Date: 20130624
Docket: A-306-12
Citation: 2013 FCA 167
CORAM: SHARLOW
J.A.
PELLETIER J.A.
WEBB
J.A.
BETWEEN:
HBC IMPORTS c/o ZELLERS INC.
Appellant
and
PRESIDENT OF THE CANADA BORDER
SERVICES AGENCY
Respondent
REASONS FOR JUDGMENT
WEBB J.A.
[1]
This
appeal arises as a result of a dispute with respect to the tariff
classification of a product known as the “Snow Boogie Astra Sled” (Astra Sled).
It is a sled and is similar to a toboggan because it is used, and is intended
to be used, by a person to slide down a snowy hill. The President of the Canada
Border Services Agency concluded that the Astra Sled should be classified under
tariff item No. 9506.99.90 of the Schedule to the Customs Tariff,
S.C. 1997, c. 36. That conclusion was upheld on the appeal of the importer
(“HBC”) to the Canadian International Trade Tribunal pursuant to section 67 of
the Customs Act, R.S.C. 1985, c. 1 (2d Supp.) (Appeal No. AP-2011-018; HBC Imports c/o Zellers Inc. v. Canada (Border Services Agency, President),
[2012] C.I.T.T. No. 58).
HBC now appeals to this Court pursuant to
section 68 of the Customs Act. For the reasons that follow, I would dismiss this
appeal on the basis that the Tribunal’s conclusion is reasonable.
Relevant
Classification Provisions
[2]
HBC argues
that the Astra Sled should be classified under heading 95.03 and not under
heading 95.06. These two headings provide as follows:
95.03:
Tricycles,
scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other
toys; reduced-size ("scale") models and similar recreational
models, working or not; puzzles of all kinds.
[…]
95.06:
Articles
and equipment for general physical exercise, gymnastics, athletics, other
sports (including table-tennis) or outdoor games, not specified or included
elsewhere in this Chapter; swimming pools and paddling pools.
|
95.03:
Tricycles, trottinettes, autos
à pédales et jouets à roues similaires; landaus et poussettes pour poupées;
poupées; autres jouets; modèles réduits et modèles similaires pour le
divertissement, animés ou non; puzzles de tout genre.
…
95.06:
Articles et
matériel pour la culture physique, la gymnastique, l'athlétisme, les autres
sports (y compris le tennis de table) ou les jeux de plein air, non dénommés
ni compris ailleurs dans le présent Chapitre; piscines et pataugeoires.
|
[3]
As noted by
the Tribunal, since the items included under heading 95.06 do not include items
that are “specified or included elsewhere in this Chapter”, if the Astra Sled
is included in “other toys” under heading 95.03, it would be classified under
heading 95.03 and not under heading 95.06.
Standard of review
[4]
The question
of whether the Astra Sled should be classified under heading 95.03 requires an
interpretation of the expression “other toys” as used in this heading and the
application of this interpretation to the Astra Sled. This is a question of
mixed fact and law which requires an interpretation of the Tribunal’s own
statute. The standard of review is reasonableness, which means that deference
is to be given to the Tribunal (Canadian Tire Corp. Ltd. v. President
of the Canada Border Services Agency 2011 FCA 242,
at paragraph 4; Dunsmuir
v. New Brunswick,
2008 SCC 9, [2008] 1 S.C.R. 190, Alberta
(Information and Privacy Commissioner) v. Alberta Teachers'
Association, [2011] 3 S.C.R. 654).
Analysis
[5]
The
Tribunal reviewed the headings referred to above and the Explanatory Notes
to the Harmonized Commodity Description and Coding System (the “Explanatory
Notes”). The Tribunal also noted that “although the Explanatory Notes
are not binding on the Tribunal, they should be respected unless there is a
sound reason to do otherwise” (paragraph 9 of the decision of the Tribunal and Canada (Attorney General) v. Suzuki Canada Inc., 2004 FCA 131, at paragraph
13).
An Astra Sled was also submitted to the Tribunal as an exhibit. After reviewing
the arguments of the parties, the Tribunal concluded that the Astra Sled should
not be included as “other toys” for the purposes of heading 95.03. The Tribunal
then determined that it should be classified under heading 95.06.
