Canada WT/TPR/S/179 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) OVERVIEW  
1. Canada's trade regime, which has undergone only mi nor changes since Canada's last review in 
2003, is largely liberal and transparent, with a fe w exceptions.  Canada applies at least MFN tariff 
treatment to all WTO Members.  The simple averag e applied MFN tariff declined slightly, from 6.8% 
in 2002 to 6.5% in 2006.  Around 53% of all tariff it ems entered Canada duty free in 2006.  This same 
year, the average applied tariff on agricultural produ cts (WTO definition) was 22.4%, compared with 
3.8% on other products.  Supply-managed agricultura l products, which cover da iry products, chicken, 
turkey, eggs, and broiler hatching e ggs, receive the highest tariff protection ( Chapter IV(2)).  There is 
tariff escalation between semi-processed and fully processed products.  Under remission orders, tariff 
reductions are granted on specific goods used for certain purposes. 
2. Canada grants tariff preferences unilaterally, and in the context of free-trade agreements with 
Chile, Costa Rica, Israel, and Mexico and the Unite d States;  Canada also grants preferences to 
Australia and New Zealand on a handful of pro ducts.  Canada grants duty-free and quota-free 
treatment on virtually all imports from least-develope d countries except Myanmar.  As for many other 
WTO Members, Canada's participation in prefer ential trade agreements and negotiations raises 
concerns about resources being distracted away fro m the multilateral trading system.  The preferential 
rules of origin that Canada applies vary between agreements;  as the Canadian authorities noted, this 
reflects the specific interests and sensitiv ities of the parties to each agreement. 
3. Internal taxes are applied equally to im ported and domestic products except for wine 
produced from Canadian-grown grapes, which is ex empt from federal excise duties, and for initial 
production volumes of beer made by domestic brewer s, which are subject to lower excise duties than 
imported beer.  Canada maintains tax and duty relief schemes for exported goods. 
4. Canada's quantitative import restrictions and licensing requirements are mostly in place for 
non-economic reasons.  Licences are required to impor t agricultural products at the in-quota tariff 
rate, and imports of natural gas are subject to author ization.  Canada also prohibits the importation of 
used motor vehicles;  exceptions include used mo tor vehicles from the United States, provided they 
meet Canadian safety standards. 
5. There has been a sharp reductio n in the use of contingency measures during the period under 
review.  Canada had 48 anti-dumping (AD) measures in  force at the end of June 2006, compared with 
91 measures in 2003;  54% of AD duties affected primary steel products.  Canada also had five 
countervailing (CV) measures in force, two of wh ich affected primary steel products.  Canada 
initiated two global safeguard inv estigations over the period January  2003-June 2006, and one China-
specific safeguard inquiry.  None of these inves tigations resulted in safeguard measures being 
imposed. 
6. Under Canada's federal regime the Federal G overnment as well as provincial and territorial 
governments have the authority to promulgate t echnical regulations and sanitary and phytosanitary 
measures.  Canada notified numer ous regulations and me asures to the WTO during the period under 
review, including one technical regulation at the pr ovincial/terrritorial level.  Canada is examining 
alternatives to facilitate notification of appropria te sub-national technical regulations in a timely 
manner. 
7. At the end of 2006, Canada imposed expor t duties on Canadian-manufactured tobacco 
products, and effective 12 October, on softwood lumber  destined to the United States.  The latter was 
the result of an agreement reached between Canada and the United States, which entered into force in WT/TPR/S/179 Trade Policy Review 
Page 26 
 
 
October 2006, over a long-standing dispute relating to Canada's exports of softwood lumber.  Controls 
may be placed on exports to particular countries liste d in Canada's Area Control List.  In mid 2006, 
Myanmar and Belarus were the only countries in the list, as Angola was removed from it in 2003. 
8. Export Development Canada (EDC), a crown cor poration, is Canada's export credit agency 
and provides export finance and insurance in Ca nada.  In 2005, the business volume supported by 
EDC programmes reached just over Can$57 billion.  In 2002, a WTO panel c oncluded that, although 
the programme as such was found to be compliant , certain EDC financing transactions constituted a 
prohibited export subsidy.  After Canada indicated that  it did not consider that it was required to take 
any further steps to comply with the DSB's re commendation for completed transactions, Brazil was 
authorized to retaliate against Canada. 
9. Canada is ranked highly for ease of doing business, and its government continues to 
undertake initiatives to make the business environmen t more efficient and transparent.  Federal 
corporation tax was reduced to 21% in 2004 (from 28 % in 2000), and tax reducti ons targeted at small 
businesses were also introduced. 
10. The Canadian Government provides inform ation on government assistance to business 
through the Tax Expenditures and Evaluations Report.  As tax expenditures refl ect benefits available 
on a selective basis to businesses (and individuals), th e Report adds transparency and accountability.  
In 2006, the Government estimated tax expenditures at  some Can$17 billion.  A variety of tax credits 
are also offered by provincial governments. 
11. The value of federal government procurement in Canada was around Can$19 billion in 2004, 
a substantial increase from previous years due mainly to higher defence spending.  Canada is a party 
to the WTO Agreement on Government Procuremen t, although this excludes procurement at the sub-
federal level, which in 2003-04 amounted to nearly Can$9 billion. 
12. Canada's state-trading enterprises have not changed during the review period.  They include 
the Canadian Wheat Board, the Canadian Dair y Commission, the Freshwater Fish Marketing 
Corporation, the ten provincial and territorial liquor  boards and the Ontario Bean Marketing Board. 
13. With respect to intellectual property, chang es were made to the Patents Act in 2005 to 
implement the 30 August decision on TRIPS and public health.  In addition, the Patented Medicines 
(Notice of Compliance) Regulations and the da ta protection provisions in the Food and Drug 
Regulations were amended in Oc tober 2006 to provide new and innovative drugs with a guaranteed 
minimum period of market exclusivity of eight year s and to address concerns regarding the timing of 
generic drugs' market entry once the relevant patent s expire.  The Trademarks Act was also amended, 
in 2004, to provide for the phased elimination of  the use of European wine and spirit names on 
Canadian labels. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Procedures 
14. The main laws governing customs procedures in  Canada are the Canada Border Services 
Agency Act1 and Customs Act.2  All importers of commercial goods are required to register with the 
Canada Revenue Agency for a business number, wh ich includes import/export account (RM account). 
The business number must be inscribed on relevant customs documentation.  All Canadian importers 
                                                      
1 Canada Border Services Agency Act.  Viewed  at:  http://laws.justice.gc.ca/en/C-1.4/index.html. 
2 Customs Act.  Viewed at:  http://laws.justice.gc.ca/en/C-52.b/index.html. Canada WT/TPR/S/179 
 Page 27 
 
 
of fresh fruit and vegetables must be licensed by the Canadian Food Inspection Agency.  The 
Licensing and Arbitration Regulations specify certain exemptions to this requirement. 
15. The Canada Border Services Agency (CBSA), created in December 20033, is in charge of 
customs operations;  it falls under the portfolio of the Minister of Public Safety and Emergency 
Preparedness Canada.4  Carriers must report shipments usi ng an approved cargo control document or 
electronic data interchange (EDI).5  Under the Customs Act, the CBSA has the authority to examine 
shipments randomly to verify compliance.  All requests for release of commercial shipments are 
reviewed.  Approximately 2% of shipments are physi cally examined:  the frequency of examinations 
depends on the importer's compliance record, as we ll as the type of goods being imported.  Goods 
examined more systematically include food products that may carry disease, hazardous products or 
waste, chemicals or biological products, and suppl y-managed goods (to ensure compliance with tariff 
quotas, see Chapter IV(2)). 
16. Recent reforms to facilitate imports include im plementation of the Customs Self-Assessment 
(CSA).  The CSA involves a streamlined accounting and payment process for all imported goods by pre-approved importers.  It also offers an expedited clearance option under which shipments entering 
Canada by pre-approved im porters, carriers and drivers are cl eared immediately at the border, upon 
identification of the importer.  According to the au thorities, there has been growing participation in 
the CSA programme;  in November 2006, CSA impo rtations accounted for 20% of Canadian trade 
(by value for duty).  Road, rail, and air carriers pa rticipate in the programme and two transnational 
marine carriers have applied to join. 
17. As reported in the Secretariat Report for Canada 's previous Review, various risk-management 
techniques are being used to process traders w ho are not approved under the CSA and to target 
shipments of higher and unknown risk;  include in formation-sharing initiatives and greater use of 
technology.
6 
18. Options to speed up release processing times of  commercial goods at Customs include the 
Prearrival Review System (PARS) and the Frequent Importer Release System (FIRST).7  According 
to the authorities, on average, 47% of all imports  are released under the PARS option and 2% are 
released under the FIRST.  PARS allows impor ters to submit the required import documentation a 
maximum of thirty days but not later than one hour  before the goods arrive in Canada, enabling the 
authorities to have the release recommendations re ady when the shipment arrives.  Shipments are 
released within minutes unless an examination is required. 
19. Expedited customs procedures for goods traded  between the United States Canada are also 
available through the Free and Secure Trade Progr am (FAST), a joint initiative between the CBSA 
and the U.S. Customs and Border Protection.  This allows Canadian and U.S. importers to clear their 
                                                      
