National Corn Growers Assn. v. Canada (Import tribunal), [1990] 2 SCR 1324

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[1990] 2 S.C.R. 1324

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National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324

American Farm Bureau Federation Appellant

Canadian Import Tribunal Respondent

and

Ontario Corn Producers' Association,

Manitoba Corn Growers Association Inc.

and Fédération des producteurs de

cultures commerciales du Québec Interveners

and

British Columbia Division,

Canadian Feed Industry Association,

British Columbia Turkey Association

and B.C. Chicken Growers Association Interveners

and between

St. Lawrence Starch Company Limited,

Casco Company, Nacan Products Limited

and King Grain (1985) Limited Appellants

Canadian Import Tribunal Respondent

and

Ontario Corn Producers' Association,

Manitoba Corn Growers Association Inc.

and Fédération des producteurs de

cultures commerciales du Québec Interveners

and

British Columbia Division,

Canadian Feed Industry Association,

British Columbia Turkey Association

and B.C. Chicken Growers Association Interveners

indexed as: national corn growers assn. v. canada (import tribunal)

File Nos.: 21366 and 21368.

1990: March 29; 1990: November 8.

Present: Chief Justice Dickson* and Chief Justice Lamer** and Wilson,

La Forest, L'Heureux‑Dubé, Gonthier and McLachlin JJ.

on appeal from the federal court of appeal

Administrative law -- Judicial review -- Canadian Import Tribunal ‑‑ Subsidizing of grain corn in U.S. ‑‑ Tribunal holding that subsidies causing or likely to cause material injury to Canadian production -- Whether Tribunal's decision patently unreasonable ‑‑ Interpretation of s. 42 of Special Import Measures Act, S.C. 1984, c. 25 -- Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.

Statutes -- Interpretation -- Canadian legislation enacted to implement Canada's GATT obligations -- Whether Canadian Import Tribunal may refer to GATT to interpret Canadian legislation -- Special Import Measures Act, S.C. 1984, c. 25, s. 42.

Customs and excise -- Subsidies and countervailing duties ‑‑ Subsidization of grain corn in U.S. -- Whether subsidies causing or likely to cause material injury to Canadian production -- Interpretation of s. 42 of Special Import Measures Act, S.C. 1984, c. 25.

Pursuant to s. 42 of the Special Import Measures Act ("SIMA "), the Canadian Import Tribunal conducted an inquiry respecting the importation into Canada of grain corn originating in or exported from the U.S. From the evidence, the majority of the Tribunal was persuaded that the dramatic decline in the international price for grain corn, which corresponded to the American price, was in large measure a direct consequence of U.S. policies and programs. Because of the open nature of the Canadian market, the low prices of American subsidized corn were transferred to Canada, with substantial adverse effect on Canadian producers. The Tribunal concluded that the subsidizing of importations into Canada of U.S. grain corn has caused, is causing and is likely to cause material injury to the production in Canada of like goods, and that a countervailing duty could accordingly be imposed. In interpreting s. 42 of SIMA , the majority of the Tribunal consulted the terms of the GATT Subsidies Code and adopted a broad interpretation of the Canadian legislation, one which took into account in the determination of the material injury not only the actual imports but also the potential imports that would certainly ensue absent a price response by Canadian producers. The Federal Court of Appeal dismissed appellants' applications, under s. 28 of the Federal Court Act , to review and set aside the Tribunal's decision. These appeals are to determine whether the decision of the Canadian Import Tribunal is patently unreasonable so as to warrant this Court's intervention pursuant to s. 28 of the Federal Court Act .

Held: The appeals should be dismissed.

Per La Forest, L'Heureux‑Dubé, Gonthier and McLachlin JJ.: Although s. 28 of the Federal Court Act is broad in scope, the courts, in the presence of a privative clause, will only interfere with the findings of a specialized tribunal where it is found that the decision of that tribunal cannot be sustained on any reasonable interpretation of the facts or of the law. Here, s. 76 of SIMA provides that the Tribunal's decision, with certain limited exceptions, is final and conclusive. Given this provision, this Court will only interfere with the Tribunal's ruling if it acted outside the scope of its mandate by reason of its conclusions being patently unreasonable.

The Tribunal acted within the scope of its mandate and made no error of law or of fact which would warrant this Court's intervention. First, it was not patently unreasonable for the Tribunal to give consideration to the terms of the GATT in interpreting s. 42 of SIMA . Since the Canadian legislation was designed to implement Canada's GATT obligations, it is reasonable for a tribunal to examine the domestic law in the context of the relevant agreement to clarify any uncertainty. Indeed, where the text of the domestic law lends itself to it, one should also strive to expound an interpretation which is consonant with the relevant international obligations. Further, it is reasonable to make reference to an international agreement at the very outset of the inquiry to determine if there is any ambiguity, even latent, in the domestic legislation.

Second, in applying s. 42 of SIMA , it was not patently unreasonable for the Tribunal to conclude that reliance could be placed on potential as well as actual imports. The goods to which s. 42 refers are "imported" subsidized goods. The section provides that the Tribunal must determine if the subsidization "is likely to cause material injury". Aside from the text of s. 42 itself, Rule 36 of the Tribunal's Rules of Procedure directs the Tribunal to "examine ... the actual and potential volume of the ... subsidized goods imported into Canada". Given these requirements, it was reasonable for the Tribunal to consider that the potential for increased imports properly formed part of its inquiry. Further, the GATT Code, in particular Article 6 , provides broad guidelines for assessing "material injury" and there is nothing in that Code to forbid that notice be taken of potential imports in a case such as this. Since, because of the potential for a great influx of relatively cheap imports the domestic price is determined by that of actual imports, it was not unreasonable for the Tribunal to conclude that the GATT Code allowed it to consider the potential for substantial loss of market share. Under Article 6, account may be taken of price undercutting and all relevant economic factors including actual as well as potential decline in profits, productivity, sales and market share. These criteria could reasonably be interpreted as encompassing, in a case such as this one, consideration of the strong potential for increased amounts of subsidized imports. Finally, having regard to the broad wording of the GATT Code provisions, it was not unreasonable and was therefore open to the Tribunal to make a finding of material injury even in the absence of an increase in the amount of imports.

Third, the Tribunal's conclusion that American subsidization of imports had caused, was causing and was likely to cause material injury to Canadian producers was not patently unreasonable. There was evidence before the Tribunal which supports its finding of a causal link between the American price and the injury to the Canadian market. It was not unreasonable for the Tribunal to infer in this case, given the open nature of the Canadian market and given that the United States is the only viable source for imports, that American stocks not used for domestic consumption would have flowed into Canada in greater amounts. It could reasonably assume that Canadian buyers would purchase the products at issue at the lowest price available, and that, absent an appropriate price response by Canadian producers, a significant amount of American goods would penetrate the Canadian market.

Per Dickson C.J. and Lamer C.J. and Wilson J.: In a long line of decisions on the question of judicial review, this Court made it clear that it should not interfere with a specialized tribunal's interpretation of its constitutive legislation where the interpretive exercise was one that was within the tribunal's area of expertise and where the impugned interpretation was not patently unreasonable. Where the matter at issue is one which falls within the administrative tribunal's jurisdiction, the "reasonableness" test still remains the appropriate standard of review. In applying the "reasonableness" test, however, one must begin not with the question whether the tribunal's conclusions are patently unreasonable, but rather with the question whether the tribunal's interpretation of the provisions in its constitutive legislation is patently unreasonable. If the tribunal has not interpreted its constitutive statute in a patently unreasonable fashion, the process of judicial review should come to an end. The courts must not then proceed to a wide ranging review of whether the tribunal's conclusions are unreasonable.

Here, this Court should not interfere with the Canadian Import Tribunal's interpretation of s. 42 of SIMA . The Tribunal concluded that s. 42 covered situations in which Canadian producers are forced to lower prices in order to keep subsidized goods out of the Canadian market. The interpretation of s. 42 is a matter that falls clearly within the Tribunal's jurisdiction and range of expertise and its interpretation is not "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation". In SIMA, the terms "subsidy" and "subsidized goods" are defined in very broad terms and the definition of "material injury" cannot be said to preclude the "broader" interpretation of s. 42(1) that the Tribunal favoured. If the Tribunal's interpretation is one that the legislature concludes is not in Canada's interests or is not consistent with Canada's international obligations, then it is for the legislature to amend SIMA to provide narrower definitions of the terms used in the relevant provision. It was not open to this Court to consider any additional issues.

Cases Cited

By Gonthier J.

Applied: Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; referred to: Bell Canada v. Canada (Canadian Radio‑Television and Telecommunications Commission), [1989] 1 S.C.R. 1722; Schavernoch v. Foreign Claims Commission, [1982] 1 S.C.R. 1092; Japan Electrical Manufacturers Association v. Anti‑dumping Tribunal, [1982] 2 F.C. 816; British Steel Corp. v. U.S., 6 I.T.R.D. 1065 (1984).

By Wilson J.

Applied: Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; referred to: Port Arthur Shipbuilding Co. v. Arthurs, [1969] S.C.R. 85; Metropolitan Life Insurance Co. v. International Union of Operating Engineers, Local 796, [1970] S.C.R. 425; Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 W.L.R. 163; Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382; Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178; Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245; Alberta Union of Provincial Employees, Branch 63 v. Board of Governors of Olds College, [1982] 1 S.C.R. 923; Teamsters Union, Local 938 v. Massicotte, [1982] 1 S.C.R. 710; Canada Labour Relations Board v. Halifax Longshoremen's Association, [1983] 1 S.C.R. 245; Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476; CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983; Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Bell Canada v. Canada (Canadian Radio‑Television and Telecommunications Commission), [1989] 1 S.C.R. 1722.

Statutes and Regulations Cited

Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade, Art. 6.

Canadian Import Tribunal Rules, SOR/85‑1068, r. 36.

Federal Court Act, R.S.C. 1970, c. 10 (2nd Supp.), s. 28.

General Agreement on Tariffs and Trade, Art. 6(a).

Special Import Measures Act, S.C. 1984, c. 25, ss. 2(1) "material injury", "subsidized goods", "subsidy", 31(1), 38(1), 42, 76(1).

Authors Cited

Arthurs, H. W. "Protection against Judicial Review" (1983), 43 R. du B. 277.

Arthurs, H. W. "Rethinking Administrative Law: A Slightly Dicey Business" (1979), 17 Osgoode Hall L.J. 1.

Brownlie, Ian. Principles of Public International Law, 3rd ed. Oxford: Clarendon Press, 1979.

Cane, Peter. An Introduction to Administrative Law. Oxford: Clarendon Press, 1986.

Craig, P. P. Administrative Law. London: Sweet & Maxwell, 1983.

Craig, P. P. "Dicey: Unitary, Self‑Correcting Democracy and Public Law" (1990), 106 L.Q.R. 105.

Dicey, Albert Venn. Introduction to the Study of the Law of the Constitution. London: MacMillan, 1885.

Dicey, Albert Venn. Introduction to the Study of the Law of the Constitution, 10th ed. London: MacMillan & Co., 1959.

Dussault, René et Louis Borgeat. Traité de droit administratif, t. III, 2^e éd. Québec: Presses de l'Université Laval, 1989.

