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U.S. Trade Remedy Law: The Canadian Experience
V. United States Countervailing Duty Investigations regarding Imports from Canada: Case Histories, 1991–1999
- 8. Live Cattle from Canada
- 8.1 Case History
- 8.2 Key Issues
- 8.3 Programs Determined to Confer Subsidies
- 8.3.1 Federal Programs
- 18.104.22.168 Farm Improvement and Marketing Cooperative Loans Act (FIMCLA)
- 8.3.2 Provincial Programs
- 22.214.171.124 Alberta Feeder Associations Guarantee Program
- 126.96.36.199 Manitoba Cattle Feeder Associations Loan Guarantee Program
- 188.8.131.52 Ontario Feeder Cattle Loan Guarantee Program
- 184.108.40.206 Saskatchewan Feeder Associations Loan Guarantee Program
- 220.127.116.11 Prairie Farm Rehabilitation Community Pasture Program (PFRA)
- 18.104.22.168 Saskatchewan Crown Lands Program
- 22.214.171.124 Manitoba Crown Lands Program
- 126.96.36.199 Alberta Crown Lands Basic Grazing Program
- 8.3.1 Federal Programs
- 8.3.3 Other Programs
- 8.4 Programs Determined Not to be Countervailable
- 8.4.1 Federal Programs
- 8.4.2 Provincial Programs Providing Goods or Services
- 188.8.131.52 Saskatchewan Pasture Program
- 184.108.40.206 Alberta Grazing Reserve Program
- 220.127.116.11 Canada–Alberta Beef Industry Development Fund (CABIDF)
- 18.104.22.168 Saskatchewan Beef Development Fund (SBDF)
- 22.214.171.124 Net Income Stabilization Account (NISA)
- 126.96.36.199 Alberta Public Grazing Lands Improvement Program
- 188.8.131.52 Saskatchewan Crown Land Improvement Policy
- 184.108.40.206 Saskatchewan Breeder Associations Loan Guarantee Program
- 8.5 Programs Determined Not to be Used
- 8.6 Programs Determined to be Terminated
- 8.7 Other Programs Reviewed
Countervailing duty and anti-dumping investigations were initiated by Commerce and the ITC on November 19, 1998, and on December 30, 1998, respectively. The investigations were in response to a petition filed by the Ranchers-Cattlemen Action Legal Foundation (R-Calf), supporting trade associations and individual cattle producers. The products under investigation were live cattle and calves for slaughter, as well as feeder cattle and calves. Excluded from the investigations were dairy and breeding cattle. The period under investigation was the fiscal year of April 1, 1997, through March 31, 1998.
Two petitions were filed for this investigation. R-Calf had previously filed a petition but withdrew it on November 10, 1998. The petition was subsequently refiled on November 12, 1998, and R-Calf asked Commerce to incorporate all submissions contained in the previous petition. Both the federal and Quebec governments contested the refiling, but there was no statutory bar to refiling a petition.
On January 20, 1999, the ITC released a preliminary affirmative determination of injury, finding a reasonable indication that the domestic industry was threatened with material injury by reason of allegedly subsidized imports from Canada. On May 11, 1999, Commerce released a postponed negative countervailing duty determination, in which estimated net subsidy rates were found to be de minimis. The total estimated preliminary net countervailable subsidy rate for all producers/exporters of live cattle was 0.38%.
On October 22, 1999, Commerce released a final negative countervailing duty determination of 0.77% ad valorem. Again, the estimated net subsidy rate for the investigated product was found to be de minimis. The ITC released its final determination on November 24, 1999, stating that the industry in the United States was not materially injured or threatened with material injury by reason of imports of live cattle from Canada sold in the United States. The investigation was therefore terminated.
Commerce considered whether the industry alleging injury had standing—that is, whether a minimum percentage of the domestic industry supported the countervailing duty petition.