[6]
The
Appellant does not take issue with the finding that if the Astra Sled is not to
be included as “other toys” for the purposes of heading 95.03, then it is to be
included under heading 95.06.
[7]
Since
the standard of review is reasonableness and the Tribunal is entitled to
deference in relation to its decision, the question is not whether the Tribunal
was correct in finding that the Astra Sled is not to be included as “other
toys” for the purposes of heading 95.03 but whether its “decision falls within
a range of possible, acceptable outcomes which are defensible in respect of the
facts and the law” (Dunsmuir, paragraph 47).
[8]
Justice
Abella, writing for the Supreme Court of Canada, in Newfoundland and
Labrador Nurses' Union v. Newfoundland and Labrador (Treasury Board), 2011
SCC 62 repeated some of the paragraphs from the decision of that Court in Dunsmuir.
In particular, in paragraph 11, she repeated the paragraph from Dunsmuir
which stated that “[t]ribunals have a margin of appreciation within the range
of acceptable and rational solutions”. Also, Justice Rothstein in paragraph 1
of Alberta (Information and Privacy
Commissioner v. Alberta Teachers' Association,
above, stated that “[c]ourts owe deference to administrative decisions
within the area of decision-making authority conferred to such tribunals”.
[9]
In
this case, the decision of the Tribunal is one that is within its area of
expertise — the classification of goods for the purposes of the Customs Tariff.
We should not interfere with this decision unless it is outside the range of
acceptable and rational results. There are two possible results: either the
Astra Sled will be included as “other toys” for the purposes of heading
95.03,or it will not. Just because there are only two possible outcomes does
not mean that any less deference should be shown to the Tribunal. Nor does it
mean that only one option is reasonable (hence correct) and the other is not.
[10]
In Alberta (Information and Privacy Commissioner v. Alberta Teachers'
Association, above, the issue was the interpretation of
subsection 50(5) of the Personal Information Protection Act, S.A. 2003, c. P-6.5. The question, as noted by Justice Rothstein, was “[d]id the inquiry
automatically terminate as a result of the Commissioner extending the 90-day
period only after the expiry of that period?” There were only two possible
outcomes: either the inquiry automatically terminated or it did not. The
Supreme Court of Canada held that the reasonableness standard still applied and
deference was to be given to the adjudicator.
[11]
In Newfoundland and
Labrador Nurses' Union v. Newfoundland and Labrador (Treasury Board),
above, “[t]he issue the arbitrator had to decide was whether time as a
casual employee could be credited towards annual leave entitlement if that
employee became permanent” (paragraph 5). There were only two possible
outcomes: either such time was to be so credited or it was not. The Supreme
Court of Canada held that the standard of reasonableness applied and that
deference was to be given to the arbitrator.
[12]
In
this case, the Tribunal provided its reasons for deciding that the Astra Sled
should not be included as “other toys” for the purposes of heading 95.03 at
paragraphs 41 to 51 of its decision. The Tribunal noted that the use and
intended use of the particular product are relevant and that the manner in
which the product is marketed is also to be considered. The Tribunal found that
“the essential purpose of the good in issue is to enable children (and adults)
to partake in the outdoor activity of sledding or sliding on snowy hills”. The
Tribunal also reviewed how HBC marketed the Astra Sled.
[13]
It
seems to me that this decision of the Tribunal is within the range of reasonable
outcomes. While it could also be argued that the Astra Sled could be included
as “other toys”, this does mean that the decision of the Tribunal is
unreasonable.
[14]
Justice
Abella in Newfoundland and Labrador Nurses' Union v. Newfoundland and
Labrador (Treasury Board), above, also quoted with approval from an article
written by Professor Dyzenhaus in which he stated that “… even if the reasons
in fact given do not seem wholly adequate to support the decision, the court
must first seek to supplement them before it seeks to subvert them”. This last
part was emphasized by Justice Abella. In this case, it seems to me that the
reasons to support the decision of the Tribunal can be supplemented by
referring to paragraph (v) of Note (D) of the Explanatory Notes to
heading 95.03. While the Tribunal referred to Note (D) it did not refer to
paragraph (v) thereof in its reasons.