Evans, J. M. "Developments in Administrative Law: The 1984‑85 Term" (1986), 8 Sup. Ct. L. Rev. 1.

Evans, J. M. et al. Administrative Law, 3rd ed. Toronto: Emond Montgomery Publications Ltd., 1989.

Hewart of Bury, Lord. The New Despotism. London: E. Benn Ltd., 1945.

Jennings, Sir Ivor. The Law and the Constitution, 5th ed. London: University of London Press, 1959.

Langille, Brian. "Developments in Labour Law: The 1981‑82 Term" (1983), 5 Sup. Ct. L. Rev. 225.

Langille, Brian. "Judicial Review, Judicial Revisionism and Judicial Responsibility" (1986), 17 R.G.D. 169.

Victor, A. Paul. "Injury Determinations by the United States International Trade Commission in Antidumping and Countervailing Duty Proceedings" (1984), 16 N.Y.U.J. Int'l L. & Pol. 749.

Wade, Sir William. Administrative Law, 6th ed. Oxford: Clarendon Press, 1988.

APPEALS from a judgment of the Federal Court of Appeal, [1989] 2 F.C. 517, 58 D.L.R. (4th) 642, 92 N.R. 264, 18 C.E.R. 268, dismissing appellants' applications to review and set aside a decision of the Canadian Import Tribunal (1987), 14 C.E.R. 1. Appeals dismissed.

John T. Morin, Q.C., and Robert W. Staley, for the appellant American Farm Bureau Federation.

J. L. McDougall, Q.C., R. C. Heintzman and D. H. Pearson, for the appellants St. Lawrence Starch Co. et al.

No one appeared for respondent.

C. J. Michael Flavell and Geoffrey C. Kubrick, for the interveners Ontario Corn Producers' Association et al.

Gordon B. Greenwood, for the interveners the British Columbia Division, Canadian Feed Industry Association et al.

The judgment of La Forest, L'Heureux-Dubé, Gonthier and McLachlin JJ. was delivered by

//Gonthier J.//

GONTHIER J. -- These are two appeals from a judgment of the Federal Court of Appeal dismissing applications by the appellants pursuant to s. 28 of the Federal Court Act, R.S.C. 1970, c. 10 (2nd Supp.), for judicial review of a decision of the Canadian Import Tribunal finding that the subsidizing of importations into Canada of grain corn originating in and exported from the United States of America has caused, is causing and is likely to cause material injury to the production in Canada of like goods. At issue is the reasonableness of the interpretation and application made by the Tribunal of s. 42 of the Special Import Measures Act, S.C. 1984, c. 25 ("SIMA"), providing for such a determination involving more particularly its consideration of the General Agreement on Tariffs and Trade ("GATT"), the taking into account of potential as well as actual importations and the finding as to causation of injury.

I. The Facts

The facts giving rise to these appeals may be summarized as follows.

On July 2, 1986, the Deputy Minister of National Revenue for Customs and Excise initiated an investigation pursuant to s. 31(1) of SIMA in relation to American subsidization of grain corn. The investigation was launched as a result of a complaint made by the intervener, the Ontario Corn Producers' Association ("OCPA"), that subsidies paid to American producers substantially lowered Canadian corn prices causing material injury to the domestic industry. The specific complaint, to the effect that the lower American prices were transferred to Canada because of the ready access of Canadian buyers to U.S. supplies, was succinctly expressed by the Tribunal as follows:

... the corn producers of Ontario, Quebec and Manitoba contended that subsidized U.S. grain corn has caused and would likely continue to cause material injury to the producers of like goods in Canada, in the absence of the protection provided by the countervailing duty. In support of their position, the growers demonstrated a significant linkage between the prices of corn in U.S. markets and the prices of corn in Canadian markets. In day-to-day business, Canadian farmers, processors and dealers routinely and consciously look to the U.S. markets for pricing signals, movements, and levels. Major purchasers and users of grain corn in Canada may not want to physically import U.S. corn but they do use its availability on open and continuous offer ... as a bargaining lever opposite their Canadian suppliers.

((1987), 14 C.E.R. 1, at p. 10.)

On November 7, 1986, the Deputy Minister, pursuant to s. 38(1), made a preliminary determination as regards the complaint and decided to impose a provisional duty on American corn. Following this preliminary determination, the Canadian Import Tribunal conducted an inquiry, under s. 42 of SIMA , and concluded that the "subsidizing of importations into Canada of grain corn ... originating in or exported from the U.S. ... has caused, is causing and is likely to cause material injury to the production in Canada of like goods" (p. 26). Under the relevant SIMA provisions, a countervailing duty could accordingly be imposed.

II. Relevant Statutory Provisions

For ease of reference, I reproduce below the statutory provisions relevant to these appeals.

Special Import Measures Act

38. (1) Subject to sections 39 and 40, within ninety days after the initiation of an investigation respecting the dumping or subsidizing of goods, the Deputy Minister shall make a preliminary determination of dumping or subsidizing with respect to the goods in respect of which the investigation has not been terminated pursuant to section 35 or 36 after estimating and specifying, in relation to each importer of goods in respect of which the investigation is made, as follows, namely,

(a) in the case of dumped goods,

(i) estimating the margin of dumping of the goods to which the preliminary determination applies, using the information available to him at the time the estimate is made, and

(ii) specifying the goods to which the preliminary determination applies;

(b) in the case of subsidized goods,

(i) estimating the amount of the subsidy on the goods to which the preliminary determination applies, using the information available to him at the time the estimate is made,

(ii) specifying the goods to which the preliminary determination applies, and

(iii) where the whole or any part of the subsidy on the goods to which the preliminary determination applies is an export subsidy, specifying that there is an export subsidy on the goods and estimating the amount of the export subsidy thereon ...; and

(c) in the case of dumped or subsidized goods, specifying the name of the person he believes, on the information available to him at the time he makes the estimate referred to in paragraph (a)(i) or (b)(i), as the case may be, is the importer in Canada of the goods.

(2) Where the Deputy Minister makes a preliminary determination of dumping or subsidizing in respect of goods, he shall

(a) cause notice of the determination to be given and published as provided in paragraph 34(a); and

(b) cause to be filed with the Secretary written notice of the determination, stating the reasons therefor, together with such other material relating to the determination as may be required under the rules of the Tribunal.

42. (1) The Tribunal, forthwith after receipt by the Secretary pursuant to subsection 38(2) of a notice of a preliminary determination of dumping or subsidizing in respect of goods, shall make inquiry with respect to such of the following matters as is appropriate in the circumstances, namely,

(a) in the case of any goods to which the preliminary determination applies, as to whether the dumping or subsidizing of the goods

(i) has caused, is causing or is likely to cause material injury or has caused or is causing retardation, or

(ii) would have caused material injury or retardation except for the fact that provisional duty was imposed in respect of the goods;

(b)in the case of any dumped goods to which the preliminary determination applies, as to whether,

(i) either

(A) there has occurred a considerable importation of like goods that were dumped, which dumping has caused material injury or would have caused material injury except for the application of anti-dumping measures, or

(B) the importer of the goods was or should have been aware that the exporter was practising dumping and that such dumping would cause material injury, and

(ii) material injury has been caused by reason of the fact that the dumped goods

(A) constitute a massive importation into Canada, or

(B) form part of a series of importations into Canada, which importations in the aggregate are massive and have occurred within a relatively short period of time,

and it appears necessary to the Tribunal that duty be assessed on the imported goods in order to prevent the recurrence of such material injury; and

(c) in the case of any subsidized goods to which the preliminary determination applies where a subsidy on the goods is an export subsidy, as to whether

(i) material injury has been caused by reason of the fact that the subsidized goods

(A) constitute a massive importation into Canada, or

(B) form part of a series of importations into Canada, which importations in the aggregate are massive and have occurred within a relatively short period of time, and

(ii) a countervailing duty should be imposed on the subsidized goods in order to prevent the recurrence of such material injury.

...

76. (1) Subject to this section and paragraph 91(1)(g), every order or finding of the Tribunal is final and conclusive.

Canadian Import Tribunal Rules, SOR/85-1068

36. Parties to an inquiry respecting the dumping or subsidizing of goods should, in the submissions and evidence that they present to the Tribunal, take into account that, in considering any issue of material injury or retardation, the Tribunal

(a) will wish to be informed about and will examine

(i) the actual and potential volume of the dumped or subsidized goods imported into Canada,

(ii) the effect of the dumped or subsidized goods on the prices of like goods in the domestic market, and

(iii) the impact of the dumped or subsidized goods on the production of like goods in Canada;

(b) will, in relation to the factors mentioned in subparagraphs (a)(i) and (ii), consider

(i) whether there has been a significant increase in the importation into Canada of the dumped or subsidized goods, either absolutely or relative to the production or consumption in Canada of like goods,

(ii) whether the prices of the dumped or subsidized goods imported into Canada have significantly undercut the prices of like goods produced and sold in Canada, and

(iii) whether the effect of the importation into Canada of the dumped or subsidized goods has been

(A) to depress significantly the prices of like goods produced and sold in Canada, or

(B) to limit to a significant degree increases in the prices of like goods produced and sold in Canada;

(c) will, in relation to the factor mentioned in subparagraph (a)(iii), consider all relevant economic factors and indices that have a bearing on the industry that comprises or includes the like goods, including, without limiting the generality of the foregoing,

(i) actual and potential decline in output, sales, market share, profits, productivity, return on investments or utilization of capacity,

(ii) factors affecting domestic prices,

(iii) actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments and, in the case of subsidizing of an agricultural product, whether there has been an increase in the financial burden on a federal or provincial government agricultural support program in Canada; and

(d) will consider such other matters as may be relevant to the inquiry.

Federal Court Act

28. (1) Notwithstanding section 18 or the provisions of any other Act, the Court of Appeal has jurisdiction to hear and determine an application to review and set aside a decision or order, other than a decision or order of an administrative nature not required by law to be made on a judicial or quasi-judicial basis, made by or in the course of proceedings before a federal board, commission or other tribunal, upon the ground that the board, commission or tribunal

(a) failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;

(b) erred in law in making its decision or order, whether or not the error appears on the face of the record; or

(c) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it.

General Agreement on Tariffs and Trade

Article VI

...

6. (a) No contracting party shall levy any anti-dumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry.

Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade (GATT Code on Subsidies and Countervailing Duties)

Article 6

Determination of Injury

1. A determination of injury for purposes of Article VI of the General Agreement shall involve an objective examination of both (a) the volume of subsidized imports and their effect on prices in the domestic market for like products and (b) the consequent impact of these imports on domestic producers of such products.

2. With regard to volume of subsidized imports the investigating authorities shall consider whether there has been a significant increase in subsidized imports, either in absolute terms or relative to production or consumption in the importing signatory. With regard to the effect of the subsidized imports on prices, the investigating authorities shall consider whether there has been a significant price undercutting by the subsidized imports as compared with the price of a like product of the importing signatory, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily give decisive guidance.

3. The examination of the impact on the domestic industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry such as actual and potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investment and, in the case of agriculture, whether there has been an increased burden on Government support programmes. This list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance.

4. It must be demonstrated that the subsidized imports are, through the effects of the subsidy, causing injury within the meaning of this Agreement. There may be other factors which at the same time are injuring the domestic industry, and the injuries caused by other factors must not be attributed to the subsidized imports.

