Dockets: A-189-14
A-195-14
Citation:
2015 FCA 157
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CORAM:
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GAUTHIER J.A.
RYER J.A.
NEAR J.A.
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Docket:A-189-14
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BETWEEN:
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ABB INC. and
CG POWER
SYSTEMS CANADA INC.
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Applicants
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and
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HYUNDAI HEAVY
INDUSTRIES CO., LTD., HYUNDAI CANADA INC., HYOSUNG CORPORATION, HICO AMERICA
SALES AND TECHNOLOGY, INC., and REMINGTON SALES CO. and
ATTORNEY
GENERAL OF CANADA
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Respondents
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Docket:A-195-14
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AND BETWEEN:
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HYUNDAI HEAVY
INDUSTRIES CO., LTD. and HYUNDAI CANADA INC.
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Applicants
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and
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ABB INC., CG
POWER SYSTEMS CANADA INC., REMINGTON SALES CO., HYOSUNG CORPORATION, HICO
AMERICA SALES AND TECHNOLOGY, INC., and
ATTORNEY
GENERAL OF CANADA
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Respondents
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REASONS FOR
JUDGMENT
GAUTHIER J.A.
[1]
On March 6, 2014, the President of the Canada
Border Services Agency (CBSA) made a final determination of dumping under
paragraph 41(1)(a) of the Special Import Measures Act, R.S.C.
1985, c. S-15 [SIMA] in relation to certain power transformers imported from
the Republic of Korea.
[2]
This was the second time the President had to
make such a determination in respect of the relevant power transformers. The first
decision, dated October 22, 2012, was the subject of an application for
judicial review by Hyundai Heavy Industries Co., Ltd (HHI) and Hyundai Canada
Inc. (HC). In the result, this Court set aside this first Final Determination
(FD) and referred the matter back to the President for redetermination in
accordance with this Court’s reasons: Hyundai Heavy Industries Co., Ltd v.
ABB Inc., 2013 FCA 284 [HHI v. ABB].
[3]
The primary issue before our Court in HHI v.
ABB was the amount of profit that the President used in determining the
export price of the power transformers for the purposes of section 25 of SIMA.
More particularly, the Applicants contested his inclusion of profit data from
ABB Inc. (ABB) and CG Power Systems Canada Inc. (CG) in this calculation on the
basis that these parties were manufacturers and, as such, were not at the same
or substantially the same level of trade as HC.
[4]
Two applications for judicial review were filed
in respect of the President’s March 6, 2014 redetermination, the New Final
Determination of dumping (NFD): ABB and CG filed an application in A-189-14, and
HHI and HC filed an application in A-195-14. The applications were heard
consecutively.
[5]
As the applications involve the same
administrative record and concern related issues, I will deal with both of them
in these reasons, a copy of which shall be placed in each file (A-189-14 and
A-195-14).
[6]
For the following reasons, I propose to dismiss
both applications.
I.
Background
[7]
ABB and CG manufacture power transformers in
Canada. ABB also sells power transformers that it imports from an associated
foreign company. On March 2, 2012, ABB and CG jointly brought a complaint
alleging that “Power Transformers originating in or
exported from Korea are being dumped into Canada, and have caused and are
threatening to cause material injury to the production in Canada of Like Goods”
(A-195-14, A.R. Vol 1, Tab 6, p. 100).
[8]
As noted earlier, following an investigation, on
October 22, 2012, the President made an affirmative final determination of
dumping under paragraph 41(1)(a) of SIMA, concluding that HHI’s goods
had been dumped at a margin of 15.5% (expressed as a percentage of the export
price).
[9]
On November 20, 2012, the Canadian International
Trade Tribunal (CITT) issued a finding under subsection 43(1) of SIMA that this
dumping was causing material injury to the Canadian domestic industry.
[10]
After this Court set aside the FD in HHI v.
ABB, the President reopened the investigation and issued the decision under
review. In the NFD, the President found that HHI’s goods had been dumped at a
margin of 9.1% (expressed as a percentage of the export price).