[15]
Note
(D) of the Explanatory Notes to heading 95.03 provides in paragraphs (i)
to (xix) a list of various items that are to be included within the general
term “other toys”. No items similar to the Astra Sled are included in this
list. This list does include the following:
(D)
Other toys.
[…]
These include: […]
(v) Toys designed to be ridden by
children but not mounted on wheels, e.g., rocking horses.
(ix) Toy sports equipment,
whether or not in sets (e.g., golf sets, tennis sets, archery sets, billiard
sets, baseball bats, cricket bats, hockey sticks).
[…]
(xix) Hoops, skipping ropes,
diabolo spools and sticks, spinning and humming tops, balls (other than those
of heading 95.04 or 95.06)
|
(D) Les autres jouets.
…
Parmi ceux-ci on peut citer : […]
5) Les jouets pouvant être chevauchés par l’enfant, mais qui ne se
déplacent pas (chevaux à bascule, par exemple)
9) Les articles de sport ayant le caractère de
jouets présentés sous forme de panoplies ou isolément (panoplies de golf, de
tennis, de tir à l’arc, de billard, par exemple; battes de base-ball, battes
de cricket, crosses de hockey, etc.).
…
19) Les cerceaux, diabolos, toupies (même
musicales), cordes à sauter (munies de poignées), balles et ballons (autres
que ceux des nos 95.04 ou 95.06)
|
[16]
The Astra
Sled is a form of a sled that is to be ridden down a hill. The only paragraph
of Note (D) which specifies items that can be ridden by children is paragraph
(v). The Appellant referred to this paragraph in its oral argument. This
paragraph will only apply to objects that would otherwise be toys since it
starts with “toys”. However, since it excludes toys mounted on wheels, it seems
to me that this paragraph confirms that not every object which might otherwise
be considered to be a “toy” will be included as “other toys”.
[17]
The only
example given in paragraph (v) is a rocking horse. It must be remembered that
the question in this appeal is whether the decision of the Tribunal is
reasonable, not whether it is correct. Because the only example of “toys
designed to be ridden by children” is a rocking horse, a reasonable conclusion
could be that only “toys designed to be ridden by children” that are like
rocking horses are the toys that are to be included as “other toys” under this
paragraph. While a rocking horse is ridden, the rocking horse will not
transport the child from one place to another. The Astra Sled is easily
distinguished from a rocking horse and therefore, a reasonable conclusion is
that the Astra Sled, even if it is a toy, is not to be included as “other toys”
under this paragraph. Since this paragraph is the only paragraph of Note (D)
that specifically refers to toys designed to be ridden by children, it also
seems that it is reasonable to conclude that the Astra Sled, even if it is a
toy, is not to be included in “other toys” for the purposes of heading 95.03.
[18]
The Astra
Sled is also easily distinguishable from the items listed as examples in
paragraph (ix) and from the items listed in paragraph (xix) as none of these
can be ridden by a child (or by an adult).
[19]
The Tribunal,
in rendering its decision, also referred to the marketing materials and
additional documents submitted by HBC. The Tribunal also noted that HBC was
conflicted about how to classify the Astra Sled as it marketed it as a “snow
toy” but it also sold it under the categories of “winter sports”, “winter
sports equipment” and “snow sports”.
[20]
In reviewing
the Chapter Notes, the Tribunal noted that Note 1 to Section XVII (Vehicles, aircraft,
vessels and associated transport equipment) of the Schedule to the Customs
Tariff provides
that:
1.
This Section [XVII] does not cover articles of heading 95.03 or 95.08, or
bobsleighs, toboggans or the like of heading 95.06.
|
1. La
présente Section [XVII] ne comprend pas les articles des nos 95.03
ou 95.08, ni les luges, bobsleighs et similaires (no 95.06).
|
[21]
The only
particular products identified in Heading 95.06 (referred to above) are
swimming pools and paddling pools. It is not entirely clear whether this Note 1
to Section XVII should be read as indicating that all toboggans should be
included in heading 95.06. Since toboggans are not specified in heading 95.06,
the classification of toboggans would be subject to the same analysis as the
Astra Sled. If it is included as “other toys” under heading 95.03, then it
would be classified under that heading. Since this note could be read as
indicating that all toboggans (regardless of their design or intended use) are
to be classified under heading 95.06, it does not seem unreasonable that the
Astra Sled should be classified under the same heading as toboggans. The Astra
Sled is more like a toboggan than it is like any of the other items listed in
any of the notes intended to clarify what is to be included as “other toys” for
the purposes of heading 95.03.