3 Customs was previously the responsibility of the Canada Customs and Revenue Agency. 
4 CBSA online information.  Viewed at:  http ://www.cbsa-asfc.gc.ca/ag ency/who-qui-e-.html. 
5 In most cases this consists of:  two copies of the cargo control document (CCD);  two copies of the 
invoice;  two copies of a completed Form B3, Canada Customs Coding Form; any import permits, health certificates or forms that other federal governments require; and a Form A, Certificate of Origin when 
necessary.  Paper copies of the documents can be presen ted, or the information can be transmitted by EDI if 
authorized (CBSA, undated b). 
6 WTO document WT/TPR/S/112/Rev.1, 19 March 2003. 
7 For further information on the PARS and FIRST programmes, see Memorandum D17-1-5, Importing 
Commercial Goods.  Viewed at:  http://www.cbsa- asfc.gc.ca/E/pub/cm/d17-1-5 /d17-1-5-e.pdf#search=' 
Memorandum%20D1715'. WT/TPR/S/179 Trade Policy Review 
Page 28 
 
 
goods, in one of 19 FAST sites before they arrive at  the border.  Importers, carriers, and registered 
drivers must be pre-approved under the Partners in Protection Scheme (PIP).8 
20. New initiatives to ensure greater security with  respect to the movement of commercial goods 
by air and sea include the Advance Commercial Information (ACI) programme.  Air and marine 
carriers are required to transmit, through EDI, data related to the cargo and mode of transportation to 
the CBSA within established timeframes prior to arrival in Canada.9  According to the authorities, this 
allows the CBSA to identify threats to Canada's he alth, safety, and security.  An extension of the ACI 
programme is the Container Security  Initiative (CSI), a U.S. initiative.10  Under the CSI Canada may 
deploy CBSA officers to foreign seaports to pre- screen and examine containers before they are 
shipped to Canada.  As at end 2006 no Canadi an officers were currently deployed under the CSI 
programme in foreign countries (however, Canadian  officers were deployed to the United States as 
part of a separate initiative, the Joint Targe ting Initiative).  Canada signed a CSI Partnership 
Arrangement with the United States in October 2005.11 
21. Monetary penalties for infractions of the Customs Act, Customs Tariff and licensing 
agreements are applied through the Administra tive Monetary Penalty System (AMPS) under the 
authority of the Customs Act.  The AMPS became fully operational in October 2002.12  Penalties are 
levied in proportion to the type, frequency, and sev erity of the infraction.  Since October 2002, over 
50,000 penalties have been levied, totalling ove r Can$36 million.  The main types of importer 
infractions found were:  failure to pay duties;  failure to provide true, correct, and accurate 
information;  failure of a CSA importer to meet  accounting time limits;  and failure to provide a 
permit or information before release.  The main types of carrier infractions were:  failure to transport 
passengers and crew to Customs;  goods moved, deliv ered or exported without permission;  and goods 
removed from a sufferance warehouse or customs office prior to release. 
22. Importers may ask for a review of CBSA decisions relating to tariff classification, origin or 
value for duty of imported goods.  Between 1 April 2003 and 31 March 2006 there were 10,577 
requests for a re-determination of the tariff classificati on, origin or value of dut y, of which 5,099 were 
allowed in full and 1,603 in part.  Decisions re sulting from the review may be appealed to the 
Canadian International Trade Tribunal.13  The CITT's decision may be appealed to the Federal Court 
of Appeal. 
(ii) Rules of origin 
23. Canada maintains both preferential and non- preferential rules of origin.  MFN (non-
preferential) rules of origin are in place to di stinguish MFN imports from those under the General 
Tariff (see section (iv)).  Goods are deemed to origin ate in a country that is a beneficiary of the MFN 
Tariff if not less than 50% of the cost of production of the goods is incurred by the industry of one or 
                                                      
8 CBSA online information.  Viewed at:  http://w ww.cbsa-asfc.gc.ca/genera l/enforcement/partners/ 
menu-e.html. 
9 For timeframes for marine transport see Custom s Notice N-542 and N-565 viewed at:  http://www. 
cbsa-asfc.gc.ca/import/advance/marmode_menu-e.html.  For timeframes for air transport see Customs Notice 
630 viewed at:  http://www.cbsa-asfc.g c.ca/import/advance/airmode_menu-e.html. 
10 U.S. Customs and Border Protection online information.  Viewed at:  http://www.cbp.gov/ 
xp/cgov/border_security/international_activities/csi/csi_in_brief.xml. 
11 CBSA online information.  Viewed at:  http://www.cbsa-asfc.gc.ca/newsroom/release-
communique/2005/1020washington-e.html. 
12 Memorandum D22-1-1, Administrative Monetary Penalty System.  Viewed at:  http://www.cbsa-
asfc.gc.ca/E/pub/cm/d22-1-1. 
13 CBSA (undated b). Canada WT/TPR/S/179 
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more countries that are beneficiaries of the MFN Tariff, or by the industry of Canada.14  No certificate 
of origin, however, is required.  In addition, a separ ate rule that exists for marking purposes applies to 
a limited number of imported goods.15 
24. Canada maintains preferential rules of origin under free-trade agreemen ts and unilateral tariff 
concessions.  Under Canada's free trade agreements with the United States and Mexico (NAFTA), 
Chile (CCFTA), Israel (CIFTA), and Costa Rica ( CCRFTA), origin is based on a shift in tariff 
classification.  In some cases, a regional value cont ent requirement may apply in addition or as an 
alternate to a change in tariff classification.  Certain goods attract specific rules of origin.16 
25. Over the period under review progress has been ma de to liberalize the NAFTA rules of origin 
on certain goods.17 
26. For beneficiaries of the General Preferential Tariff (GPT), the Least-Developed Country 
Tariff (LDCT) and the Commonwealth Caribbean Countries Tariff (CARIBCAN), origin for goods 
that incorporate non-originating materials is based upon a certain percentage of the ex-factory price of 
the goods originating in beneficiary countries or Canada.  Under the GPT and CARIBCAN, at least 
60% of the ex-factory price of the goods must have  been incurred in one or more GPT or CARIBCAN 
beneficiary country or Canada.  Except for certain textiles and apparel, under the LDCT, at least 40% 
of the ex-factory price of the goods must have b een incurred in one or more LDCT beneficiary 
country or Canada;  the 40% may include up to 20% of the ex-factory price of the goods from other GPT countries.  Certain textiles and apparel, which we re previously ineligible for the benefits of the 
LDCT, may now receive duty-free tariff treatment under Canada's Market Access Initiative for Least 
Developed Countries.
18 
27. Rules of origin for the Australia and New Zealand tariff treatments are similar to Canada's 
MFN rules of origin.19  Goods are deemed to originate in Austra lia if not less than 50% of the cost of 
production is incurred by the industry of Australia or Canada  and the goods were finished in 
Australia in the form in which they are importe d into Canada.  The same formula applies to 
New Zealand. 
                                                      
14 CBSA Memorandum D11-4-3 on Rules or Origin Respecting the Most-Favoured-Nation Tariff.  
Viewed at:  http://www.cbsa-asfc.gc.ca/E/pub/cm/ d11-4-3/d11-4-3-e.pdf#searc h='Memorandum%20D1143% 
20Rules%20of%20Origin. 
15 CBSA Memorandum D11-3-1, Marking of Imported Goods. 
16 CCFTA, Annex D-01;  CCRFTA, Annex IV.1;  CI FTA, Annex 3.1;  and NAFTA Annex 401. 
17 These have included:  certain alcoholic beverages, petroleum/topped crude, esters of glycerol, pearl 
jewellery, headphones with microphones, chassis fitted w ith engines, and photocopiers (January 2003);  teas, 
spices, carrageenan, seasonings, precious metals, speed drive controllers and their printed assemblies, household 
appliances, loudspeakers, thermostats, parts for various machinery and equipment, and toys (January 2005); 
certain "short supply" textile goods (July 2005 (Canad a and United States only));  and cocoa preparations, 
cranberry juice, ores, slag and ash, leather, cork, certai n textile products, feathers, glass and glassware, copper 
and other metals, televisions, and automatic regulating or controlling instruments (July 2006).  See also Foreign 
Affairs and International Trade Canada online informat ion.  Viewed at:  http ://www.dfait-maeci.gc.ca/nafta-
alena/tech-rect-en.asp. 
18 Memorandum D11-4-4, September 4, 2003.  Viewed at:  http://cbsa-asfc.gc.ca/E/pub/cm/d11-4-
4/d11-4-4-e.html. 
19 Memorandum D11-4-6, February 17 2005.  Vi ewed at:  http://www.cbsa.gc.ca/E/pub/cm/d11-4-
6/d11-4-6-e.pdf#search='D1146'. WT/TPR/S/179 Trade Policy Review 
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(iii) Customs valuation 
28. Canada's customs valuation rules are contained in Part III of the Customs Act20, as well as the 
Valuation for Duty Regulations, and other Canada Customs D-13 memoranda.21  The President of the 
CBSA is responsible for issuing rules relati ng to the determination of customs value. 
29. Canada applies tariffs based on the transaction value of the goods if the goods are sold for 
export to Canada to a purchaser in Canada and the price paid or payable for the goods can be 
determined, as well as other stipulated conditions.22  Section 48(5) of the Customs Act lists the items 
to be included or excluded in the price of the goods.  Where the transaction method cannot be used (in approximately 5% of imports), othe r methods of determining the value of goods reflect the hierarchy 
set out in the WTO Customs Valuation Agreement.
23  The order of application of the deductive and 
computed methods may be reversed on the basis of a written request by the importer. 
30. Interpretations of the value for duty for certain imports, or specific valuation issues are 
provided by the authorities.24  The value for duty of goods imported into Canada must be in Canadian 
currency;  foreign currency values are multiplied by th e exchange rate in effect on the date the goods 
began their direct and uninterrupted journey to Canada.25  Exchange rates are primarily based upon 
the latest exchange rate provided to the Minister by the Bank of Canada.26 
31. Importers must declare a value for duty for all goods imported into Canada.  Designated 
customs officers determine the customs value of imported goods, generally through a risk-based, post-
importation verification of importe r's books and records;  they ma y also make re-determinations 
within four years.  Customs officers must notify importers of their decisi ons and the rationale for 
them.  Importers may request a re-determination of  the customs value within 90 days, although this 
time limit may be extended under certain circumstan ces.  Decisions by the President of the CBSA 
may be appealed to the Canadian International Trade Tribunal (CITT) within 90 days.  CITT 
decisions may be appealed to the Federal Court of  Appeal and, beyond that, the Supreme Court of 
Canada. 
                                                      