III. The Decisions of the Courts Below

As I stated earlier, the majority of the Tribunal concluded that the subsidization of U.S. corn had caused, was causing and was likely to cause material injury to Canadian producers. I turn now to the reasons of the majority for reaching that conclusion, as well as to the decision of the Federal Court of Appeal.

Canadian Import Tribunal

Majority Decision

The majority first outlined the position of Canadian corn growers. It remarked that the latter basically argued that, in the face of American subsidies, they had two choices: they could either maintain their prices and risk losing a share of the market, or they could lower their prices in an effort to remain competitive with their American counterparts. The Tribunal observed that the Canadian producers had, for the most part, chosen the latter alternative.

The majority then dealt with the appellants' main argument, namely that there was no causal linkage between the financial predicament of Canadian producers and the importation of American grain in Canada. In this respect, the majority noted (at p. 15):

Other indicia of injury normally considered, such as increased imports and loss of sales and employment, are not present in this case because Canadian corn producers have accepted lower prices in order to maintain sales in the face of the potential inflow of low-priced U.S. corn.

The majority next went on to find that the American subsidies adversely affected the price of corn in Canada. It concluded (at p. 20):

From the evidence, the majority of the panel is persuaded that the dramatic decline in the international price for grain corn is, in very large measure, a direct consequence of the provisions of the 1985 Farm Bill.... Because of the open nature of the Canadian market, these lower prices were transferred to Canada, with substantial adverse effect on Canadian producers.... For these reasons, the majority of the panel therefore concludes that the subsidization of U.S. grain corn has caused and is causing material injury to Canadian corn producers.

After having determined that American subsidies caused Canadian prices to fall and that the Canadian industry had suffered and was suffering as a result, the Tribunal considered more closely s. 42 of SIMA . The appellants' argument was that the goods which are targeted by s. 42 , given the scheme of SIMA and Canada's obligations under the GATT, are imported subsidized goods. It was contended that the OCPA could not benefit from the protection of a countervailing duty as its case was based on potential as opposed to actual imports. Rejecting that argument, the majority gave a broader interpretation to the Canadian legislation. Accepting the OCPA's argument that consideration could be given not only to actual imports but also to the inflow of imports that would certainly ensue absent a price response by Canadian producers, the majority, after noting that it felt entitled to look at the GATT for guidance, stated (at p. 22):

Both the Special Import Measures Act and the GATT Subsidies Code exist for the express purpose of dealing with unfairly traded goods which cause or threaten injury. Necessarily, their provisions must be interpreted, not in the abstract, but within the context of the environment within which they apply, namely, international trade. Since the economic and commercial realities of international trade dictate that price be met or market share lost, the majority of the panel is persuaded to adopt the broader interpretation of "subsidized imports", that is, that cognizance be taken of potential or likely imports in the determination of material injury. To do otherwise, in the view of the majority of the panel, would be to frustrate the purpose of the system.

After observing that there have been, in recent years, imports of American grain into Canada, the majority stated that the real issue was whether imports would increase in the absence of a price response by Canadian producers to American subsidies. The majority concluded that, given the openness of the Canadian market, higher levels of imports would have been a certainty.

Dissent

The dissenting member of the panel, while accepting that American policy had contributed to the world glut in the grain corn industry, rejected the claim that the Canadian producers were entitled to the relief afforded by the imposition of a countervailing duty. In his opinion, the OCPA, in order to succeed, had to show that the injury related to subsidized imports and not merely "to the availability of trans-border stocks at depressed world prices" (p. 36). The OCPA, in his view, had failed in making its case.

First, the dissenting member pointed out that there were other factors besides American policy which were responsible for the Canadian producers' difficulties. He stated (at pp. 35-36):

... there is equally little doubt that other adverse factors were present to depress world prices. There were many references to the trade war between the U.S. and the European Economic Community and the distortions it creates in the supply of agricultural commodities generally. There is the effect of the technological advance in the development of corn hybrids, fertilizers and insecticides which has revolutionized the concepts of yield per acre. Such knowledge is available worldwide, particularly to developing countries which seek to attain self-sufficiency in agricultural products. The high value of the American dollar in recent years made the cost of imports more expensive. In the aftermath of the recent deep depression which affected all nations, debt-burdened countries restricted their purchases. Erstwhile importing nations have become exporters. There is more intensive competition for the available export business as import demand shrinks. And with the advantage of hindsight we can attach blame to poor forecasting.

The dissenting member of the panel then turned to s. 42 of SIMA . Like the majority, he considered the appellants' argument that there could be no material injury unless there was a causal link between the prejudice said to have been suffered and subsidized imports. After suggesting that the relevant provisions of the GATT provided protection against subsidized imports only and after having observed that there was only a slight amount of Canadian importations of U.S. corn in the relevant time frame, he stated, reaching a conclusion different from that of his colleagues, that (at pp. 42-43):

A number of factors have been identified as having contributed to this situation of distress, and no doubt the U.S. subsidization programme, by encouraging production, contributed to the world glut, but the injury being suffered is not the kind for which SIMA and the GATT have provided a remedy: namely, injury caused by reason of subsidized imports.

...

Given all of the above, I determine that imports of U.S. subsidized grain corn have not caused material injury to Canadian production.

Nor can I make a finding of likelihood of material injury. The admonition of the GATT Code is that such findings should not be based on speculation or conjecture, but that the circumstances required to justify such a conclusion must be real and imminent.

...

I cannot make a likelihood finding essentially for the same reason that I have determined that there was no past injury: injury must relate to the presence in Canada of subsidized imports. It would be sheer speculation and conjecture to hold that, in the absence of a countervailing duty, subsidized imports would enter Canada in such volume as to cause material injury.

Federal Court of Appeal

The Federal Court of Appeal dismissed the appellants' applications for judicial review made pursuant to s. 28 of the Federal Court Act : [1989] 2 F.C. 517. In a majority decision, the Court held at pp. 538‑39 that the approach of the Tribunal was "sensible and reasonable as it relates to deciding whether material injury is likely to be caused to Canadian domestic producers". In a s. 28 application, the Court noted that it is sufficient, in order for the Tribunal's decision to be maintained, that there is some basis for its findings and conclusion. In this case, the Court was of the view that such a basis had been established.

Majority

The majority of the Court of Appeal remarked that the main issue before it concerned the interpretation of s. 42 of SIMA .

After addressing itself to the scheme of SIMA and to the appropriate GATT provisions, the majority found that s. 42 was unambiguous in that it referred only to subsidizing and not to "subsidized imports". While acknowledging that a court should generally interpret statutes so as to be in conformity with international obligations, the majority held that, as the terms of s. 42 were clear, effect had to be given to the Canadian legislation in preference to other words used in the GATT. For all intents and purposes, the majority found that one could not use the GATT as a basis for reading the terms "subsidized imports" into s. 42 of SIMA . However, the majority observed, at p. 533, that:

Moreover, the words used in section 42 do not lead to a perverse or absurd conclusion by the clear meaning that the majority of the Tribunal gave them. The majority characterized their reading of the section as a wider and, in effect, more liberal construction saying this was appropriate for the Act and GATT generally.

The majority noted that the decision of the Tribunal could be read as saying that there was, in fact, a causal relationship between imported corn and injury to Canadian producers. The majority remarked that the Tribunal had found that there were imports into Canada and that these imports would have taken on greater importance had Canadian producers not lowered their prices. While suggesting that the Tribunal's reasons were not as clear as they could have been, the majority held that its ruling was not unreasonable. The majority therefore declined to interfere with its findings.

Dissent

MacGuigan J., in dissent, observed that the most fundamental issue was whether there could be material injury in the absence of a causal link between that injury and subsidized imports. The answer to that question, he noted, depended on s. 42 of SIMA and the importance to be given, in interpreting the legislation, to Canada's obligations under the GATT.

MacGuigan J. remarked that, to the extent that the Canadian legislation would have to be read in light of the GATT, there could be no material injury unless that injury was caused by subsidized imports. With respect to the Code on Subsidies and Countervailing Duties he concluded, at p. 547:

In sum, I find the interpretation of the Code crystal-clear as to national action against the subsidies of other countries: countervailing duties can be imposed only where there is "a causal link between the subsidized imports and the alleged injury". All signatories are bound to this standard.

After reviewing the scheme of SIMA and observing that it refers to the GATT in "several key areas", MacGuigan J. concluded, at p. 550, that SIMA "would appear to involve an acceptance of the whole scheme of the Code, which requires a causal connection between subsidized imports and domestic injury". Noting that the Federal Court of Appeal has held that the words of a statute must be interpreted in accordance with their total context and quoting from the statement of the Minister who introduced SIMA , MacGuigan J. held that the legislation was indeed enacted to implement Canada's international obligations under the GATT.

Turning his attention to s. 42 of SIMA , MacGuigan J. disagreed with his colleagues that the words in the section were clear and unambiguous. Recourse could be had, in his view, to the international treaty as an aid to interpretation. He stated, at p. 554:

In sum, [SIMA ] is so enmeshed with the Code that it must be taken to be an implementation and reflection of it. It must therefore be presumed that Parliament intended that SIMA should be interpreted in accordance with the Code. Consequently, to the extent that the majority decision of CIT depended upon an interpretation of SIMA contrary to the Code it was vitiated by error of law.

MacGuigan J. then analyzed the decision of the Tribunal. At page 557, he quoted that part of the decision where the majority stated:

From the evidence, the majority of the panel is persuaded that the dramatic decline in the international price for grain corn is, in very large measure, a direct consequence of the provisions of the 1985 Farm Bill; ... For these reasons, the majority of the panel therefore concludes that the subsidization of U.S. grain corn has caused and is causing material injury to Canadian corn producers.

MacGuigan J. found that the Tribunal's conclusion was erroneous in law. The finding of material injury, in his opinion, was founded on "an analysis [made] without regard to the Code standard that the domestic material injury must have been caused by subsidized imports" (p. 557).

MacGuigan J. concluded that "material injury" can refer only to what has actually happened. Observing that there had been low levels of imports in the relevant time frame, he held that "[w]here subsidized imports have not actually increased no material injury can be shown to have been so caused" (p. 557).

While acknowledging that account must be taken of potential injury, MacGuigan J. held that the Tribunal's conclusions were too speculative. He stated, at p. 559:

But that much higher levels of imports would have been a certainty, as stated and defended by the majority, does not appear to be a reasonable speculation about the future. Indeed, it is not evident to me that the majority decision has any rationale at all beyond this bold verbal assertion of certainty.

MacGuigan J. concluded that the Tribunal's error of law in attributing material injury to U.S. subsidies when, in fact, no material injury had been proven, also applied to the Tribunal's finding with respect to the likelihood of injury in the future. He would have returned the matter to the Tribunal for redetermination in light of the requirement that material injury to Canadian producers must be causally linked to subsidized imports.

