Evidence of meeting #32 for International Trade in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was clause.
A recording is available from Parliament.
10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
I don't think that is a point of order, Mr. Harris.
Mr. Julian, go ahead, please.
10:40 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Chair.
The reality is that we are discussing the legislation that is before us, and while it may not be the government's intention, the legislation that is before us very clearly indicates that the scenario I outlined could well occur.
What you have done is clarify the government's intention. We appreciate that, but it does not relate to how this legislation is drafted. I want to make sure that's on the record.
I have a series of questions relating to payments and duty deposits.
The first question is what percentage of companies' duty deposits have now actually been formally, legally, and completely assigned to EDC. I'm not talking about the approval letters, because many of those are no longer valid. I'm talking about the actual percentage of duty deposits for which the legal paperwork has been completely finalized. I'd like to know that.
Secondly, I'd like to come back to clause 10. We had the export charge that was levied. This in a sense has been amended, and surely the issue of the export charge that was levied as of October 12 is something that we will be treating in committee. I would like to know in terms of the illegal AD and CVD orders in the United States, when was the last AD or CVD payment collected at the border? I'm not talking about October 12; I'm talking about the actual physical collection of those duties. Then from this ministry, how much was double-taxed? We had the imposition of the export tax at the same time as we had the continuing of the AD and CVD. I'd like to know the actual amount that was double-taxed through the process.
10:40 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Thank you very much, Mr. Julian. There are a couple of points.
With respect to the EDC process, the latest information from the EDC is that they are close to finalizing a first tranche of companies. But until the documentation is, as you say, finalized, you can't say whether or not they're participating in the program. So we don't have any figures for you at this time to share, because under the process, as you'll recall, they have from four to eight weeks to refund after documentation is finalized.
I'm pleased to report that the EDC is close to finalizing documentation with a number of companies, but I can't at this point say that they've all been finalized. Hopefully in the coming days we'll be able to start talking about those types of elements. So I don't have the information as you've requested, because the documentation checks have not been finalized by the EDC process. But we're--
10:45 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
What you have identified quite correctly is that not until the EDC has completed such things as the credit checks with respect to whether there are liens on the company, which would affect their participation in the process, not until those elements are completed can you say that all the documentation has been finalized. What I'm saying is that we have been told by EDC that they're close to finalizing, under those criteria, the first tranche of companies. So we'll be able to know quite soon with respect to a refund type of schedule, the types of money and companies that will receive money in the first tranche. Because it's anticipated that this will be over a course of time, as you are aware, because it's dependent upon whether companies complete their documentation, and that documentation completion then triggers the refund money.
You've also asked questions with respect to a possible double taxing, both of the charge and of the trade remedy orders that are in place. There was on October 12, when this came into force, some confusion at some border entries with respect to the imposition of the U.S. duty. What U.S. Customs has advised us is that, for October 12, they have identified the money that was collected, and 100% will be returned to the companies who had to pay the charge because of the confusion on the first day. Since then, there has been no further collection of the U.S. duties, if I am correct. I can ask my colleague.
10:45 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
That's an important point. So you're saying that the last day that an AD or CVD order was imposed on softwood going across the border was October 13?
10:45 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
No, October 11.
10:45 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
That's right. If a CVD or an AD duty was imposed on October 12, that was an error and we account that to the confusion at some of the border points.
10:45 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
That's my question: when was the last time that you actually...? You have been monitoring this situation, of course.
10:45 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
That's right. So what I'm saying, in response to your first question about what is the last day that the U.S. can legally collect the duties, the AD and CVD duties, is that it's October 11.
10:45 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
I know, but I just wanted to give you the sequence. And then on October 12, when any collection by the U.S. side of those duties should have ceased, I'm just informing the committee that there were some border checkpoints where there was confusion on the part of U.S. Customs officials where they collected that money. What Customs has done to rectify that is put that money collected in a special account. The company that had paid the duty gets 100% of that back. There's no hiving off of the 18% for U.S. interest. One hundred per cent of that money for October 12 will be returned to those companies.
We have not heard of any situations on October 13 where the U.S. was collecting the anti-dumping or countervailing duties. So I hope that's given you the sequence. Up until October 11, anti-dumping and countervailing duties were collected. On October 12, at that point, the Canadian charges came into effect. There was some confusion; however, that's been rectified with full refund back to the companies who felt that confusion.
10:45 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Julian.
We need five minutes at the end of the meeting to quickly go through a couple of things, and we'll have to cut it off then.
Go ahead, Mr. Maloney, and then Monsieur Cardin.
10:45 a.m.
Liberal
John Maloney Liberal Welland, ON
I basically have one question dealing with the penalty section as it relates to clause 75 on liability of officers and corporations.
The offences basically relate to the day-to-day operations of a firm, such as failure to file a return, failure to answer a demand to file a return, failure to provide information, and making false statements or omissions.
Section 75 would appear to pierce the corporate veil, making officers or directors liable. If they say “directed” or “authorized” or “participated in”, that's pretty heavy involvement; “assented to” or “acquiesced in” is a little fuzzier. They're guilty of the offence and liable on conviction, and the key words are, “whether or not the person has been prosecuted or convicted”. A director or officer who may be in a Vancouver, Montreal, or Toronto head office doesn't appear to have any due process to be allowed to respond.
Is this a normal type of clause in statutes of this nature that deal with Revenue Canada or is this something new? It's a little draconian. I'd hate to be liable. The penalties are up to $25,000 or 18 months in jail, without having the ability to respond as to what my participation was, if any.
10:50 a.m.
Manager, Softwood Lumber, Canada Revenue Agency
Again, this is a standard provision. It is also in the Income Tax Act and the Excise Tax Act for purposes of the goods and services tax. It basically provides for the liability of the directors of the corporation.
10:50 a.m.
Liberal
John Maloney Liberal Welland, ON
Do they have an opportunity to respond to their involvement? Are they served, put on notice, and allowed to defend themselves?
10:50 a.m.
Manager, Softwood Lumber, Canada Revenue Agency
At this time, I couldn't really comment on the application of that clause and on how it would work. I can get back to the committee.
10:50 a.m.
Liberal
John Maloney Liberal Welland, ON
If it's a standard clause, what is the standard procedure for officers and directors? Do they have an opportunity to respond to the charges or offences that they may or may not have been involved in?
10:50 a.m.
Manager, Softwood Lumber, Canada Revenue Agency
I'm saying I'm not aware of any standard procedure on how the clause would apply. I can get back to the committee.
10:50 a.m.
Conservative
The Chair Conservative Leon Benoit
Mr. Hagmann, do you agree to give some written follow-up to the committee on that question? Would you do so, please?