20 Department of Justice Canada online information.  Viewed at:  http://laws.justice.gc.ca/en/C-
52.6/232434.html. 
21 D13 Memoranda on valuation policy.  Viewed at:  http://www.cbsa-asfc.gc.ca/import/valuation/ 
policy-e.html. 
22 Memorandum 13-4-1, April 2001 outlines the "transaction method of valuation" in section 48 of the 
Customs Act.  Memorandum D13-4-2, April 2001 provides an interpretation of the meaning and application of 
"sold for export to Canada", and Memorandum D13-4-3 explai ns the types of payments to be included as part of 
the price paid or payable for the purpose of determining a transaction value under the Customs Act. 
23 Information on valuation methods is set out in Memorandum D13-3-1, Methods of Determining 
Value for Duty.  See also CBSA (undated c). 
24 Including for:  used goods; used automobiles, motor vehicles and other vessels;  goods sold in 
Canada while entered temporarily for convention and exhibitions;  certain information-based products;  printed 
or lithographed matter or paper; promotional material and computer software;  and imports to be used in the assembly, construction or fabrication of a facility or a ma chine sold on an installed contract basis.  See CBSA 
online information for issue-specific interpretations.  Viewed at:  http://www.cbsa- asfc.gc.ca/import/valuation/ 
issue-e.html. 
25 Customs Notice N-557, March 2004.  Viewed at:  http://www.cbsa-asfc.gc.ca/E/pub/cm/cn557 
/cn557-e.pdf. 
26 Memorandum D13-2-3, Exchange Rate for Calculation of Value for Duty Under the Customs Act.  
Viewed at:  http://www.cbsa-asfc.g c.ca/E/pub/cm/d13-2-3/d13-2-3-e.pdf. Canada WT/TPR/S/179 
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(iv) Tariffs 
32. Canada levies customs duties on the f.o.b. value of  imports at the point of direct shipment to 
Canada.27 
33. The Customs Tariff was enacted in December 1997 a nd entered into force in January 1998.  It 
is based on the Harmonized Commodity Description a nd Coding System (HS).  The Canada Border 
Services Agency issues regular consolidated versi ons of the Customs Tariff incorporating previous 
amendments.28  The 2006 Customs Tariff reflects the 2002 amendments to the HS.  It comprises 
8,455 tariff lines at the HS 8-digit level (Chapters 1-97). 
34. Canada's Customs Tariff contains prov isions that automatically round down ad valorem  MFN 
and preferential tariffs to the closest half percentage point (except for certain motor vehicles and 
chassis), and eliminate all tariff rates of less than 2%, both on an annual basis.29 
(a) Applied MFN tariff rates30 
35. Import duties accounted for 1.5% of tota l federal government revenue in 2005/06.31 
36. Canada applies at least MFN tariff treatment to all WTO Members.  Among non-members the 
Democratic People's Republic of Korea and Liby a do not receive MFN tariff treatment;  both are 
subject to the General Tariff, levied at 35% on a ll goods except those subject to MFN rates exceeding 
35%, in which case the MFN rate is applied.32  MFN tariff treatment was extended to East Timor in 
April 2006.33 
37. The simple average applied MFN tariff dec lined from 6.8% in 2002 to 6.5% in 2006 
(Table AIII.1).  The average applied tariff for ag ricultural products (WTO definition) in 2006 was 
22.4% (up from 21.7% in 2002);  and the average for non-agricultural products was 3.8% (down from 
4.2% in 2002).  This decline was driven by  tariff reductions on 1,123 products following the 
implementation of WTO commitments, which resulted in a reduction of applied rates in tandem with 
bound rates.  In 2006, duty-free lines represente d 52.7% of all tariff lines (Table III.1). 
38. The share of non- ad valorem  tariff lines is virtually the same as in 2002 (Table III.1).  On 
average, non- ad valorem  duties afford significantly higher protection than ad valorem ones:  in 2006, 
the simple average of ad valorem  equivalents of non- ad valorem  tariff rates was 72.1%, compared 
with 3.8% for ad valorem  rates.  About 96% of non- ad valorem  tariff rates apply to agricultural 
products (WTO definition). 
                                                      
27 Section 48(5), Customs Act. 
28 Viewed at:  http://www.cbsa.gc.ca/gene ral/publications/customs_tariff-e.html. 
29 Section 30(7) et seq., Customs Tariff. 
30 The analysis in this sub-section is based on the 2006 Customs Tariff, as provided by Canada to the 
WTO's Integrated Data Base (IDB).  It includes ad valorem  equivalents of non- ad valorem  tariff rates, estimated 
by the Secretariat on the basis of unit values for 2005.  The data used to estimate unit values was obtained from 
Canada's submission to the IDB.  Ad valorem  equivalents could not be estimated for 23 tariff lines.  These were 
not included in the calculation of tari ff averages, standard deviations or ranges.  For another 20 tariff lines 
subject to non- ad valorem  rates, ad valorem  equivalents were estimated using the ad valorem  component of the 
duty.  For products subject to tariff quotas, the analysis is based on out-of-quota rates unless stated otherwise. 
31 Department of Finance (2006b). 
32 The General Tariff is applied on imports from countries that are not on the List of Countries and 
Applicable Tariff Treatments, a schedule of the Customs Tariff (see Section 29, Customs Tariff). 
33 Canada Gazette  140(8), 19 April 2006. WT/TPR/S/179 Trade Policy Review 
Page 32 
 
 
39. In 2006, some 1.6% of tariff lines had MFN ra tes exceeding 20%, 6.5% had rates exceeding 
15%, 13.5% exceeding 10%, 35.6% exceeding 5%, a nd 47.1% exceeding 0%.  The products subject 
to the highest ad valorem  or ad valorem  equivalent rates were dried egg albumin (532.3%), prepared 
meals of fowl (377.8%), and fats derived from milk (313.5%).  Milk and cream were subject to rates 
amounting to 292.5%. 
40. Tariff quotas cover around 2% of tariff lines;  all tariff quotas correspond to agricultural 
products (Chapter IV(2)(ii)). 
Table III.1 
Structure of the tariff schedule, 2002 and 2006 
(Per cent)  
 2002 2006 
Total number of tariff lines a 8,364 8,455 
Non- ad valorem  tariffs (% of all tariff lines) 3.9 3.8 
Non- ad valorem  with no AVEs (% of all tariff lines) 0.5 0.5 
Tariff quotas (% of all tariff lines) 2.2 2.1 
Duty-free tariff lines (% of all tariff lines) 49.0 52.7 
Dutiable lines tariff average rate (%) 13.3 13.7 
Domestic tariff "peaks" (% of all tariff lines)b 1.6 1.8 
International tariff "peaks" (% of all tariff lines)c 9.9 6.5 
Bound tariff lines (% of all tariff lines) 99.7 99.7 
 
a Including 23 lines for which it was not possible to estimate ad valorem  equivalents. 
b Domestic tariff peaks are defined as those exceed ing three times the overall average applied rate. 
c International tariff peaks are defined as those exceeding 15%.  
Source:  WTO Secretariat calculations, based on data provided by the authorities of Canada. 
41. There is no consistent pattern of tariff escalation:  the average applied rate for semi-processed 
products is lower than for raw materials and the average for fully-processed products is higher than 
the average for raw materials and se mi-processed products (Table AIII.1). 
(b) WTO bindings 
42. Canada has bound all but 22 tariff lines in Chapters 1-97.34  The unbound lines cover mineral 
oils and fuels and electrical energy (9 lines under HS  27);  cruise ships, tankers, tugs, and drilling and 
platform ships (12 lines under HS 89);  and posta ge stamps (HS 9704.0000).  The average bound tariff 
rate is 8.2%.  The applied MFN tariff rate on wa rships (HS 8906.1000) is 25%, ten percentage points 
above the bound tariff rate. 
43. All tariff lines reached their final bound MFN tariff rate, in accordance with Canada's 
Uruguay Round commitments, by January 2004.  Products subject to final bound MFN tariff reductions in January 2004 included textiles and cl othing, footwear, chemicals, plastics, paper and 
paperboard articles, a nd iron and steel products. 
44. Canada has submitted to the WTO a list of tari ff items affected by th e 2002 changes to the 
HS.  Canada is covered by the collective General Council waiver su spending the application of GATT 
binding disciplines to allow WTO Members to impl ement the HS 2002 changes domestically pending 
                                                     
