Consumers Glass Company Limited v. Minister of National Revenue, Deputy Minister of National Revenue for Customs and Excise, Andrew a Bradley and George Schoenhofer, [1985] 1 CTC 15

The Associate Chief Justice:—This application for a writ of prohibition or an interim and permanent injunction came on for hearing at Toronto, Ontario, on June 9, 1984. Counsel for the applicant abandoned the relief sought in all but paragraph 1(e) of the notice of motion:

1. For an Order to issue a Writ of Prohibition or, alternatively, for an interim and permanent injunction:

(e) restraining and prohibiting the Respondents herein and their officers, agents collectors, appraisers and representatives from determining or establishing the normal value of soda ash on the basis that it is not in the ordinary course of trade, as provided in section 9(1) of the Anti-dumping Act, for United States exporters to sell soda ash at a price that generates revenue that is less than their fully-absorbed costs of production plus a reasonable profit;

At the conclusion of argument, I indicated my view that the circumstances did not appear to justify such an order, but that after review of the material filed and the written submissions, these brief written reasons would follow.

The applicant’s memorandum sets out the following facts which are substantially uncontradicted.

The applicant, Consumers Glass Company Limited, operates five glasscontainer manufacturing plants in Canada. Commercial grade sodium carbonate, commonly known as soda ash, is an ingredient used in the manufacture of glass, and makes up a substantial proportion of the raw material cost of manufactured glass. Soda ash may be produced synthetically through a chemical reaction known as the Solvay Process, and may also be refined from natural ore deposits of either trona or brine. Soda ash imported from the United States is of the natural variety. The Anti-dumping Tribunal conducted an inquiry respecting the preliminary determination of dumping of soda ash made by the Deputy Minister of National Revenue for Customs and Excise. On July 7, 1983, the Anti-dumping Tribunal made a finding of both present and future material injury. As a result of the Anti-dumping Tribunal’s finding of material injury, a dumping duty equal to the margin of dumping is levied, collected and paid on each shipment of soda ash imported into Canada subsequent to the Tribunal’s finding. The margin of dumping, and the amount of duty levied, collected and paid by Consumers Glass Company Limited, and other importers of soda ash, is equal to the amount by which the normal value exceeds the export price of the soda ash. A normal value and export price is applied by the Department of National Revenue, Customs and Excise, (“the Department’’) in respect of each shipment of soda ash as it is imported into Canada. The export price of goods imported into Canada, generally speaking, is an amount equal to the lesser of, the exporter’s sale price for the goods, and the importer’s purchase price for the goods. The normal value of soda ash, generally speaking, is defined in subsection 9(1) of the Anti-dumping Act. Pursuant to this subsection, the normal value changes from time to time as determined by the Department. If the normal value of any goods cannot be determined under subsection 9(1) by reason that there is not a sufficient number of sales of like goods that comply with all of the terms and conditions that are referred to in that subsection, paragraph 9(5)(b) states that the normal value of the goods may be determined as the aggregate of the costs of production of the goods, and an amount for administrative, selling

and all other costs and for profits, calculated in such manner as may be prescribed by the Regulations. Where sufficient information has not been furnished or is not available to enable the Department to determine the normal value of goods, section 11 states that the normal value shall be determined in such manner as the Minister of National Revenue prescribes. Since early 1982, the listed or posted FOB Green River, Wyoming price of soda ash sold by United States exporters to their United States and Canadian customers has been declining The decline in prices in the industry is due to the effect of the recession on demand for soda ash, and to other factors that have had an effect and will continue to have an effect on the demand for soda ash in the near future. In October of 1983, United States exporters began offering large “temporary voluntary allowances” to companies in the glass container manufacturing industry, including Consumers Glass Company Limited. On or about February 20, 1984, the Department commenced a review of the normal value of soda ash originating in or exported from the United States of America. It is the policy of the Department to initiate such a review in any case in which prices of goods for which a finding of material injury has been made have declined significantly in the country of origin. As part of the investigation, the Department has written to United States exporters, and to importers of soda ash, in order to obtain financial and other information regarding shipments of soda ash imported into Canada. The Department’s approach respecting the review of the normal value of soda ash, as explained by Mr Andrew A Bradley and Mr George J Schoen- hofer, employees of the Department, is that each exporter that is selling soda

ash in the United States at a price that generates revenue that is less than its fully-absorbed costs of production plus a reasonable profit is not selling in the ordinary course of trade” as provided in paragraph 9(l)(b) of the Anti-dumping Act. Fully-absorbed costs of production has been defined by the Department to be variable costs of production, fixed costs including depreciation, selling and administrative costs and all other costs associated with the production of the goods. If any exporters are found to be selling at a price that generates revenue that is less than their fully-absorbed costs of production plus a reasonable profit, the Department has taken the position that the Deputy Minister of National Revenue for Customs and Excise is entitled to determine or establish a normal value for soda ash sold by each of these exporters in accordance with paragraph 9(5)(b) of the Act. The approach being taken by the Department is not confined to soda ash, and this policy is applied to any goods in similar circumstances. If the United States exporters do not provide the information requested by the Department that it considered necessary to carry out the review or if the information provided is insufficient, the Department has taken the position that the normal value would be determined or established in accordance with section 11 of the Act. If a decision is made to determine or establish the normal value of soda ash in accordance with paragraph 9(5)(b) or section 11, its effect will be retroactive to February 20, 1984, which is the commencement date of the current investigation. Consumers Glass Company Limited has taken the position in discussions with the Department that a pricing policy that generates revenue that is less than the fully-absorbed costs of production plus a reasonable profit, but in excess of the variable costs of production is carrying on business in the ordinary course of trade. The applicant has taken the position that the Department must therefore determine normal value in accordance with subsection 9(1) of the Act, and is not entitled to determine or establish normal value in accordance with paragraph 9(5)(b) or section 11 of the Act. The applicant has also informed the Department that the approach the Department is taking in respect of the determination of normal value will have a severe adverse economic effect on Consumers Glass Company Limited and the Canadian economy in general.

The relevant sections of the Anti-dumping Act, RSC 1970, c A-15, and amendments thereto: are:

9. Determination of normal value of goods.—

(1) Subject to subsection (5), the normal value of any goods is the price of like goods when sold by the exporter

(a) to purchasers with whom, at the time of the sale of the like goods, the exporter is not associated,

(b) in the ordinary course of trade for home consumption under competitive conditions,

(c) during such period, in relation to the time of the sale of the goods to the importer in Canada, as may be prescribed in the regulations, and

(d) at the place which the goods were shipped directly to Canada or, if the goods have not been shipped to Canada, at the place from which the goods would be shipped directly to Canada under normal conditions of trade,

as adjusted by allowances calculated in the manner prescribed by the regulations to reflect the differences in the terms and conditions of sale, in taxation and other differences relating to price comparability between the sale of the goods to the importer in Canada and the sales by the exporter of the like goods but with no other allowances affecting price comparability whatever.

[...]

(5) Where normal value cannot be determined under subsection (1). — Where the normal value of any goods cannot be determined under subsection (1) by reason that there was not a sufficient number of sales of like goods that comply with all the terms and conditions that are referred to in that subsection or that are applicable by virtue of subsection (2), the normal value of the goods shall be determined, at the option of the Deputy Minister in any case or class of cases, as

(b) the aggregate of

(i) the cost of production of the goods, and

(ii) an amount for administrative, selling and all other costs and for profits,

calculated in such manner as may be prescribed by the regulations.

11. Where information not available. — Where, in the opinion of the Deputy Minister, sufficient information has not been furnished or is not available to enable the determination of normal value or export price under section 9 or 10, the normal value or export price, as the case may be, shall be determined in such manner as the Minister prescribes.

It seems to me to be beyond question that the circumstances of this case are precisely those contemplated by Parliament in the mandate given these respondents in the Anti-dumping Act. Furthermore, in the discharge of this mandate, the respondents are engaged in a purely administrative responsibility, at least at this stage. To the extent that their statutory authority will carry them into determinations of a judicial nature, it would be inappropriate for this Court to interfere and almost certainly beyond our jurisdiction to do so. In respect to the administrative responsibilities presently in issue, the applicant obviously has the onus of persuading me that its grievance establishes an excess of jurisdiction or breach of duty on the part of the respondents to deal fairly with the applicant’s case.

As I understand it, the applicant’s submission arises from the concern that if the respondents proceed to make determinations of sales “in the ordinary course of trade” in the manner anticipated, the result will be disadvantageous if not unjust to the applicant. Surely the obvious flaw in the argument is that such adverse consequences are to be anticipated. This apprehended prejudice certainly should be the subject of argument both on matters of fact and law as the ap- propriate investigation or hearings unfold. I also accept the submission of the respondents that the applicant’s premise, if it is to be accepted by the Court, must be supported by expert evidence, none of which is before me. Except upon the clearest grounds, such determinations must be left to the duly authorized tribunal. I need not add that, in my opinion, the statute provides ample mechanisms for review and appeal and that in any event the Board’s proceedings are subject to comprehensive review in the Federal Court of Appeal, in accordance with section 28 of the Federal Court Act.

I must also emphasize that the relief sought is discretionary in nature. To the extent that the Board has made a finding that the dumping of soda ash into Canada is causing and is likely to cause, material injury to the production in Canada of like goods, that decision is purely administrative in nature and certainly one that falls within the authority of the Board. The applicant seeks to persuade me that the respondents are in the process of losing jurisdiction because of their intention to act upon a wrong premise in making the determination which is at the centre of this dispute. It would be most extraordinary for any Court to interfere with duly authorized responsibilities of the respondents on the basis of such speculation. In any event, there is nothing to indicate that the Board will not give full and proper consideration to all such submissions by the applicant. Furthermore, there is nothing to persuade me that if the applicant’s fears do become a reality, that the Board is not competent to address the question of compensation. There is simply no basis for an order of this Court interfering with the respondents’ exercise of its statutory responsibilities.

This application must be dismissed with costs.