3 Jun 2019

The Government of Canada Introduces Legislation to Temporarily Remove the Two-Year Prohibition against Imposing Additional Rounds of Safeguard Measures on the Same Steel Products

On 3rd June 2019, the Department of Finance issued a news release announcing that the Government of Canada has introduced a “Notice of Ways and Means Motion that would temporarily amend the Customs Tariff to remove the two-year moratorium on the imposition of safeguard measures on imports previously subject to safeguards”.

On 10th October 2018, the Government of Canada made an Order in Council that imposed safeguard measures on seven categories of steel products (including heavy steel plate, concrete reinforcing bar (rebar), energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, and wire rod). The Canadian International Trade Tribunal conducted an inquiry to determine whether or not these safeguard measures were warranted and determined that they were not for five out of the seven product categories. Accordingly, the Order imposing the safeguard measures on those products expired after the 200th day — 28th April 2019 — in accordance with subsection 56(2) of the Customs Tariff.

Subsection 55(5) of the Customs Tariff currently requires a two-year “cooling off” period, prohibiting the Government of Canada from making any further orders to impose safeguard measures “with respect to goods that have already been the subject of an order … unless, after the expiry of the order and any related orders … there has elapsed a period equal to”, in this case, “two years”. This provision is consistent with Canada’s international obligations under Article 7.5 of the WTO Agreement on Safeguards.

The Minister of Finance’s ”ways and means motion” introduces an “Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act”. The sole function of this proposed legislation is to temporarily remove the “cooling off” period required under subsection 55(5). It does so by repealing subsection 55(5) and certain related provisions for a period of exactly two years. On “the second anniversary” of the date on which these amendments enter into force, the repealed provisions will be re-instated exactly as they were before.

The practical effect of the proposed amendments is to permit the Government of Canada to impose one or more successive rounds of safeguard measures on the same categories of steel products within a two-year timeframe, notwithstanding the Tribunal’s previous determinations that such safeguards are not warranted.

The news release published by the Department of Finance is available online at https://www.fin.gc.ca/n19/19-055-eng.asp, and the draft of the “Act to amend the Customs Tariff and the Canadian International Trade Tribunal Act” is available online at https://www.fin.gc.ca/drleg-apl/2019/nwmm-amvm-0619-l-eng.asp (HTML) and https://www.fin.gc.ca/drleg-apl/2019/nwmm-amvm-0619-bil.pdf (PDF).

Tereposky & DeRose regularly provides advice on Canadian trade matters, including safeguard actions. Should you have any questions regarding this matter, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Daniel Hohnstein
613.237.9005
dhohnstein@tradeisds.com