[22]
In another
decision of the same Tribunal member (Canadian Tire
Corp. Ltd. v. Canada (Border Services Agency, President) [2012] C.I.T.T. No.
57) that was
released April 12, 2012 (which was the date between the date that the decision
in this case was released and the date that the reasons in this case were
released), the Tribunal found that “a trampoline with a
safety enclosure for use by children” (paragraph 2) which was clearly marketed to
children with its
“bright colours and the printed pictures of Dora or Diego”
(paragraph 41), was not to be included as “other toys” for the purposes of
heading 95.03 but was to be included under heading 95.06.
[23]
As a result,
it seems to me that the decision of the Tribunal is reasonable as it is within
the range of acceptable and rational outcomes. I would dismiss the appeal, with
costs.
“Wyman W. Webb”
“I
agree,
J.D.
Denis Pelletier J.A.”
SHARLOW
J.A. (Dissenting)
[24]
For
the reasons that follow, I am unable to agree that classifying the Astra Sled
under tariff item No. 9506.99.90 is within
the range of “possible, acceptable outcomes which are defensible in respect of
the facts and law” (Dunsmuir, paragraph 47).
[25]
The
Tribunal found, and it is now undisputed, that the Astra Sled is designed for
sliding down a snowy hill and is something like a toboggan. It is also
undisputed that in the Schedule to the Customs Tariff, the Astra
Sled falls within Section
XX, entitled “Miscellaneous Manufactured Articles”, and also within Chapter 95
of Section XX, entitled “Toys, Games and Sport Requisites; Parts and
Accessories Thereof”. That is because it is reasonable to infer, from Note 1(n)
of Chapter 95, that Chapter 95 includes toboggans and the like. Note 1(n) reads as
follows:
1.
This Chapter [95] does not cover:
|
1.
Le present Chapitre [95] ne comprend pas :
|
(n) Sports vehicles (other than
bobsleighs, toboggans and the like) of Section XVII.
|
n) les véhicules de sport de la
Section XVII, à l'exclusion des luges, des bobsleighs et similaires;
|
[26]
The
Tribunal was required to locate the Astra Sled within Chapter 95. That is, it
was required to determine, by interpreting the headings in Chapter 95, into
which of those headings the Astra Sled could fall. There are two possible
candidates, heading 95.03 and heading 95.06.
[27]
According to
the language of heading 95.06, exercise
and sports equipment is within heading 95.06 unless it is “specified or
included” elsewhere in Chapter 95. Heading 95.06 reads as follows (my
emphasis):
Articles and equipment for general physical
exercise, gymnastics, athletics, other sports (including table-tennis) or
outdoor games, not specified or included elsewhere in this Chapter;
swimming pools and paddling pools.
|
Articles et
matériel pour la culture physique, la gymnastique, l'athlétisme, les autres
sports (y compris le tennis de table) ou les jeux de plein air, non
dénommés ni compris ailleurs dans le présent Chapitre; piscines et pataugeoires.
|
[28]
The
Astra Sled, being something like a toboggan, is exercise or sports equipment
within the opening words of heading 95.06. But if it is specified or included
within heading 95.03, it is excluded from heading 95.06 even though it is
exercise or sports equipment. Heading 95.03 reads as follows (my emphasis):
Tricycles,
scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other
toys; reduced-size ("scale") models and similar recreational
models, working or not; puzzles of all kinds.
|
Tricycles,
trottinettes, autos à pédales et jouets à roues similaires; landaus et
poussettes pour poupées; poupées; autres jouets; modèles réduits et
modèles similaires pour le divertissement, animés ou non; puzzles de tout
genre.
|
As the Tribunal explained at paragraph 40 of its
reasons, products that are “other toys” cannot be classified under heading
95.06.
