On April 7, 2022, the Government of Canada released the 2022 Federal Budget (the “Budget”).[1] This article summarizes announcements in the Budget relating to Canada’s trade remedy system, sanctions regime, and procurement policy.
Trade Remedy System
The Budget announced an intention to introduce three changes to Canada’s trade remedy system following public consultations in 2021.[2] While the Budget itself uses general language, the 2021 Consultation provides some additional detail on Canada’s intentions.
First, the Budget announced an intention to introduce amendments to the Special Import Measures Act (the “SIMA”) and the Canadian International Trade Tribunal Act (the “CITT Act”) to “strengthen Canada’s trade remedy system by ensuring unfairly traded goods are subject to duties, and increasing the participation of workers”.
Our understanding is that the first part of this sentence signals that Canada will be amending the SIMA’s provisions on circumvention to impose a more relaxed standard for initiating circumvention investigations. The second part signals that Canada will amend the SIMA and the CITT Act to allow unionized workers to file trade remedy complaints. Both measures were proposed in the 2021 Consultation.
We also understand that the following will be included in the final text of the Budget Bill:
- amending provisions of SIMA and policies relating to “massive importation”, a finding of which allows the Canadian International Trade Tribunal to impose retroactive duties on imports during the 90-day period prior to the Canada Border Services Agency’s preliminary determination;
- reducing the amount of notice given to foreign governments that a complaint has been filed in advance of an investigation being initiated; and
- eliminating the preliminary stage of expiry review proceedings.
Second, the Budget announced an intention to establish a Trade Remedy Counselling unit (“TRC Unit”) to improve access to Canada’s trade remedy system for small and medium-sized enterprises (“SMEs”). The TRC Unit’s purpose will be to assist companies in trade remedy proceedings, with a focus on SMEs. In the 2021 Consultation, the Government explained that this unit could provide free-of-charge assistance to companies affected by unfairly traded imports or impacted by trade remedy duties, including importers and downstream companies.
Third, the Budget announced amendments to the Customs Act that will implement electronic payments and clarify importer responsibilities on duties and taxes.
Sanctions Legislation
In response to Russia’s invasion of Ukraine, the Budget announced an intention to clarify the ability of the Minister of Foreign Affairs to confiscate and dispose of assets in Canada held by sanctioned individuals and entities. This measure is meant to support Canada’s participation in the Russian Elites, Proxies and Oligarchs (“REPO”) Taskforce, a plurilateral sanctions enforcement initiative.
Green Procurement
The Budget announced an intention to use the federal government’s purchasing power “to accelerate the transition to a net-zero economy” by purchasing goods and services with a reduced environmental impact and adopting clean technologies. In the months ahead, Public Services and Procurement Canada will develop new tools, guidelines, and targets to support the adoption of green procurement.
This announcement is part of a broader trend towards leveraging federal procurement to achieve Canada’s socio-economic and environmental policy goals. For example, Canada’s new Directive on the Management of Procurement, which took effect on May 13, 2021, lists the achievement of environmental objectives as an expected result of the directive.[3] Companies bidding for government contracts should account for this policy shift in their strategy.