To meet this requirement, the domestic producers or workers supporting the petition were required to account for: (1) at least 25% of the total production of the domestic like product; and (2) more than 50% of the production of the domestic like product produced by that portion of the industry expressing support for or opposition to the petition.
In evaluating industry support, Commerce must consider what constitutes a domestic like product in order to define the industry producing domestic like products. The Tariff Act of 1930175 defines domestic like product as “a product that is like, or in the absence of like, most similar in characteristics and uses with, the article subject to investigation.” In this case, the petition defined domestic like product as live cattle, feeder steers and heifers, slaughter steers and heifers, and cull cows and bulls, which are all fed for the purpose of beef production. 176 Since no party commented on the petition’s definition of domestic like product, and since there was nothing in the record to indicate that the definition was inaccurate, Commerce accepted the petition’s definition of domestic like product.
Commerce’s initial review of production data indicated that the petitioner did not account for 50% of the production of total domestic like product. Pursuant to the Tariff Act of 1930,177 Commerce found it necessary to poll or otherwise determine support for the petition. The deadline for initiation was extended to December 22, 1998. In Commerce’s view, the large number of cattle producers and the lack of a comprehensive listing thereof made it unfeasible to conduct a traditional sampling of producers. Instead Commerce contacted over 150 cattle and related associations, requesting that the associations report the views of their members. Commerce also included the views of individual producers who had contacted Commerce directly. Commerce concluded that domestic producers or workers supporting the petition did meet the threshold level indicated above, and that there was therefore sufficient industry support for the petition.
Canada held consultations with Commerce on three occasions between October 15 and November 20, 1998.178 Regarding the issue of whether the domestic industry supporting the petition had standing, during these consultations Canada raised concerns, contesting the methodology and results of the Commerce polling.
The petitioners suggested that Commerce should use several pricing statistics for determining export price benchmarks, such as Canadian export statistics, U.S. Portland and Pacific Northwest (PNW) prices, Producer Direct Sales (PDS) prices and U.S. import statistics. Commerce had in fact made several price comparisons using prices from several sources (including Portland prices) and making appropriate adjustments for freight when necessary. Commerce determined that the Canadian Wheat Board (CWB) export sale transactions to the United States were reliable prices. Commerce was also called on to explain the specificity analysis regarding the Farm Improvement and Marketing Cooperative Loans Act (FIMCLA). Commerce agreed with Canada that the disproportionality analysis should focus on the level of benefits provided rather than on the number of subsidies given to different industries. However, Commerce confirmed the preliminary analysis that the FIMCLA program was de facto specific. Commerce also attempted to ensure that the prices charged for public pasture services and those charged by private providers were comparable when services were nearly identical. Finally, regarding the Alberta Crown Lands Basic Grazing Program, Commerce disagreed with the contention that the compensation system for lessees of public and private land should be stricken from the record. Other issues related to CWB control, and market distortions, cross-border comparisons and various provincial programs.
While the following programs were determined to be subsidies and were therefore countervailable under U.S. trade law, the total estimated net subsidy for each product under investigation was found to be de minimis.
220.127.116.11 Farm Improvement and Marketing Cooperative
Loans Act (FIMCLA)
Total Estimated Net Subsidy
0.04% ad valorem
The Government of Canada provided guarantees on loans extended by private commercial banks and other lending institutions to farmers across Canada. The purpose of this program was to increase the availability of loans for the improvement and development of farms, and for the marketing, processing and distribution of farm products by cooperative associations. Any individual engaged in farming in Canada and any farmer-owned cooperative was eligible to receive loan guarantees covering 95% of the debt outstanding for projects related to farm improvement or increased farm production.
The maximum amount of money that an individual could borrow under this program was $250,000. For marketing cooperatives, the maximum amount was $3 million. Beef and hog farmers received approximately 18% to 27% of all guarantees between 1994 and 1998, while poultry, fruit-and-vegetable and dairy producers received less than 10% of the guarantees. The specificity analysis examined disproportionality by reference to actual users of the program. The share of the subsidy received by producers of the subject merchandise was compared to the shares received by other agricultural producers. The disproportionality analysis focused on the level of benefits provided rather than on the number of subsidies given to different industries. Commerce concluded that the beef and hog industries received a disproportionate amount of assistance under the FIMCLA program during the period of investigation. FIMCLA was therefore found de facto specific to the beef and hog sectors.
