedy in response to the short supply of large diameter line pipe in the Canadian market at the time of importation for specific natural gas pipeline projects.
Granting remission on these requests would be consistent with government policy that situations of domestic short supply constitute appropriate grounds for remission of anti-dumping duties.
Description
This Order would remit anti-dumping duties paid by the importer of record with respect to specific importations of large diameter line pipe from Japan. Remission would be granted on the condition that the importer provides the CBSA with documentation that demonstrates that the importer is entitled to such a remission under the Order, and that a claim for remission is made within two years after the Order comes into force.
The scope of remission is specific to goods that have been imported for Coastal GasLink and NOVA projects.
Regulatory development
Consultation
All companies impacted by this Remission Order have been consulted directly and none opposed the remission of the anti-dumping duties covered by the Order. As a result, this Order was granted an exemption from the requirement to prepublish in the Canada Gazette, Part I.
Modern treaty obligations and Indigenous engagement and consultation
An assessment of modern treaty implications did not identify any adverse impacts on potential or established Aboriginal or treaty rights, which are recognized and affirmed in section 35 of the Constitution Act, 1982.
Instrument choice
Section 115 of the Customs Tariff provides the authority for the Governor in Council to remit the anti-dumping duties on the recommendation of the Minister of Finance.
Regulatory analysis
Benefits and costs
This Order would result in a refund of anti-dumping duties that have already been paid, the amount of which is not published, as it would disclose commercially confidential information. The refund is not an incremental cost of the Order; it is a result of an established process whereby, under certain specified conditions, duties can be refunded to the importer.
The CBSA will incur some incremental cost to administer and enforce the Order. The cost is expected to be minimal and is not estimated.
This Order may result in additional administrative burden, as importers may be required, upon request by the CBSA, to provide evidence to demonstrate eligibility for remission. However, any such administrative burden is expected to require minimal incremental effort.
Small business lens
The companies concerned are not small businesses. Analysis under the small business lens concluded that the Order will not impact Canadian small businesses.
One-for-one rule
The initiative introduces administrative burden on businesses, as importers may be required, upon request by the CBSA, to provide evidence to demonstrate eligibility for remission. However, the measure relates to tax or tax administration and is exempt from the requirement to offset administrative burden and regulatory titles under the one-for-one rule.
Regulatory cooperation and alignment
Given this in an ad hoc request for the remission of anti-dumping duties, there is no regulatory cooperation or alignment component associated with the Order.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that the Order would not have positive or negative effects on the environment; therefore, a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for this Order.
Implementation, compliance and enforcement, and service standards
This Order comes into force on the day on which it is registered.
The CBSA is responsible for the administration of, and compliance with, customs legislation and regulations. The CBSA will administer the provisions of this Order in the normal course of its administration of customs legislation and regulations.
Contact
Jason Christie
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Telephone: 343‑550‑7777