[11]
At paragraph 3 of HHI v. ABB, this Court
explained what constitutes dumping:
[3] Goods imported into Canada are “dumped”
(as defined in subsection 2(1) of SIMA) when the normal value of the goods
exceeds the export price of such goods. The margin of dumping is defined in
subsection 2(1) of SIMA as the difference between these two amounts. The normal
value is determined in accordance with the provisions of sections 15 to 23.1
and 30 of SIMA and the export price is determined in accordance with the
provisions of sections 24 to 28 and 30 of SIMA.
[12]
In this case, the normal value of the goods was
determined pursuant to subsection 19(b) of SIMA. This value is based on
an aggregate of the costs of production, a reasonable amount of administrative,
selling, and other costs, and a reasonable amount for profit. None of the
Applicants took issue with the normal value used by the President (nor did they
in HHI v. ABB). Rather, it is the export price of the goods that is at
issue.
[13]
In both applications, the parties argue that the
President erred in his calculation of the export price using the deductive
method set out in section 25 of SIMA. It is therefore worthwhile to define the
term “deductive export price” and outline its
calculation.
[14]
When, as here, the relevant transactions involve
an importer affiliated with the exporter and the export price – normally
calculated under section 24 of SIMA – is deemed “unreliable” under paragraph
25(1)(b) of SIMA, the margin of dumping will be calculated using a deductive export price pursuant to paragraph 25(1)(c),
(d), or (e). In this case, the President used paragraph 25(1)(d)
of SIMA, which applies to goods which are imported for the purpose of assembly,
packaging or other further manufacture or for incorporation into other goods in
Canada. The parties do not dispute that it was appropriate to do so.
[15]
Pursuant to paragraph 25(1)(d), the
deductive export price is the price of the goods as assembled, packaged or
otherwise further manufactured, or of the goods into which the imported goods
have been incorporated, less all costs incurred in preparing, shipping,
exporting and re-selling the goods to Canada including duties, and, as
stipulated at subparagraph 25(1)(d)(i), an amount for profit on the sale
of the assembled, packaged or otherwise further manufactured goods.
[16]
Sections 21 and 22 of the Special Import
Measures Regulations, SOR/84-927 [SIMR] deal with how to calculate profit
for the purpose of subparagraph 25(1)(d)(i). Section 21 provides that
the expression “an amount for profit” means “the amount of profit that would be made in the ordinary
course of trade on the sale of the goods”. Subsection 22(a),
which was applied by the President in the present case, provides that this
amount is “the amount of profit that generally results
from sales of like goods in Canada by vendors who are at the same or
substantially the same trade level” (in French: «
au même niveau ou
presque du circuit de distribution ») as the importer to arm’s length
purchasers in Canada; otherwise put, the average profit margin on sales in
Canada by such vendors.
[17]
In application A-195-14, HHI and HC ask this
Court to set aside the President’s NFD and direct that a new margin of dumping
be calculated on the basis of the existing administrative record (with no
further investigation) and on the basis that the “the
same or substantially the same trade level” excludes ABB and CG’s profit
data as Canadian manufacturers of like goods.
[18]
In application A-189-14, ABB and CG ask this
Court to set aside the President’s NFD and direct that a new margin of dumping
be calculated based on a deductive export price from which the profit data of
HC and HICO America Sales and Technology Inc. [HICO] is excluded, as both are
associated with the Korean manufacturer from which they import goods (HICO
imports goods from a Korean exporter also found to have dumped power
transformers under paragraph 41(1)(a) of SIMA in the NFD).
[19]
This means that if both applications were
allowed, the President would have insufficient data from which to calculate the
amount of profit under subparagraph 25(1)(d)(i) and therefore have to
proceed on the basis of section 29 of SIMA. This section allows the amount for
profit to be determined in the manner specified by the Minister.
[20]
That said, I will now proceed to examine the
issues raised in each application.
[21]
In their written submissions, HHI and HC allege
three grounds of review:
i.
That the President failed to comply with this
Court’s directions in HHI v. ABB;
ii.
That the President’s decision was substantively
unreasonable due to other errors in the NFD (see paras. 55-71 of HHI and HC’s
memorandum); and
iii.
That the President breached procedural fairness
by ignoring obviously crucial evidence and by demonstrating a reasonable
apprehension of bias.
[22]
At the hearing, HHI and HC confirmed that they
would only be relying on their allegations regarding non-compliance with
directions and bias, which they addressed during their oral arguments. I will
therefore only deal with those issues.
