Mr. Cardin.
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.
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.
10:35 a.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Thank you, Mr. Chairman.
I have a short question dealing mostly with section 12. To establish dumping, the Americans took the price of wood and deducted various costs. Therefore, this was probably a method advantageous to them.
Why, when calculating the FOB value, couldn't we deduct all the costs, whether it be for transportation or insurance, brokage, commission and so on? With that method, the export charge paid by exporters would be calculated on a lesser value that would better reflect the value of the wood.
10:35 a.m.
Manager, Softwood Lumber, Canada Revenue Agency
Thank you.
The definition of FOB does exclude shipping costs. We have heard from industry that other costs related to these shipments were deducted for purposes of the duties in the United States. We're reviewing that right now in consultation with international trade and we are developing a policy, because it was the intention that certain costs could be deducted from the export price.
At this point I believe it was amounts incidental to the shipment, such as permits or brokerage fees. This concern from the industry was brought to our attention and we are looking at it.
10:40 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Mr. Chair, if I can add, the question of what is included and excluded for the purposes of calculating the export price is an important element. We have been receiving a lot of very specific questions relating to that and we are jointly undertaking a general notice of these types of questions, plus a specific notice with respect to the calculation of the export price, for greater clarification for the exporters.
And we're getting now into the very, very minute elements, which we recognize are important, and the way to best address them is through a notice to exporters where we've taken their questions, worked through all of them, and got them in a form that's both understandable to exporters as well as consistent with Canadian policy as it relates to these elements.
I hope that's answered the question. Greater detail will be forthcoming.
10:40 a.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Yes, but you should not forget that when the U.S. were establishing a case of dumping, they subtracted from the price many cost elements that it would be reasonable to include in the act to lessen the price. I think that it would be fair to make that calculation on the same basis than before.
10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
We're not talking about renegotiating the deal here, are we? We're dealing with the implementation act.
Mr. Robertson.
10:40 a.m.
Director General, North America Trade Policy, Department of Foreign Affairs and International Trade
Thank you, Chair.
We're certainly keeping as a yardstick U.S. practice in these areas to further our understanding and our approach with respect to the calculation of the export price.
10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
We have only about three minutes before we go to dealing with our subcommittee report. I do have something first, and then, Mr. Julian, if you have a question or two we'll get to you.
This act includes a lot of clauses that are included in other acts. It would be really helpful if we could get a cross-reference to the standard clauses that are used in Bill C-24 and also used in, for example, the Air Travellers Security Charge Act, the Excise Act, the Excise Tax Act, which is the GST act, and the Income Tax Act. So if we could get those cross-references it will certainly help us in clause-by-clause.
When members see that these are standard clauses used, there's likely to be a lot less question and a lot less debate needed on those.
10:40 a.m.
Manager, Legislative Policy Directorate, Canada Revenue Agency
Just to verify, you're looking for the actual text of those clauses, right?
10:40 a.m.
Manager, Legislative Policy Directorate, Canada Revenue Agency
Just the reference.
October 26th, 2006 / 10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
So your starting point would be in Bill C-24, a certain clause. That clause is used in these other acts as well.
10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
So it's kind of standard. If you could do that it would be very helpful.
10:40 a.m.
Conservative
The Chair Conservative Leon Benoit
Thank you.
Now, Mr. Julian, you have about two minutes if you want the report to be dealt with. We are going to stop at a quarter to.
10:40 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, and for the rest of my questions I'll have to wait for next Tuesday's witnesses.
I did want to ask specifically about two issues: subclause 68(1) and subclause 81(6). Subclause 68(1) talks about how every person who fails to file or make a return as and when required under this act is guilty of an offence and is guilty to penalties.
I want to ask whether or not that covers U.S. importers of record, in which case, what would be the enforcement mechanism?
Second, 81(6):
For the purposes of subsection (5), a requirement to provide information or a record shall not be considered to be unreasonable because the information or record is under the control of or available to a non-resident person that is not controlled by the person on whom the notice of the requirement is served or to whom the notice of requirement is sent under subsection (2) if that person is related to the non-resident person.
Both of those clauses seem to deal with extraterritoriality, the United States importers of record. So I want to know what the enforcement mechanisms are for that, and what are the penalties to a small Canadian company that has records that they are unable to access in the United States?
10:45 a.m.
Manager, Legislative Policy Directorate, Canada Revenue Agency
Essentially, if we have a non-resident exporter then certainly all the provisions contained within will apply to them as well. Keep in mind that this clause 68 is really a criminal offence. We're talking about summary conviction, so we are talking about a case actually being looked at by the court. So it's not really something that is first imposed by the Minister of National Revenue.
Your second question, 81--
10:45 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, 81(6). For information that's available in the United States that a small company in B.C., say in Prince George, is unable to access, they are subject to penalties. What's the enforcement mechanism? What would the penalties be for that company that's unable to access those records that are required from the United States, from their U.S. importer?
10:45 a.m.
Manager, Legislative Policy Directorate, Canada Revenue Agency
Just bear with me for one moment while I review the provision.
10:45 a.m.
Conservative
10:45 a.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
I understand that, Mr. Chair. I'm very sorry about that, as I'm sure the rest of the committee is as well.
10:45 a.m.
Manager, Legislative Policy Directorate, Canada Revenue Agency
Essentially, this provision really, as it is contained in other statutes as well, refers to records that are outside of the country, and really this is to ensure that people do not place their records outside of the country so that they are inaccessible for basically verification and enforcement purposes.
So that's why it's here.