ARTICLE 1904
BINATIONAL PANEL REVIEW PURSUANT TO THE
NORTH AMERICAN FREE TRADE AGREEMENT

DECISION OF THE PANEL

(JULY 19, 2000)

Pursuant to subsection 76(2) of SIMA[2], the CITT conducted Review No. RR-97-007 of its findings of material injury made under Inquiry No. NQ-92-009.  Public and in camera hearings were held in Ottawa, Ontario from May 20 - 27, 1998.  In its review, the CITT concluded that there is no likelihood of resumed dumping of the subject goods from, inter alia, the United States.  In light of this conclusion, the CITT found it unnecessary to consider the issue of the likelihood of injury.  Pursuant to subsection 76(4) of SIMA, the CITT issued an Order on July 28, 1998, rescinding its findings made under Inquiry No. NQ-92-009.  

The CITT’s Statement of Reasons are framed as a response to the Complainants’ argument that 1) increased U.S. capacity and 2) the impact of low-priced imports in the U.S. will cause U.S. producers to dump subject goods on the Canadian market.  The heart of the CITT’s response to this argument and therefore its entire decision, is that favorable U.S. market conditions for subject goods leave U.S. producers no economic incentive to dump goods in Canada.  Therefore, there is no likelihood of resumed dumping of the subject goods from the U.S. into Canada.  More particularly, U.S. producers have no incentive to dump the subject goods in Canada because supply and demand is in balance in the U.S. market, demand is outpacing capacity and prices for subject goods are high.  Further, along with discounting the effects of low-priced imports into the U.S., the CITT addresses the diminishing value of the Canadian dollar, the volume of U.S. exports to Canada, U.S. steel exports to Mexico and U.S. producers’ policies regarding dumping.  

On September 30, 1998, the Complainants filed their complaint seeking the review of the decision of the CITT in Review No. RR-9-007.  The Complainant Stelco’s Brief, with which the other Complainants concur, submits that the issues before this Panel include:  

1)      The appropriate standard of review to be applied to the CITT’s decision to rescind the 1993 Finding;  

2)      Whether the CITT erred in its findings relating to supply and demand in the U.S. market;  

3)      Whether the CITT erred in its findings of fact regarding U.S. products and current and future levels of capacity utilization for the production of subject goods;  

4)      Whether the CITT erred in its finding of a steady upward trend of cold-rolled steel sheet pricing in the U.S.;  

5)      Whether the CITT erred in failing to analyze the proportion of exports of subject goods from the U.S. to Canada; and  

6)      Whether the CITT erred in its interpretation of the phrase “likelihood of resumed dumping” and whether the CITT erred in failing to ask the proper questions relating thereto.  

These issues were further refined in the Complainant Stelco’s Reply Brief and at the oral hearing. This Panel will address the relevant issues as framed by the Complainant Stelco in the Complainants’ Brief, albeit not necessarily in the same order, as a guide for discussion.  

OPINION   index

1)STANDARD OF REVIEW 

This Panel is constituted under NAFTA Article 1904 to review a determination of the CITT in accordance with Canadian anti-dumping laws and regulations.  This Panel is directed to apply relevant statutes, legislative history, regulations, administrative practice and judicial precedents to the extent that a court of ...[Canada] ... would rely on such materials.[3]  

This Panel is further directed by NAFTA to apply:  

... the standard of review set out in Annex 1911 and the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority.[4]  

Annex 1911 defines the standard of review, in the case of Canada, as the grounds set out in subsection 18.1(4) of the Federal Court Act, R.S.C. 1985, c. F-7  (as amended).  Moreover, as Canada is the importing Party, the general legal principles of Canadian law are to be applied in this review.[5]  

Section 18.1(4) of the Federal Court Act lists the grounds for review of a decision of an administrative tribunal.  These grounds are that the tribunal:  

a)         acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;

b)         failed to observe a principle of natural justice, procedural fairness or other procedure that it was required in law to observe;

c)         erred in law in making a decision or order, whether or not the error appears on the face of the record;

d)         based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;

e)         acted, or failed to act, by reason of fraud or perjured evidence; or

f)          acted in any other way that was contrary to law.

These grounds for review are read in light of the standard of review developed by the Supreme Court of Canada, which states that “the central question in ascertaining the standard of review is to determine the legislative intent in conferring jurisdiction to administrative tribunals”.[6]  More specifically, the reviewing court must ask whether the question is one that was intended by the legislators to be left to the exclusive decision of the board.[7]  

In order to assist the reviewing courts in deciphering legislative intent and determining the appropriate standard of review, the Supreme Court has developed a spectrum of standards of review.  This spectrum was developed in Pezim[8] and has been refined in Southam[9] and Baker[10].  The spectrum ranges from patent unreasonableness, on the one extreme, where deference is at its highest to correctness at the other extreme where deference is at its lowest.[11]  This standard was further refined to include a third standard of reasonableness in cases where the appropriate standard falls between the two extremes.[12]  The appropriate standard of review within the spectrum in the circumstances under review is determined by a functional and pragmatic analysis.  

i) Issues of Jurisdiction 

The Federal Court Act provides that a court may review a tribunal where it:  

18.1 (4)(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction.  