Established in 1938 to encourage banks to lend to cattle producers, this program was administered by the Alberta Department of Agriculture, Food and Rural Development. Under the program, up to 15% of the principal amount of commercial loans taken out by feeder associations for the acquisition of cattle was guaranteed. Eligibility for the guarantees was limited to feeder associations located in Alberta. Sixty-two associations received guarantees on loans that were outstanding during the period of investigation. Because eligibility was limited to feeder associations, Commerce determined that the program was specific. It was determined that the loan guarantees were countervailable subsidies to the extent that they lowered the cost of borrowing. Commerce calculated Alberta’s benchmark rate by averaging the verified range of lending rates that the associations could obtain in the market absent the government guarantee. On this basis, the program was found to be countervailable at a rate of 0.01%.
The Manitoba Cattle Feeder Associations Loan Guarantee Program was established in 1991 to assist in the diversification of Manitoba farm operations. The program was administered by the Manitoba Agricultural Credit Corporation (MACC). Through MACC, the provincial government guaranteed 25% of the principal amount of loans for the acquisition of livestock by feeder associations. Eligibility for the guarantees was limited to feeder associations located in Manitoba. Associations had to be incorporated under the Cooperatives Act of Manitoba, and had to have a minimum of 15 members, an elected board of directors and a registered brand for use on association cattle.
Because eligibility was limited to feeder associations, Commerce determined that the program was specific. On this basis, it was found that the total subsidy from the program was less than 0.01%.
The Ontario Feeder Cattle Loan Guarantee Program was established in 1990 to help secure financing for cattle producers. The program was administered by the Ontario Ministry of Agriculture, Food and Rural Affairs. The Ministry provided a start-up grant of $10,000 to new feeder associations, and government guarantees covering 25% of the amount borrowed by associations for the purchase and sale of cattle. Eligibility for the guarantees was limited to feeder associations composed of at least 20 individuals who owned or rented land in Ontario and were not members of other feeder associations. Eighteen associations received guarantees on loans that were outstanding during the period of investigation. The program was found to be countervailable on the grounds that it was limited to feeder associations and that it lowered the cost of borrowing. The total subsidy from the program was found to be 0.01%.
The Saskatchewan Feeder Associations Loan Guarantee Program was established in 1984 to facilitate the establishment of cattle feeder associations in order to promote cattle feeding in Saskatchewan. The program was administered by the Livestock and Veterinary Operations Branch of the Saskatchewan Agriculture and Food Department. This agency provided a government guarantee covering 25% of the principal amount on loans to feeder associations for the purchase of feeder heifers and steers. Eligibility for the guarantees was limited to feeder associations with at least 20 members over the age of 18 who were not active in other feeder associations. One hundred and sixteen associations received guarantees on loans that were outstanding during the period of investigation. Because eligibility was limited to feeder associations, the program was found to be specific. The total subsidy from the program was found to be 0.01%.
The Prairie Farm Rehabilitation Administration was created in the 1930s to rehabilitate drought and soil-drifting areas in the provinces of Manitoba, Saskatchewan and Alberta. The PFRA established the Community Pasture Program to facilitate improved land use through rehabilitation, conservation and management. The goal of the Community Pasture Program was to utilize the resource primarily for the summer grazing of cattle to encourage long-term production of high-quality cattle.
In pursuit of its objectives, the PFRA operated 87 separate pastures covering approximately 2.2 million acres. At these pastures, the PFRA offered grazing privileges and optional breeding services for fees established by it. The fees were based upon recovery of the costs associated with the grazing and breeding services. Because use of Community Pastures was limited to Canadian farmers involved in grazing livestock, Commerce determined that the program was specific. As a result, the provision of public pasture services was a countervailable subsidy at 0.02%.