[23]
The parties agree that the President is entitled
to deference in respect of questions of mixed fact and law, and generally on
questions involving the interpretation of its home statute (SIMA) and the
regulations adopted thereunder (SIMR).
[24]
I agree that reasonableness applies to questions
of mixed fact and law and presumptively applies to questions of law involving
the interpretation of the decision-maker’s home statute, unless the relevant
question falls into one of the categories to which correctness continues to
apply: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at
paras. 54-61; Alberta (Information and Privacy Commissioner) v. Alberta
Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at paras. 30 and
34; Agraira v. Canada (Public Safety and Emergency Preparedness), 2013
SCC 36, [2013] 2 S.C.R. 559 at para. 50. None of these exceptions are relevant
here.
[25]
The determination of whether, in the context of
a particular investigation, particular vendors fall within the same or
substantially the same trade level as an importer is a question of mixed fact
and law. Even if the interpretation of the words “same
or substantially the same trade level” could be considered an extricable
question of law, it would fall squarely within the President’s expertise in
interpreting the SIMA and SIMR.
[26]
However, HHI and HC argue that in this case, the
correctness standard somehow applies because, as a matter of law, the President
was bound to do what he was directed to do by this Court in HHI v. ABB.
[27]
There is no doubt that in cases where the
directions given by the Court are directions as to a question of law, the
decision-maker is bound by stare decisis to apply the law as found by the Court. On the other hand, when
the matter on which the Court directs the decision-maker is one of mixed fact
and law, the fact that directions are given cannot modify the standard of
review applicable to such questions if the decision-maker otherwise did what it
was directed to do by the Court. This is especially so here, where a new
investigation was carried out and the NFD was made on the basis of a different
record containing additional profit data.
A.
Compliance with this Court’s directions
[28]
HHI and HC submit that the President erred by
failing to follow this Court’s instructions in HHI v. ABB, for the
following reasons:
i.
He simply re-applied the rationale rejected by
this Court, finding that ABB, CG, HC and HICO were at the same level of trade
based on their similar selling functions;
ii.
He failed to consider the double counting of
manufacturing profits in determining whether ABB and CG were at the same level
of trade as HC and HHI; and
iii.
He failed to exclude ABB and CG’s profits in
calculating the applicable average profit margin after determining that no
adjustment to account for their manufacturing profit was possible under SIMA or
SIMR.
[29]
In Canada (Commissioner of Competition) v.
Superior Propane Inc., 2003 FCA 53, [2003] 3 F.C. 529 [Superior],
this Court adopted a five-step analytical approach to determine whether the
decision-maker, in its redetermination decision, had followed the directions of
the Court (Superior at para. 10). In the prior decision, the Court
concluded that the Competition Tribunal had erred in law in its interpretation
of section 96 of the Competition Act, R.S.C.1985, c. C-34 (Superior
at paras. 16 and 18) and provided the Competition Tribunal detailed and
somewhat complex instructions as to how to proceed on redetermination. The
matter before us is simpler. I will therefore focus on our Court’s conclusions
and directions and what the President did as a result of those directions.
(1)
The Court’s conclusions and directions
[30]
In the FD, the President gave no explanation for
using the profit data of two Canadian manufacturers (ABB and CG), save for two
sentences in Appendix 2 of the decision (see para. 12 of HHI v. ABB).
The Court noted these were essentially excerpted from a passage in the SIMA
Handbook.
[31]
It is worth reproducing the full passage of the
SIMA Handbook quoted by the Court at paragraph 13 of HHI v. ABB, for it
provides context for the Court’s findings:
Trade Level
In considering the terms “same” or
“substantially the same trade level” a firm should not arbitrarily be dismissed
from the data base simply because of its designation, i.e. distributor or
manufacturer. Rather, care should be taken to examine the functions
performed in that industry, particularly those relating to sales and
distribution. In most industries, it would be appropriate to utilize data from
both manufacturers and importers in that their sales and distribution functions
will likely have significant similarities. It is recognized that, in some
cases, it may be reasonable for firms at different trade levels to anticipate
different profit levels. For instance, a manufacturer who performs its own
distribution function, (as opposed to a distributor who purchases from the
manufacturer and then resells the goods), could reasonably expect a larger
profit margin than a distributor since part of the profit could reasonably be
attributed to the manufacturing operation.
