Madam Speaker, today it is certainly a privilege for me to begin debate on Bill C-35.
Essentially this bill contains amendments to Canada's anti-dumping and countervailing duty law, known as the Special Import Measures Act, or SIMA. It responds directly to the recommendations contained in a 1996 parliamentary report on Canada's trade remedy system.
These amendments will fine-tune the law by rationalizing the investigative process, increasing transparency and procedural fairness, and in fact enhancing the system's ability to consider representations from various segments of Canadian business.
The bill also includes certain technical changes that clarify existing provisions and practices under SIMA and the Canadian International Trade Tribunal Act.
SIMA is an important component of Canada's trade remedy legislation. It authorizes the federal government to impose anti-dumping and countervailing duties to offset injury to domestic firms caused by foreign dumping and subsidies. In this regard it implements Canada's rights and obligations under the World Trade Organization agreements on subsidies and anti-dumping.
Two federal government departments and one independent tribunal are directly involved under SIMA. As actions taken under SIMA result in the imposition of duties on imported goods, the Minister of Finance is responsible for the legislation.
Revenue Canada and the Canadian International Trade Tribunal share responsibility for investigations under the law and Revenue Canada enforces anti-dumping and countervailing duties at the border.
With respect to international implications and negotiations, it is foreign affairs and finance which work together on trade remedy policy to co-ordinate Canada's import and export interests and develop our international trade negotiating positions.
Before discussing the merits of Bill C-35, I would like to provide some background as to why these amendments are being proposed.
Canada has a long history in the use of trade remedies. In fact in 1904 Canada introduced the world's first anti-dumping legislation.
Since then our trade remedy system has undergone various refinements due to changing economic conditions and the evolution of international trade rules. These international rules are governed by the World Trade Organization, or the WTO, which sets out detailed rights and obligations of member countries in administering trade and remedy protection.
As the imposition of anti-dumping or countervailing duties represents an exception from a country's WTO commitments not to raise tariffs and not to discriminate in its treatment of imports, the right to impose these special duties is carefully circumscribed.
In general, the Canadian SIMA system is comparable to the systems of other major users such as the United States and the European Union. The WTO does, however, provide some latitude in the administration of trade remedy laws. As a result, there are some variations between systems, largely reflecting differing legal cultures and economic circumstances.
There are, of course, important domestic interests on both sides of the trade remedies equation.
One of the key challenges associated with the Special Import Measures Act was to strike the right balance between the interests of industries seeking trade remedy action and the interests of consumers and other manufacturers who may be negatively affected by the imposition of anti-dumping or countervailing duties on imported goods.
First and foremost, this law is intended to assist Canadian enterprises by offsetting the injurious economic effects resulting from dumping or underpricing practices of foreign exporters, or in the case of subsidies, to remedy the injurious effects of the subsidy practices of foreign governments. However, the downstream economic interests cannot be ignored.
As markets operate increasingly on a global basis, market openness becomes a critical factor in attracting investment and maintaining the competitiveness of our domestic firms.
Canadian manufacturers often have to rely on imported inputs, for example, to meet specific quality and technical needs of their customers.
According to the OECD, the operations of Canadian manufacturers rely more on imported inputs than their G-7 counterparts in the U.S., France, Germany, Japan and the U.K. This reflects the relatively smaller size of the Canadian economy, as well as its high level of integration with the United States.
Given this, SIMA must represent a balancing act. It must provide effective relief to Canadian firms injured by foreign dumping or subsidies while not imposing unnecessary or excessive burden on downstream producers or consumers. This was the key challenge for lawmakers when SIMA was first developed in 1984 and it certainly remains the challenge today.
When the Minister of Finance requested the House of Commons Standing Committees on Finance and Foreign Affairs and International Trade to jointly review SIMA in 1996, he noted that significant changes had taken place in the global trading environment since 1984 and that it was time to reassess whether the law continued to reflect the interests of Canadian producers.
Two subcommittees were asked to undertake this review. They heard from a broad range of interests, including domestic producers, importers, retailers, academics, trade practitioners and government officials. These parties gave evidence and submitted proposals for changes based on their experience with the SIMA system.
It was based on these submissions and their deliberations that the subcommittees concluded in their report that Canada's trade remedy system under SIMA continues to respond to the needs of Canadian producers that seek protection under the law, while affording downstream producers and consumers an opportunity to have their interests considered.
They also identified areas where improvements could be made to the system to make it more efficient and more responsive to Canada's economic needs.
Generally, the recommendations represented adjustments to the SIMA investigation process that allow the system to more adequately consider the views of various parties which have a stake in this law.
I want to be clear that it was for this reason that the government supported virtually all of the subcommittees' recommendations. What we have before us today is Bill C-35, which essentially reflects the subcommittees' recommendations and the requirement that the subcommittees put forward in asking the government to review these recommendations and build them into legislation.
There are key changes in Bill C-35, the first being the rationalization of investigative functions of Revenue Canada and the Canadian International Trade Tribunal to better reflect their respective areas of expertise.
The second would enhance procedural fairness and transparency by bringing Revenue Canada's treatment of confidential information more in line with the tribunal's practice respecting the disclosure of confidential information.
The third would ensure that the tribunal, in its fact finding, would benefit more fully from expert evidence by permitting expert witnesses to play a more effective role in tribunal inquiries.
The fourth would establish new penalty provisions to deter any unauthorized disclosure or misuse of confidential information by legal counsel or expert witnesses in the context of SIMA investigations.
The fifth would improve the provisions which allow the Deputy Minister of National Revenue to accept an undertaking from exporters to raise prices as an alternative to the imposition of anti-dumping duties and to ensure that all interested persons are afforded an opportunity to provide views when undertakings are being considered.
The sixth would require the tribunal to cumulate the injurious effects of dumping or subsidizing from more than one country consistent with the single price effect in the Canadian market of such practices.
The final change would clarify the conditions under which the tribunal can consider issues of broader public interest and the types of measures it may recommend in a public interest report.
The discussions that took place in the recent parliamentary review of SIMA reflected the changes that have taken place in the structure of the Canadian economy since the law was established in 1984. These changes will ensure that the Special Import Measures Act remains a strong trade instrument which truly protects Canadian producers injured by dumped or subsidized imports, while at the same time allowing an opportunity for other producers and consumers to have their interests considered.
It certainly introduces important changes to Canada's trade remedy system which take account of the interests of all stakeholders. It is for the reasons that I have outlined that I would urge all of my colleagues to support its passage.