IV. Issue

As has been seen in the Federal Court of Appeal, the case was argued and decided on the basis of whether the Canadian Import Tribunal properly interpreted SIMA . In this Court, however, the interveners raised a quite different issue, namely whether the decision of the Tribunal is patently unreasonable so as to warrant the intervention of the Court pursuant to s. 28 of the Federal Court Act . As will become apparent later in this judgment, that seems to me to be the proper issue to consider. The cases clearly establish that the Court should not interfere with an expert Tribunal's decision unless the interpretation of the Tribunal was patently unreasonable. This involves a consideration of the following:

(1) whether it was patently unreasonable for the Tribunal to give consideration to the terms of the GATT in interpreting s. 42 of SIMA ;

(2) whether it was patently unreasonable for the Tribunal to conclude that, in applying s. 42 to this case, reliance could be placed on potential as well as actual imports, and

(3) whether the Tribunal's conclusion, on the evidence, that American subsidization of imports had caused, was causing and was likely to cause material injury to Canadian producers was patently unreasonable.

V. Parties' Main Submissions

The Appellants

The appellants (respectively users of both American and Canadian corn and representing interests of American corn producers) note at the outset that s. 42 of SIMA does not use the terms "imported goods". However, because of the legislative scheme in which the section is embedded and because the legislation as a whole is designed to implement Canada's international obligations under the GATT, the appellants submit that the material injury claimed to have been suffered must relate to subsidized imports and not simply to the fact of subsidization in a foreign country. The appellants contend that the term "goods" is employed in s. 42 in such a way that there is an underlying assumption that the only subsidized goods with which SIMA is concerned are imported subsidized goods. Arguing that there can be no finding of material injury unless such an injury is caused either by subsidized goods that are imported into Canada or for which there is a meaningful threat that such importation will occur in the future, the appellants submit that the Tribunal's conclusions in this case are inconsistent with both SIMA and the GATT.

The Respondent

The respondent did not submit written arguments nor did it appear before this Court.

The Interveners

a)Ontario Corn Producers' Association, Manitoba Corn Growers Association Inc. and Fédération des producteurs de cultures commerciales du Québec

Counsel for the above-mentioned interveners argues that SIMA , given that its purpose is to provide Canadian producers with relief from unfair and injurious import competition, should not be interpreted in an excessively narrow manner. Counsel submits that to accept the suggestion that no injury can be found in the absence of an actual increase in subsidized grain imports would be to deny to Canadian corn producers the protection which Parliament afforded them through SIMA . Counsel submits that there is nothing in SIMA which restricts the scope of the Tribunal's inquiry to actual as opposed to potential imports. It is also argued that the Tribunal's interpretation of subsidized imports and of the causation standard is in accordance with both SIMA and the GATT.

b)British Columbia Division, Canadian Feed Industry Association; British Columbia Turkey Association and B.C. Chicken Growers Association

The above-mentioned interveners have not presented written or oral arguments on the issue raised by these appeals. They have, however, asked this Court to exclude them from a finding of material injury in the event that the appeals are allowed and that the matter is sent back to the Tribunal for consideration.

VI. Analysis

As I noted earlier, the main issue in these appeals is whether the decision of the Tribunal is patently unreasonable so as to warrant the intervention of this Court pursuant to s. 28 of the Federal Court Act . I propose to address this issue by outlining first the appropriate course to follow in applying s. 28 of the Federal Court Act to this case and, second, by discussing the reasonableness of the Tribunal's findings and conclusions.

A) Judicial Review

Although the terms of s. 28 of the Federal Court Act are quite broad in scope, it is to be remembered that courts, in the presence of a privative clause, will only interfere with the findings of a specialized tribunal where it is found that the decision of that tribunal cannot be sustained on any reasonable interpretation of the facts or of the law. This principle, now widely recognized by the courts, has recently been expressed in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722, where I had occasion to state at p. 1744 referring to the leading decision of Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227 ("C.U.P.E."):

Where the legislator has clearly stated that the decision of an administrative tribunal is final and binding, courts of original jurisdiction cannot interfere with such decisions unless the tribunal has committed an error which goes to its jurisdiction. Thus, this Court has decided in the CUPE case that judicial review cannot be completely excluded by statute and that courts of original jurisdiction can always quash a decision if it is "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review" (p. 237). Decisions which are so protected are, in that sense, entitled to a non-discretionary form of deference because the legislator intended them to be final and conclusive, and, in turn, this intention arises out of the desire to leave the resolution of some issues in the hands of a specialized tribunal.

In this particular case, s. 76 of SIMA provides that the Tribunal's decision, with certain limited exceptions, is final and conclusive. Given this provision, this Court, therefore, will only interfere with the Tribunal's ruling if it acted outside the scope of its mandate by reason of its conclusions being patently unreasonable.

In some cases, the unreasonableness of a decision may be apparent without detailed examination of the record. In others, it may be no less unreasonable but this can only be understood upon an in-depth analysis. Such was the case in the C.U.P.E. decision where it was found that the Board's interpretation of the legislation at issue was reasonable even though it was not the only reasonable one. Similarly, understanding of the issues raised by the appellants herein as to the reasonableness of the Tribunal's decision requires some analysis of the relevant legislation and the way in which the Tribunal has interpreted and applied it to the facts.

B) The Tribunal's Ruling

a) Using the GATT to Interpret the Canadian Legislation

The first issue to be decided is whether it was patently unreasonable for the Tribunal to make reference to the GATT for the purpose of interpreting SIMA . In turning to that issue, I note that it was not disputed in either of the courts below that the Canadian legislation was designed to implement Canada's GATT obligations. Since I am prepared to accept that such is the case, the only issue that really needs to be discussed concerns the exact use which may be made of the GATT in interpreting s. 42 . My comments on this issue will be brief since no party to these appeals suggested that the Tribunal acted unreasonably in referring to the international agreement.

The first comment I wish to make is that I share the appellants' view that in circumstances where the domestic legislation is unclear it is reasonable to examine any underlying international agreement. In interpreting legislation which has been enacted with a view towards implementing international obligations, as is the case here, it is reasonable for a tribunal to examine the domestic law in the context of the relevant agreement to clarify any uncertainty. Indeed where the text of the domestic law lends itself to it, one should also strive to expound an interpretation which is consonant with the relevant international obligations.

Second, and more specifically, it is reasonable to make reference to an international agreement at the very outset of the inquiry to determine if there is any ambiguity, even latent, in the domestic legislation. The Court of Appeal's suggestion that recourse to an international treaty is only available where the provision of the domestic legislation is ambiguous on its face is to be rejected. As I. Brownlie has stated at p. 51 of Principles of Public International Law (3rd ed. 1979):

If the convention may be used on the correct principle that the statute is intended to implement the convention then, it follows, the latter becomes a proper aid to interpretation, and, more especially, may reveal a latent ambiguity in the text of the statute even if this was `clear in itself'. Moreover, the principle or presumption that the Crown does not intend to break an international treaty must have the corollary that the text of the international instrument is a primary source of meaning or `interpretation'. The courts have lately accepted the need to refer to the relevant treaty even in the absence of ambiguity in the legislative text when taken in isolation.

In Schavernoch v. Foreign Claims Commission, [1982] 1 S.C.R. 1092, this Court had occasion to comment upon the circumstances in which it is proper for the courts to consult an underlying international agreement. Though the language used by Estey J. is perhaps not explicit, I do not understand his remarks to mean that consultation of the treaty is proper only where it appears that the text to be interpreted is ambiguous on its face. At page 1098 of his decision, he writes:

If one could assert an ambiguity, either patent or latent, in the Regulations it might be that a court could find support for making reference to matters external to the Regulations in order to interpret its terms. Because, however, there is in my view no ambiguity arising from the above-quoted excerpt from these Regulations, there is no authority and none was drawn to our attention in argument entitling a court to take recourse either to an underlying international agreement or to textbooks on international law with reference to the negotiation of agreements or to take recourse to reports made to the Government of Canada by persons engaged in the negotiation referred to in the Regulations. [Emphasis added.]

The suggestion that recourse can be had to an underlying international agreement where a latent ambiguity can be asserted implies that there is no need to find a patent ambiguity before consultation of the agreement is possible. As a latent ambiguity must arise out of matters external to the text to be interpreted, such an international agreement may be used, as I have just suggested, at the preliminary stage of determining if an ambiguity exists.

b) Tribunal's Interpretation of s. 42

Having found that the rules of statutory interpretation allow consideration of an underlying agreement at the preliminary stage of determining if the domestic legislation contains an ambiguity, I do not hesitate to conclude in this case that the Tribunal did not act unreasonably in consulting the GATT. The question that remains, therefore, is whether the Tribunal's interpretation of s. 42 in this case, given the relevant SIMA and GATT provisions, is unreasonable having regard to all the circumstances.

The appellants St. Lawrence Starch Company Ltd. et al. argue that on reading s. 42 within the scheme of SIMA and together with the GATT, a latent ambiguity may be disclosed. According to them, the issue is whether the term "goods" as used in s. 42 refers to subsidized goods as such or to subsidized goods which are either actually imported into Canada or "for which there is a meaningful threat that such importation will occur". They suggest not only that consultation of the GATT is appropriate but also that consultation of the GATT will reveal that the Tribunal's interpretation of SIMA is unnecessarily inconsistent with Canada's international obligations.

The Tribunal's interpretation of s. 42 appears from the extract of its decision quoted previously which I repeat:

It is apparent that the Tribunal, in that it refers to "subsidized imports", agreed with the appellants that the goods to which s. 42 refers are "imported" goods. Accepting, as do all parties to these appeals, that such is a proper conclusion, I am left to determine, in reviewing the impugned decision: (1) if the Tribunal could reasonably rest its findings, under SIMA and the GATT, on potential as well as actual imports, in other words were the SIMA and the GATT reasonably open to such an interpretation, (2) whether, as MacGuigan J. suggests, no finding of material injury can reasonably be made by the Tribunal absent an increase in the amount of actual imports, and (3) if the conclusion in this case of material injury caused thereby, given the evidence before the Tribunal, is reasonable.

Potential Imports Under SIMA

In turning to the subject of potential imports under SIMA , I note first that this is not a case where no actual imports have been shown to exist. In its reasons for judgment, the Tribunal observed, in fact, that there had been modest levels of imports throughout recent years. From the table accompanying the dissenting decision, part of which I reproduce below, it will be seen at once that there were some 612 thousand tons of U.S. corn imported into Canada in 1984/85 and 416 thousand tons in 1985/86.

Imports Production Domestic Exports

Usage

(000's tons)

1984/85 612 7,024 6,640 570

1985/86 416 7,472 6,870 534

Given the figures before it, it cannot be suggested, therefore, that the Tribunal found material injury in the absence of actual imports. The Tribunal considered actual imports and decided that, absent a price response by Canadian producers, these imports would, as a matter of certainty, have increased in number.

With regard now to the specific issue of potential imports, s. 42 provides that the Tribunal must determine if the subsidization "is likely to cause material injury" (emphasis added). Aside from the text of s. 42 itself, Rule 36 of the Tribunal's Rules of Procedure directs the Tribunal to "examine ... the actual and potential volume of the ... subsidized goods imported into Canada" (emphasis added). Given these requirements, it was reasonable for the Tribunal to consider that the potential for increased imports properly formed part of its inquiry.