In determining the standard of review, this Panel must distinguish between questions establishing the parameters of a tribunal’s jurisdiction and questions within a tribunal’s jurisdiction.[13]  As noted in Concrete Panels, the purpose of jurisdictional review is to ensure that administrative agencies conform to the mandate assigned to them by the legislators.[14]  Questions demarcating the jurisdiction of a tribunal are those questions yielding answers which define the powers of the tribunal to embark on proceedings, issue orders, etc.[15] These questions are identified by a functional and pragmatic analysis which examines:  

... not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal.[16]  

At the heart of this analysis is an effort to glean whether the legislature intended that the question at issue be decided by the tribunal acting within its jurisdiction or the courts.[17]  Questions involving issues of interpretation central to the purpose for the creation of the tribunal and requiring the exercise of the specialized expertise of the tribunal are likely to be within the tribunal’s jurisdiction.  Questions concerning general legislation or otherwise requiring the supervision or expertise of the courts may be found to be jurisdictional.[18]  

It is settled law that with respect to questions dealing with a tribunal’s jurisdiction, correctness is required and the concept of deference is severely constrained.  That is, a tribunal must be correct with respect to any question that defines its jurisdiction.[19]  

This Panel must determine whether the CITT correctly determined any question affecting its jurisdiction.  If the tribunal incorrectly dealt with this question, this Panel must remand.  If the relevant question does not affect the CITT’s jurisdiction, then a different standard is applicable as the question becomes one of law, fact or mixed law and fact.  

ii) Issues of Law 

The Federal Court Act provides that a court may review a tribunal where it:  

18.1 (4)(c) erred in law making a decision or an order, whether or not the error appears on the face of the record. 

Issues of law relate to interpretations of law made by tribunals acting within their jurisdiction.  In response to privative clauses[20] shielding tribunals from review, the standard of review that was traditionally applied to errors of law was “patent unreasonablility”.  This test is very deferential and calls for a strict approach to judicial review.[21]  

In Southam, the Supreme Court of Canada explained the difference between unreasonable and patently unreasonable as:  

The difference between “unreasonable” and “patently unreasonable” lies in the immediacy or obviousness of the defect.  If the defect is apparent on the face of the Tribunal’s reasons, then the Tribunal’s decision is patently unreasonable.  But if it takes some significant searching or testing to find the defect, then the decision is unreasonable but not patently unreasonable.[22]  

The court in Southam went on to elaborate as follows:  

This is not to say, of course, that judges reviewing a decision on the standard of patent unreasonableness may not examine the record.  If the decision under review is sufficiently difficult, then perhaps a great deal of reading and thinking will be required before the judge will be able to grasp the dimensions of the problem... but once the lines of the problem have come into focus, if the decision is patently unreasonable, then the unreasonableness will be evident.[23]  

Recent Supreme Court of Canada decisions have moderated this standard by asking the courts to employ a functional and pragmatic test to decipher legislative intent and to determine the appropriate standard of review to fit the agency and the circumstances.  The analysis inherent in this test focuses upon a number of relevant factors, none of which alone are dispositive.  These factors include:  

1)         the presence or lack of a privative clause and the wording of that clause;

2)         the presence or lack of a statutory right of appeal;

3)         the expertise of specialization of a tribunal in the circumstances;

4)         the purpose of the Act as a whole and the provision in particular; and

5)         the nature of the problem in question, especially whether it relates to a determination of law or fact and whether the decision is individual or polycentric in nature.[24] 

In determining the appropriate standard of review, the Supreme Court of Canada has emphasized the importance of balancing the presence or lack of a privative clause with the other factors, especially the relative expertise of the tribunal.  The court in Pezim held that what is “crucial is whether or not the agency’s decisions are protected by a privative clause”.[25]  However, that court went on to say that even where there is no privative clause and where there is a statutory right of appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal’s expertise.[26]  This reasoning was adopted in Pushpanathan which held that:  

the presence of a full privative clause is compelling evidence that the court ought to show deference to the Tribunal’s decision, unless other factors strongly indicate the contrary as regards the particular determination in question.[27]  

Pezim did not determine the precise extent of deference to be applied in each case.  Rather, the court stated that:  

Having regard to the large number of factors relevant in determining the applicable standard of review, the courts have developed a spectrum that ranges from the standard of reasonableness to that of correctness.[28] 

The Court went on to elaborate:  

Continuation