 
34 In addition, three lines are partially bound (HS 2710.1999, HS 2710.9199, and HS2710.9999). Canada WT/TPR/S/179 
 Page 33 
 
 
the incorporation of these changes into their schedules of concessions.35  This waiver expires in 
December 2006. 
(c) Preferential tariffs 
45. Tariff preferences may be granted by Canada either unilaterally or in the context of 
preferential trade agreements. 
Unilateral tariff preferences 
46. Canada grants unilateral pref erential tariff treatment under th e General Preferential Tariff 
(GPT), the Least-Developed Country Tariff (LDCT), and the Commonwealth Caribbean Country Tariff (CARIBCAN).  The GPT provides tariff prefer ences for most developing countries.  Mongolia 
became a GPT beneficiary in J une 2003, and Oman in May 2006.
36  Upon the accession to the EC of 
Cyprus, the Czech Republic, Estonia, Hungary, La tvia, Lithuania, Malta, Poland, Slovakia, and 
Slovenia in May 2004, Canada withdr ew GPT benefits for these countries.37  Dairy products, poultry, 
eggs, refined sugar, and most textiles, clothing, a nd footwear are not eligible for preferential tariff 
treatment.  Around 67% of tariff lines benefit from duty-free treatment under the GPT (Table AIII.2).  
The simple average tariff under the GPT was 5.2% in 2006, roughl y the same as in 2002.  The GPT 
has been extended until June 2014.38 
47. The LDCT provides duty-free access for imports  from the least developed countries, as 
defined by the United Nations, except Myanmar.  Fo llowing the expansion of the LDCT in January 
2003, close to 99% of tariff lines are eligib le for duty-free treatment (Table AIII.2).39  The remaining 
1% is subject to average tariffs of around 224% a nd covers out-of-quota tariffs on dairy, poultry, and 
egg products, which have been excluded from pr eferential treatment under the LDCT (see also 
Chapter IV(2)(ii)).  The simple average tariff unde r the LDCT was 2.5% in 2006, down from 4.1% in 
2002.  The LDCT has been extended until June 2014.40 
48. There have been no major changes affecting the level or coverage of tariff preferences under 
the CARIBCAN.  This pr ogramme provides tariff reductions to Caribbean countries and territories.41  
In 2006, the average tariff on imports from CARIBC AN beneficiaries was 4.3%.  Some 87% of tariff 
lines were duty free. 
Free-trade agreements and other arrangements 
49. Canada grants preferential tariff treatment for el igible goods under agre ements with Australia, 
Chile, Costa Rica, Israel, New Zealand, and to  Mexico and the United States under the NAFTA 
(Table AIII.2 and Chapter II(5)(ii)). 
                                                      
35 WTO documents WT/L/469, 17 May 2002;  WT/L/511, 20 January 2003;  WT/L/562, 13 February 
2004;  WT/L/598, 14 December 2004 ;  and WT/L/638, 6 December 2005. 
36 Canada Customs and Revenue Agency, Customs Notice N-537, 22 September 2003, and Canada 
Border Services Agency, Tariff Notice TN-15, 15 June 2006. 
37 Canada Border Services Agency, Cu stoms Notice N-569, 28 April 2004. 
38 Bill C-21, An Act to Amend the Customs Tariff, 29 April 2004. 
39 Canada Border Services Agency, Customs Noti ce CN-361, Order Amending the Schedule to the 
Customs Tariff (Least-developed Country Tariff) and Re gulations Amending the General Preferential Tariff and 
Least Developed Country Tariff Rules of Origin Regulations. 
40 Bill C-21, An Act to Amend the Customs Tariff, 29 April 2004. 
41 Beneficiaries are Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, Bermuda, Cayman 
Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Ne vis, St. Lucia, St. Vincent and the 
Grenadines, Trinidad and Tobago, Turks and Ca icos Islands, and the British Virgin Islands. WT/TPR/S/179 Trade Policy Review 
Page 34 
 
 
50. Under the Canada-Chile free-trade agreement,  tariffs have been eliminated on all goods 
imported from Chile, except some 98 lines covering mostly poultry and dairy products.  These 
products are subject to a simple average tariff of close to 220%.  In 2006, the simple average tariff 
applied to imports from Chile was 2.5%. 
51. Under the Canada-Costa Rica free-trade agreement, the simple average tariff applied to 
imports from Costa Rica has decreased from 4.2% in 2002 to 3.5% in 2006.  Some 1,210 tariff lines 
on imports from Costa Rica were still subject to tariffs  at end 2006.  In add ition to poultry and dairy 
products, these included beverages, textiles, clothi ng, and footwear. The simple average tariff rate 
applied on dutiable products was 24.5%. 
52. Tariffs on imports from Israel averaged 3.1% in  2006.  Tariffs remain on 594 lines, including 
poultry and dairy products, fish, fruit and vegetables,  grains, beverages, and tobacco.  The simple 
average tariff applied on dutiable products was 44.6%.  In November 2003, Canada and Israel 
implemented additional agricultural tariff concessions under the agreement. 
53. Under NAFTA, tariffs on imports from the Unite d States have been eliminated, except for 
around 98 tariff lines, which are subject to tariffs  amounting to 222.5% on average.  These tariffs 
reflect mainly high out-of-quota tariffs on poultry a nd dairy products.  Imports of 98.3% of all lines 
from Mexico were duty-free in 2006, up from 93.8% in 2002.  The average tariff on the 140 lines subject to tariffs was 155.7%.  The products concer ned are largely the same as for the United States. 
54. Under the Canada-Australia Trade Agreemen t and the Trade and Economic Co-operation 
Agreement with New Zealand, the simple average tariff on imports was 6.1% in 2006.  This is 
marginally lower than the average MFN tariff rate  because subsequent reductions in MFN tariff rates 
have eroded preferences under both agreements. 
(d) Tariff remissions 
55. Under the Customs Tariff the Governor-in- Council may issue Remission Orders granting 
tariff reductions on imported goods used for certain purposes or pursuant to certain conditions, while 
maintaining the general applicability of tariffs (Chapter IV(4)).
42  Nine new Remission Orders for 
customs duties were issued between mid-2002 and mid 2006. 
56. Additionally, Canada maintains a Duty Deferral Program (section (3)(vi)).  As part of this 
programme, imports can be stored in a customs bonded warehouse without paying customs duties and 
taxes, normally for up to four years.43  Duties are payable once the goods enter the domestic market.  
A limited number of activities can be performed in a bonded warehouse, including reassembly, 
marking, labelling, packing, grading, diluting, an d displaying.  There were approximately 400 bonded 
warehouses in Canada in mid 2006;  half were pr ivately operated and half publicly operated. 
(v) Other charges affecting imports 
(a) The GST/HST and provincial sales taxes 
57. The goods and services tax (GST), levied under the Excise Tax Act44, is Canada's largest 
indirect tax by revenue, generating nearly Can$3 0 billion in FY 2004/05 (up from Can$25 billion in 
                                                      
42 Section 115, Customs Tariff. 
43 See Canada Border Services Ag ency online information, "Importing in a bonded warehouse".  
Viewed at:  http://www.cbsa.gc.ca /import/duty_deferral/tab9-e.html. 
44 Excise Tax Act.  Viewed at:  http://laws.justice.gc.ca/en/E-15/index.html. Canada WT/TPR/S/179 
 Page 35 
 
 
FY 2001/02), and amounting to around 15% of total fe deral budgetary revenue.  It applies to most 
goods and services at a rate of 6%, following a one percentage point reduction effective 1 July 2006.45  
Some products are exempt from the GST.46  In Nova Scotia, New Brunswick, and Newfoundland the 
GST has been consolidated with the provincial sal es tax.  This harmonized sales tax (HST), of 14%, 
applies to supplies made in or imported into a participating province. 
58. The GST/HST is payable on the duty-paid valu e of imported goods plus any other duties and 
taxes imposed under the Customs Tariff, the Special Import Measures Act, the Excise Tax Act, Excise 
Act 2001 or under any other law relating to Custom s.  The application of the GST/HST does not 
discriminate between domestic and foreign suppliers. 
59. Sales taxes are levied by six provinces that do not apply HST;  Alberta and Nunavut do not 
have a sales tax.  The rates of sales taxes in each province are represented in Table III.2.  In a number 
of cases, refunds and/or exemptions to the sales ta x apply to specific goods and services.  In addition, 
some cases, higher sales taxes apply to certain goods .  For example Ontario applies higher sales tax 
rates to alcoholic beverages (10% and 12%), and British Colombia applies higher rates to alcohol 
(10%) and passenger vehicles over Ca n$55,000 (8%-10%).  In general,  the basis of the provincial 
sales tax is the customs-duty-paid value of impor ted products.  Quebec and Prince Edward Island 
apply provincial sales taxes to the GST-inclusive value. 
Table III.2 
Provincial sales taxes, November 2006 
Province/territory Rate generally applicable 
to imports Source 
Alberta No sales tax  
British Colombia 7% http://www.re v.gov.bc.ca/ctb/publications/bro chures/SmallBusinessGuide.pdf 
Manitoba 7% http://www.gov.mb.ca/fi nance/taxation/taxes/retail.html 
New Brunswick 8% HST 
Newfoundland 8% HST 
Northwest Territories No sales tax http://www.fin.gov.nt.ca/taxrates.shtml 
Nova Scotia 8% HST 
Nunavut No sales tax   
Ontario 8% http://www.trd.fin.gov.on. ca/userfiles/HTML/cma_3_4381_1.html 
Prince Edward Island 10% http://www.gov.pe.ca/ pt/taxandland/index.ph p3?number=76948&lang=E 
Quebec 7.5% http://www.revenu.gouv.qc.ca/e ng/travailleur_autonome/oblig-fiscales/tvq-
tps/info.asp 
Saskatchewan 5% http://www.gov.sk.ca/fina nce/revenue/pst/bulletins/pstnotice.pdf 
Yukon No sales tax  
 
Source: Government of Canada. 
(b) Excise taxes and duties 
60. Federal excise duties on beer are imposed  as production levies on domestic and imported 
products under the Excise Act.47  Beer made by domestic brewers is eligible for lower, tiered excise 
                                                      
