Emerson Electric Canada Ltd. v. Minister of National Revenue, [1997] 2 CTC 177

No ël J.:

Emerson Electric Canada Limited (the “Applicant”) seeks the judicial review of the decision made by the Minister of National Revenue (the “Minister” or the “Respondent”) on August 11, 1995 confirming the revocation of the remission of duty orders which had been granted to the Applicant.

I BACKGROUND AND FACTS

The Applicant is an importer of woodworking tools for sale to companies such as Sears Canada under the Craftsman trade name. The Applicant does not pay customs duties on imports of tools that are subject to remission orders issued by the Minister pursuant to section 76(1) of the Customs Tariff 1 [1] Division III of the Customs Tariff deals with the remission of customs duties, and the revocation thereof, in the case of machinery and equipment. Sections 75 and 76, which are the applicable provisions in the case at bar, provide as follows:

75. (1) The Minister may establish a list of machinery and equipment that, in the opinion of the Minister, having regard to the criteria mentioned in subsection (3), is not available from production in Canada.

(2) The Minister shall cause a list established under subsection (1) and every addition thereto and deletion therefrom to be published in the Canada Gazette within sixty days after the establishment, addition or deletion, and a list, addition or deletion so published shall be judicially noticed.

(3) For the purpose of subsection (1), the Minister shall have regard to the following criteria:

(a) whether a manufacturer has, within his normal operational framework, the full range of technical and physical capabilities necessary for production in Canada of machinery and equipment reasonably equivalent to the relevant machinery and equipment; and

(b) whether a Canadian manufacturer has so produced machinery and equipment as to demonstrate a production competence reasonably equivalent to that required to produce the relevant machinery and equipment.

76. (1) Where an application for remission is made in accordance with subsection (4) in respect of machinery and equipment not included on the list established pursuant to subsection 75(1) and the Minister is of the opinion, having regard to the criteria mentioned in subsection 75(3), that the machinery and equipment is not available from production in Canada, the Minister may remit in respect of the machinery and equipment

(a) the customs duties that, but for this subsection, would be payable in respect of the machinery and equipment, and

(b) that portion of the excise taxes that, but for this subsection, would be payable in respect of the machinery and equipment in an amount equal to the difference between the amount of the excise taxes payable in respect of the machinery and equipment and the amount of excise taxes that would be payable in respect of the machinery and equipment if the duty paid value used to calculate the excise taxes so payable were the value for duty used to calculate the customs duties so payable,

and, notwithstanding Part I of the Excise Tax Act, the amounts of the customs duties and excise taxes payable in respect of the machinery and equipment shall be reduced in accordance with paragraphs (a) and (b).

(2) Subject to subsection (3), remissions under subsection (1) may be conditional or unconditional and may be granted regardless of whether in a particular case any liability to pay the duties has arisen.

(3) Where the Minister is of the opinion, having regard to the criteria mentioned in subsection 75(3), that machinery and equipment in respect of which remission has been granted under subsection (1) has become available from production in Canada, the Minister may revoke the remission and, notwithstanding the terms and conditions of the remission, it shall cease to apply to machinery and equipment accounted for under section 32 of the Customs Act after the effective date of the revocation.

(4) An application for remission must be accompanied by evidence satisfactory to the Minister that, having regard to the criteria mentioned in subsection 75(3), the machinery and equipment is not available from production in Canada.

The chronology of the relevant facts and events is as follows.

On October 27, 1992 the Minister granted the Applicant a remission of customs duties on imports of 12 inch bandsaws (models 27949 and 27947) under remission order 2079719. On August 16, 1993 the remission order was amended to include 10 inch bandsaws (model 283270-C). On May 21, 1993 the Minister granted the Applicant a remission of customs duties on imports of 12 1/2 inch thickness planers (model 275120C) under remission order 2079795. On March 1, 1995 this remission order was amended to include 12 inch thickness planers (model 275040C). On September 17, 1993 the Minister granted the Applicant a remission of customs duties on imports of 10 inch table saws (models 298721C, 298842C, 272860C and 3400) under remission order 2079794. On December 14, 1993 the Minister granted the Applicant a remission of customs duties on imports of 8 inch and 10 inch drill presses (models 3380 and 280110C) under remission order 2079721.