Nevertheless, it may still be appropriate to
include such a manufacturer and hold that the manufacturer is at substantially
the same trade level as a distributor/importer based on the actual functions
performed. Companies in Canada are generally considered to be at “substantially
the same trade level” when they sell to the same customers and compete directly
in the marketplace for the same customers. In any case where the above trade
level considerations exist, the file should clearly explain the rationale for
the decision.
[Emphasis added]
[32]
The reasons of this Court in HHI v. ABB
are, in my view, very much in line with the Handbook, which reflects the
approach that has been followed by the CBSA for many years.
[33]
The Court set aside the FD because the President
had not sufficiently explained why, in this particular case, it would be
appropriate to include the two Canadian manufacturers who submitted the
complaint in determining the amount of profit of the importer-distributor for
which the export price is being determined.
[34]
The cursory reference to the fact that these
manufacturers sold to the same end-users was found to be insufficient.
[35]
As I read HHI v. ABB, it was not clear
from the record before the Court that care had been taken in determining
whether the amount for profit of a company that both manufactures and sells to
end-users should be used to determine the amount for profit of a company that
only imports and sells to end-users (see para. 17 of HHI v. ABB).
[36]
The Court also mentions that there was no
indication that ABB and CG’s profit data had been adjusted to account for the
profits attributable to their manufacturing function, nor was any rationale offered
for the absence of such an adjustment (see para. 20 of HHI v. ABB).
Further explanation was required, because on the particular facts before the
Court (see para. 22 of HHI v. ABB) it was necessary for the President to
at least consider the issue of double-counting manufacturing profits (see para.
21 of HHI v. ABB).
[37]
However, there is no indication in HHI v. ABB
as to whether the Court was asked to determine if indeed the statutory scheme
allowed for any adjustment to the profit data provided by a party (see para. 20
of HHI v. ABB). The Court did not consider what should be done if no
adjustment could be made.
[38]
The Court therefore directed the President to
take care in determining whether or not Canadian manufacturers were at
substantially the same level of trade as the subject importer-distributor, and
if so, to provide a further explanation in support of this conclusion, given the
potential issues identified by the Court.
[39]
I do not agree with HHI and HC that this Court
directed a specific result in any respect, considering that the President had
to re-open the investigation and make a new final determination on the basis of
evidence that was different than what was before the Court.
(2)
Did the President comply with the Court’s
directions?
[40]
Having carefully examined the record, including
the confidential memoranda to which the parties referred, the submissions of
the parties to the President, and the NFD itself, I am satisfied that care was
indeed taken in determining whether it was appropriate for the President to use
the profit data of the Canadian manufacturers in accordance with paragraph 17
of the HHI v. ABB.
[41]
It is evident that the President found the fact
that both Canadian manufacturers were distributing their product themselves to
the same end-users as the importer-distributor to be an important
consideration. In my view, he could not avoid placing importance on this
consideration given the wording of section 22 of SIMR itself, which focuses on
the level of trade (in French: « le niveau du circuit
de distribution »), i.e. to
whom one is selling.
[42]
I do not agree with HHI and HC that the
President failed to provide the further explanation required by the Court as to
why, in this particular case and in the circumstances following the
reinvestigation, it was appropriate to include this data.
[43]
At paragraphs 78 to 89 of the NFD (and further
discussed at pages 25 – 30 of Appendix 2 to the NFD), the President explains,
among other things: i) that the power transformer industry in Canada is unique;
ii) that the relevant power transformers are capital goods that are acquired
through a procurement process by electrical utilities and large industrial
customers; iii) that the nature of the power transformers industry is such that
there are no independent distributors of large power transformers like those
under investigation; iv) that manufacturers do not produce such transformers
unless a sale is made (e.g., manufacturers and distributors hold no inventory);
and v) that for end-users/purchasers in Canada, all suppliers of power
transformers appear to be at the same trade level, as the suppliers are all
fully integrated from design and production to delivery, installation, and
warranty work.
