Evidence of meeting #33 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 companies.
A recording is available from Parliament.
Bloc
Guy André Bloc Berthier—Maskinongé, QC
Over 1,000 jobs has been mentionned for Quebec. Those are often family businesses. It would be advisable to have a definition in the bill.
Conservative
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Thank you very much, Mr. Chair.
I will just to add to what has been said by my colleagues, who are much more knowledgeable. Of course, there is a definition of independent remanufacturers in the agreement itself, under annex 7C. There is a certification process under way for obtaining that status; it is voluntary, but it is under way. Those are the steps currently being taken. Of course, I defer to my CRA colleagues with respect to the actual implementation.
Thanks very much.
Conservative
The Chair Conservative Leon Benoit
Mr. Julian is next, for seven minutes.
I just want to mention, now that everyone is here, that we will have a short meeting, either at the end of this meeting at 10:45 or when the questions end, to deal with the steering committee report from yesterday. This is just a notification so that everybody can be ready for that.
Go ahead, Mr. Julian.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Chair.
Thank you for coming back. We appreciate having you back for a second round. Of course, the advantage of having you back a second time is that we can ask the questions you may not have been able to answer on Tuesday. We know you can answer them today, because I'm sure you've had a chance to look into them.
My first question was around the double payment that was made by companies after October 11. They had to pay the ADD and CVD payments at the same time as they had to pay these charges. What is the actual amount of those double payments?
The second question was around what percentage of the duty deposits has now been formally assigned--in other words, has all of the legal work been completed? Those are questions I asked on Tuesday, as you'll recall, and you didn't have specific answers, so I'm hoping you'll have them now.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Thank you very much.
With respect to the question about duties collected on October 12, when the agreement and hence the charges came into force, I don't have a specific amount, because it's a question of what was collected on the U.S. side of the border, not on the Canadian side, but I've been told anecdotally that it's a sporadic type of thing; it wasn't all border crossings.
The second point is that upon hearing of the first incidents of duty being levied by U.S. customs on a shipment going to the United States, we immediately contacted U.S. customs. They assured us that this money would be refunded expeditiously at 100%, whereas duties collected up until October 11, of course, as you know, will be refunded to importers of record, either through the EDC program or through the special charge; for the special charge, there will be a levy put on to pay for the $1 billion. That represents about 18% of the duty.
However, October 12 was only one day this happened, and it was sporadic. We're talking more about individual customs agents who might have been confused as to the regulation; it was not a systemic question.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Are you saying that absolutely no collection took place after October 12?
October 26th, 2006 / 9:35 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
There was none that we're aware of. It was the one day in terms of the transition. I'm not sure if we've had any companies....
I'll ask Mr. Seebach.
Director, Administration and Technology Services, Department of Foreign Affairs and International Trade
We've had no companies come to us about any incidents after October 12. When I spoke with U.S. Customs and Border Protection people, they said it was limited to a very few border crossings on the morning of October 12.
Director, Administration and Technology Services, Department of Foreign Affairs and International Trade
We don't know the amount because it's a U.S.--
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, but although we're expecting 100% repayment, we don't know the amount.
Director, Administration and Technology Services, Department of Foreign Affairs and International Trade
Correct.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
That's right. The companies that paid know the amount, and they're aware they are getting the money back. They contacted us to seek clarification, and we advised them. For those companies that had to pay—and they all know that they should be paid on October 12—this is a point of record, with respect to the refund, that will be open to us in the coming weeks. The Canadian government made its views clear and we got immediate satisfaction from the U.S.—assurance that an error had been made and that a refund would be given.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Yes, the EDC is confident that their timeframes for payments can be maintained. The refund will take place four to eight weeks after the completion of documentation. They are now in the process of finalization for a number of companies. The amount and the number is a question we're trying to get some precision on. They have to do with lien searches. But there are also questions of confidentiality, of mentioning companies and the like.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
I'm not asking you for specific companies. I'm asking you what percentage has actually been assigned and had the formal legal procedures completed.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
The first tranche of companies that are close to completing the documentation should be done in the next few days.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
So you're saying that no company has actually completed the formal documentation process.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Yes. But can I clarify just one point? EDC is telling me that within the next couple of days there will be completion of documentation by some companies. This will allow the refund process to begin. So it may be that as of yesterday afternoon they have the final documentation from a number of the companies. But at this point, I can't give you any specificity—
NDP
Peter Julian NDP Burnaby—New Westminster, BC
That is helpful. It's been over two months since Minister Emerson said that companies absolutely had to have irrevocable letters of approval in to the government. Two months later, no company has actually completed the legal process. It's important for our committee to know that after more than two months none of the loose ends have been tied up. That helps us to plan our work and to make sure we're doing the due diligence on this bill. I appreciate your mentioning that.
I'd now like to come back to clause 18. We established on Tuesday that clause 18 imposes a charge on companies that they would quite possibly have to pay before getting any money back. I would like to refer specifically to subclause 18(6):
(6) If, at any time after September 18, 2006, a specified person sells or otherwise disposes of the rights to a duty deposit refund to a person other than Her Majesty in right of Canada, the specified person and the other person are jointly and severally, or solidarily, liable to pay the charge under subsection (3) and any penalties and interest payable under this Act in relation to that charge.
What we have here in clause 18, then, is not only the imposition of a special charge but also potential penalties and interest payable under the act.
It's possible that this charge could be miscalculated. What is the appeal process for companies? If the government botches the calculation of the charge in relation to a company—and there are strong punitive measures—what appeal process does the company use to dispute the charge?
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Could I ask my colleagues in the CRA section to respond to the first question?
Cindy Negus Manager, Legislative Policy Directorate, Canada Revenue Agency
Basically any time the minister raises an assessment for any amount of money under all of the other statutes the Minister of National Revenue will consider any objection that is filed by a taxpayer. Of course, in due course they will come to a conclusion. They will evaluate the facts of the case and then respond. If someone has in fact erroneously paid an amount of money they shouldn't have and they were assessed incorrectly, that would of course be corrected.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you for that.
How long does the appeal process take? Under clause 18 there are very strict deadlines about companies having to pay that charge. Let's say the charge is levied, they're forced to pay it, even though under protest, of course, because they believe the charge has been miscalculated. What would be the appeal process for those companies that are already cash-strapped and are being forced to pay this charge?