RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/492
12 February 2002
(02-0698)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS,
AND THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in document G/SCM/W/473
of 18 December 2001
Paper Submitted by Canada
The following communication, dated 11 February 2002, has been received from the
Permanent Mission of Canada.
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B. QUESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
Q1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number  of staff to handle the notifications, or is it more a
question of insufficiently trained  staff?
Q2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government’s ability to make therequired subsidy notifications?
Q3. Balancing your government’s needs for as simp le a format as possible against its needs
to be able to understand other Members’ notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?
Reply
The main issues which arise in the preparation of the Canadian subsidy notification relate to
resources  and specifically the problems (including time consumption) associated in co-ordinating
across a number of government agencies and departments and integrating the WTO subsidy
notification requirements with their own established and internal priorities.  Canada has no specific
suggestion to make on any amendments to the form at but would be open to considering suggestions
made by other delegations while bearing in mind the need to have the notifications made in
conformity with the obligations of the Agreem ent on Subsidies and Countervailing Measures
(ASCM).
Q4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government’ s experience, do individuals responsible for making
notifications have difficulties understanding the requirements due to the language used in theG/SCM/W/492
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Agreement to define “subsidy”, “specificity”, etc. ?  For example, do these individuals believe
that subsidies are in the nature of cash grants  only, and do not encompass revenue foregone via
tax and duty incentives?  Could some sort of explanation be introduced into the questionnaire
format to make more clear the scope of measures that are subject to notification?  How might
such an explanation be worded?
Q5. Does your government experience general pr oblems due to the formatting requirements
of the notification questionnaire?  In particular, does your government maintain any pre-
existing information that addresses the substance of the notification questionnaire, but does not
correspond to the questionnaire’s format?  If so, what are the specific problems that your
government encounters when it tries to fo rmat the information as required by the
questionnaire?  If the information were to be notified in its pre-existing format, could itnevertheless be keyed to the data elements of the subsidy questionnaire?
Q6. In reviewing other Members’ notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?  How important would it be for this information to be keyed or coded to the
questionnaire format?
Reply
Canadian authorities charged with the preparation of the notification are well versed in the
concepts, definitions and obligations of Articles 1- 3 of the ASCM.  As noted above, Canada would be
prepared to consider amendments in the standard notification format so long as these did not detract
from the ASCM obligations.
Q7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?  How much wo uld your notification of subsidies be simplified
if such information could be submitted in its pre-existing format?  As a reviewer of
notifications, what sorts of limits should there be to the substitution of information from web
sites for completed notification questionnaires?  Would references to web sites be a useful
supplement to substantive information provided in a notification?
Reply
Website references could be a useful supplement to the substantive notification.  For example,
Canada could provide departmental websites wh ere subsidy programme information is available
(through a search function), however, this information should only be viewed as supplemental toregular notifications.
Q8. Concerning General Rule 6, which requires that  notification of subsidies provided “to
specific products or sectors” be organized on a product- or sector-specific basis, does this rule
pose problems for your government when notifying subsidies that are provided on a horizontal,rather than a product- or sector-specific basis?   What are the specific steps and difficulties in
preparing sector- or product-specific informatio n for subsidies provided on a horizontal basis?
Q9. Does this rule present problems for notifi cation of subsidies that are provided on a
product- or sector-specific basis (e.g., some agricultural subsidies)?
Q10. Would a redrafting of General Rule 6 to refer to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would beG/SCM/W/492
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required for subsidies provided on a horizontal basis, which product- or sector-specific
subsidies would continue to need to be notified on that basis.)
Q11. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Reply
In Canada, as in many other countries, subsidy programmes are available generally through
sponsoring departments and thus our notification information is grouped broadly e.g. industrial
programmes, agriculture programmes.  Indeed, it is only in the area of agriculture where the subsidy
programmes are more in the nature of sector or product specific, that Canada can and does providethis information.  For those programmes which are broad-based, this information is usually not
available in Canada.  Notwithstanding, if this information were available from other governments in
respect to their programmes, we would like to be in a position to review it.  Hence, we do not see the
merit in changing the current requirements.
Q12. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of item 9) impede or delay the presentation of
subsidy notifications?
Q13. To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?
Q14. How important is this statistical informat ion about other Members’  subsidies to your
government when reviewing subsidy notificati ons?  Could these reporting requirements be
made less stringent in some manner?  If so, how?
Reply
All countries should continue to make best efforts in providing statistical data on subsidy
programmes.  This approach seems to fall within the chapeau of 9, i.e.,  “to the extent possible”.
In terms of the Canadian notification, the technical difficulties in the development of
statistical information on the trade effects of subsidies is a particularly challenging requirement of thenotification as well as the statistical information outlined in items 9(a) and (b) for sectors other than
agriculture.  Nevertheless, we find this information be very useful in the analysis of other members’
subsidy programmes.