[44]
With respect to the need to make adjustments to
the profit of the two Canadian manufacturers included in the calculations, or
to at least provide the rationale as to why no such adjustments were made, the
President explains that SIMR does not provide for an adjustment to account for variance
in the level of profit expected by vendors that are otherwise at “substantially the same trade level.” In contrast, adjustments
are permitted in respect of the normal value and only within the parameters of
section 9 of SIMR.
[45]
The President also explains why, as a matter of
principle, the CBSA could not make an adjustment to the amounts for profit actually
reported by ABB and CG on their sales of like goods in Canada (para. 87 of the
NFD).
[46]
The President did consider the allegation of
double-counting: see p. 28 of Appendix 2 to the NFD, where he again notes the
distinction between the concepts of normal value and export price and the
absence of provisions that deal with trade-level variations in respect of the
latter.
[47]
Finally, the President explains that it is the
additional data collected in the second investigation that reduced the amount
of profit used to calculate the deductive export price (8.69% as opposed to
12.55%, see para. 89 of the NFD). In fact, it is clear from the record that
the additional data upon which the President relied in the NFD materially
changed the facts described in paragraph 22 of HHI v. ABB.
[48]
I also note that the confidential information to
which the parties referred during the hearing before us suggests that in this
particular industry, the general assumption that a manufacturer-distributor
could expect a larger margin of profit than an importer-distributor may not
apply. In addition to the wide disparity in the profit margins of the Canadian
manufacturers at issue, the record before us indicates that, in some cases, the
profit margin of an importer-distributor could exceed that of a
manufacturer-distributor (A-195-14, A.R. Vol 3, Tab 1 at p. 553; A-195-14 Confidential
Compendium of the Respondents, Tab 2D).
[49]
I am satisfied that the President complied with
the Court’s directions in HHI v. ABB. The President did not just pay
lip service to the directions of the Court, nor did he defy its directions (Superior
at para. 59). I have not been persuaded that, on the record before us and
considering the further explanations given by the President, that his trade
level determination is unreasonable because he failed to take into account the
Court’s directions. In fact, considering all of the profit data he used, it
appears to me that his methodology smoothed the outliers in the calculation,
reaching an outcome that is justifiable on the facts and the law.
B.
Bias
[50]
HHI and HC assert that there is a reasonable
apprehension of bias on the part of the President in this file. This is a new
issue. It could not have been raised before the President given that it is
based on some of his findings in the NFD, as well as comments in some
confidential documentation provided to the Applicants thereafter. The Court
must thus assess whether there was indeed a breach of procedural fairness that
would justify its intervention.
[51]
There is no dispute as to the applicable test to
determine whether a reasonable apprehension of bias exists. It is whether a
reasonable and informed person, viewing the matter realistically and
practically, and having thought the matter through, would conclude that it is
more likely than not that the decision-maker, whether consciously or
unconsciously, would not decide fairly: R. v. S.(R.D.), [1997] 3 S.C.R.
484 at para. 111 [S.(R.D.)]; Baker v. Canada (Minister of Citizenship
and Immigration), [1999] 2 S.C.R. 817 at para 46.
[52]
The Applicants first argue that the President’s
refusal to follow the Court’s directions in HHI v. ABB, including his
failure to take into account the issue of double-counting of manufacturing
profits, evince a closed mind and raises a reasonable apprehension of bias (paras.
86, 97 and 98 of HHI and HC’s memorandum, A-195-14 A.R., Vol. 8).
[53]
Also, according to HHI and HC, bias is evident
from the President’s assertion at paragraph 80 of the NFD that the objective of
section 22 is to ensure that “the associated importer
is earning an amount for profit that is representative of the amount for profit
earned in the Canadian market in order to eliminate possible secondary dumping
and its injurious effects on Canadian producers.” The Applicants note that
only the CITT can determine whether or not particular dumping is causing injury
to domestic producers (see paragraph 9 above), and that dumping does not
necessarily cause injury to domestic producers (paras. 87-90 of HHI and HC’s
memorandum, A-195-14 A.R., Vol. 8).