On May 5, 1995 the Applicant received four facsimiles from Mr. Walter Ballard, Senior Machinery Officer, Revenue Canada, Customs and Excise, advising of the termination of the remission of customs duties effective May 16, 1995 on imports of 8 and 10 inch table saws, 12 and 12 1/2 thickness planers, as well as 10 and 12 inch bandsaws. The facsimiles stated that reasonably equivalent products were being manufactured in Canada by the Respondent General MFG.CO. LTD. (herein “General MFG”), [2] and that this was the reason for the termination in each case? [3]

Upon receiving the facsimiles, Tracey L. Speares, the Applicant’s Customs Manager, telephoned Mr. Ballard to ask him why the remissions were being terminated. Mr. Ballard responded that General MFG had complained to the Machinery Board about the approved remissions. During that same telephone conversation, Ms. Speares informed Mr. Ballard that she was not in agreement with the decision as in her view General MFG’s products were not reasonably equivalent to the products imported by the Applicant. Mr. Ballard advised Ms. Speares that if the Applicant could present a con- vincing case, the decision to terminate the remissions would be reconsidered.

Mr. Ballard also indicated that if Ms. Speares sent him proof of the Applicant’s quote to Sears, he would extent the remission orders to cover shipments for confirmed orders received prior to May 16, 1995. Ms. Speares transmitted to Mr. Ballard the relevant quotes under cover of a letter dated May 23, 1995 and requested an extension of remission orders 2079794 (10 inch table saws), 2079795 (12 inch and 12 1/2 inch thickness planers), 2079719 (10 inch and 12 inch bandsaws) and 2079721 (8 inch and 10 inch drill presses) to December 31, 1995. Mr. Ballard eventually confirmed the grant of these extensions by facsimile dated July 31, 1995.

Meanwhile, on July 13, 1995 Mr. Giggal, Senior Trade Advisor at Livingston Trade Services, sent a submission on behalf of the Applicant to Mr. Ballard, requesting that the remission orders be reinstated for imports of 10 inch table saws, 10 inch drill presses, 12 and 12 1/2 inch thickness planers and 10 and 12 inch bandsaws, on the ground that reasonably equivalent machinery was not being produced by General MFG. In a letter dated August 11, 1995 Mr. Ballard denied the Applicant’s submission thus maintaining the revocation of the remission orders.

These are the facts as they were known to the Applicant at the time when the judicial review application was launched and indeed until April 18, 1996 when the Respondent Minister filed his Application Record. Included in this Record were three yet undisclosed documents which add considerable light to the matter in issue. The first is a memorandum dated May 24, 1995 addressed to the Minister from J.F. Shearer, Chairman of the Machinery and Equipment Advisory Board (“MEAB”) recommending the revocation of a series of remission orders listed in a specified Schedule. The relevant portion states:

There are ... 21 applications listed on Schedule “D” where machinery and equipment reasonably equivalent to the goods previously authorized for remission of duty have since become available from Canadian production. Goods described in SCHEDULES ... “D” are not eligible for duties relief under the Machinery Program and it is therefore recommended that remission be denied or revoked, as the case may be.

I recommend that these lists be authorized by your signature on the attached document and returned to Ms. Diane Tait, Director and Secretary of the Machinery and Equipment Advisory Board.

The second document is dated May 29, 1995 and is signed by the Honourable David Henderson, the then Minister of National Revenue. It reads in part:

The Minister of National Revenue ... pursuant to subsection 76(3) and 79.2(3), hereby establishes that the machinery and equipment enumerated under Column I of Schedule D of the attached lists 1995-07 which were previously authorized for duties relief, have since become available from Canadian production and are terminated effective the date set out in Column VI of Schedule D.

Schedule D is a document dated May 17, 1995 entitled “Applications revoked under subsection 76(3) of the Customs Tariff’. In it were identified inter alia the remission orders pertaining to the Applicant’s imports of 10 inch table saws (remission order 2079794), 12 inch and 12 1/2 inch thickness planers (remission order 2079795), as well as 10 inch and 12 inch bandsaws (remission order 2079719). [4] The final column of Schedule D indicates December 31, 1995 as the effective date of the revocation.