45 Canada Revenue Agency online information.  Vi ewed at:  http://www.cra-arc.gc.ca/agency/budget 
2006/gstratega-e.html. 
46 Some examples include:  long-t erm residential rents;  purchases of previously-owned homes;  most 
health and dental services;  childcare services;  most education services;  municipal transit services;  and most 
financial services, including loans, mortgages and insurance. 
47 Excise Act.  Viewed at:  http: //laws.justice.gc.ca/en/E-14/51156.html. WT/TPR/S/179 Trade Policy Review 
Page 36 
 
 
duty rates48;  imported beer is not eligible for these lower excise duty rates.  Excise duty rates for beer, 
wine, spirits, and tobacco were most recently ch anged as a result of the federal budget of 12 May 
2006.49 
61. Excise duties on non-exempt wine range from Can$0.0205 per litre to Can$0.62 per litre 
depending on the alcohol content level:  100% Ca nadian wine (including cider, wine coolers, fruit 
wines and sake) packaged on or after 1 July 2006 is exempt from excise duties.  Evidence must be 
provided when claiming the exemption that the wi ne is wholly composed of Canadian-grown 
agricultural products.50 
62. Federal excise duties on spirits and tobacco are imposed as production levies under the Excise 
Act, 2001.51  A special duty of Can$0.12 per litre of absolute ethyl alcohol is also payable on 
imported spirits delivered to or imported by a licensed user. 
63. As outlined in the Secretariat Report for Cana da's previous review, the Excise Act 2001, was 
the outcome of a government review of the legisl ative and administrative fra mework for the federal 
taxation of alcohol and tobacco pr oducts initiated in 1993.  Key features of the Act included the 
continued imposition of a production le vy on spirits and tobacco, the replacement of the sales levy on 
wine with a production levy at an equivalent rate, modern administrative provisions, and a 
strengthened enforcement structure. 
64. Excise duties, are complemented by excise taxe s imposed under the Exci se Tax Act as sales 
levies.  The following products carry federal excise ta xes:  gasoline, diesel and aviation fuels;  heavy 
automobiles;  automotive air conditioners;  and insurance premiums.  The excise tax on jewellery 
products was eliminated in May 200652;  and the excise taxes on tobacco products and wine 
respectively were repealed and replaced by an excise duty in June 2003.53 
65. All provinces and territories also impose taxe s on specific products, generally on fuel and 
tobacco;  different tax rates are applicable for each province. 
(vi) Quantitative restrictions and licensing 
66. Canada's licensing requirements and quantitative import restrictions are mostly in place for 
non-economic reasons (Table III.3, and section (2)(i x)).  Canada's latest reply to the WTO 
questionnaire on import licensing pro cedures was submitted in October 2006.54  The authorities 
indicate that the following products are subject to quantitative restrictions not previously notified to 
the WTO:  true hemp under HS 5302;  white phos phorous matches (HS 9897.0000);  used mattresses 
(HS 9897.0000); and hate propaganda and obsce ne materials (HS 9899.0000).  Rough diamond 
imports into Canada must be accompanied by a Ki mberley Process Certificate validated by a foreign 
government that is also participating in the Kimberley Process regime. 
                                                      
48 Excise Duty Notice EDBN8, July 2006.  View ed at:  http://www.cra-arc.gc.ca/E/pub/em/edbn8/ 
edbn8-e.pdf. 
49 Excise Duty Notice May 2006.  Viewed at:  http://www.cra-arc .gc.ca/E/pub/em/edn9/edn9-e.pdf. 
50 Excise Duty Notice EDN11 May 2006.  Viewed at:  http://www.cra-
arc.gc.ca/E/pub/em/edn11/edn11-e.pdf;  and Excise  Duty Notice EDN15 June  2006.  Viewed at:  
http://www.cra-arc.gc.ca/E/pu b/em/edn15/edn15-e.pdf. 
51 Excise Act, 2001.  Viewed at:  http ://laws.justice.gc.ca/en/E-14.1/index.html. 
52 CCRA Notice ET/SL-060.  Viewed at:  http:// www.cra-arc.gc.ca/E/pub/et/etsl60/etsl60-e.pdf. 
53 CCRA Notice ET/SL-0049.  Viewed  at:  http://www.cra-arc.gc.ca/E/ pub/et/etsl49/etsl49-e.pdf;  and 
CCRA Notice ET/SL-0048.  Viewed at:  http://www .cra-arc.gc.ca/E/pub/et/etsl48/etsl48-e.pdf. 
54 WTO document G/LIC/N/3/CAN/5, 26 October 2006. Canada WT/TPR/S/179 
 Page 37 
 
 
67. Licences are required to import agricultura l products at the in-quota tariff rate 
(Chapter IV(2)(ii)). 
Table III.3  
Products subject to import licensing requirements for non-economic reasons, 2006 
Products Licensing 
intended to 
restrict the 
quantity of 
imports? Legal basis Purpose (as stated by the Canadian 
authorities) 
Controlled drugs (e.g., amphetamine, methamphetamine, and barbituric acids), narcotics, and restricted drugs 
(used only for research, not commercial sale) and precursor chemicals Yes Controlled 
Drugs and 
Substances Act To minimize diversion while imports 
do not exceed domestic medical, 
scientific, or industrial needs;  to 
ensure compliance with international 
commitments 
Explosives, including blasting explosives, detonators, 
propellants, sporting and indust rial cartridges, fireworks, 
and pyrotechnic devices No Explosives Act To ensure safety of imported 
explosives 
Nuclear equipment and inform ation, radio-active devices, 
and nuclear substances (e.g. deuterium, thorium, 
uranium, their respective derivatives or compounds;  
radioactive nuclides;  substances capable of releasing 
nuclear energy;  radioactive by-products of the development, production or use of nuclear energy;  and radioactive substances used for the development, production or use of nuclear energy) No Nuclear Safety 
and Control Act To ensure that products subject to 
licensing are destined for authorized 
persons or organizations and that their 
use will not pose undue risk to health, 
safety, security, and the environment;  
to implement international obligations 
Carbon steel products, define d as semi-finished steel 
(ingots, blooms, billets, slabs, and sheet bars), plate, 
sheet and strip, wire rods, wire and wire products, railway-type products, bars, structural shapes and units, 
and pipe and tube;  and speci alty steel products, defined 
as stainless flat-rolled produc ts (sheet, strip and plate), 
stainless steel bar, stainless steel pipe and tube, stainless 
steel wire and wire product, alloy tool steel, mold steel, 
and high speed steel No Export and 
Import Permits 
Act To monitor the volume and the origin 
of carbon and specialty steel products 
Plant pests, plants and plant products No Plant Protection 
Act To protect against the introduction of 
plant pests 
Non-U.S. origin:  animals (except pet dogs and 
domesticated cats, some rodents, reptiles other than 
turtles and their eggs, and amphibians), semen (except 
canine), embryos, veterinary biologics derived through 
biotechnology, and certain animal products and by-
products depending on the species and country of origin;  
and U.S. origin:  semen (except equine and canine), 
embryos, veterinary biologics, psittacine birds other than pet birds, turtles, tortoises,  skunks, foxes, raccoons, some 
ruminants, swine, honeybees, dogs (commercial 
shipments), and certain animal products and by-products 
dependant on species No Health of 
Animals Act To protect against the introduction of 
diseases 
Food of animal and plant origin No Food and Drugs 
Act and other 
statutes 
administered by 
the CFIA To ensure that the imported food 
meets Canadian standards for safety, 
quality, and labelling 
Specimens of species and their by-products listed in 
Schedules I and II under the Wild Animal and Plant 
Protection and Regulation of International and 
Interprovincial Trade Act Yes Wild Animal 
and Plant 
Protection and 
Regulation of 
International and 
Interprovincial 
Trade Act To allow importation in endangered 
species and their by-products in 
internationally agreed circumstances;  
for species in Schedule II, to ensure 
that there are sufficient safeguards and security to prev ent escapes to the 
wild 
Table III.3 (cont'd)WT/TPR/S/179 Trade Policy Review 
Page 38 
 
 
Products Licensing 
intended to 
restrict the quantity of 
imports? Legal basis Purpose (as stated by the Canadian 
authorities) 
Natural health products No Food and Drugs 
Regulations and 
Natural Health 
Products 
Regulations To ensure that im ported substances 
meet Canadian standards for safety, 
efficiency, and quality 
 
Source:  WTO Secretariat, based on information provided by Canada. 
68. Imports of natural gas are subject to authorization55:  the National Energy Board assesses 
import applications.  Authorizations are granted on the basis of a case-by-case assessment of the 
impact on the Canadian gas industry, consum er cost, distribution, and other factors.56  For large 
volume and long-term imports, authorization is gr anted through a licence.  The licence application 
process involves a public hearing and takes a minimum of four months;  approval of the Governor-in-
Council is also required. 
69. Tariff item HS 9897.0000 of the Customs Tariff prohibits the importation of used or second-
hand motor vehicles.  Exceptions include used or  second-hand motor vehicles that are 15 years or 
older, and those imported from the United States, pr ovided they meet Canadian safety standards.57 
70. The licensing scheme used to implement quantitative restrictions on imports of textiles and 
clothing was abolished following the elimination in  2005 of remaining quantitative restrictions as a 
result of the implementation of the WTO Agreement on Textiles and Clothing.58 
(vii) Contingency measures 
(a) Anti-dumping and countervailing measures 
71. The Special Import Measures Act (SIMA) is Ca nada's main legal instrument governing the 
use of anti-dumping and countervailing measures, together with the Special Import Measures Regulations and related directives.
59  The President of the Canada Border Services Agency (CBSA) 
and the Canadian International Trade Tribunal (CI TT) are charged with the administration of the 
SIMA.60  The responsibility of the CBSA is to evaluate complaints filed by a Canadian industry and, 
when warranted, to initiate investigations to dete rmine whether imports are dumped or subsidized.  
The CITT is mandated to make preliminary and final determinations whether the dumped or 
subsidized imports have caused, or threaten to cause,  injury to the Canadian industry.  The CBSA may 
levy provisional duties on imports from the date of its preliminary determination.  The CITT estimates 
that anti-dumping and countervailing duty actions ha ve affected only a small fraction (less than 0.5%) 
of Canada's merchandise imports since 1994. 
                                                      