Agricultural crown land managed by Saskatchewan Agriculture and Food (SAF) was made available to all Saskatchewan agricultural producers for lease. Activities carried out on the land included grazing, cultivation, community pastures and additional multiple-use activities. Leases ranged from 1- to 33-year terms. Beginning in 1997, SAF set rental rates using a formula that took account of the average price of cattle marketed in the previous years. Lessees were responsible for paying taxes, developing and maintaining water facilities and fences, and providing for public access to the land. Because the cattle industry was a predominant user of the Saskatchewan Crown Lands Program, it was found to be specific and thus, to provide a countervailable subsidy at the rate 0.02%.
Agricultural crown land was managed by Manitoba Agriculture Crown Lands (MACL), whose primary objective was to administer the disposition of crown lands and to improve the lands’ productivity. Crown agricultural land was made available to farmers through cultivation and grazing leases. Leases for grazing dispositions ranged from 1- to 50-year terms. Leaseholders were required to pay an amount in lieu of municipal taxes, as well as to construct and maintain fences and watering facilities. The public had access to crown lands at all times without prior permission of the lessee for the period of such activities as wildlife hunting, forestry, winter sports, hiking and berry picking. During the period of investigation, MACL administered 1.6 million acres of grazing leases. Although Commerce agreed with the Government of Manitoba that most of the crown land was located in fringe areas, it was determined that the lease rate for public grazing land should be compared solely to the rate for private fringe area leases. Commerce determined that it was necessary to adjust the lease rate for private land downward to account for differences between the leases on private and public land. This adjustment was undertaken to reflect costs associated with the paying of taxes, and the construction of fences and water dugouts.
Because livestock (including cattle) industries were predominant users of the Manitoba Crown Lands Program, Commerce determined that the program was specific and thus that the provision of public grazing rights was a countervailable subsidy. On this basis, the countervailable subsidy was set at 0.01%.
Grazing rights were first issued on public lands in the early 1930s. Over 10.5 million acres of land were managed by the Alberta government, including a grazing component of approximately 2 million acres. Leases ranged from 1- to 20- year terms. Annual rent was equal to a percentage of the forage value of the leased land. When determining the forage value, consideration was given to the grazing capacity of the land, the average gain in weight of cattle on grass, and the average price per pound of cattle sold in the principal livestock markets in Alberta during the preceding year. Beyond paying the lease fee, lessees were also required to construct and maintain capital improvements necessary for livestock in order to comply with all multiple-use and conservation restrictions imposed by the government on the land. Lastly, lessees had to pay school and municipal taxes charged on the land being leased.
Commerce found that public lessees appeared to receive more compensation from oil and gas companies for use and access to the land than they would if leasing the same land from a private provider. Accordingly, public land was more valuable to a lessee than private land. The government was not found to be adequately remunerated for the provision of the land.
To measure the benefits received under the Alberta Crown Lands Basic Grazing Program, Commerce combined the difference calculated by comparing the grazing fees paid for public and private land with the difference in compensation received. The resulting amount became a recurring benefit, which was then divided by the province’s total sales during the period of investigation. On this basis, Commerce determined the countervailable subsidy to be 0.65%.
The Northern Ontario Heritage Fund Corporation (NOHFC), a Crown corporation, was established in 1988. Its purpose was to promote and stimulate economic development in Northern Ontario. Assistance for eligible projects was available through forgivable performance loans, incentive term loans and loan guarantees. With respect to agricultural projects, all assistance provided by NOHFC was in the form of forgivable performance loans. The types of agricultural projects funded included capital projects, marketing projects, and research and development projects. The loans made available for the projects were interest-free and normally forgiven after two to three years. The extent of debt forgiveness was dependent on whether the project met its target of increasing the value of farm production by an amount equal to the NOHFC contribution.