Upon disclosure of these documents the Applicant filed a Supplementary Application Record in which it notes that until receipt of the Minister’s Application Record on April 18, 1996, it had never seen the above described documents despite the fact that its originating Notice of Motion called, pursuant to Rule 1612 of the Federal Court Act, for the production of all documents which the Minister had before him when the decision was made. [5] The Applicant subsequently obtained an order compelling the Minister to produce all relevant documents [6] and granting it leave to file an Amended Originating Notice of Motion and a Supplemental Application Record to address the relevant issues in light of this belated disclosure.

As a result of this disclosure, counsel for the Applicant acknowledged in open Court that the decision to revoke was taken on May 29, 1995 and not on May 5, 1995 as had been previously understood. Nevertheless, the Amended Notice of Motion continues to be directed at “the decision of the Respondent Minister of National Revenue, dated August 11, 1995” whereby the decision to revoke is alleged to have been confirmed. The specific relief sought remains as follows:

a) an order setting aside the decision of the Respondent Minister dated August 11, 1995;

b) an order declaring that the Applicant is eligible for remission duties;

C) an order in the nature of mandamus requiring the Minister to remit duties to the Applicant from May 5, 1995 onward, with interest. [7]

Despite the changes in the factual background resulting from the Minister’s late disclosure, counsel for the Applicant indicated that she was pressing all the arguments raised in support of her application including those raised in her Original Memorandum of Fact and Law, with such changes as are necessary to take into account the newly disclosed facts.

II OBJECTIONS BY THE APPLICANT

Against this background, I understand the Applicant’s objections to the decision in issue to be as follows:

A) Abuse of Discretion

In revoking the remission orders on May 29, 1995 and in confirming this revocation on August 11, 1995, the Minister exceeded his jurisdiction, erred in law and based his decision on an erroneous finding of fact made in a perverse Or capricious manner or without regard to the material before him. [8]

B) Erroneous Finding of Fact

In revoking the remission orders on May 29, 1995 and in confirming this revocation on August 11, 1995, the Minister made an erroneous finding of fact in holding that the Applicant’s goods and those of General MFG were reasonably equivalent. [9]

C) Procedural Fairness

The Minister failed to observe a principle of procedural fairness in not providing the Applicant prior to the revocation of the remission orders an opportunity to make submissions or contradict the evidence and information allegedly demonstrating that machinery and equipment reasonably equivalent to that of the Applicant had become available from Canadian production. [10]

The entire decision making process surrounding the revocation of the remission orders was tainted in that:

-the facsimiles of May 5, 1995 purporting to revoke the remission orders effective May 16, 1995 were sent well before the Minister’s decision of May 29, 1995;

-the facsimile of July 31, 1995 purporting to extend the remission orders until December 31, 1995 was sent well after the Minister’s decision of May 27, 1995 which had revoked the remission orders effective December 31, 1995;

-the Applicant was not aware of the existence of the Minister’s decision of May 29, 1995 nor the MEAB’s recommendation of May 24, 1995 until April 18, 1996. [11]

D) Absence of Delegation of Authority

There is no evidence that Walter Ballard was properly authorized to make the decision of August 11, 1995. [12]

III ANALYSIS AND DECISIONS

Before addressing the Applicant’s first contention, a few brief comments on the statutory scheme are necessary. The first is that in order to hold that the Applicant’s imports were no longer eligible for remission, the Minister had to form an opinion that the products in question had “become available from production in Canada”, pursuant to section 76(3). The second is that in forming that opinion, the Minister had to have regard to the criteria mentioned in section 75(3) namely:

(a) Whether a manufacturer had, within his normal operational framework, the full range of technical and physical capabilities necessary for production in Canada of machinery and equipment reasonably equivalent to the relevant machinery and equipment; and

(b) Whether a Canadian manufacturer has so produced machinery and equipment as to demonstrate a production competence reasonably equivalent to that required to produce the relevant machinery and equipment.