Q15. Does your government find, in preparing s ubsidy notifications, that there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
Q16. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
Q17. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significant
difficulties to your government in preparing its subsidy notifications?  How might these
requirements be simplified?G/SCM/W/492
Page 4
Reply
We do not see any particular overlap in the subsidy notification requirements and see no
difficulty in providing information on the background, including policy objectives of a subsidy.
Indeed, the provision of this information in the notification of other Members’ is indispensable to ouranalysis.
Q18. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing its
notifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
Q19. Is there sufficient flexibility in item 7 of the subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?  If not, is there a way to simplify this requirement while preserving its
substantive content?
Reply
Generally, this information is not calculable for programmes from Canada.  As per response
to questions (12, 13, 14) this should be submitted on a “best efforts” basis.
C. QUESTIONS PERTAINING TO THE SUBSIDY NOTIFICATION SEMINAR
Q1. Concerning the number and nature of pa rticipants in the seminar, how many
individuals in your government have day-to-day responsibility for gathering information about
subsidies and for preparing and submitting subsidy notifications based on that information?  If
more than one, please describe the differen ces in these individuals ’ responsibilities.
Q2. Would it be sufficient for your government to have two participants in the seminar?  If
not, why not, and how many participants would be optimal from your government’s point of
view?
Reply
There are many Canadian government departments or agencies involved in the preparation of
the Canadian subsidy notification.  The Department of Finance has primary responsibility for co-
ordinating, assembling and verifying the information received from other agencies.
Q3. Would two days be a sufficient/appropriate length for the seminar?  If not, what would
be more appropriate?
Q4. Would the following schedule be appropriate:  First session:  detailed presentation of the
basic definitions in Articles 1, 2 and 3 of the SCM Agreement, and presentation of the subsidy
notification obligations in the light of these definitions.  Second session:  Presentations by
Members concerning the specific problems they experience in preparing subsidy notifications.
Third session:  Information-sharing and brainstorming among Members as to possible practical
solutions for the identified problems (ways to coordinate and streamline gathering and
formatting of subsidy information).  Fourth session:  Follow-up steps to ensure that information
shared and lessons learned would be retained and implemented.  (It has been emphasized that
to be effective, such follow-up should be immediate and intensive.)  Ideas suggested to date have
included establishment of informal contacts am ong capital-based officials, planning of future
focused technical assistance activities, etc.G/SCM/W/492
Page 5
Reply
We have no problem with the length of the agenda proposed for this seminar and consider
that it will provide sufficient opportunity to set out the issues confronting those members experiencing
problems in the preparation of their subsidy notifications.
Q5. Does your government normally send capital-based representatives to the Committee’s
regular meetings?  If not, why not?
Q6. Does your government view this subsidy noti fication seminar as an important event in
improving its ability to understand the subsidy rules, and to make subsidy notifications in acomplete and timely manner?  (That is, does your government view the seminar as a priority
event for its participation?)  Does your government  plan to send capital-based participants to
the seminar?  If so, how many and what are their functions?  If not, why not?
Reply
Canada normally sends capital based representative to the Committee’s regular meetings.
In respect to the attendance at this seminar, there has not yet been any decision taken on
whether  participants  would be sent from capital.
Q7. In the view of your government, would financial sponsorship only of participants from
least-developed country Members be appropriate?  If not, why not?  What other objective
criteria for eligibility for financial sponsorship could be developed that might be more
appropriate?
Reply
We consider that the sponsorship of least developed countries would be an appropriate
criterion.  However, we would be open to discuss other options.
Q8. If your government would be prevented from sending participants to the seminar due to
financial constraints, what is the minimum level of financial sponsorship that would make itpossible to send participants (e.g., airfare only, airfare and subsistence for the days in Geneva,
etc.)?
Reply
Not applicable.
Q9. Assuming that it is not possible to finance the seminar out of existing trust funds in the
WTO (a possibility currently being explored), and assuming a total budget of approximately
CHF 225,000, would your government consider making  a donation to finance it?  If so, how
much would your government be in a position to contribute?
Q10. If the seminar were financed by earmarked contributions from individual Members,
and there were a surplus in the budget for the seminar (due to fewer than expected participants
from Members eligible for financial sponsorship,  however they might be identified), how should
any such surplus be disposed of?  Two possible  options have been discussed (i) returning the
surplus to the sponsors on a pro-rata basis; or (ii) making the surplus available on a first-come,G/SCM/W/492
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first-served basis to other developing countr y Members.  Are there other, more appropriate,
options?
Reply
Canada is not in a position at this time to make any financial commitment to finance a
seminar on subsidy notifications.
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