Tax & Trade Blog

• Reading from Egypt and want an Arabic Version? / القراءة من مصر وأريد النسخة العربية
• Reading from Vietnam and want a Vietnamese version? / Đọc bài viết bằng tiếng Việt tại đây

On March 8, 2024, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping of certain wire rod from China, Egypt, and Vietnam.  This investigation was prompted by a complaint filed by an Ontario manufacturer. 

The goods under investigation are more specifically described as: 

Certain hot‐rolled wire rod of carbon steel and alloy steel of circular or approximately circular cross section, in coils, equal to or less than 25.5 mm in actual solid cross‐sectional diameter, originating in or exported from the People’s Republic of China, the Arab Republic of Egypt and the Socialist Republic of Vietnam (the “Subject Goods”). 

In December 2023, the Supreme Court of Canada dismissed the Crown’s application for Leave to Appeal the Federal Court of Appeal (“FCA”) decision in Canada v. Dr. Kevin L. Davis Dentistry Professional Corporation 2023 FCA 76(“Davis”), leaving the FCA decision as the state of the law.  The FCA had upheld the Tax Court of Canada’s (“TCC”) judgment (2021 TCC 25) allowing Dr. Davis to claim input tax credits (“ITCs”) incurred in the course of suppling orthodontic appliances and services to patients.

On January 18, 2024, the Canada Border Services Agency (“CBSA”) issue a Notice of Conclusion in the ongoing Expiry Review of Carbon Steel Welded Pipe 2 (“CSWP-2”) exported from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (“Chinese Taipei”), India, Oman, South Korea, Thailand and the UAE (“Subject Goods”). The CBSA determined that the expiry of the Canadian International Trade Tribunal’s (“CITT”) order dated October 15, 2018, in Expiry ReviewRR‑2017‑005, is likely to result in the continuation or resumption of (i) dumping of Subject Goods (from all the above-noted countries) and (ii) subsidizing of Subject Goods (exported from India). A detailed Statement of Reasons for this determination was released on February 02, 2024.

On January 22, 2024, the CBSA issued a Notice of Retroactive Assessments in respect of certain Corrosion-Resistant Steel Sheet (“COR-2”) goods imported into Canada from Türkiye (formerly Turkey) and Vietnam.

Canadian importers of these COR-2 goods may soon find themselves on the receiving end of these retroactive assessments in respect of imports into Canda between December 2021 and November 2022!

On January 22, 2024, the Canada Border Services Agency (“CBSA”) issued a notice of conclusion of expedited review in respect of certain hollow structural sections (“HSS”) exported to Canada by Histeel Co. Ltd. (“Histeel”) from South Korea.

What is an Expedited Review?

Under subsection 13.2(1) of the Special Import Measures Act (“SIMA”), an exporter or producer may request the CBSA conduct an expedited review where:

There seems to have been an uptick in Canada Border Services Agency audits concerning the tariff classification of gloves, carrying costly consequences to potential importers not based on what their product is, but how it is used by their customers!

This is a function of the wonderful world of tariff classification, some of the complexities of which we tackled in a previous blog, here.  

The chief issue is whether imported gloves will be used “with protective suits in a noxious atmosphere” or whether they will be used in other circumstances/places which CBSA does not consider a “noxious atmosphere” (e.g. nail salons, restaurants, etc.). 

On September 28, 2023, Health Canada launched the Canadian Product Safety Pledge (the “Safety Pledge”) – a voluntary compliance initiative aimed at increasing product safety with respect to consumer products and cosmetics available to Canadians online. 

The Safety Pledge consists of 14 voluntary commitments concerning protective and corrective actions that Health Canada has indicated are grouped into four categories :

1. Detection and prevention of the sale of unsafe products;
2. Cooperation with Health Canada;
3. Raising of product safety awareness amongst sellers; and
4. Empowerment of consumers on product safety issues.

One of the more notable differences between Income Tax and GST/HST is that for GST/HST purposes partnerships are expressly defined to be “persons” – separate from the partners of the partnership.  Most provincial sales tax statues take the same approach and define partnerships to be separate legal persons.  However, this is not the case in British Columbia (“BC”), which is the sole Canadian jurisdiction that does not treat partnerships as persons for Provincial Sales Tax (“PST”) purposes.

This could change as the BC Ministry of Finance (the “Ministry”) has released a Consultation Paper seeking feedback on proposed legislative changes to bring BC in line with the rest of Canada.  Subject to public support, the Ministry has identified four legislative or regulatory changes which would be required:

On November 14, 2023, the Canadian International Trade Tribunal (“CITT”) issued a notice that it was beginning an expiry review in respect of cold-rolled steel originating in or exported from the People’s Republic of China (“China”), the Republic of Korea (“South Korea”), and the Socialist Republic of Vietnam (“Vietnam”). On November 15^th CBSA similarly gave notice of the initiation of their parallel expiry review investigation.

The CITT more specifically described the Subject Goods as:

On October 27, 2023, the Canada Border Services Agency (“CBSA”) issued a notice of conclusion of Expedited Review in respect of certain Chinese upholstered domestic seating (“UDS”) from Eterno Co. Ltd. (“Eterno”) and Zhe Jiang Shengli Furniture Co., Ltd. (“Shengli”) (the “Exporters”). 

Background

The Canadian International Trade Tribunal (the “CITT”) concluded an Investigation into certain UDS from China and Vietnam, and issued a Finding on September 2, 2021 that the dumping and subsidizing of said UDS had caused injury to the domestic (Canadian) industry, resulting in the imposition of anti-dumping and countervailing duties subject to exclusions and inclusions specifically identified by CBSA. 

All taxpayers under audit should be aware of both the scope and limitations of Canada Revenue Agency’s audit powers, as well as the consequence of failing to respond to a CRA Auditor’s valid request for documents or information.

The Federal Cout decisions in Canada v. Money Stop Ltd. (2013 FC 133), and Canada v. Money Stop Ltd. (2013 FC 684) are poignant reminders that ignoring the demands of a CRA auditor may land the Director(s) of the Corporation in prison!

On September 29, 2023, the Canada Border Services Agency (“CBSA”) issued a scope ruling concluding that National Nail’s CAMO Edge Screws are subject to the Canadian International Trade Tribunal (“CITT”)’s Expiry Review order covering the dumping of certain carbon steel fasteners from China and Chinese Taipei, and the subsidizing of certain carbon steel fasteners from China.

On September 14, 2023 the Prime Minister announced upcoming legislation to remove the Goods and Services Tax (GST) on the construction of new apartment buildings. 

The announcement also called on the provinces participating in the Harmonized Sales Tax (HST), or that impose their own provincial sales tax, to match the federal government’s rebate.  In a twitter post the Ontario Minister of Finance has already indicated they will “work closely with Ottawa to do the same when it comes to Ontario’s portion of the HST.”