The third is that in light of the use of the word “may” in section 76(1) and 76(3) of the Customs Tariff, the Minister retains the discretion to refuse the grant of a remission or to revoke an existing remission order even where it can be shown in accordance with the foregoing criteria that the machinery and equipment in question is not available from production in Canada.

Bearing this in mind, I now turn to the issues as they have been raised by the Applicant.

(a) Did the Minister exceed his jurisdiction in deciding that machinery and equipment reasonably equivalent to that of the Applicant’s had become available from production in Canada? [13]

The Applicant contends that the Minister abused his jurisdiction by acting arbitrarily. Specifically, the Applicant argues that the Minister had before him at the time when he revoked the orders the very same information as that which was before him when the remission orders of September 17, 1993 and March 1,1995 were granted. Thus the Applicant contends that there was no new evidence from which the Minister could form the opinion that reasonably equivalent machinery and equipment had become available in Canada.

The problem with this initial contention is that whether the relevant information was new or not is irrelevant. The question is whether the Minister had before him information from which he could form the opinion contemplated by section 76(3). In this regard, the record reveals that the Minister had before him inter alia published descriptions of the Applicant’s machinery, a catalogue of machinery produced by General MFG, questionnaire results regarding the production of machinery by General MFG, as well as a record of a visit by Mr. Ballard to the plant operated by General MFG. It is quite clear from a review of this material that the Minister had before him information allowing for a comparison of the respective products, and hence for an opinion being formed as to equivalency.

The Applicant contends that to construe the statutory power so as to allow the Minister to come to a different conclusion on the basis of the same set of facts would be to sanction arbitrariness. I disagree. The fact that the Minister may have come to a different conclusion in the past on the basis of the same facts does not prevent him from taking a different position so long as he does so in good faith with the view of better attaining the statutory objectives. There is no indication that the Minister acted otherwise in this instance.

The Applicant also contends that the decision of the Minister was based on irrelevant considerations. Three such considerations are alleged by reference to Mr. Ballard’s letter of August 11, 1995.

The first pertains to the statement that the decision to revoke “was made primarily to address the concerns of the Canadian manufacturer as well as to more closely conform to the terms of the machinery program”. [14] According to the Applicant, addressing the concerns of a Canadian manufacturer is not a relevant consideration. However, the statement must be read in context. So read, its author was obviously expressing the view that the concerns expressed were found to be valid having regard to the relevant statutory criteria and hence a decision was made to address them. I do not believe that the statement can reasonably be read otherwise.

Secondly, the Applicant takes issue with the following passage from the letter of August 11:

Please note the guidelines governing availability published in Memorandum DBS’1 as follows:

AVAILABILITY

5. Goods are considered to be available from production in Canada if at least one manufacturer has proven capability to manufacturer the goods which, insofar as their range of physical qualities, operational characteristics and efficiency are concerned, is reasonably equivalent to the goods for which relief is sought. Proven capability may be deemed as existing in Canada if:

(a) a manufacturer has, within his normal operational framework, the full range of technical and physical capabilities necessary for production in Canada of machinery and equipment reasonably equivalent to the relevant machinery and equipment; and

(b) a Canadian manufacturer has so produced machinery and equipment as to demonstrate a production competence reasonably equivalent to that required to produce the relevant machinery and equipment.

According to the Applicant, these guidelines published by Revenue Canada reflect extraneous considerations which are not embodied in section 76(3) or 75(3). [15] I do not believe that this is so. First of all, paragraphs (a) and

(b) of the guidelines are verbatim reproductions of the statutory language. Secondly, equivalence in terms of physical qualities, operational characteristics and efficiency are considerations which relate to the goods themselves and which rationally flow from the statutory language; as such, they cannot be labelled as extraneous.

Finally the Applicant argues that “[a]dhering to the terms of the machinery program will ensure equitable treatment to all importers” as the letter states introduces yet another improper consideration. Specifically, the Applicant argues that “equitable treatment to all importers” is not among the statutory criteria to be considered. [16] I disagree. Applying a statutory provision in a consistent fashion by reference to validly established criteria so as to achieve equal treatment amongst those affected is not an improper consideration. Indeed, it is a duty which generally underlies the exercise of discretionary powers.