In Japan Electrical Manufacturers Association v. Anti-dumping Tribunal, [1982] 2 F.C. 816, the Federal Court of Appeal stated, in fact, at pp. 818-19:

The inquiry of the Tribunal must relate, therefore, to the goods described in the preliminary determination but is not limited to the very goods which have been found by the Deputy Minister to have been dumped. Moreover, if the decision of the Tribunal must relate to the effect of the dumping (past, present and future) of goods described in the preliminary determination, it is not restricted to the effect of the dumping which, according to the preliminary determination, has occurred in the past. It is only the description of the goods in the preliminary determination which sets the limits of the inquiry of the Tribunal.

Potential Imports and the GATT

Turning now to the GATT, it is also my conclusion that nothing in Canada's international obligations made it unreasonable for the Tribunal to find as it did. Reading the relevant GATT Code provisions, it is reasonable to consider that broad guidelines are provided for assessing material injury and that there is nothing in the agreement to forbid that notice be taken, in a case such as this one, of potential imports. Looking at Article 6 of the GATT Code, which governs this case, it is apparent that various factors may be looked at in determining material injury. Consideration, in fact, may notably be given to: a) the volume of subsidized imports, b) the impact of imports on domestic producers, c) the impact of imports on prices, and d) a number of economic factors, including, among others, potential decline in output, sales, productivity and market share. The section itself, which bears repeating, provides:

Article 6

Determination of Injury

In my view, under Article 6 of the Code it was not unreasonable for the Tribunal, in this particular case, to conclude that notice could be taken of potential imports. Where, as in this case, the domestic price, because of the potential for a great influx of relatively cheap imports, is determined by that of actual imports, it was not unreasonable for the Tribunal to conclude that the GATT allowed it to consider the potential for substantial loss of market share. Under Article 6 of the GATT Code, account may be taken of price undercutting and all relevant economic factors including actual as well as potential decline in profits, productivity, sales, market share, etc. These criteria could reasonably be interpreted as encompassing, in a case such as this one, consideration of the strong potential for increased amounts of subsidized imports.

In the case before us, it has to be remembered, again, that American goods were effectively crossing the border. The Tribunal was faced with actual imports and the certainty, it concluded on the evidence, of a substantial loss of market share, should the Canadian producers fail to meet the prices of imports.

Having determined that the Tribunal's interpretation of the GATT with regard to potential imports was not unreasonable, I turn now to the related question of whether a finding of material injury must necessarily rest on an increase in the amount of subsidized goods crossing the border.

Increase in the Amount of Imports

In his dissenting judgment in the Court of Appeal, MacGuigan J. concluded that the GATT Code forbids a finding of material injury absent an increase in the amount of imports. He stated at p. 557:

When measuring a completed period such as the past, or even the present, in the only way in which the present can be measured, material injury can refer only to what has actually happened. What has happened, in turn, must be taken in relationship to the Code standard of a causal link between subsidized imports and material injury. Where subsidized imports have not actually increased no material injury can be shown to have been so caused.

With all due respect, I would disagree that this is the only reasonable interpretation of the GATT Code. While an increase in imports is a factor to be weighed in making a determination of material injury, paragraph 2 of Article 6 of the Code lists a number of factors and concludes: "No one or several of these factors can necessarily give decisive guidance".

In the United States, the view that an increase in the amount of imports is not determinative has gained acceptance. In British Steel Corp. v. U.S., 6 I.T.R.D. 1065 (1984), for example, the U.S. Court of International Trade upheld a finding of material injury despite relatively low levels of imports. In discussing the lack of correlation between price depression and import volume, the Court observed at p. 1072:

The Court agrees with the contention of the Commission that an absence of a direct correlation between price depression and the volume of imports does not necessarily exonerate the imports as a causal factor of the price depression. The statute's causation prerequisite to an affirmative injury determination is satisfied if the subsidized imports contribute, even minimally, to the conditions of the domestic industry, and the Commission is precluded from weighing the causes of injury.

That view is echoed in "Injury Determinations by the United States International Trade Commission in Antidumping and Countervailing Duty Proceedings" in (1984), 16 N.Y.U.J. Int'l L. & Pol. 749, where, addressing the U.S. legislation, A. P. Victor writes at pp. 756-57:

The Act sets forth with particularity the indicia of injury the ITC must examine in determining whether a domestic industry is materially injured by reason of imports. These indicia are: (1) the volume of imports; (2) the effect of imports on prices in the United States for like products; and (3) the impact of imports on domestic producers of like products. The presence or absence of any of these factors is not determinative of the Commission's decision with regard to injury. The legislative history of the Act makes clear that the "significance of the various factors affecting an industry [depends] upon the facts of each particular case".

Having regard to the broad wording of the GATT provisions, it was not unreasonable and was therefore open to the Tribunal to make a finding of material injury even in the absence of an increase in the amount of imports. MacGuigan J.'s assertion to the contrary must accordingly be rejected.

c) The Finding of "Material Injury"

One of the appellants' main contentions in this case was that the Tribunal reached its decision in the absence of any cogent evidence to support its conclusion of material injury. The appellants suggested that there was no objective evidence upon which it could be shown that greater amounts of imports would flow into Canada and that the Tribunal, in this case, simply ignored the SIMA and GATT requirement that there be a causal link between injury and subsidized imports.

In the factum which they presented to this Court, the appellants St. Lawrence Starch Company Ltd. et al. state, at pp. 25-26:

The material injury to Canadian producers, the price drop in corn in the period following the 1985 Farm Bill, was caused not by threatened imports but by the fall in the world price of corn. Thus there is no nexus or causal link between subsidized imports (or threatened imports) and the material injury, the fall in the price.

The Tribunal was obliged, by section 42 of the SIMA , to determine if the subsidization of goods "has caused, is causing or is likely to cause material injury". Except for the bare finding that there would have been past injury (which was based on a threat of imports), there were no facts and no evidence before the Tribunal upon which to base a finding of material injury in the future.

Upon close examination of the Tribunal's decision, I must disagree with the appellants that there was no evidence in this case upon which a finding of material injury could be made.

With respect first to price, there was evidence before the Tribunal that the world price corresponded to the American price, which, in turn, determined the Canadian price. At the very outset of its analysis, the Tribunal noted (at p. 15):

There was considerable evidence presented to the Tribunal concerning the nature and function of the Chicago market. It was given in evidence that the Chicago Board of Trade is the principal grain exchange, where prices are deteremined [sic] by open market bids and offers for corn and other grains and oilseeds; that is, the spot and futures [sic] prices for corn established by the trading activity at the Chicago Board of Trade are the prices looked to by all corn traders, not only in the U.S., but also in many other parts of the world.

On the evidence before it, the Tribunal rejected the appellants' suggestion that injury to Canadian producers was caused by low world prices and that such were independent of U.S. policies and programs. The Tribunal stated (at p. 19):

The Tribunal heard considerable argument that prices are established in response to world supply-and-demand conditions; that the lower prices are a result of excess world supply rather than the operation of the U.S. programmes; and that the excess supply results from increased production in countries other than the U.S. Such argument, in the view of the majority of the panel, belies the realities of the situation.... [t]he productive capacity of the U.S., and thus its ability to exert influence on the international market, is shown to be overwhelming.

and further (at p. 20):

From the evidence, the majority of the panel is persuaded that the dramatic decline in the international price for grain corn is, in very large measure, a direct consequence of the provisions of the 1985 Farm Bill; in fact, one of the anounced [sic] objectives of the Bill was to make U.S. corn more competitive. But this competitiveness must be interpreted in the context of many years of continued subsidies to U.S. corn producers. Because of the open nature of the Canadian market these lower prices were transferred to Canada, with substantial adverse effect on Canadian producers.

Given these observations by the majority of the Tribunal, I cannot adhere to the view that there was no evidence, with respect to price, indicating that material injury had been caused, was caused and was likely to be caused to corn producers in Canada. Having regard to the evidence before the Tribunal, it cannot be said that its finding of a causal link between American price and injury to the Canadian market was patently unreasonable.

In saying this, I also dismiss the suggestion that there was no indication that a greater amount of imports would enter Canada absent a price adjustment by domestic producers. In his dissenting judgment, MacGuigan J. stated, at p. 560:

The conclusion of material injury to Canadian producers in the absence of a price response by them is not a simply observed fact, but would require an inference to be drawn from the evidence. Not only did the Tribunal not consider at all the availability of American corn for export to Canada ... or the proportion of the Canadian market that could be affected after the exemptions allowed for grain corn for consumption in British Columbia and for yellow and white dent corn for snack food and tortilla manufacturers, but it also did not establish the fundamental point that low Canadian prices in the future would arise from subsidized American imports and not from world conditions.

In my opinion, MacGuigan J.'s reading of the Tribunal's decision is too narrow. In the course of giving its reasons, the majority of the Tribunal, in point of fact, made quite clear that there was a large surplus in American stocks and that this surplus would only diminish over a long period of time. It stated (at p. 20):

There is every indication that present conditions will persist for some time. Even with more onerous acreage set-asides, U.S. production is unlikely to be brought into balance with current demand much before the 1988/89 crop year. Disposal of the existing burdensome stocks would seem to require even more time.

Further, the Tribunal observed that the United States was the only viable source for imported grain corn. It stated (at p. 15):

Grain-corn movement between Canada and the U.S. is essentially unrestricted, save for duty and transportation costs. Because of the requirements of the Plant Quarantine Act and the Animal Disease and Protection Act, the U.S. is currently the only viable source for imported grain corn.

In my opinion, it was not unreasonable for the Tribunal to infer in this case, given the open nature of the Canadian market and given that the United States is the only viable source for imports, that American stocks not used for domestic consumption would have flowed into Canada in greater amounts. It could reasonably assume that Canadian buyers will purchase the products at issue at the lowest price available, and that, absent an appropriate price response by Canadian producers, a significant amount of American goods would penetrate the Canadian market. Given these circumstances, I accordingly find that the Tribunal's reasoning and conclusions were not unreasonable and should not be disturbed.

I would add one final observation. In the course of these reasons, I have at times dealt in some detail with the manner in which the Tribunal arrived at its conclusion. Unlike my colleague, Wilson J., I do not think that the Tribunal's references to the provisions of the GATT, as well as all other aspects of the reasoning by which it arrived at its interpretation of SIMA , are totally irrelevant to a determination of an application for judicial review. With respect, I do not understand how a conclusion can be reached as to the reasonableness of a tribunal's interpretation of its enabling statute without considering the reasoning underlying it, and I would be surprised if that were the effect of this Court's decision in C.U.P.E., supra. I would however note that this consideration must be undertaken in light of the overall question for determination, namely, whether or not the interpretation ultimately arrived at is patently unreasonable.

VII. Disposition

For the above reasons, I would dismiss the appeals with costs in this Court and the court below.

The reasons of Dickson C.J. and Lamer C.J. and Wilson J. were delivered by

//Wilson J.//

WILSON J. -- I have had the benefit of reading the reasons of my colleague Justice Gonthier. I am in agreement that this Court should not interfere with the Canadian Import Tribunal's interpretation of s. 42 of the Special Import Measures Act, S.C. 1984, c. 25 (the "Act"), specifically its interpretation of the phrases "subsidizing of the goods" and "material injury". But I have reached this conclusion for somewhat different reasons from those advanced by my colleague.

Like my colleague I take Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227 ("C.U.P.E."), as the starting point for any contemporary discussion of the appropriate standard of review of an administrative tribunal's interpretation of provisions in its constitutive legislation. In my view, however, it is not enough simply to refer to that decision and then proceed to analyze the soundness of an administrative tribunal's reasoning. We must understand the context within which C.U.P.E. was decided and the reasons why it has been described as "one of the most influential judgments in modern Canadian administrative law": see J. M. Evans et al., Administrative Law (3rd ed. 1989), at p. 414. Only then will we be in a position to discuss the appropriate approach to the review of the decisions of an administrative body like the Canadian Import Tribunal.

1. What C.U.P.E. Sought to Leave Behind

It is by now almost universally acknowledged that the impact of A.V. Dicey's description of the "rule of law" on the early history of Anglo-Canadian administrative law was remarkably influential: see, for example, W. Wade, Administrative Law (6th ed. 1988), c. 2; P. P. Craig, Administrative Law (1983), at p. 29; Evans et al., op. cit., at p. 13; R. Dussault and L. Borgeat, Traité de droit administratif (2nd ed. 1989), vol. III, at p. 42; and H. W. Arthurs, "Rethinking Administrative Law: A Slightly Dicey Business" (1979), 17 Osgoode Hall L.J. 1, at p. 7. Dicey's account of the "rule of law" was most succinctly stated in the Law of the Constitution (1885) in which he argued that the term had three meanings: see the Law of the Constitution (10th ed. 1959), at pp. 202-3. First, "regular law" was supreme and individuals should not be subject to "arbitrary power". Second, the state's officials were as much subject to the "ordinary" law of the land administered by "the ordinary law courts" as other citizens: "the "rule of law" in this sense excludes the idea of any exemption of officials or others from the duty of obedience to the law which governs other citizens or from the jurisdiction of the ordinary tribunals". Third, "the principles of private law have with us been by the action of the courts and Parliament so extended as to determine the position of the Crown and of its servants; thus the constitution is the result of the ordinary law of the land".

Of particular relevance to this appeal are the first two propositions: that "regular law" is supreme and that the state's officials are subject to the jurisdiction of the "ordinary" courts in the same way as any individual. In a particularly incisive article Craig has described the rationale that shaped these propositions and that led Dicey to contend that administrative tribunals should be subject to the jurisdiction of courts: see Craig, "Dicey: Unitary, Self-Correcting Democracy and Public Law" (1990), 106 L.Q.R. 105. Mr. Craig observes at p. 113:

It is apparent that the execution of the legislative will may require the grant of power to a Minister or administrative agency. Herein lies the modern conceptual justification for non-constitutional review. It was designed to ensure that the sovereign will of Parliament was not transgressed by those to whom such grants of power were made. If authority had been delegated to a Minister to perform certain tasks upon certain conditions, the courts' function was, in the event of challenge, to check that only those tasks were performed and only where the conditions were present. If there were defects on either level, the challenged decision would be declared null. For the courts not to have intervened would have been to accord a "legislative" power to the Minister or agency by allowing them authority in areas not specified by the real legislature, Parliament. The less well-known face of sovereignty, that of parliamentary monopoly, thus demanded an institution to police the boundaries which Parliament had stipulated. It was this frontier which the courts patrolled through non-constitutional review.

As guardians of the rule of law it was incumbent on the courts to ensure that any person or body relying on power delegated by the legislature abide by the terms and conditions on which that power was granted. Thus, ministers, agencies and administrative tribunals would have to be able to justify their actions by pointing to specific legislative authority in the same way that any citizen would have to be prepared to show that his or her acts were lawful. Many a scholar and judge embraced this logic with open arms. No one more so than Lord Hewart of Bury who drew a contrast between the "rule of law" and administrative law principles in The New Despotism (1945), at p. 37:

Between the "Rule of Law" and what is called "administrative law" (happily there is no English name for it) there is the sharpest possible contrast. One is substantially the opposite of the other.

It is a system which is fundamentally opposed to the English conception of the "Rule of Law", especially as regards exemption from the jurisdiction of the ordinary legal tribunals, in the case of public officials acting in performance or purported performance of their official duties.

Not surprisingly, the notion that emanations of the state which had received delegated power might be subject to a different standard of review from that imposed on lower courts initially found little favour in the courts. However, as time passed this changed. It came to be recognized that the process of running a modern administrative state required (1) that officials be allowed a certain degree of discretion; and (2) that the countless decisions administrative tribunals are called upon to make should not be subject to the same extensive form of review as the decisions of courts: see, for example, Sir I. Jennings, The Law and the Constitution (5th ed. 1959), at pp. 42-62.

Mr. Craig explains that the flaws in classic "rule of law" thinking became more evident as the administrative state evolved:

The philosophy implicit within this traditional model is suspect and only partially evident. Underlying the model is an implicit dislike or distrust of the role adopted by the state which was producing this plethora of administrative institutions and agencies. The vigorous assertion of the supremacy of the ordinary law, and the protection of traditional private rights must be seen against this setting. Control or containment of the bureaucratic organs of the state was at the centre of this philosophy. The emphasis is upon the preservation of administrative power within its proper boundaries. In this endeavour external control through the courts was viewed as the main vehicle for the vindication of private autonomy. The idea that there is an interest in securing the efficacious discharge of regulatory legislation was no part of this model, except in so far as it was viewed as a natural correlative of the proper maintenance of external judicial supervision delimiting the boundaries of the legislative will. [Emphasis added.]

(Craig, "Dicey: Unitary, Self-Correcting Democracy and Public Law", op. cit., at pp. 118-19.)

Evidence of a continuing judicial reluctance to accept the proposition that tribunals should not be subject to the same standard of review as courts is seen in some of the judgments of this Court in the late 1960's and early 1970's: see, for example, Port Arthur Shipbuilding Co. v. Arthurs, [1969] S.C.R. 85, where this Court overturned an arbitration board's findings without suggesting that the standard of review governing this kind of body was any different from that governing a lower court; and Metropolitan Life Insurance Co. v. International Union of Operating Engineers, Local 796, [1970] S.C.R. 425 (described as the "high water mark of activist" review in Canada in Evans et al., op. cit., at p. 565), where this Court quashed a labour relations board's decision to grant certification despite the presence of a privative clause. A similar reluctance may be seen in decisions of the House of Lords: see, for example, Lord Reid's reasons in Anisminic Ltd. v. Foreign Compensation Commission, [1969] 2 W.L.R. 163, where the House of Lords concluded that a compensation commission's order was a nullity despite the presence of a privative clause because the commission had misinterpreted a provision in its constitutive legislation, a conclusion that led commentators to note that the House of Lords had thereby significantly expanded the limits of judicial review in England: see P. Cane, An Introduction to Administrative Law (1986), at p. 52. It seems to me that these decisions reflect a lack of sympathy for the proposition that if administrative tribunals are to function effectively and efficiently, then we must recognize (1) that their decisions are crafted by those with specialized knowledge of the subject matter before them; and (2) that there is value in limiting the extent to which their decisions may be frustrated through an expansive judicial review.

2. What C.U.P.E. Set Out to Achieve

Canadian courts have struggled over time to move away from the picture that Dicey painted toward a more sophisticated understanding of the role of administrative tribunals in the modern Canadian state. Part of this process has involved a growing recognition on the part of courts that they may simply not be as well equipped as administrative tribunals or agencies to deal with issues which Parliament has chosen to regulate through bodies exercising delegated power, e.g., labour relations, telecommunications, financial markets and international economic relations. Careful management of these sectors often requires the use of experts who have accumulated years of experience and a specialized understanding of the activities they supervise.

Courts have also come to accept that they may not be as well qualified as a given agency to provide interpretations of that agency's constitutive statute that make sense given the broad policy context within which that agency must work. Evans et al. point out, for example, that "[o]ne of the most important developments in contemporary public law in Canada has been a growing acceptance by the courts of the idea that statutory provisions often do not yield a single, uniquely correct interpretation, but can be ambiguous or silent on a particular question, or couched in language that obviously invites the exercise of discretion": see Evans et al., op. cit., at p. 414. They then note:

In administrative law, judges have also been increasingly willing to concede that the specialist tribunal to which the legislature entrusted primary responsibility for the administration of a particular programme is often better equipped than a reviewing court to resolve the ambiguities and fill the voids in the statutory language. Interpreting a statute in a way that promotes effective public policy and administration may depend more upon the understanding and insights of the front-line agency than the limited knowledge, detachment, and modes of reasoning typically associated with courts of law. Administration and interpretation go hand in glove. [Emphasis added.]

In a detailed review of the forces that led up to this Court's decision in C.U.P.E. Professor Evans suggests that the decision was the result of pressure that emanated from three sources: see "Developments in Administrative Law: The 1984-85 Term" (1986), 8 Sup. Ct. L. Rev. 1, at pp. 27-28. First, courts engaged in overt reappraisal of the decision-making roles assigned by the legislature to courts and agencies in the administration of regulatory programs:

The composition and institutional structure of the agencies, together with the expertise and the wide range of procedural tools available to them, apparently persuaded the courts that these bodies had indeed been given the primary statutory responsibility for implementing and elaborating the legislative mandate within their area of regulation.

Second, courts recognized the "failure of previous judicial efforts to construct logically coherent doctrine for distinguishing those questions conclusively committed to the agency from those which the courts could decide for themselves". Third, "judges have recognized that the interpretation of statutory language requires more than the kind of linguistic and textual analysis that they had previously appeared to believe would, with the aid of the presumptions of statutory interpretation developed by the courts, inevitably provide the uniquely "correct" meaning of legislation". Thus, when a provision of an agency's enabling legislation did not admit of only one "correct" meaning, interpretation was increasingly regarded as a matter for the exercise of the agency's discretion informed by its specialist perspective.

This process of rethinking the relationship between courts and administrative tribunals and its implications for statutory interpretation was foreshadowed in Dickson J.'s (as he then was) decision in Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association, [1975] 1 S.C.R. 382, at pp. 388-89, where he observed:

There can be no doubt that a statutory tribunal cannot, with impunity, ignore the requisites of its constituent statute and decide questions any way it sees fit. If it does so, it acts beyond the ambit of its powers, fails to discharge its public duty and departs from legally permissible conduct. Judicial intervention is then not only permissible but requisite in the public interest. But if the Board acts in good faith and its decision can be rationally supported on a construction which the relevant legislation may reasonably be considered to bear, then the Court will not intervene. [Emphasis added.]

But it is in C.U.P.E. that this line of reasoning was most fully developed. The case involved a controversy surrounding the correct interpretation of s. 102(3)(a) of the Public Service Labour Relations Act, a provision that dealt with whether an employer could replace striking employees with "other employee[s]". In the process of discussing the Public Service Labour Relations Board of New Brunswick's interpretation of the term "other employee[s]", specifically its conclusion that the term included management personnel, Dickson J. observed at p. 230 that "[o]n one point there can be little doubt -- section 102(3)(a) is very badly drafted. It bristles with ambiguities".

In one of the most important passages in the decision Dickson J. set out the general approach the Court should adopt when reviewing an administrative tribunal's interpretation of a provision like s. 102(3)(a). After pointing out that the Public Service Labour Relations Board of New Brunswick's constitutive legislation contained a privative clause designed to protect the decisions of the Board made within jurisdiction, Dickson J. noted at pp. 235-36 that the rationale for protecting the Board's decisions within jurisdiction was "straightforward and compelling". It was that:

The labour board is a specialized tribunal which administers a comprehensive statute regulating labour relations. In the administration of that regime, a board is called upon not only to find facts and decide questions of law, but also to exercise its understanding of the body of jurisprudence that has developed around the collective bargaining system, as understood in Canada, and its labour relations sense acquired from accumulated experience in the area.

The usual reasons for judicial restraint upon review of labour board decisions are only reinforced in a case such as the one at bar. Not only has the Legislature confided certain decisions to an administrative board, but to a separate and distinct Public Service Labour Relations Board. That Board is given broad powers -- broader than those typically vested in a labour board -- to supervise and administer the novel system of collective bargaining created by the Public Service Labour Relations Act. The Act calls for a delicate balance between the need to maintain public services, and the need to maintain collective bargaining. Considerable sensitivity and unique expertise on the part of Board members is all the more required if the twin purposes of the legislation are to be met.

As a result there was a strong case for judicial restraint in reviewing the Board's interpretation of s. 102(3)(a), particularly since interpreting the provision in question was a function that "would seem to lie logically at the heart of the specialized jurisdiction confided to the Board. In that case, not only would the Board not be required to be "correct" in its interpretation, but one would think that the Board was entitled to err and any such error would be protected from review by the privative clause" (p. 236). The question that the Court should ask was therefore (at p. 237):

Did the Board here so misinterpret the provisions of the Act as to embark on an inquiry or answer a question not remitted to it? Put another way, was the Board's interpretation so patently unreasonable that its construction cannot be rationally supported by the relevant legislation and demands intervention by the court upon review? [Emphasis added.]

Dickson J. concluded that the ambiguity in the wording of s. 102(3)(a) was acknowledged and undoubted. No one interpretation could be said to be "right". The Board's decision should therefore be allowed to stand.

The adoption of a "reasonableness" test marked an important shift away from Dicey's conviction that tribunals should be subject to the same standard of review as courts. This new approach was quickly adopted and applied in a series of cases which one commentator has suggested amount to a "restrictive and unified theory of judicial review": see B. Langille, "Developments in Labour Law: The 1981-82 Term" (1983), 5 Sup. Ct. L. Rev. 225, at p. 246. More precisely, whereas C.U.P.E. involved a labour relations board protected by a privative clause, the test was soon applied in a case involving a consensual arbitrator. In Volvo Canada Ltd. v. U.A.W., Local 720, [1980] 1 S.C.R. 178. Pigeon J. stressed that "arbitration is not meant to be an additional step before the matter goes before the courts, the decision is meant to be final". Pointing to the decision in C.U.P.E. Pigeon J. observed at p. 214:

It is therefore imperative that decisions on the construction of a collective agreement not be approached by asking how the Court would decide the point but by asking whether it is a "patently unreasonable" interpretation of the agreement.

The same point was made with respect to statutory arbitrators in Douglas Aircraft Co. of Canada v. McConnell, [1980] 1 S.C.R. 245. In a passage with which the rest of the Court concurred, Estey J. noted that "the law of review has evolved, even in the absence of a privative clause, to a point of recognition of the purpose of contractually-rooted statutory arbitration: namely, the speedy, inexpensive and certain settlement of differences without interruption of the work of the parties" (p. 275). He went on to state at p. 276:

In the modern era of administrative law, such reviewable error as regards a contract must amount to an error relating to the construction of the constituting contract of such magnitude that the interpretation so adopted by the board may not be reasonably borne by the wording of the document in question, and hence such determination is beyond the contemplation of [sic] amount to an amendment of the constituting agreement. [Emphasis added.]

Professor Langille observes that "[a]fter CUPE, Volvo, and Douglas Aircraft, three of the four necessary parts of the theory were in place. Labour boards protected by a privative clause, consensual arbitrators, and statutory arbitrators were all to be dealt with in accordance with the new restrictive version of judicial review. The missing part of the puzzle was a labour relations board not protected by a privative clause": see B. Langille, "Judicial Review, Judicial Revisionism and Judicial Responsibility" (1986), 17 R.G.D. 169, at p. 195. He suggests that the final element was put in place in Alberta Union of Provincial Employees, Branch 63 v. Board of Governors of Olds College, [1982] 1 S.C.R. 923. In that case, Laskin C.J. dealt with a board that was not protected by a privative clause and observed that given the extensive powers which The Public Service Employee Relations Act, S.A. 1977, c. 40, conferred on the Alberta Public Service Employee Relations Board, certiorari "is a long way from an appeal and is subject to restriction in accordance with a line of decisions of this Court which, to assess them generally, preclude judicial interference with interpretations made by the Board which are not plainly unreasonable" (p. 927).

While one may question whether the Court deliberately set out to construct a "restrictive and unified" theory of judicial review through its decisions in C.U.P.E., Volvo, Douglas and Olds College, in my view there can be no doubt that this Court made clear that it was not prepared to interfere with a specialized tribunal's interpretation of its constitutive legislation where the interpretative exercise was one that was within the tribunal's area of expertise and where the impugned interpretation was not patently unreasonable. This proposition has not been confined to the cases that Professor Langille suggests are of a piece; it has been endorsed on many other occasions. I note, for example, that in Teamsters Union, Local 938 v. Massicotte, [1982] 1 S.C.R. 710, at p. 724, Laskin C.J. embraced the decision in C.U.P.E. and observed that "mere doubt as to correctness of a labour board interpretation of its statutory power is no ground for finding jurisdictional error, especially when the labour board is exercising powers confided to it in wide terms to resolve competing contentions". And speaking in more general terms in Canada Labour Relations Board v. Halifax Longshoremen's Association, [1983] 1 S.C.R. 245, at p. 256, Laskin C.J. stated:

It is rarely a simple matter to draw a line between a lawful and unlawful exercise of power by a statutory tribunal, however ample its authority, when there are conflicting considerations addressed to the exercise of power. This Court has, over quite a number of years, thought it more consonant with the legislative objectives involved in a case such as this to be more rather than less deferential to the discharge of difficult tasks by statutory tribunals like the Board.

More recent cases that have affirmed that the test remains the appropriate one include Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476, at p. 493, where Lamer J. stated that it was "a very severe test and signals a strict approach to the question of judicial review", and CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, at p. 1003, where La Forest J. observed that this "restricted scope of review requires the courts to adopt a posture of deference to the decisions of the tribunal".

Evans et al. point out that as a result of this extensive string of decisions courts have increased agency autonomy in recent years. They emphasize that "judicial decisions have recognized that it is a distortion of our system of government to regard the courts as sitting at the apex of a hierarchy of bodies that are performing essentially the same tasks for which courts' procedures, personnel, knowledge, and approaches are perfectly apt": see Evans et al., op. cit., at p. 530.

It is my view, then, that courts in this country have come to accept that there is a significant measure of truth to the comment of Professor Arthurs in "Protection against Judicial Review" (1983), 43 R. du B. 277, at p. 289:

There is no reason to believe that a judge who reads a particular regulatory statute once in his life, perhaps in worst-case circumstances, can read it with greater fidelity to legislative purpose than an administrator who is sworn to uphold that purpose, who strives to do so daily, and is well-aware of the effect upon the purpose of the various alternate interpretations. There is no reason to believe that a legally-trained judge is better qualified to determine the existence or sufficiency or appropriateness of evidence on a given point than a trained economist or engineer, an arbitrator selected by the parties, or simply an experienced tribunal member who decides such cases day in and day out. There is no reason to believe that a judge whose entire professional life has been spent dealing with disputes one by one should possess an aptitude for issues which arise often because an administrative system dealing with cases in volume has been designed to strike an appropriate balance between efficiency and effective rights of participation.

In recent years, however, some commentators have expressed concern that this Court has shown signs of hesitation about its commitment to the position set out in C.U.P.E. In particular, critics point to this Court's decision in Syndicat des employés de production du Québec et de l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412. At issue in that case was the question whether, on the correct interpretation of the relevant collective agreement, overtime was compulsory or voluntary and, therefore, whether a concerted refusal to work overtime constituted a strike. The Canada Labour Relations Board found that a refusal to work overtime constituted an unlawful strike and ordered the union and the Canadian Broadcasting Corporation to submit the problem of overtime to arbitration. This Court held that the Board had had no jurisdiction to refer that unlawful strike to arbitration.

In the process of coming to this conclusion, Beetz J. stated that the test of patent unreasonableness set out in C.U.P.E. was only intended to apply to statutory material that was ambiguous when the ambiguity to be resolved was clearly within an agency's jurisdiction. He found that in the case before him the error was one that went to jurisdiction and the patently unreasonable test was therefore inapplicable. The Board simply did not have the power to refer an unlawful strike to arbitration. He observed at pp. 441-42:

Once a question is classified as one of jurisdiction, and has been the subject of a decision by an administrative tribunal, the superior court exercising the superintending and reforming power over that tribunal cannot, without itself refusing to exercise its own jurisdiction, refrain from ruling on the correctness of that decision, or rule on it by means of an approximate criterion.

This is why the superior courts which exercise the power of judicial review do not and may not use the rule of the patently unreasonable error once they have classified an error as jurisdictional.

And later at p. 444 he said:

When the courts of law have to rule on the validity of a statute, so far as I know they do not ask whether Parliament or the legislature has expressly or by implication given ss. 91 and 92 of the Constitution Act, 1867 an interpretation which is not patently unreasonable. Why would they act differently in the case of judicial review of the jurisdiction of administrative tribunals? The power of review of the courts of law has the same historic basis in both cases, and in both cases it relates to the same principles, the supremacy of the Constitution or of the law, of which the courts are the guardians. [Emphasis added.]

These observations have been severely criticized. Professor Evans says that the decision threatens much of the progress made by Canadian courts in this area of law. He points out that it will not always be easy to know when a given statutory provision deals with matters that are within jurisdiction and when it confers jurisdiction, Evans (op. cit., at pp. 33-34). The risk, of course, is that all a court need do to avoid the deferential standard of review set out in C.U.P.E. is to classify a provision as one that goes to jurisdiction. Finally, Professor Evans points to the final passage from Beetz J.'s decision cited above and observes at p. 35:

This wave of the banner of the Rule of Law hardly does justice to Canadian developments in thinking about the proper roles of courts and agencies: indeed, in holding that "mere" errors of law are virtually unreviewable, Beetz J. has himself indicated that the courts' function as "guardians of the law" is susceptible of more than the simple meaning suggested by the passage quoted above. Nor is the Court's analogy between review for constitutional and statutory ultra vires particularly compelling. Administrative agencies are, after all, expressly charged by the legislature with the very task of administering a statute in a context for which they are especially equipped: boards' decisions are generally made after hearing argument from the parties to the dispute, and are accompanied by reasons.

For a similar detailed critique of the decision see Langille, "Judicial Review, Judicial Revisionism and Judicial Responsibility", op. cit., at pp. 197-214.

Beetz J. subsequently acknowledged that ascertaining a tribunal's jurisdiction would not always be easy. In U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048, he observed at p. 1087:

I doubt whether it is possible to state a simple and precise rule for identifying a question of jurisdiction, given the fluidity of the concept of jurisdiction and the many ways in which jurisdiction is conferred on administrative tribunals.