[29]
Thus,
the specific question for the Tribunal was whether the Astra Sled is a “toy”
within the meaning of that word as used in the Schedule to the Customs
Tariff. The question for this Court is whether it was reasonable for the
Tribunal to conclude that for tariff classification purposes, the Astra Sled is
not a toy.
[30]
The
word “toy” is not defined in the Customs Tariff. Therefore, its meaning
for tariff classification purposes is a matter of statutory interpretation,
which requires consideration of its ordinary or dictionary meaning, and the
statutory context.
[31]
Although
the Tribunal referred to various dictionaries to aid its understanding of a
number of words that were relevant to the dispute in this case (including
“sled”, “bobsleigh”, and “toboggan”), it did not refer to any dictionary
definitions of the word “toy”. I assume that is because its ordinary meaning was
not a matter of controversy before the Tribunal. For completeness, I reproduce
below the relevant parts of the definition of the noun “toy” from The
Canadian Oxford Dictionary (Oxford University Press, 1998):
[…]
a plaything, esp. for a child.
[…]
a model or miniature replica of a thing, esp. as a plaything (toy boat).
[…]
a thing, esp. a gadget or instrument, regarded as providing amusement or
pleasure.
|
[32]
It
is mandatory, because of section 11 of the Customs Tariff, to consider
certain publications of the Customs
Co-operation Council (also known as the World Customs Organization), as amended
from time to time.
Section 11 reads as follows:
11. In interpreting
the headings and subheadings, regard shall be had to the Compendium of
Classification Opinions to the Harmonized Commodity Description and Coding
System and the Explanatory Notes to the Harmonized Commodity Description and
Coding System, published by the Customs Co-operation Council (also known as
the World Customs Organization), as amended from time to time.
|
11. Pour l’interprétation
des positions et sous-positions, il est tenu compte du Recueil des Avis de
classement du Système harmonisé de désignation et de codification des
marchandises et des Notes explicatives du Système harmonisé de désignation et
de codification des marchandises et de leurs modifications, publiés par le
Conseil de coopération douanière (Organisation mondiale des douanes).
|
[33]
In
this case, the only relevant publication of the Customs Co-operation Council is
the Explanatory Notes to the Harmonized Commodity Description and Coding
System (the “Explanatory Notes”). This Court has held, and the
Tribunal correctly noted, that although the Explanatory Notes are not
binding on the Tribunal, they must be respected unless there is a sound reason
to do otherwise (Canada (Attorney General) v. Suzuki Canada Inc., 2004
FCA 131).
[34]
The
Explanatory Notes relating to Chapter 95 suggest one element of the
intended meaning of “toy”, namely, that it is something intended for
amusement:
This
Chapter [95] covers toys of all kinds whether designed for the amusement of
children or adults.
|
Le
présent chapitre [95]
comprend
les jouets et les jeux pour l’amusement des enfants et la distraction des
adultes[…]
|
[35]
This
statement is consistent with the ordinary meaning of the word “toy”, except
that it requires consideration of the use intended by its producer (“designed
for”), as opposed to any potential or possible use. Thus, as recognized by the
Tribunal in the jurisprudence summarized later in these reasons, an ordinary
cardboard box is not a toy for tariff classification purposes because it is not
designed for use as a toy, even though a child may play with it.
[36]
Further
guidance on the meaning of “toy” for tariff classification purposes is found in
Note (D) of the Explanatory Notes relating to the meaning of “other
toys” in heading 95.03:
(D)
Other toys.
[…]
These
include: […]
(vii) Toy balloons and toy
kites.
|
(D)
Les autres jouets.