[54]
HHI and HC also rely on two confidential
memoranda which, according to them, further indicate bias. The first is a
memorandum sent from the Assistant Director General of the Anti-dumping and
Countervailing Directorate of the CBSA to the CBSA’s Vice President. Under the
heading “Environmental Scan”, the Assistant
Director makes comments on the expected public reaction to the NFD. The Applicants
allege that these comments support the conclusion that the President sought to
unlawfully benefit the domestic industry. HHI and HC further submit that
another passage in this memo shows the President’s eagerness to defend the NFD
– an improperly adversarial attitude (Canada (Attorney General) v. Quadrini,
2010 FCA 246 at para. 16; Northwestern Utilities Ltd. and al. v. Edmonton,
[1979] 1 S.C.R. 684 at p. 709). Finally, HHI and HC argue that bias is evident
from the confidential memorandum by the Assistant Manager of the Anti-dumping
and Countervailing Directorate summarising this Court’s decision in HHI v.
ABB.
[55]
The onus of establishing a reasonable
apprehension of bias lies with the person who alleges it, and the threshold for
perceived bias is high (S.(R.D.) at paras. 113-14).
[56]
Considering that I am satisfied that the
President followed the Court’s directions and that I have not been persuaded
that his determination in respect of the trade level is unreasonable in light
of HHI v. ABB, it is clear that the main allegations upon which HHI and
HC rely cannot support a conclusion of reasonable apprehension of bias.
[57]
None of the other allegations described above
meet the high threshold described above. Each is premised on a selective and acontextual
reading of the relevant documents and draws improper inferences from these
documents.
C.
Conclusion
[58]
In light of the foregoing, in my view, this
application should be dismissed with costs.
[59]
ABB and CG raise two grounds of review. First,
they allege that the President erred in his calculation of the deductive export
price by using the profit data of HC and HICO. Second, they allege that the
President erred in failing to find targeted dumping. Both issues involve
questions of mixed fact and law and are subject to the standard of
reasonableness. Here again, even if the interpretation of section 22 of SIMR
could be considered an extricable question of law, it is not disputed that this
would also be reviewed on the reasonableness standard.
[60]
As a preliminary argument, HHI and HC assert
that ABB and CG are barred by issue estoppel and stare decisis from raising the arguments listed above because HHI v. ABB
is a prior, final judicial decision involving the same issues and ABB and CG failed
to contest the FD on the bases they now raise.
[61]
Although this preliminary argument was discussed
at length at the hearing, and such considerations are indeed important to avoid
a series of judicial reviews dealing with arguments that should have been
raised at the earliest opportunity, I do not find it appropriate to decide this
application on the basis of a finality doctrine, as it is clear that in any
event neither of the applicants’ arguments can succeed on the merits. Indeed,
I agree with HHI and HC that ABB and CG have not shown that the President made
a reviewable error in rejecting their arguments on those issues.
A.
Calculation of the deductive export price
[62]
Having relied heavily on the SIMA Handbook in
the context of file A-195-14 in support of the President’s inclusion of their
profits in his calculation of the deductive export price, ABB and CG candidly acknowledged
that their argument in this application, as described in their memorandum, runs
very clearly against the practice followed for many years by the CBSA and
described in the SIMA Handbook at section 5.10.2.3. The Handbook expressly
indicates that “information from the importer for whom
export price is being determined should be included”, as well as “information
from firms importing from related exporters.”
[63]
At the hearing, ABB and CG confirmed that they
only take issue with the inclusion of HC and HICO’s profit data because of the
special circumstances here, where the profit data of HC and HICO takes on a
greater importance in the overall calculation of the average profit margin of
vendors at the same or substantially the same trade level. It is thus a
special case where the SIMA Handbook should not be followed. They note that this
would be especially crucial if this Court were to exclude profit data from ABB
and CG as requested in file A-195-14.
[64]
ABB and CG say that in such circumstances, the
fact that HC and HICO do not have an arm’s-length relationship with the
exporter (and thus do not purchase goods in the ordinary course of trade) and
that the export prices for the goods they imported were deemed unreliable under
paragraph 25(1)(b), it would contrary to the purpose of section 25 of
SIMA to include profit data from these importers through section 22 of SIMR. In
fact, according to ABB and CG, this would promote, rather than deter, hidden
dumping.