Because benefits under this program were available only in Northern Ontario, it was determined that the program was regionally specific. To calculate the total benefit to cattle producers under the program, Commerce summed the benefit calculated for the forgiven debt and the interest-free loans. On this basis, Commerce determined the total subsidy from the program to be less than 0.01%.
This program, administered by the Ontario Ministry of Agriculture, Food and Rural Affairs, provided compensation to livestock producers whose animals were injured or killed by wolves or coyotes. Producers applied for, and received, compensation through the local municipal government. The Ministry reimbursed the municipality. Beef cattle producers were believed to derive most of the benefits from the program. Because the program was limited by law to livestock producers, poultry farmers and beekeepers, Commerce determined that it was specific. The program was found to be countervailable at a rate of 0.01%.
This program was administered by the Farm Assistance Branch of the Ontario Ministry of Agriculture, Food and Rural Affairs. It was designed to encourage farmers to report cases of rabies in livestock by compensating livestock producers for damage caused by rabies. Of the grants, 60% were funded by Ontario and 40% by the federal government. The program was found to be specific because the legislation establishing it expressly limited the grants to livestock producers. Commerce determined the countervailable subsidy to be less than 0.01%.
The purpose of this program was to promote the diversification of Saskatchewan’s rural economy by encouraging investment in livestock and horticultural facilities. The program allowed for an annual rebate of education and health taxes paid on building materials and stationary equipment used in livestock operations, as well as greenhouses, and vegetable and raw fruit storage facilities. In examining the legislation and regulations governing both the program and the Education and Health Tax, Commerce determined that even if the two programs were found to be integrally linked under the regulations governing this case, the program would still be specific and thus countervailable. This determination was based in part on the fact that legislation administering these programs made them available only to certain industries. On this basis, Commerce determined the countervailable subsidy to be less than 0.01%.
The Canadian Wheat Board had the exclusive authority to market Canadian feed and malting barley in domestic and export markets. It was alleged that the CWB pooling system sent distorted market signals to Canadian farmers and that the system of marketing feed barley in Canada imposed excessive costs on farmers, resulting in a decrease in barley exports. Consequently, more feed barley was available on the domestic market, thus artificially lowering prices paid by Canadian cattle producers.
Commerce preliminarily found that Canadian domestic prices were comparable to U.S. prices. In the final determination, it found that although the CWB had extensive control over the feed barley export market and its operations in that market could, and did, have a major impact on the domestic feed barley market, CWB operations did not provide a benefit to producers of live cattle. Commerce had to address many concerns relating to the actions of the Canadian Wheat Board and its effects on the price of barley. There were allegations by the petitioners that the CWB, through policies such as export restraints, caused the price of barley to decrease and consequently provided a benefit to cattle farmers. Commerce determined that although some actions of the CWB did create market distortions, the CWB did not provide a benefit to the producers of live cattle, thus not satisfying the specificity criteria.
A second issue was the reliance on certain methods for the analysis of barley prices. First, Commerce explained that cross-border comparison was a valid method of determining whether Canadian barley and wheat prices were artificially low. Also, after adjusting for freight in the comparisons, there were no consistent price differentials. Export price benchmarks, actual versus bid or offer prices, using Lethbridge as domestic pricing points—all these were valid instruments in determining whether in fact Canadian barley prices were artificially low.
Based on price comparisons, Commerce determined that CWB operations did not provide a benefit to producers of live cattle and thus did not provide an indirect countervailable subsidy.
The Saskatchewan Pasture Program had been in place since 1922. It was designed to provide supplemental grazing to Saskatchewan livestock producers, and to maintain grazing and other fragile lands in permanent cover in order to promote soil stability. Saskatchewan Agriculture and Food offered grazing, breeding and health services for fees that it established. Fees were based upon recovery of the costs associated with the grazing and breeding services of each pasture. Commerce found no subsidy.