55 National Energy Board Act, section 116;  and the National Energy Board Part VI (Oil and Gas) 
Regulations, section 5. 
56 WTO document G/LIC/N/3/CAN/5, 26 October 2006. 
57 See also Canada Border and Services Agency, Memorandum D9-1-11, Importation of Used or 
Second-Hand Motor Vehicles, 2 July 1998. 
58 Canada Gazette  139(7), 6 April 2005. 
59 See SIMA, as well as SIMA Regulations an d Directives.  Viewed at:  http://www.cbsa-
asfc.gc.ca/sima/act-regs-e.html. 
60 CBSA Anti-Dumping and Countervailing Program, Trade Program Director ate.  Viewed at:  
http://www.cbsa-asfc.gc.ca/sima/menu-e.html. Canada WT/TPR/S/179 
 Page 39 
 
 
72. Decisions by the CITT may be subject to judici al review by the Federal Court of Appeal.  
Final decisions of the CBSA may be subject to judicial review by the Federal Court of Appeal while other CBSA decisions may be subject to judicial re view by the Federal Court.  From January 2003 to 
November 2006, five CITT cases were challenged in the Federal Court of Appeal.  Over the same 
period, three CBSA decisions were challenged in the Federal Court of  Appeal and six in the Federal 
Court.  With respect to goods from the United Stat es and Mexico judicial review by a bi-national 
panel under NAFTA may be requested. 
73. Most complaints are brought by or on behalf of Canadian industry, however, in limited 
circumstances the President of the CBSA may la unch own-initiative investigations.  In certain 
circumstances, the CITT may advise the President of the CBSA to start an investigation.  During the 
period under review, all investigati ons initiated were the result of complaints filed by Canadian 
industry. 
74. Up to 60 days after a preliminary determinati on, foreign exporters or governments can offer 
undertakings aimed at eliminating the dumping/subsid izing or injury to the Canadian industry.  
Undertakings are accepted only if they are given by exporters or governments of foreign countries 
representing all or substantially all of the trade in the product under investigation, which the CBSA 
interprets as those accounting normally for 85% of the volume of dumped or subsidized imports into 
Canada.
61 
75. Canada operates a prospective anti-dumping en forcement system in which exporters are 
informed of the normal values for the products they  export to Canada.  If fu ture sales are made at 
price levels equal to or higher than the no rmal value of the product, no duties are assessed. 
76. Anti-dumping and countervailing in vestigations may be initia ted simultaneously, and  
products may be the subject to both AD duties and CV  measures at the same time.  At end June 2006, 
these items included steel fasteners from China (find ing on 7 January 2005);  laminate flooring from 
China (finding on 16 June, 2005);  hot-rolled carbon steel sheet from India (finding on 17 August 2001);  refined sugar from the EC (CV duties)  and from Denmark, the Netherlands, and the 
United Kingdom (AD duties) (findings on 6 Nove mber 1995, 3 November, 2000 and 2 November, 
2005). 
77. Since 1 January 2003, goods from Chile have been exempt from the application of anti-
dumping laws.
62  Chile has no such exemption for CV measures. 
78. At end June 2006, 48 Canadian anti-dumping measures plus one price undertaking (on 
cigarette tubes from France) remained in force.63  This is a large decrease relative to the 91 measures 
in place at the time of Canada's previous Review  (in 2003) and 85 measures at the time of its 2000 
Review.  Some 24 countries or customs territories are affected by these measures;  suppliers from 
China (12 actions), the EC (6 actions), and the United States (4 actions) are the subject of most actions.  Some 30 duties cover steel products. 
                                                     
 
61 CBSA Memorandum D14-1-9, on Information Pertaining to the Acceptance, Enforcement, and 
Renewal of Undertakings in Dumping and Subsidy Investigations.  Viewed at:  http://www.cbsa-
asfc.gc.ca/E/pub/cm/d14-1-9/README.html. 
62 Regulations Exempting Goods of Chile from the Application of Anti-dumping Measures.  Viewed at:  
http://laws.justice.gc.ca/en/s-15/SOR-97-326/text.html.  In cludes:  investigations, re views, enquiries, duties 
and/or measures. 
63 WTO document  G/ADP/N/145/CAN, 1 September 2006. WT/TPR/S/179 Trade Policy Review 
Page 40 
 
 
79. Over the period 1 January 2002 to 30 June 2006, there were 36 anti-dumping investigation 
initiations, of which nearly half concerned products of the steel i ndustry.  Provisional duties were 
applied in 30 of the investigations.  In 18 of th ese cases, no final measures were applied (in four cases 
there was an insignificant margin of dumping; four  cases were terminated due to negligible volumes 
of dumped imports; in eight cases, no injury was found;  and in one case there was no dumping.  
(Table III.4). 
80. Anti-dumping orders and findings expire after five years unless reviewed and continued by 
the CBSA and the CITT before this deadline.  If the CITT decides to conduct a review64, the CBSA 
must determine whether there is a likelihood of continued or resumed dumping and the CITT is 
charged with determining injury or threat thereo f to domestic industry.  In the period July 2002 to 
August 2006, the CBSA (and previously the CCRA) a nd the CITT initiated and completed 18 expiry 
reviews:  12 findings or orders, affecting 21 countri es were rescinded, many of which related to steel 
products.65  As at end June 2006, 21 an ti-dumping definitive duties had been in place for longer than 
five years. 
Table III.4 
Anti-dumping investigation initiations, 1 January 2002 to 30 June 2006 
Country/ 
customs 
territory Product Initiation 
date Provisional 
measures date, 
dumping margin Definitive duty,
date, dumping 
margin No final 
measures Trade volume Dumped 
imports/ 
domestic 
consumpt.
Austria Laminate flooring 04.10.04 16.02.05, 4.7% 17.05.05a .. CF 
Belgium Laminate flooring  04.10.04 16.02.05, 6.6% 17.05.05a .. CF 
Bulgaria Hot-rolled carbon steel 
plate 13.06.03 11.09.03, 74.6% 09.01.04, 74.6%  CF CF 
China Copper pipe fittings 08.06.06    1, 805,712 kg.  
 Steel fasteners 28.04.04 10.09.04, 0.06%-94% 07.01.05 
0.04%-187%c 07.01.05b 39,241,532 kg. 2% 
 Laminate flooring 04.10.04 16.02.05, 26.6% 16.06.05, 0.0%-
17.0% .. CF 
 Fuel tanks (steel) 19.12.03 03.05.04, 0.3%-
83.4% 31.08.04d CF CF 
 Barbecues 13.04.04 27.08.04, 0.0%-
87.4% 19.11.04a 380,105 units 15.2% 
 Wood Venetian blinds 
and slats 21.11.03 19.02.04, 120% 18.06.04, 28%, 
120% 18.06.04d 
blinds .. .. 
 Steel: Pipe nipples 
Couples Pipe fittings 18.12.02 18.03.03, 1%-333% 16.07.03, 4%-
158%  CF CF 
 Xanthates 21.06.02 04.11.02, 3%-49% 04.03.03, 44.7%  429,690 kg. 11% 
Chinese Taipei Steel fasteners 28.04.04 10.09.04, 0.01%-
118% 07.01.05, 
0.04%-260%c  132,664,862 
kg. 46% 
Table III.4 (cont'd)
                                                      
64 The CITT may review its findings on its own initiative or at the request of the Minister of Finance, 
the President of the CBSA or any other person or of any government.  The Minister of Finance may also ask the 
Tribunal to review a finding in the light  of a recommendation by the WTO DSB. 
65 CBSA online information on expiry reviews.  Vi ewed at:  http://www.cbsa-asfc.gc.ca/sima/expiry-
e.html.  Findings and orders that were rescinded related to:  certain prepared baby foods;  preformed fibreglass 
pipe insulation with a vapour barrier;  certain carbon steel plate;  certain hot-rolled steel sheets;  certain 
corrosion-resistant steel sheet products;  certain cold-ro lled steel sheet products;  concrete reinforcing bar; 
women's boots;  carbon steel welded pipe;  certain hot-rolled steel plate;  certain dishwashers and dryers; and 
garlic.  Guidelines on the CBSA's role in expiry reviews viewed at:  http ://www.cbsa-asfc.gc.ca/sima/ 
expiryguide-e.html;  and the CITT's Expiry Review Guideline viewed at:  http://www.citt- tcce.gc.ca/doc/ 
english/Publicat/dump_e.pdf. Canada WT/TPR/S/179 
 Page 41 
 