He then set about developing a "pragmatic and functional" approach to dealing with questions of jurisdiction, one that would be sensitive to "the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal" (p. 1088). This Court has since had occasion to confirm that this is the approach to take to questions of jurisdiction: see CAIMAW v. Paccar of Canada Ltd., supra, at p. 1000.

In my view, this is not an appropriate appeal in which to discuss the strengths and weaknesses of Acadie and the approach taken in Bibeault to the process of ascertaining a tribunal's jurisdiction. My colleague Gonthier J. does not appear to have any doubt about the fact that interpreting s. 42 of the Act is a matter that falls within the Canadian Import Tribunal's jurisdiction. I can see no reason to take issue with such a conclusion. The Tribunal has, after all, been established with a view to reaching decisions about what are and what are not subsidies for the purposes of the Act, as well as the circumstances in which the Deputy Minister of Revenue may respond to a foreign country's use of subsidies. Given that the appeal does not require us to explore the jurisdiction test set out in Acadie and Bibeault, I will refrain from doing so. Nevertheless, it seems to me that the reaction to Acadie serves to remind us that it is important to be sensitive to the suggestion that the Court may be wavering in its commitment to C.U.P.E. and to make it clear that in a case like the one before us the "reasonableness" test remains the appropriate standard of review.

3. The Case at Bar

This brings me to the question how best to approach this appeal. My colleague Gonthier J. begins his analysis by pointing to C.U.P.E, as well as to this Court's decision in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] S.C.R. 1722. He states that "it is to be remembered that courts, in the presence of a privative clause, will only interfere with the findings of a specialized tribunal where it is found that the decision of that tribunal cannot be sustained on any reasonable interpretation of the facts or of the law" (p. 000). He adds that this Court will only interfere with the Tribunal's ruling "if it acted outside the scope of its mandate by reason of its conclusions being patently unreasonable" (p. 000).

In my view, this is not an entirely accurate rendering of the test set out in C.U.P.E. I think it important to remember that Dickson J. stated, at p. 237, that the proper question was:

It seems to me that Dickson J. was not suggesting that a tribunal's decision should be reviewed if the conclusions reached in that decision could not be sustained on any reasonable interpretation of the facts or the law. Instead, he was stating that if it was evident that the Board's interpretation of provisions in its constitutive legislation was not "patently unreasonable", then the process of judicial review should come to an end.

The distinction is a subtle one. But it is not without importance. One must, in my view, not begin with the question whether the tribunal's conclusions are patently unreasonable; rather, one must begin with the question whether the tribunal's interpretation of the provisions in its constitutive legislation that define the way it is to set about answering particular questions is patently unreasonable. If the tribunal has not interpreted its constitutive statute in a patently unreasonable fashion, the courts must not then proceed to a wide ranging review of whether the tribunal's conclusions are unreasonable. It seems to me, however, that this is what my colleague has done. And in the process he has engaged in the kind of detailed review of a tribunal's findings that this Court's jurisprudence makes clear is inappropriate.

I note that my colleague has not simply considered whether the Tribunal's interpretation of s. 42 of the Act is patently unreasonable. He has also considered whether the Tribunal may refer to the text of the General Agreement on Tariffs and Trade (GATT) when interpreting its constitutive legislation, whether there is anything in Canada's international obligations that should have prevented the Tribunal from finding as it did (including the question whether the Tribunal could take notice of potential imports), and whether there was evidence to support a finding of material injury. With respect, it seems to me that it is not open to this Court to consider these additional issues.

More precisely, it seems to me that it is for the Tribunal, staffed by experts familiar with the intricacies of international trade relations who are in the business of dealing with a large volume of trade related cases, to decide what documents may or may not be of assistance in interpreting the Act. While my colleague's discussion of the documents that a court may refer to in interpreting legislation may well be sound, we are not faced with an appeal from an ordinary court's decision. Instead, we are dealing with a statutory tribunal's interpretation of its own constitutive legislation. If the legislature wishes to place limits on the range of documents that the Tribunal may refer to, then it is for the legislature to do so. In the meantime, courts should not get into the business of assessing what documents a statutory tribunal may consult.

Similarly, I do not think that it is this Court's role on an application for judicial review to look beyond the Tribunal's statute to determine whether the Tribunal's interpretation of that statute is consistent with Canada's international obligations. If the interpretation is not consistent with Canada's obligations under the GATT, then it is for the legislature to address this matter. Until such time as the courts in this country are given the responsibility of enforcing the GATT, I do not think that they should begin to analyze the merits of a tribunal's interpretation of the Act in light of the GATT. Courts have no particular expertise in the interpretation of international trade agreements and, in my view, they should not get into the business of trying to explain the significance of the Kennedy and Tokyo Rounds of negotiations (or the ongoing Uruguay Round of talks) for the GATT, let alone for the "proper" interpretation of the Act.

Finally, it seems to me that to embark upon a detailed analysis of the extent to which the evidence will support the Tribunal's finding in the face of a privative clause is to engage in the very kind of meticulous analysis of the Tribunal's reasoning that C.U.P.E. made clear courts should not conduct. The legislature has created the Canadian Import Tribunal in part so that it may review the Deputy Minister of Revenue's determinations. In the process, the legislature has made clear that neither this Court nor the Federal Court of Appeal is to act as a normal appellate court in connection with the Canadian Import Tribunal's findings. In my view, this means that it is not open to us to evaluate the correctness of the Tribunal's assessment of the Deputy Minister's conclusions concerning whether particular trade practices have given rise to a "material injury". Faced with the highly charged world of international trade and a clear legislative decision to create a tribunal to dispose of disputes that arise in that context, it is highly inappropriate for courts to take it upon themselves to assess the merits of the Tribunal's conclusions about when the government may respond to another country's use of subsidies. If courts were to take it upon themselves to conduct detailed reviews of these decisions on a regular basis, the Tribunal's effectiveness and authority would soon be effectively undermined.

What then are the implications of these points for the case at bar? In my view, they prescribe that the only issue which this Court may consider, once it accepts that the interpretation of a given provision is a matter that falls within a tribunal's jurisdiction, is whether the Tribunal's interpretation of the provision is "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation". Thus, if one determines that the Canadian Import Tribunal's interpretation of s. 42 of the Act is not "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation", then the inquiry must come to an end.

I note that ss. 2(1), 42(1) and 76(1) of the Act state:

2. (1) ...

"material injury" means, in respect of the dumping or subsidizing of any goods, material injury to the production in Canada of like goods, and includes, in respect only of the subsidizing of an agricultural product, an increase in the financial burden on a federal or provincial government agricultural support program in Canada;

"subsidized goods" means

(a) goods in respect of the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of which a subsidy has been or will be paid, granted, authorized or otherwise provided, directly or indirectly, by the government of a country other than Canada, and

(b) goods that are disposed of at a loss by the government of a country other than Canada,

and includes any goods in which, or in the production, manufacture, growth, processing or the like of which, goods described in paragraph (a) or (b) are incorporated, consumed, used or otherwise employed;

"subsidy" includes any financial or other commercial benefit that has accrued or will accrue, directly or indirectly, to persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods, as a result of any scheme, program, practice or thing done, provided or implemented by the government of a country other than Canada, but does not include the amount of any duty or internal tax imposed on goods by the government of the country of origin or country of export from which the goods, because of their exportation from the country of export or country of origin, have been exempted or have been or will be relieved by means of refund or drawback;

(a) in the case of any goods to which the preliminary determination applies, as to whether the dumping or subsidizing of the goods

(i) has caused, is causing or is likely to cause material injury or has caused, or is causing retardation, or

(ii) would have caused material injury or retardation except for the fact that provisional duty was imposed in respect of the goods;

...

(c) in the case of any subsidized goods to which the preliminary determination applies where a subsidy on the goods is an export subsidy, as to whether

(i) material injury has been caused by reason of the fact that the subsidized goods

(A) constitute a massive importation into Canada, or

(B) form part of a series of importations into Canada, which importations in the aggregate are massive and have occurred within a relatively short period of time, and

(ii) a countervailing duty should be imposed on the subsidized goods in order to prevent the recurrence of such material injury.

. . .

76. (1) Subject to this section and paragraph 91(1)(g), every order or finding of the Tribunal is final and conclusive.

A majority of the Canadian Import Tribunal stated:

In the case of grain corn, imports into Canada have existed in recent years, albeit at modest levels. The issue, therefore, is not whether imports have taken place, but whether they would have increased substantially in the absence of a price response by the domestic producers to the subsidized U.S. corn. Given the openness of the Canadian market, much higher levels of imports would have been a certainty. [Emphasis added.]

((1987), 14 C.E.R. 1, at p. 22.)

Thus, the majority concluded that s. 42 covered situations in which Canadian producers are forced to lower prices in order to keep subsidized goods out of the Canadian market.

In my view, it is clear that the Tribunal was dealing with the kind of issue that it was set up to deal with. It cannot be said to have been acting outside its jurisdiction. Indeed, none of the parties to this appeal raised questions concerning the Tribunal's jurisdiction to deal with the dispute at the root of the case before it. Moreover, while the Tribunal's interpretation of s. 42 might well be unsatisfactory to those concerned to secure a more liberal international trade policy, in my view it can hardly be described as an interpretation that is "so patently unreasonable that its construction cannot be rationally supported by the relevant legislation". The terms "subsidy" and "subsidized goods" are defined in very broad terms indeed and the definition of "material injury" certainly cannot be said to preclude the "broader" interpretation of s. 42(1) that the Tribunal favoured. If the Tribunal's interpretation is one that the legislature concludes is not in Canada's interests or is not consistent with Canada's international obligations, then it is for the legislature to amend the Act to provide narrower definitions of the terms used in the relevant provision. In my view, the Tribunal's interpretation of s. 42(1) must therefore stand.

4. Disposition

I would dismiss the appeals with the costs in this Court and in the court below.

Appeals dismissed.

Solicitors for the appellant American Farm Bureau Federation: Fasken Campbell Godfrey, Toronto.

Solicitors for the appellants St. Lawrence Starch Co. et al.: Gottlieb, Kaylor & Stocks, Montréal.

Solicitors for the interveners Ontario Corn Producers' Association et al.: McCarthy Tétrault, Ottawa.

Solicitors for the interveners British Columbia Division, Canadian Feed Industry Association et al.: McMaster Meighen, Ottawa.

* Chief Justice at the time of hearing.

** Chief Justice at the time of judgment.

Summaries

Summary Under

Tax Topics - Statutory Interpretation - Treaties

In interpreting s. 42 of the Special Import Measures Act (Canada), it was proper for the Canadian Import Tribunal to consult the terms of the GATT Subsidies Code. Gonthier J. stated (p. 1371):

"It is reasonable to make reference to an international agreement at the very outset of the enquiry to determine if there is any ambiguity, even latent, in the domestic legislation. The Court of Appeal's suggestion that recourse to an international treaty is only available where the provision of the domestic legislation is ambiguous on its face is to be rejected."

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National Corn Growers Assn. v. Canada (Import tribunal), [1990] 2 SCR 1324

Citations[1990] 2 S.C.R. 1324

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[1990] 2 S.C.R. 1324