International Trade Committee on Oct. 18th, 2018

[Doug Band]

They can misclassify them. They can, as you say, say that it's only this much or it's from this country. When we have a measure in force as a result of our investigations and we're applying duties to imports from a given country of a given product, we have the ability to identify those and correct them. In those cases there can be an advance monetary penalty. The maximum penalty is $25,000, but those penalties can be issued in that regard.

Where people are being mischievous, if you will, and trying to deceive by avoiding application of duties that are protecting Canadian jobs and companies, we have new authorities called anti-circumvention investigations, and that's about giving us the ability to identify and quickly go after companies that may be actually physically altering a product, for example.

Take, for example, puncturing holes in waterproof rubber footwear to evade a measure in force for those types of products, and then after it's imported, fixing it so that it is once again waterproof. That gives us new authority to go after those kinds of activities.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Are you able to detect those things that you just brought up? It seemed to me that the amount you brought up, $25,000, is a pittance in terms of a penalty. In your opinion, should that be much higher?

[Doug Band]

We're looking at the whole advance monetary penalties regime in the trade area, including the SIMA duties, to make sure they are providing the deterrents they are intended to provide. On the first part of the question, we haven't had yet....

I should back up. The SIMA investigative process is initiated by industry, by and large. They bring forward a complaint. Once we determine it is a legitimate and reasonable complaint, the investigation is initiated after 51 days, as a maximum. That gets the ball rolling, if you will. We do rely on and work with industry to identify these actors who may be trying to avoid duty, and when there is the perception of dumping and a reasonable case, we launch the investigation, and if it's found to be true, attach duties for a period of five years.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

What are your thoughts in terms of the penalty?

[Doug Band]

The penalty really depends on the nature of the activities. There are penalties for late accounting and there are penalties for making errors in classification. There's a whole gamut of them. The penalty depends on the type of misclassification or activity, but the maximum, at the end of the day, is $25,000.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Are these bad actors repeat offenders?

[The Chair, Liberal, Mark Eyking]

Sorry, Mr. Fonseca; I know you're on a roll there, but I have to....

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

It's five seconds. Yes, okay.

Are they repeat offenders, is what I—

[The Chair, Liberal, Mark Eyking]

We're going to move over to the NDP now.

Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you, and welcome to the committee.

I want to ask the CBSA officials a couple of questions.

How many people were in your anti-dumping department before these tariffs were levied against us?

[Doug Band]

I believe it was upwards of 60 personnel.

[Tracey Ramsey, NDP, Essex, ON]

Okay, and of the 40 people who are meant to be allocated for that $30 million, how many have actually been hired?

[Doug Band]

So far we've hired 10, and those are all investigators. We were able to hit the ground running with staffing. Staffing in the government, as you can appreciate, takes a while. We have 10 in the door already, and we have processes under way to bring in more.

[Tracey Ramsey, NDP, Essex, ON]

Okay, and you're up to three times your normal levels so far this year. You've already hit three times your number, and we're not even through the end of the year then, given the numbers you gave us. I would like to see you fully staffed with as many people as it takes to be able to process these in a quick manner, because that is the criticism we're hearing here. It is about that inspection point where you have to go out.

I certainly have heard locally, from companies in Windsor-Essex, that they're being told there were dates of four to five months out until someone can actually come to the site to see whether they qualify. For small and medium-sized businesses, this is really a killer, and a lot of them, as we've heard at this committee, are laying people off and having down weeks. We're really in an emergency situation.

I want to ask you about the anti-circumvention unit that you mentioned. I think you delicately described what I would call cheating, which is what these companies are doing to disadvantage Canadian companies greatly. I wonder how many people work in this particular unit or department.

[Doug Band]

We don't have a specific unit dedicated to that function. As of yet, we haven't had any complaints initiated by the industry. What we have is a team that is able to undertake all the various forms of investigative activity.

I should say that your point about cheating is quite legitimate. They are cheating the system, and if we suspect that it is a case of trade fraud, it can be referred to a criminal investigation. That can occur from time to time.

[Tracey Ramsey, NDP, Essex, ON]

How many people are on that team, then, with the anti-circumvention unit?

[Doug Band]

The team that is new is 10 people strong right now. That is in addition to our initial resource base. I have to be clear with the committee; it's not dedicated to the new authorities. That additional team of people will give us the ability to cover all of the authorities, including the new ones and the ones existing under the Special Import Measures Act.

[Tracey Ramsey, NDP, Essex, ON]

Have you made further staffing requests from the government to try to deal with this influx?

[Doug Band]

I think that at this point what we'd be able to do is reallocate internally. The member raised the question of the duty relief processing times and the requirement for a visit. We've reallocated personnel to shore it up in the regions where this work is done, so I've had the regional offices reallocate personnel. As you can see, so far at least, with the surge, there's always room for improvement, and we have to do everything we can to get those processed. It seems to be at least holding water for now.

[Tracey Ramsey, NDP, Essex, ON]

I'm sure you've analyzed the need for people on the ground, and if you had additional people who were able to fill those roles, you would be able to ramp up your efforts and not even have to reallocate. You would actually have fresh people there.

Have you done any analysis on what you feel you need to be able to deal with the emergency situation that we're in?

[Doug Band]

We have a sense that surely.... Let me back up. It really depends on how long the surtax is in effect and how long the surge lasts. That's an unknown commodity for everybody.

[Tracey Ramsey, NDP, Essex, ON]

Yes, we have to assume it's indefinite at this point.

[Doug Band]

At this point it's difficult to predict. More is always better, but in the trade world, as you can tell from some of the things we're talking about, it's a very technical domain. It's deep expertise.

I just want to caution that immediate surges of untrained people are helpful for the medium term, but in the short term we're going to have to get through together with what we have, working with industry and other departments, because after we bring new officers on board, it takes them well over a year to get up to speed to be of the kind of assistance that industry needs.

[Tracey Ramsey, NDP, Essex, ON]

All right. I think the gap that we're hearing exists is between the approval.... It is just shocking to me that there are only 36 people who have been approved, but those 36 people are not getting their payment, which jumps over to finance because they're approved. How many of the 36 have received the funds that they're owed at this point? Does that go to finance? Do they cover the payments?

[Doug Band]

It would be us, actually. We're both the administrator as well as...on both sides.