 
Country/ 
customs 
territory Product Initiation 
date Provisional 
measures date, 
dumping margin Definitive duty,
date, dumping 
margin No final 
measures Trade volume Dumped 
imports/ 
domestic 
consumpt.
 Fuel tanks (steel) 19.12.03 03.05.04, 83.4% 31.08.04d CF CF 
 Stainless steel wire  21.11.03  02.04.04b 73,631 kg.       CF 
Czech Republic  Hot-rolled carbon steel 
plate 13.06.03 11.09.03, 74.6% 09.01.04, 74.6% CF CF 
France Laminate flooring 04.10.04 16.02.05, 7.5% 16.06.05, 7.0% .. CF 
Germany Laminate flooring 04.10.04 16.02.05, 0.0% -8.7%  17.05.05a .. CF 
Hong Kong, 
China Waterproof footwear 26.04.02 09.09.02, 42%-187%  07.01.03b CF CF 
India Stainless steel wire 21.11.03   02.04.04e   
Korea, Republic 
of Copper pipe fittings 08.06.06    959,310 kg.  
 Stainless steel wire 21.11.03 02.04.04, 108% 30.07.04c 163,893 kg. CF 
 Hollow structural steel 21.05.03 19.08.03, 44% 23.12.03, 89%  CF CF 
Luxembourg  Laminate flooring 04.10.04 16.02.05b ..  
Macao, China Waterproof foot wear 26.04.02 09. 09.02, 26%-187% 07.01.03d CF       CF 
Mexico Wood Venetian blinds 
and slats 21.11.03 19.02.04, 120% 18.06.04, 1%-
120% 18.06.04 
(blinds)d .. .. 
Poland Laminate flooring 04.10.04 16.02.05, 4.0% 17.05.05e .. 0.0% 
Romania Hot-rolled carbon steel 
plate 13.06.03 11.09.03, 40.9%-
74.6% 09.01.04, 
39.3%-74.6% CF     CF 
South Africa Hollow structural steel 21.05.03 19.08.03, 0.5-41.8% 23.12.03, 9.5-
88.7%  CF CF 
Switzerland Stainless steel wire 21.11.03 02.04.04, 108% 30.07.04c 133,400 kg. CF 
Turkey Hollow structural steel 21.05.03 19.08.03, 0.4%-
43.7% 23.12.03, 0.9-
43.3% CF CF 
United States Grain corn 16.09.05 15.12.05 US$0.58 per 
bushel 18.04.06d 92.1 (million 
bushels) 20% 
 Cross-linked 
polyethylene tubing 03.03.06 01.06.06, 213%  109,121 kg. CF 
 Copper pipe fittings 08.06.06  2,207, 095 kg.  
 Stainless steel wire 21.11.03 02.04.04, 0.1%-149% 30.07.04c  2,079,893 kg. CF 
 Pizza products 02.01. 04 17.05.04, 0.3%-
199.5% 18.08.04d CF CF 
Viet Nam Waterproof footwear 26.04.02 09.09.02, 72%-187% 07.01.03d CF CF 
 
a No final measures:  insignificant margin of dumping. 
b No final measures:  negligible volume. c No final measures:  certain goods excluded. 
d No final measures:  no injury. 
e No final measures:  no dumping. CF Confidential. 
 
Source:  WTO documents:  G/ADP/N/145/CAN, 1 Septem ber 2006;  G/ADP/N/139/ CAN, 9 March 2006;  
 G/ADP/N/132/CAN, 12 August 2005;  G/ADP/N/126/CAN, 25 Fe bruary 2005;  G/ADP/N/119/CAN, 13 August 
 2004;  G/ADP/N/112/CAN, 27 Janua ry 2004;  G/ADP/N/105/CAN, 18 August 2003;  G/ADP/N/98/CAN, 
 18 February 2003; and,  G/ADP/N/92/CAN, 25 July 2002. 
81. The Tribunal may at any time review its findings of injury or orders.  It may do this on its 
own initiative or at the request of the Minister of Finance, the CBSA or any person or government.  
As noted by the CITT, interim reviews may be warranted where there is a reasonable indication that 
new facts have arisen or there has been a change in  the circumstances that led to the finding or order, 
or in circumstances where there are facts that, alt hough in existence, were not put into evidence 
during the previous review or enquiry and were not discoverable by the exercise of reasonable WT/TPR/S/179 Trade Policy Review 
Page 42 
 
 
diligence at that time.66  Between March 2002 and March 2006, the CITT concluded 11 interim 
reviews.  In two cases the findings/orders were re scinded, in six cases they were continued with 
amendments, and in three cases they were continued without amendment.67 
82. Between March 2002 and Ma rch 2006, the CITT received two requests for a public interest 
enquiry following its findings in a case relating to stainless steel wire from Korea, Switzerland, and 
the United States.  In March 2005, the Tribunal reported  to the Minister of Finance its opinion that it 
was not in the public interest to continue imposing an anti-dumping duty at a rate of up to 181% on belting wire and wireline from the United States (but not from Korea and Switzerland), and it 
recommended that the rate be reduced to 35%.
68  The Government subsequently reduced the anti-
dumping duty rate to 35% on all im ports of belting wire and wireline subject to the CITT's anti-
dumping order (Korea, Switzerland, and the United States).69 
83. Since 2003, Canada has been involved in th ree anti-dumping dispute settlement cases in the 
WTO, each time as a complainant.70 
84. Between July 2002 and end-July  2006, Canada initiated seven countervailing investigations.  
In three cases, provisional duties were levied, but no final measures.  These related to grain corn from 
the United States, where no injury was found;  barbeques from China, a nd steel fasteners from 
Chinese Taipei, where there were insignificant amounts of  subsidy.  Final duties were applied in three 
cases:  steel fasteners (with certain goods excluded)  from China, laminate flooring from China, and 
stainless steel wire (with certain goods excluded) from India. 
85. By end-June 2006, five counterva iling duty orders were in place, compared with ten at the 
time of Canada's previous review  in 2003, and six at the time of the 2000 review (Table III.5). 
Table III.5 
Countervailing duty measures in force, 30 June 2006 
Country Product Date of finding 
China Steel fasteners 07.01.05 
 Laminate flooring 16.06.05 
European Communities Refined suga r 06.11.95 (03.11.0 0) (02.11.05) 
India Hot-rolled carbon steel sheet 17.08.01 
 Stainless steel wire 30.07.04 
 
Note: A subsequent date is shown in brackets if  the injury finding was reviewed and re-affirmed. 
 
Source: WTO document G/SCM/N/144/ CAN, 4 September 2006. 
86. Since 2003, Canada had been involved in three dispute settlement cases relating to 
countervailing measures in the WTO, each time as a complainant.71 
                                                      
66 CITT (2006). 
67 Details of interim review cases are summarized  in the CITT Annual Reports.  Viewed at:  
http://www.citt-tcce.gc.ca/ publicat/index_e.asp#13. 
68 CITT Annual Report (2006). 
69 Stainless Steel Round Wire Products Anti-dumping Duty Remission Order, SOR/2005-392 
November 28, 2005, Canada Gazette , Vol. 139, No. 25.  December 14, 2005. 
70 DS234, United States – Continued Dumping and Subsidy Offset Act of 2000;  DS264, United States 
– Final Dumping Determination on Softwood Lumber from Canada;  and DS277, United States – Investigation 
of the International Trade Commission in Softwood Lumber from Canada. 
71 DS257, United States – Final Countervailing Duty Determination with respect to certain Softwood 
Lumber from Canada;  DS277, United States – Investigation of the International Trade Commission in Canada WT/TPR/S/179 
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(b) Safeguards 
87. Canada notified its laws, regula tions, and administrative procedures relating to safeguards to 
the WTO Secretariat in August 2004.72  Safeguard remedies may be imposed in the form of surtaxes 
under the Customs Tariff Act and quantitative restri ctions under the Export an d Import Permits Act.  
The Canadian International Trade Tribunal Act im plements the safeguards provisions of the WTO 
Agreement on Safeguards, the NAFTA, the Canada-I srael Free Trade Agreement, the Canada-Chile 
Free Trade Agreement, and the Canada-Costa Rica Free Trade Agreement.  Goods may be subject to 
AD/CVD and safeguard measures simultaneously. 
88. Safeguard investigations are conducted by th e CITT under the Canadian International Trade 
Tribunal Act.  Safeguard enquiries by the CITT may be  initiated as a result of complaints by domestic 
producers or by the Government of Canada.  Th e CITT inquiry report may contain recommendations 
for the Government's consideration.  CITT safeguard  enquiry reports must be tabled in Parliament 
only when the Government has direct ed the CITT to address a specific issue as part of its enquiry.  
Decisions by the CITT on injury in the context of saf eguard measures are subject to judicial review by 
the Federal Court of Appeal. 
89. In global safeguard enquiries, the CITT consid ers the effects of imports from all sources on 
domestic producers.  If the CITT makes a determination of serious injury or threat thereof, it must 
also determine if imports from countries with wh ich Canada has a bilate ral free-trade agreement 
(except Costa Rica) are "substantial" and "c ontribute importantly" to the serious injury.73  If this is not 
the case, then imports from that country must be excluded from global safeguards measures applied.  
The authorities indicate that while there are no speci fic legislative provisions to implement Article 9 
of the Agreement on Safeguards, in the two globa l safeguard enquiries undertaken by Canada since 
the WTO was established, the CITT made reco mmendations that took into account Canada's 
obligations under Article 9.74 
90. In September 2002, the Canadian Internationa l Tribunal Act was amended to implement the 
safeguard provisions of the Protocol on Accession of China to the WTO and sets out the CITT's 
policies and procedures for safeguard enquiries with r espect to market disruption (including extension 
of market disruption) and actions affecting Chinese imports into the market of another WTO Member 
which cause or threaten to cause a significant divers ion of trade into the domestic market of Canada.75  
These bilateral safeguard provisions will be available until 11 December 2013.76 
91. Canada has initiated three global safeguard inv estigations since the establishment of the WTO 
of which two were during the period under review.  In addition, one China-specific investigation was 
undertaken by the CITT concerning imports of barb eques from China.  The Government decided not 
to impose safeguard actions in he investigation re lated to imports of bicycles as well as the China-
specific investigation on imports of barbeques,   despite findings of injury by the CITT (see 
                                                                                                                                                                     