[…]
Parmi
ceux-ci on peut citer : […]
7) Les ballonnets et les cerfs-volants.
|
[…]
(ix) Toy sports equipment,
whether or not in sets (e.g., golf sets, tennis sets, archery sets, billiard
sets, baseball bats, cricket bats, hockey sticks).
|
[…]
9) Les articles de sport ayant le caractère de
jouets présentés sous forme de panoplies ou isolément (panoplies de golf, de
tennis, de tir à l’arc, de billard, par exemple; battes de base-ball, battes
de cricket, crosses de hockey, etc.).
|
[…]
(xix)
Hoops, skipping ropes, diabolo spools and sticks, spinning and humming tops,
balls (other than those of heading 95.04 or 95.06).
|
[…]
(19) Les cerceaux, diabolos, toupies (même
musicales), cordes à sauter (munies de poignées), balles et ballons (autres
que ceux des nos 95.04 ou 95.06).
|
[37]
Note
(D) does not address directly the classification of a child’s sled or toboggan.
However, the parts of Note (D) quoted above indicate that the word “toy”
includes a play version of sports equipment and other items that may involve
significant physical activity (such as toy kites, hoops and skipping ropes). Generally,
those provisions are consistent with the notion that a child’s toy sled is a
toy for tariff classification purposes.
[38]
The
jurisprudence of the Tribunal in tariff classification cases relating to toys also
is consistent, generally speaking, with the dictionary definition of “toy”. The
leading case is Zellers Inc. v. Canada (Deputy Minister of National Revenue
– M.N.R.), [1998] C.I.T.T. No. 53 (AP-97-057), a tariff classification case
involving “Pillow Buddies”. That product could function as either a toy or a
pillow, but for tariff classification purposes it was found to be a toy based
in part on the following reasoning (at paragraph 41, page 7 of the official
report):
In essence, a toy is something from which one
derives amusement or pleasure. Toys can replicate things or animals or have
forms of their own. They can be of hard or stiff construction, or be soft and
cuddly. They can be designed for manipulation or for display on a shelf. They
can be cute and friendly in presentation, or be fierce and frightening. They
can be designed for rough and tumble use or require careful handling. Their
value is often small in cash terms, although some toys, such as miniature
electric train sets, can easily cost thousands of dollars. This is all to say
that toys cover a world of products, some of which are readily identified as
toys and some of which are recognizable as toys only upon closer inspection.
[39]
In
other cases the Tribunal has recognized, consistently with the Explanatory
Notes referred to above relating to Chapter 95, that amusement or play
value is not necessarily determinative if the product in issue is primarily
designed for some other purpose.
[40]
For
example, Regal Confections Inc. v. Canada (Deputy Minister of
National Revenue - M.N.R.),
[1999]
C.I.T.T. No. 51 (Appeal Nos. AP-98-043, AP-98-044 and AP-98-051), involved the
classification of three products: candy-filled miniature baby bottles, clear
plastic toy banks in the shape of a duck that were intended to be filled with
candy before sale, and blister cards containing a motorized candy dispenser and
two packages of PEZ candy. All of these products had some play value, but the
baby bottles and toy banks were held not to be toys because their play value
was secondary to their principal function as confectionery or containers for
confectionery. The PEZ product was found to be a toy because the dispenser had
play value that was significantly more important than the included
confectionery. The principle that guided the Tribunal in Regal is stated as
follows at paragraph 23 (page 8 of the official report):
Regarding
toys generally, and in light of Zellers, the Tribunal notes that, in Zellers,
the Tribunal referred to the essence of a toy as being amusement. That does
not mean, however, merely because a product provides amusement value, that it
should necessarily be classified as a toy. It is common knowledge that a
child will play for hours with an empty cardboard box, a paper bag or a
stick. Thus, the Tribunal is of the view that amusement alone does not make
an object a toy for the purpose of tariff classification.
|
[41]
Following
Regal, the Tribunal determined in Korhani Canada Inc. v. President
of the Canada Border Services Agency, [2008] C.I.T.T. No. 79 (Appeal No.
AP-2007-008)
that interactive play mats were toys rather than carpets because they were
designed to have significant play value, and there was evidence that children
played with them. The same principles were cited in Franklin Mint Inc. v. Canada (Border
Services Agency), [2006] C.I.T.T. No. 63 (Appeal No.