Alberta developed community pastures (reserves) on which multiple ranchers’ herds could graze. Grazing reserves also provided multiple-use opportunities to other users. As of April 1, 1999, Alberta ceased to perform management activities on 32 of its 37 grazing reserves as a result of a privatization initiative. Under the initiative, livestock management responsibilities were shifted to grazing associations and new fees were negotiated.
However, during the period of investigation, the Alberta government operated 20 reserves. Commerce determined that the government was adequately remunerated for its provision of land to the privatized reserves. As for the petitioners’ request to calculate five separate full-service public pasture rates, it was rejected on the basis that rates for public pastures were all lower than the private pasturing rate provided by Alberta. Thus no countervailable subsidy existed.
Established by the federal and Alberta governments in April 1997, CABIDF supported research, development and related activities connected to the beef industry in Alberta. To receive funding through this program, applicants had to submit a series of research proposals, which were evaluated on the basis of the project’s relationship to the Fund’s research priorities, its scientific merits, and the direct or indirect usefulness of the results to the beef industry. Final proposals were evaluated for technical merit by a scientific committee consisting of industry experts and scientists, and were then approved or rejected based on the evaluations by CABIDF’s governing committee. After verification, Commerce determined that programs funded by CABIDF were related to scientific research activities for the beef industry and the agriculture industry in general. All of the approved projects were grants, not revenue forgone, and none were paid directly to producers or processors. Based on this analysis, Commerce found that CABIDF was eligible for “green box” treatment under section 771(5B)(F) of the Tariff Act of 1930 and thus was not countervailable.
SBDF supported the development and diversification of Saskatchewan’s beef industry through the funding of various projects related to production research, technology transfer, and development and promotion of new products. Priority was given to public research institutions conducting research, development and promotion activities that were to be generally available to the industry. All of the approved projects consisted of grants, not revenue forgone, and none were paid directly to producers or processors. Based on this analysis, Commerce found that SBDF was eligible for green box treatment under section 771(5B)(F) of the Tariff Act of 1930 and thus was not countervailable.
NISA was designed to stabilize an individual farm’s overall financial performance through a voluntary savings plan. Participants enrolled all eligible commodities grown on the farm. Farmers then deposited a portion of the proceeds from their sales of eligible NISA commodities (up to 3% of net eligible sales) into individual savings accounts, received matching government deposits, and made additional, non-matchable deposits up to 20% of net sales. The matching deposits came from both the federal and provincial governments.
NISA provided stabilization assistance on a “whole farm” basis. A farmer’s eligibility to receive assistance depended on total farm profits, not on the profits earned on individual commodities. A producer could withdraw funds from a NISA account under a stabilization or minimum income trigger. The stabilization trigger permitted withdrawal when the gross profit margin from the entire farming operation fell below a historical average, based on the previous five years. If poor market performance of some products was offset by increased revenues from others, no withdrawal was triggered.
Commerce found NISA not to be de facto specific with respect to cattle producers. There was no evidence that cattle producers were dominant users or received disproportionate benefits from the NISA program. Commerce also found that NISA was not limited to a particular region. It was therefore found not to be countervailable.
Established in 1970 and terminated in 1995, this program provided a partial credit toward the payment of rent on public grazing land if the lessee undertook certain pre-approved range improvement projects. The leaseholder was required to pay for all the costs incurred for these improvements, and was reimbursed for 25% to 50% of the costs through credits on the rental fees otherwise due annually. All improvements belonged to the government and, once the improvements were completed, lessees were required to maintain them at their own expense. On the basis of its analysis, Commerce determined that the program did not provide a financial contribution and therefore was not countervailable.
This policy was designed to provide rental adjustments when crown land leaseholders made capital improvements to the land, such as clearing, bush removal, or breaking and re-seeding. In return, Saskatchewan Agriculture and Food agreed not to increase or even reduce the rental rate for a certain period of time, depending on the length of the improvement project. All improvements belonged to the Crown. In order for a financial contribution to exist under this program, the government had to forgo rental fees. In this case, the reduction in the rental fees corresponded to a reduction in the land’s carrying capacity while improvements were undertaken. The increased value as a result of the improvements was captured with the subsequent setting of rental fees. Commerce determined, therefore, that the program did not provide a financial contribution and was not countervailable.