I therefore come to the conclusion that there is no basis for the allegation that the decisions to revoke the remission orders, and its subsequent confirmation, were reached on the basis of irrelevant considerations. The contention that the Minister exceeded his jurisdiction in deciding as he did must therefore be rejected.

(b) Did the Minister base his decision on an erroneous finding of fact made without regard to the material before him in concluding that machinery and equipment reasonably equivalent to that of the Applicant had become available in Canada? [17]

In support of this contention, the Applicant relies on various facts outlined in a submission addressed to Walter Ballard on July 13, 1995. In it, a consultant acting on behalf of the Applicant outlines why, in his view, the equipment produced by General MFG is not reasonably equivalent to the equipment imported by the Applicant. The “essential differences” were summarized by the author of the report as follows:

10"' Table Saw:

The top “Craftsman” model table saw, imported by Emerson and sold by Sears at the retail level is the model 272860C which has a recommended retail price of $900.00. It has a 1.5 hp 240 volt motor. The closest model manufactured by General is the Model 350-1 which has a hp recommendation of at least 2 hp but is capable of handling 3 hp. The general saw has a recommended retail list price of $2,224.00.

10"' Drill Press:

The 10" “Craftsman” drill press is powered by a 1/3 hp electric motor with 4 drill speeds and has a 2 5/16" spindle travel. The drill press weighs 65 lbs. The recommended retail price is $349.00.

The General drill press is a 15" press with a recommended motor size for “average” work of 1/2 hp. It has six speeds, a spindle travel of 4 1/2" and weights 162 lbs. The recommended retail price is $989.00.

12” Thickness Planer

The enclosed item description page for the “Craftsman” 12" thickness planer notes that the motor size is as large as any available on a non-industrially sold planer. As noted previously, the 1.5 amp rating limits the motor size to 1.5 hp. The key here is “non-industrially sold”. This item carries a recommended retail price of $899.00 and weighs 79 lbs.

The General 12" jointer and planer has a recommended retail price of $5,255.00 and a recommended minimum motor size of 2-3 hp, placing it, in terms of the aforementioned Craftsman description in the “industrially sold” category. It has four knife blades, as opposed to the Craftsman’s two. Net weight is 1,300 lbs.

12

1/2" Thickness Planer

The Craftsman planer has a retail price of $1,199.00 and has similar specifications, apart from the planing width and planing depth to the 12" planer. General does not offer a 12 1/2" model.

10” Bandsaw

The Craftsman bandsaws carry a suggested retail price of $269.00 and $699.00 for the 10" and 12" saws, respectively. Again, motor size is limited to 1.5 hp.

General does not offer a 10" or 12" bandsaw. The smallest model is 15" with a suggested retail price of $1,417.00.

From these differences in specifications and price, the point was made that although the equipment in question performs similar functions, it is not aimed at the same segment of the market. General MFG’s production was said to be aimed at the industrial user whereas the Applicant’s imports were said to be aimed at the amateur woodworker. Based on this, the author of the submission concluded that the machinery produced by General MFG cannot be said to be reasonably equivalent to that imported by the Applicant.

Mr. Ballard in his letter of August 11, 1995 provided the following response: [18]

Your points of comparison between the imported and Canadian-made models are valid but when we tried to accommodate these differences, the results were inconsistent. It was impossible to establish a clear line of demarcation between light-duty hobby and professional or industrial types of machinery.

Mr. Ballard went on to state that when the tools are viewed from a “strictly operative standpoint” they all perform the same function. After noting that price was not a consideration when determining availability from Canadian production, Mr. Ballard concluded that the decision would remain unchanged. Earlier in the letter, Mr. Ballard had emphasized that equivalence in the range of physical qualities, operational characteristics and efficiency were the relevant considerations in ascertaining reasonable equivalence.

The Applicant’s contention is essentially that its imports are intended for a different market and that the product specifications attest to this. However, the fact that a product may be intended for a given segment of the market does not prevent it from reaching other segments of the market. As Mr. Ballard’s letter points out when attempts were made to test the relevant products by reference to light-duty or hobby users and professional or industrial users, it was impossible to establish a clear demarcation. What this indicates is that despite the differences in the specifications of the respective products, the functions which they in fact perform are such that their intermingled use by professional woodworkers and amateurs alike cannot be excluded. Keeping this in mind, it is apparent that the Minister had before him evidence from which he could hold that the products in question were reasonably equivalent.

In addition, it must be borne in mind that by virtue of section 75(3) the relevant attributes which a Canadian manufacturer must possess are:

(1) the full range of technical and physical capabilities necessary for production of reasonably equivalent machinery and equipment (section 75(3)(a)); and

(2) a demonstrable production competence reasonably equivalent to that required to produce the relevant machinery and equipment (section 75(3)(b)).

It follows that even if it could be said that General MFG’s products were not strictly speaking, equivalent, it remained open to the Minister to conclude that the Applicant’s imports were “available from production in Canada” if he was satisfied that General MFG was in a position to produce reasonably equivalent products.

I therefore reject the contention that the Minister ignored the evidence before him or reached his decision on the basis of an erroneous finding of fact.

(c) Did the Minister fail to observe a principle of procedural fairness in not providing the Applicant, prior to the revocation of the remission orders, an opportunity to make submissions or to contradict the evidence allegedly demonstrating that machinery and equipment reasonably equivalent had become available from production in Canada. [19]

The existence and extent of the duty of fairness which was owed to the Applicant by the Minister in this instance depends on whether the decision to revoke the remission orders was a discretionary decision in the nature of policy or legislative action or whether it was the exercise of a statutory power reviewable according to the ordinary principles of administrative law. The authorities are clear that purely ministerial decisions, on broad grounds of public policy, afford little or no procedural protection. [20]

That the decision reached by the Minister in this instance is based on broad grounds of public policy is apparent for the recommendation which was addressed to the Minister by the MEAB and which led to the decision. The full text states:

The Customs Tariff authorizes the Minister of National Revenue to grant relief from customs duties and a portion of the excise taxes in respect of qualifying machinery and equipment that are not available from production in Canada. Relief may be authorized in three ways:

1. Subsection 75(1) provides your authority for the establishment of a list of machinery and equipment that are not available from production in Canada. A list has been established under this authority and is updated periodically; most recently on January 1, 1994.

2. Subsection 76(1) provides your authority for the remission of customs duties and a portion of the excise taxes where an application is made describing goods that are determined to be not available from production in Canada.

3. Subsection 79.2(1) provides your authority for the remission of customs duties and a portion of the excise taxes where an application is made describing goods that are determined to be not available from production in Canada and are used to manufacture original equipment parts for motor vehicles.

It should be noted that subsections 76(3) and 79.2(3) authorize you to revoke remission authorizations established under subsections 76(1) and 79.2(1) when reasonably equivalent machinery and equipment have become available from production in Canada.

The attached SCHEDULE “Al” refers to remission of duties under subsection 76(1) of the Customs Tariff and recommends duties relief on 126 applications covering machinery and equipment considered by the Machinery and Equipment Advisory Board (MEAB) at its meeting of May 16, 1995. The attached SCHEDULE “Cl” refers to remission of duties under subsection 79.2(1) of the Customs Tariff and recommends duties relief on 1 application covering automotive machinery and equipment. The Board is satisfied that these schedules cover machinery and equipment not available from production in Canada and therefore recommends remission of duties.

In addition to these applications, there were 52 applications (SCHEDULES “A2” AND “C2”) where it was considered that reasonably equivalent machinery was available from production in Canada and 0 applications (SCHEDULE “B”) describing replacement parts available from production in Canada. There was also 21 applications listed on Schedule “D” where machinery and equipment reasonably equivalent to the goods previously authorized for remission of duty have since become available from Canadian production. Goods described in SCHEDULES “A2”, “B”, “C2” AND “D” are not eligible for duties relief under the Machinery Program and it is therefore recommended that remission be denied or revoked, as the case may be.

Approximately $350 million in customs duties was remitted under the Machinery Program during the last fiscal year. This list will provide duties relief in the estimated amount of $14 million.

I recommend that these lists be authorized by your signature on the attached document and returned to Ms. Diane Tait, Director and Secretary of the Machinery and Equipment Advisory Board. [21]

Memorandum D8-5-1 published by Revenue Canada [22] indicates that the MEAB has the mandate of advising the Minister regarding the eligibility of machinery and equipment for relief under the Machinery Program. The MEAB is composed of a chairperson (in this instance, Mr. J.F. Shearer), and the Deputy Ministers of Industry Canada, Finance, and National Revenue, or their designated representative. [23]

The policy objective which guides the MEAB in its recommendations and the Minister in its decisions is stated as follows:

The objective of the Machinery Program is to increase efficiency throughout Canadian industry by enabling users to acquire advanced equipment not obtainable from Canadian production, yet affording Canadian manufacturers tariff protection on the machinery and equipment they produce as soon as they are in a position to supply. [24]

The actual grant or revocation of a remission order to a specific business is, in any given case, the means by which this policy is implemented and hence considerations relating to those affected do arise. However, as can be seen, the policy decision itself is based on a much broader range of considerations involving two competing interests namely increased domestic industrial efficiency by providing access to otherwise inaccessible foreign manufactured goods and protection for Canadian manufacturers as and when they are in a position to produce such goods.

The statutory scheme is indicative of the highly discretionary nature of the power exercised by the Minister in making decisions pursuant to Division III of the Customs Tariff. While the Minister must have regard to the two statutory criteria set out in section 75(3) in determining whether a given product is available from production in Canada, [25] he nevertheless retains the discretion to collect the appropriate duties, whether or not the relevant product is eligible for remission. This is clear from the statutory language which provides that the Minister “may remit” and “may revoke” as the case may be. [26]

In this respect, it cannot be seriously argued that the verb “may” as it is used in sections 76(1) and 76(3) can be read as imposing a duty. Within sections 73 to 79 of the Customs Tariff (Division III), the verb “may” is used on nine occasions and the verb “shall” is used on eight occasions. It is quite clear, having regard to the repeated and proximate use of these verbs that they were used in each instance in contradistinction. [27]

What this indicates as a matter of legislative intent is that while the eligibility of products for duty remission must be determined in conformity with specified statutory criteria, the decision to remit duties is left to the discretion of the Minister. In Martineau v. Matsqui Disciplinary Institution Board, Dickson J. (as he then was) enunciated the following principle:

A purely ministerial decision, on broad grounds of public policy, will typically afford the individual no procedural protection, and any attack upon such a decision will have to be founded upon abuse of discretion. Similarly, public bodies exercising legislative functions may not be amenable to judicial supervision. On the other hand, a function that approaches the judicial end of the spectrum will entail substantial procedural safeguards. Between the judicial decisions and those which are discretionary and policy-oriented will be found a myriad decision-making processes with a flexible gradation of procedural fairness through the administrative spectrum. [28]

The decision a quo stands at the non-judicial end of this spectrum. In my view, the ultimate power to remit or to not remit duties is vested in the Minister of Revenue in order to enable him to respond to industrial, trade and fiscal concerns of the moment. [29] Such considerations reach beyond the particular concerns of the Applicant and call for an exercise that is essentially of a legislative or policy nature. In so far as the actual decision of the Minister to revoke the remission orders and to collect the appropriate duties is concerned, the only remedy available to the Applicant is political, not legal.

A different conclusion could be reached on the ancillary question of the eligibility of the Applicant’s imports for remission. As was noted earlier, the Minister must have regard to the criteria set out in section 75(3) in determining which products are available from production in Canada, and hence which products are eligible for remission. Keeping in mind the factors identified by the Supreme Court in Knight v. Indian Head School Division 19 ® [30] in ascertaining the existence and extent of the duty of fairness owed to those affected by a decision, a strong argument can be made in this instance that the Applicant was entitled to state its views before the Minister could hold that its imports were no longer eligible for remission.

However, as it turned out, the Applicant was given this opportunity and did make submissions well before the effective date of the decision. I note as well that these submissions added little if anything to what was known by the Minister when the decision was made on May 29, 1995. At that time, the Minister already had before him the specifications of the relevant products. Furthermore, the question as to whether the Applicant’s imports were reasonably equivalent to General MFG’s production had been an ongoing issue, as between the Applicant and the Minister, ever since the Applicant obtained its first remission order on October 27, 1992. [31] Specifically, the Applicant had identified General MFG as a producer of potentially equivalent products in conjunction with each remission, but had argued successfully that the products were slated for different markets. [32] The Minister accepted this view as a basis for holding that the relevant products were not reasonably equivalent until he reversed his position on May 29, 1995. He was at that time fully aware of the Applicant’s view of the matter but simply ceased to accept it as valid.

The submission that was eventually made by the Applicant merely reiterated this view by reference to specifications which were already known to the Minister. Against this background, it cannot be said that the Minister’s decision was reached without regard to the Applicant’s view of the matter.

With respect to the submission that the entire decision making process was tainted from the beginning, [33] I agree that Mr. Ballard’s communications were less than transparent and are properly the object of the Applicant’s criticisms.

The communication of May 5, 1995 advising the Applicant of the decision to terminate the remission orders effective May 16, 1995 was both wrong and inaccurate. In issuing this communication, Mr. Ballard was plainly presumptuous about the decision which the Minister would eventually take, as well as the timing of that decision. With respect to the communication of July 31, Mr. Ballard was less than forthright in advising the Applicant at that time that the remission orders had been extended to December 31, 1995 in circumstances where the decision of the Minister had been reached on May 29, 1995 and was to take effect as of December 31, 1995 from the onset.

However, Mr. Ballard’s behaviour, as objectionable as it may seem, has not resulted in the type of breech that would warrant overturning the decision of the Minister. As it turns out, Mr. Ballard took for granted the decision of the Minister in his communication of May 5, 1995 and did not advise the Applicant, as he should have, of the time and place of the Minister’s decision when it was actually made. Although the Applicant is properly offended by Mr. Ballard’s behaviour, it was nevertheless informed of the decision that was reached, the reasons therefore and its effective date well before it was to take effect. It therefore cannot be said that the Applicant was thereby prevented from addressing the issues relevant to its position.

Finally, the Applicant argues that Mr. Ballard did not have the authority to confirm the decision of the Minister on August 11, 1995. [34] The position held by Mr. Ballard at the relevant time was that of Senior Machinery Officer, Revenue Canada. The record reveals that he had been the officer with whom the Applicant dealt with throughout the course of obtaining the various remission orders which were subsequently revoked.

The Applicant does not take issue with the authority under which Mr. Ballard represented to Tracey Speares on May 5, 1995 that the decision to revoke would be reconsidered if a convincing case was presented. What the Applicant argues is that upon reviewing the Applicant’s submission, Mr. Ballard did not have the authority to confirm the decision of the Minister as he purported to do in his letter of August 11, 1995. According to the Applicant, the matter had to be submitted again to the Minister himself.

In my view, Mr. Ballard did not purport to exercise the Minister’s discretion anew and the letter in question does not constitute a fresh decision on the question of the Applicant’s entitlement to the remissions. What Mr. Ballard did was to consider the Applicant’s submission and assess whether it contained anything which would warrant having the matter being resubmitted for decision. Based on the undertaking which he had made to Ms. Speares, that presumably would have been the outcome if the Applicant’s submission had revealed facts or arguments which had not been considered when the MEAB made its recommendation and when the Minister reached his decision. However, as was noted earlier, the submission of the Applicant added nothing new to what was already known to the Minister.

There is no doubt that Mr. Ballard was in a position to determine if the submission of the Applicant raised facts or issues which the Minister had not considered when the decision was made. It also seems clear that he had the authority to refer the matter again for decision, depending on whether or not new facts or issues had been raised by the Applicant. That, in my view, is the extent of the authority which Mr. Ballard exercised on August 11, 1995.

For these reasons, the application is dismissed.

Application for judicial review dismissed.