AP-2004-061), but with a different outcome. Figurines and bell jars depicting
various characters and personalities were held not to be toys. Part of the
result in that case is set out in paragraph 15 (page 4 of the official report),
which reads as follows:
Applying
Rule 1 of the General Rules, the Tribunal finds that the goods cannot be
classified in heading No. 95.03. In light of the Tribunal's jurisprudence,
and in particular Regal, the Tribunal does not consider the goods to
be toys. The Tribunal acknowledges that, although they may have an amusement
value, this factor is not determinative and does not make them toys for the
purpose of tariff classification. "Play value" is
an identifying aspect of toys, and the testimony focussed on the visual
aesthetic value of these items as the pleasure-giving element and, in fact,
de-emphasized any play value that they might have. The goods are not sold
as toys, are usually not played with by children and are not designed to be
manipulated. This is particularly true of the bell jars. Moreover, the
testimony of Franklin's witness indicated that the goods were marketed as
collector's items rather than toys in order to fetch a higher price in the
market.
|
[42]
All of these
cases were cited by the Tribunal in the present case. The Tribunal found as a fact
that the Astra Sled is intended to provide and does provide amusement and play
value for children. Therefore, it would appear to fall within the ordinary
meaning of the word “toy” in accordance with the Explanatory Notes and
the Tribunal’s own jurisprudence. Why then did the Tribunal reach the opposite
conclusion?
[43]
As
I understand the Tribunal’s reasons, its conclusion is based substantially on
paragraph 47 of its reasons, which reads as follows (footnote omitted):
According
to note (D) of the Explanatory Notes to heading No. 95.03, toys are
"... intended essentially for the amusement of persons (children or
adults)." In focussing on the pleasure-giving element, HBC has in fact
omitted that the essential purpose of the good in issue is to enable children
(and adults) to partake in the outdoor activity of sledding or sliding on
snowy hills. It is this same sliding on the snow which, in turn, provides
amusement.
|
[44]
In
other words, the Tribunal concluded that even though the Astra Sled is intended
for amusement, it is not a toy for tariff classification purposes
because the amusement results from using the product for sliding on a snowy
hill. The apparent premise underlying the Tribunal’s reasoning is that
something that is intended to be used for physical activity or exercise,
however amusing the result, cannot be a toy for tariff classification purposes.
[45]
However,
that premise is not based on any provision of the Customs Tariff or any
of the jurisprudence cited by the Tribunal. It is not easily reconcilable with
the parts of Note D from the Explanatory Notes that are quoted above. It
is not supported by any evidence on the record.
[46]
Most
importantly, that premise led the Tribunal to reach a conclusion that is not
consistent with the analytical framework mandated by the Customs Tariff.
Consider this analogy. If tariff heading A includes all four wheeled vehicles
designed for highway travel except vehicles specifically included in another
heading, and tariff heading B includes all cars, then a car cannot be within
tariff heading A even though it is designed for highway travel. And yet, by the
logic of this case, the Tribunal would have concluded that a car is within
tariff heading A. The Tribunal’s reasoning in this case, taken to its logical
conclusion, would deny tariff classification under heading 95.03 to any number
of items that clearly belong there including, as suggested above, play versions
of sports equipment (including balls), toy kites, hoops and skipping ropes.
[47]
The
difficulty is that the Tribunal has interpreted a word in heading 95.03 – the
word “toy” – by reference to a defining characteristic of sports and exercise
equipment. In doing so, the Tribunal addressed the wrong question. The relevant
question is whether, even though the Astra Sled is fairly described by a term
found under heading 95.06 (exercise or sports equipment that is something like
a toboggan or something that is designed to slide on a snowy hill), it should
be classified under heading 95.03 because it is a toy designed to slide
on a snowy hill. Once the Tribunal found as a fact that the Astra Sled is
designed to provide amusement and play value for the children for whose use it
was intended, it could not reasonably conclude that the Astra Sled is anything
but a toy for tariff classification purposes.
[48]
For
these reasons, I conclude that the Tribunal’s decision is not based on a defensible
interpretation and application of the Customs Tariff, and therefore it
is not reasonable. It
follows that the Astra Sled should have been classified under tariff item No.
9503.00.90. I would allow this appeal with costs, set aside the decision of the
Tribunal and the determination of the President, and direct the President to
issue a new determination in accordance with these reasons.
“K. Sharlow”