On October 13, 2016, the government of Canada referred to the Canadian International Trade Tribunal (CITT) the matter of whether the additional duties imposed on certain gypsum originating in or exported from the US, imported into Canada for use or consumption in British Columbia, Alberta, Saskatchewan, and Manitoba, and the Yukon and Northwest Territories, is contrary to Canada’s economic, trade or commercial interests, and whether such an imposition has or would substantially reduce competition in those markets or cause significant harm to consumers or businesses who use these goods.
On January 4, 2017 the CITT advised that after reviewing the evidence presented, they concluded that the imposition of provisional duties or duties applicable to the subject gypsum board, in its full amount, is contrary to Canada’s economic, trade or commercial interests, and that such an imposition has or will substantially reduce competition in those markets, or cause significant harm to consumers of those goods or to businesses who use them.
Accordingly, the CITT made the following recommendations:
That provisional duties collected be retained by the federal government and used to refund, either wholly or in part, the higher costs for imported and domestically produced gypsum board purchased since the imposition of the provisional duties on September 6, 2016, up to but not including January 4, 2017;
That all of the final duties imposed on cooperating exporters be remitted to them through a simplified process until the earlier of a) six months, from January 4, 2017, up to and including July 4, 2017, or b) the date the subject imports reach a maximum volume of 229 million square feet, allocated on the basis of historical export shares; this temporary elimination of the duties would give time for the downstream market participants (especially drywall installers) to perform existing fixed-price contracts and, going forward, to give them an opportunity to reflect the duties in new contracts;
That final duties for any cooperating exporters on any export transaction involving subject gypsum board to Canada should not exceed 43 percent of the export price at any time on and after the earlier of July 5, 2017, or the date the subject imports reach a maximum volume of 229 million square feet, a reduced rate which should allow either U.S. exports or domestic shipments from Eastern Canada to continue to supply the Western Canadian market;
That, considering the limited amount of data available to the CITT at the time of the inquiry in GC-2016-001, the reduced final duty be reviewed at the appropriate time; and
That, if the Government considers the measures mentioned above as insufficiently alleviating the hardship suffered by certain residents of the Wood Buffalo (the Fort McMurray region) as a result of the May 2016 wildfires, and considering the consent by the domestic industry to a special remission in connection with the Fort McMurray region, the Government grant a special remission in an amount equivalent to the dumping duties collected on gypsum board used for the rebuilding of the Fort McMurray region, on terms and conditions that ensure that the end users or consumers benefitting from the measure do not pay more than the amount that they would have paid for that gypsum board in the absence of duties. This special remission should cover subject imported gypsum board specifically linked to the reconstruction effort, and purchased and installed between September 6, 2016, and December 31, 2019.
The full report, GC-2016-001 is available on the CITT website. The reasons for its findings and recommendations will be issued within 15 days of the January 4, 2017 report.
Please contact your Livingston account representative should you have any questions.