[65]
The President refers to this issue at pages 25
to 27 of Appendix 2 to the NFD under the general title “Methodology
Used to Determine the Amount for Profit for Purposes of Section 25 Export
Price Calculations”, where he also deals with HHI and HC’s argument that
manufacturer-distributor data should not be considered.
[66]
Indeed, although based on a different rationale,
ABB and CG’s argument mirrors the argument by HHI and HC in file A-195-14, instead
taking issue with vendors at the opposite end of the spectrum of what could
constitute “substantially the same trade level.”
[67]
In fact, in my view this reinforces the propriety
of the methodology set out in SIMA Handbook. The Handbook notes that the
amount for profit calculated pursuant to section 22 of SIMR will not be “a precise figure that can be established conclusively”,
considering that there will be variance in the actual profits of each
individual vendor and that the level of profit may fluctuate greatly. Thus, the
Handbook suggests that a representative profit is best obtained from as broad a
data base as possible, adopting a liberal interpretation of the “same and substantially the same trade level” (A.R.
Vol. 1, p. 129). One must also not lose sight of the fact that the President
must make his final determination within a very limited time frame. Using this
practical approach appears to ensure that the average figure will not favour
one party or another.
[68]
Although the applicants argue otherwise, in my
view, the language of SIMA and SIMR further supports the propriety of the
President’s methodology. Section 22 of SIMR focuses on the profits made on
sales to “purchasers in Canada who are not associated
with the vendor.” There is no requirement to consider prior
transactions. Paragraph 25(1)(b) of SIMA deals with the unreliability
of the export price (the price at which HC and HICO purchased their power
transformers). Again, this is quite different than the price at which HC and HICO
sold their transformers to non-associated Canadian purchasers.
[69]
I have not been persuaded that the President’s interpretation
of section 22 of SIMR and his decision to use the profit data of HC and HICO is
unreasonable.
B.
Targeted dumping
[70]
ABB and CG assert that the President’s failure
to find targeted dumping was unreasonable because he provided either no
explanation, or provided an insufficient explanation for declining to apply subsection
30.2(2) of SIMA to determine the margin of dumping when there is evidence targeted
dumping, which the applicants submit is the case. I cannot agree.
[71]
Targeted dumping occurs when exporters sell
goods at below the normal value to a subset of purchasers, regions, or for a
subset of time periods. The magnitude of such dumping is therefore disguised
by the remaining sales.
[72]
The issue of targeted dumping raised in ABB and
CG’s complaint was re-examined in the course of the reconsideration process. It
was noted that the power transformer industry is unique and that this type of power
transformer can vary greatly in size and value, and that even within the same
size of power transformer there can be significant variations in costs
depending on the customer’s requirements. After a new targeted dumping analysis
was conducted, the CBSA concluded that there was no evidence of targeted
dumping: see the memo summarising this Court’s decision in HHI v. ABB at
A.R. Vol 6, Tab 8O.
[73]
The margin of dumping is generally calculated,
as it was in this case, under subsection 30.2(1) of SIMA. This subsection provides
that subject to subsection 30.2(2), the margin of dumping is the greater of
either zero or the amount determined by subtracting the weighted average export
price of the goods from the weighted average normal value of the goods. Subsection
30.2(2) provides a method by which the President may calculate the
margin of dumping in the event of targeted dumping.
[74]
The President is not mandated to apply subsection
30.2(2). Rather, he may do so if, in his opinion, significant variations in price
exist. This last determination is a highly fact-intensive exercise. Although
variations in individual transaction prices were identified, they were not
viewed as significant, nor was the President satisfied that they constituted
evidence of targeted dumping (see p. 31 of Appendix 2 to the NFD). Subsection 30.2(2)
was not engaged.
[75]
I agree with HHI and HC that, in fact, what ABB
and CG presently ask the Court to do is to reweigh the evidence. That is not
this Court’s role on the applicable standard of review. This is especially so
when one considers that even if some significant variation in price existed,
the President may nonetheless have found it more appropriate to calculate the
margin of dumping under subsection 30.2(1). I have not been persuaded that the
President committed any reviewable errors in failing to find that targeted
dumping was present.
C.
Conclusion
[76]
I therefore propose to dismiss this application
with costs.
"Johanne Gauthier"
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“I agree”
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Ryer, J.A.
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“I agree”
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D.G. Near
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