This program was established in 1991 to facilitate the establishment of cattle breeder associations in an effort to promote cattle breeding in Saskatchewan. It provided a guarantee on 25% of the principal amount of loans to breeder associations for the purchase of certain breeding cattle. Eligibility was limited to breeder associations composed of at least 20 individuals who were residents of Saskatchewan. One hundred and seven associations received guarantees on loans that were outstanding during the period of investigation.
Breeding livestock was not covered by the investigation. Commerce therefore determined that the program did not provide a countervailable subsidy to the subject merchandise.
Commerce determined that the producers of the subject merchandise under investigation did not apply for or receive benefits under the following programs during the period of investigation.
- Feed Freight Assistance Adjustment Fund
Only Ontario participated in the Feed Freight Assistance Adjustment Fund program. Commerce verified that Ontario producers did not receive benefits under the program.
- Canadian Adaptation and Rural Development (CARDS) Program in Saskatchewan
- Western Diversification Program
- Ontario Export Sales Aid Program
Commerce did not consider it necessary to determine whether benefits conferred under the following programs were countervailable because any benefit to the subject merchandise was so small that there would be no impact on the overall subsidy rate.
- Ontario Bear Damage to Livestock Compensation Program
- Ontario Livestock Programs for Purebred Dairy Cattle, Beef,
and Sheep Sales Assistance Policy / Swine Assistance Policy
- Ontario Artificial Insemination of Livestock Act
Current law provides for a finding of “de facto” specificity if one or more of the following factors is present: (1) actual recipients are limited in number when measured by either enterprise or industry; (2) one enterprise or industry is a predominant user; (3) an enterprise or industry receives a disproportionally large amount; or (4) the authority providing the subsidy exercises discretion in granting the subsidy.
On January 6, 1994, Commerce issued its second remand determination that stumpage and log export restrictions were not countervailable.The panel accepted the remand on February 23, 1994. On April 6, 1994, the U.S.Trade Representative requested the establishment of an Extraordinary Challenge Committee.On August 3, 1994, the committee affirmed the panel’s order. On August 16, 1994, Commerce revoked the countervailing duty order.
Commerce noted that its Proposed Rulemaking of May 1989 identified four factors for determining specificity: (a) the extent to which a government acts to limit the availability of a program; (b) the number of users that actually use the program; (c) whether any user receives benefits of the program in a dominant or disproportionate manner; and (d) whether the government exercises discretion in awarding benefits under the program.
The benchmarks are, in order of preference: (1) the prices charged by the government for the identical good to others in the same political jurisdiction; (2) the price charged by the government for a similar or related good, adjusted for quality differences; (3) the price charged by private sellers in the same political jurisdiction for an identical good; (4) the government’s cost of providing the good; and (5) the price paid for the identical good outside the political jurisdiction.These benchmarks are known as the “Preferentiality Appendix” and first appeared in Commerce’s preliminary determination of its Administrative Review of Carbon Black from Mexico in 1986.
To calculate the stumpage subsidies, Commerce followed the same general formula in each province.The numerator in each province consisted of the calculated benefit per cubic metre (i.e. the difference between administered rates and the benchmark),multiplied by the softwood sawlog harvest.The denominator consisted of the value of softwood lumber shipments plus the value of lumber co-products (e.g., chips and sawdust).
The original investigation is summarized here, even though it is outside the time period of this study, because of the continued participation by the Government of Canada in the many administrative reviews that were to follow.
The “all others” rate was originally found to be 4.48% but was amended by Commerce on July 13, 2000.
The “all others” rate for the 1993 review period also included an exemption from the payment of water bills for Norsk Hydro.The rate as calculated was 6.34% for SDI grants and 1.00% for the exemption from the payment of water bills.
- Date Modified: