Surtax on the Importation of Certain Steel Goods Refund Order: SOR/2019-129
Canada Gazette, Part II, Volume 153, Number 11
SOR/2019-129 May 9, 2019
P.C. 2019-477 May 9, 2019
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 58 of the Customs Tariff footnote a, makes the annexed Surtax on the Importation of Certain Steel Goods Refund Order.
Surtax on the Importation of Certain Steel Goods Refund Order
1 (1) A refund is granted of a surtax paid under the Order Imposing a Surtax on the Importation of Certain Steel Goods, as it read on April 28, 2019, in respect of goods of the following classes of goods, as set out in column 1 of Schedule 1 to that Order:
- (a) classes of goods 2 to 5 and 7 for goods originating in all countries; and
- (b) classes of goods 1 and 6 for goods originating in Colombia, Korea, Panama and Peru.
(2) The refund referred to in subsection (1) is granted of the surtax, or portion of the surtax, for which no other claim for relief has been granted under the Customs Tariff.
Coming into force
2 This Order comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
On October 11, 2018, the Government of Canada announced the imposition of provisional safeguard surtaxes on seven categories of steel goods, effective October 25, 2018, through the Order Imposing a Surtax on the Importation of Certain Steel Goods footnote 1 (hereafter referred to as the “Provisional Surtax Order”). The categories of steel goods subject to provisional safeguards included heavy plate, concrete reinforcing bar (rebar), energy tubulars, hot-rolled sheet, pre-painted steel, stainless steel wire and wire rod. At the same time, the Government directed the Canadian International Trade Tribunal (CITT) to inquire into whether longer-term final safeguards were warranted and, if so, to recommend appropriate remedies to the Government.
Under the World Trade Organization (WTO) Agreement on Safeguards, provisional safeguard surtaxes must be refunded if an investigation into the matter determines that final safeguard measures are not warranted. Section 58 of the Customs Tariff provides the authority for the Governor in Council, on the recommendation of the Minister of Finance, to refund provisional safeguard surtaxes where necessary.
On April 3, 2019, the CITT submitted its report to the Governor in Council. The CITT determined that final safeguards are warranted on imports of heavy plate and stainless steel wire. In making its remedy recommendation, the CITT further recommended that imports from certain trading partners be excluded from the scope of the final safeguards. Additionally, it determined that final safeguards are not warranted on imports of rebar, energy tubular products, hot-rolled sheet, pre-painted steel and wire rod.
In light of the CITT report, the Surtax on the Importation of Certain Steel Goods Refund Order (Safeguard Surtax Refund Order) refunds provisional safeguard surtaxes in respect of goods for which the CITT recommended that no final safeguard measures be imposed.
The objective of this Order is to refund provisional safeguard surtaxes collected under the Provisional Surtax Order, on goods for which the CITT recommended that no final safeguard measures be imposed.
Pursuant to section 58 of the Customs Tariff, the Safeguard Surtax Refund Order provides refunds for provisional safeguard surtaxes paid on imports of rebar, energy tubular products, hot-rolled sheet, pre-painted steel and wire rod, as well as imports of heavy plate and stainless steel wire from Korea, Panama, Peru and Colombia specifically. The description of those products can be found in the schedule to the Provisional Surtax Order.
Refunds are granted for such goods that have been imported on or after October 25, 2018, for which surtaxes have been collected under the Provisional Surtax Order, provided that no other relief of the surtax has been granted.
Public consultations were held in August 2018 on the possibility of imposing provisional safeguard surtaxes on seven classes of steel goods. All interested parties have also been able to participate in the enquiry conducted by the CITT on whether final safeguards were warranted on imports of those seven classes of goods.
While the issue of refunds was not raised in those processes, providing refunds for provisional safeguard surtaxes collected on products for which the CITT has determined no final safeguards are warranted is an obligation under the WTO. For this reason, no consultations on the Safeguard Surtax Refund Order have been undertaken, and this Order was not prepublished.
Modern treaty obligations and Indigenous engagement and consultation
The Order does not impact Indigenous peoples’ rights and interests.
Section 58 of the Customs Tariff provides the authority for the Governor in Council to refund provisional safeguard surtaxes on the recommendation of the Minister of Finance.
Costs and benefits
Refunds are provided for provisional safeguard surtaxes paid on goods for which no final safeguard measures are imposed and provide relief to importers who have paid the surtax on such goods, in accordance with Canada’s WTO obligations. The amount to be refunded will depend on the amount of provisional safeguard duties collected on the products covered. It is currently estimated at around $5.3 million.
The costs for the Government associated with administering the refunds are expected to be minimal and will be managed within existing resources, as the Canada Border Services Agency (CBSA) will assess transactions for which surtaxes have been paid and process refunds. No incremental costs to businesses are anticipated because any business that has paid provisional safeguard surtaxes will not need to submit an application in order to receive a refund. While this Order does not require the provision of documents, in exceptional cases, importers may be asked to provide additional information to the CBSA to clarify eligibility for refunds, or the amount of surtaxes paid.
Small business lens
The small business lens does not apply to this Order, as it would not impose any costs on small businesses. Businesses that have paid provisional surtaxes will not need to make a claim in order to obtain a refund.
The “One-for-One” Rule does not apply to this Order, as it would not impose new administrative burden on businesses, nor remove any existing administrative requirements. Businesses that have paid provisional surtaxes upon importation of goods covered by this Order will not need to make a claim in order to obtain a refund.
Regulatory cooperation and alignment
This Order is not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
In accordance with The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that this Order would not result in positive or negative environmental effects; therefore, a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for the Order.
Implementation, compliance and enforcement, and service standards
The CBSA is responsible for administering the Customs Tariff and its regulations, including the provision of refunds. The CBSA will assess all transactions for which provisional safeguard surtaxes have been paid and process refunds pursuant to this Order. In doing so, its existing administrative framework will be leveraged to ensure that costs can be managed within existing resources. Depending on the volume and complexity of transactions for which refunds must be issued, the CBSA strives to achieve a 90-day processing standard.
International Trade Policy Division
Department of Finance Canada