Softwood Lumber from Canada (concerned injury allegedly caused by both dumped and subsidized imports);  
DS311, United States – Reviews of Countervailing Duty on Softwood Lumber from Canada. 
72 WTO document  G/SG/N/1/CAN/3, 10 August 2004. 
73 The terms "substantial" and "contribute importan tly" are defined in Article 802 of the NAFTA;  
Article 4.6 of CIFTA; and Article F-02 of the CCFTA. 
74 See for example paragraphs 247 to 251 and Appendix V of the CITT report on bicycles and bicycle 
frames.  Viewed at:  http://www.citt-tcce.gc .ca/safeguar/global/fin alrep/gs2e001-e.asp. 
75 CITT (2003), inter alia  provides a definition of market disruption and how market disruption is 
determined by the CITT;  procedures fo r market disruption extension enquiries;   as well as the purpose of trade 
diversion inquiries and how determinations are made by the CITT. 
76 CITT (2003), describes the basic pr ocedures the Tribunal will follow. WT/TPR/S/179 Trade Policy Review 
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Table III.6).  According to the authorities, the Ca nadian Government, after considering all of the 
information determined that temporary protective tariffs would not provide a competitive long-term 
solution in these cases.77 
Table III.6 
Safeguard investigations, 2003-06 
Enquiry 
(year initiated) Source of 
complaint Tribunal findings and recommendations Action taken 
Global enquiries  
Bicycle and 
bicycle frames; and finished painted bicycle 
frames (2005) Canadian Bicycle 
Manufacturers Association The CITT found a sharp and significant increase in imports of bicycles 
was a principal cause of serious in jury to domestic producers, and 
recommended that a surtax set at 30% in the first year of application be 
applied to imports of bicycles with  certain characteristics, followed by 
25% in the second and 20% in the third.  It recommended that certain 
products be excluded as should imports  from Canada's free-trade partners 
and certain developing countries.  The CITT did not find that imports of 
finished painted bicycle frames thr eatened serious injury to domestic 
producers.  None
a 
 
Unmanufactured 
bright Virginia flue-cured tobacco 
(2005) Ontario Flue-
Cured Tobacco Growers 
Marketing Board The CITT found that there was a significant increase in the subject 
imports from 2001 to 2005, which was causing or threatening to cause serious injury to domestic producers.  However, in February 2006, the 
Ontario Flue-Cured Tobacco Grower s Marketing Board  notified the 
Tribunal that its members no longer wished to participate in the enquiry and would not submit evidence to support their complaint. 
 Investigation 
terminated (February 
2006)
b 
Safeguards inquiries – imports from China  
Barbeques (2005) Onward 
Manufacturing 
Company Limited The CITT determined that imports of barbeques from China were a 
significant cause of market disruption to domestic producers.  It 
recommended that the Government impose a surtax of 15% for a period 
of three years on imports of barbeques from China. Nonec 
 
 
a Notified in WTO document G/SG/N/9/CAN/3, 7 June 2006. b Notified in WTO document G/SG/N/9/CAN/2, 23 Febr uary 2006 and G/SG/N/9/CAN/2/Corr.1, 6 March 2006. 
c Notified in WTO document G/SG/N /16/CAN/1/Suppl.1, 7 June 2006. 
 
Source: WTO Secretariat. 
92. As at end-2006 Canada had not been involved in any WTO dispute settlement cases related to 
safeguards either as complainant or respondent, nor  had it imposed special safeguards, as allowed 
under the WTO Agreement on Agriculture for im ports of products for which tariff quotas are 
administered.78  Canada has never imposed transitional safeguards on imports of textiles and clothing 
under Article 6 of the WTO Agreement on Textiles and Clothing. 
(viii) Technical regulations, conformity assessment, and standards 
93. Under Canada's federal regime, the federal, pr ovincial, and territorial governments have the 
authority to promulgate technical regulations (and sanitary and phytosanitary standards).  The Federal 
Government is responsible for th e implementation of international trade obligations.  The Statutory 
Instruments Act, the Statutory Instruments Regul ations, Cabinet policy, and the Government of 
Canada Regulatory Policy govern the development a nd adoption of federal re gulations, which include 
                                                      
77 Department of Finance Canada, News Release May 29, 2006.  
78 For latest WTO notification, covering the calendar years 2003-05, see WTO document 
G/AG/N/CAN/59, 2 March 2006. Canada WT/TPR/S/179 
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technical regulations adopted by federal authorities.   The Treasury Board Secretariat is developing a 
new Government Directive on Regulating.79 
94. The Treasury Board Secretariat oversees the ma nagement and coordina tion of federal policy 
on technical and other regulations.  The Regulator y Affairs Secretariat at the Treasury Board 
Secretariat ensures that regulations proposed by federal departments comply with the Regulatory 
Policy.  The Treasury Board, a Cabinet committee,  grants final approval to federal regulations. 
95. Foreign Affairs and Internationa l Trade Canada (DFAIT) is res ponsible for implementation of 
the TBT Agreement.80  Canada last updated its notification on the implementation and administration 
of the TBT Agreement in September 2002.81  DFAIT contracts with the Standards Council of Canada 
(SCC) for the operation of Canada's enquiry point and notification authority.  The SCC, a federal 
Crown corporation, is the focal poi nt for standardization in Canada. 
96. The SCC monitors the Canada Gazette , the official newspaper of the Government of Canada, 
to identify relevant technical regulations and conformity assessment procedures for WTO 
notification.82  It relies on provincial gazettes for techni cal regulations and conformity assessment 
procedures adopted by provincial governments.  The Canadian authorities note that, in general, 
provincial regulations are not notified to the WTO b ecause they do not have an international impact.  
They also state that the issue of sub-national notif ications is under review, and that they are making 
significant efforts to raise provinces' awaren ess of the importance of increased regulatory 
transparency.  In this context, the SCC is working with provincial regulators to explore approaches 
that would facilitate the sub-national notificati on process, especially since many provinces publish 
adopted regulations in their gazett es, rather than draft regulations. 
97. Canada made 119 notifications of technical re gulations to the WTO between July 2002 and 
mid-August 2006.83  Around 52% of the notifications were  from Health Canada, 22% from Transport 
Canada, 13% from Environment Canada, 8% from Indus try Canada, and 6% from  other authorities.  
Only one notification was of a technical regulation adopted for urgent problems.84  The vast majority 
of technical regulations notified were aimed at  protecting human health, human safety, or the 
environment. 
98. Canada also made 37 notifications of conf ormity assessment procedures during the period 
(2 in 2002, 9 in 2003, 12 in 2004, 11 in 2005, and 3 in 2006).85  Around half of the notifications were 
from Industry Canada, and the other half from H ealth Canada, Transport Canada, Environment 
Canada, Natural Resources Canada, and the Canadian  Nuclear Safety Commission.  Canada also 
notified one mutual recognition agreement, which covers certificates issued by Australia of good 
manufacturing practices for medicines.86 
                                                      
79 The draft directive was viewed at:  http://www.re gulation.gc.ca.  The Canadian authorities indicate 
that further guidance documents for regulators have been produced by Industry Canada and the Standards 
Council of Canada.  See Industry Canada (2004) and Standards Council of Canada (2006b). 
80 WTO document G/TBT/2/Add.6/Rev.1, 9 September 2002. 
81 WTO document G/TBT/2/Add.6/Rev.1, 9 September 2002. 
82 WTO document G/TBT/2/Add.6, 4 June 1996. 
83 Excluding notifications contained in documents with the symbols "Add" and/or "Corr".  WTO 
documents G/TBT/N/CAN/42-170.  The annual distribution of notifications was:  10 in 2002, 25 in 2003, 28 in 2004, 39 in 2005, and 17 in 2006. 
84 WTO document G/TBT/N/C AN/78, 17 October 2003. 
85 The majority of these measures were also notified as technical regulations. 
86 WTO document G/TBT/10.7/N/48, 10 January 2006. WT/TPR/S/179 Trade Policy Review 
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99. Canada has notified one draft technical regul ation proposed by a provincial/territorial 
authority (the Ontario Ministry of the Environment) since mid 2002.87 
100. Between July 2002 and August 2006, no trade c oncerns were raised in the TBT Committee 
regarding technical regulations or  standards adopted by Canada. 
101. Various federal and provincial authorities develop regulations, including technical 
regulations, as part of their mandate.  Federal authorities must carry out "timely and thorough" 
consultations with interested parties "as ear ly as possible" when developing regulations.88  The extent 
of the consultations should be proportional to each  regulation's impact.  Federal authorities must 
publish draft technical regulations that affect trade in Part I of the Canada Gazette  and provide an 
opportunity for comment.89  This stage is referred to as "pre- publication".  Upon request by a federal 
authority, the Treasury Board may waive the pre- publication requirement, or shorten the comment 
period. 
102. For technical regulations that affect trade, the comment period should be at least 75 days, 
except in "urgent circumstances".90  The Canadian authorities note that it would be highly unusual for 
a technical regulation with international trade im plications to be exempt from the 75-day notice 
period.  They also indicate that "urgent circumst ances" would be defined in accordance with the TBT 
Agreement. 
103. Draft regulations must be accompanied by a "regulatory impact analysis statement" 
describing their anticipated benefits and costs, th e results of the consultations with stakeholders 
carried out by the sponsoring authority, a nd the regulations' monitoring and enforcement 
instruments.91  This statement must be revised to reflect the comments received during pre-
publication.  The Treasury Board grants final approv al to the regulation, after taking into account the 
results of the pre-publication stage.  Upon approval by the Treasury Board, the Governor General signs the regulation, and the Registrar of Statutor y Instruments registers it.  Regulations normally 
enter into force immediately after registration, but  can only be enforced once published in Part II of 
the Canada Gazette , which must occur within 23 days of registration.
92 
104. Under the Regulatory Policy, federal authorities must use available international standards, 
guidelines, and recommendations "where those standa rds achieve the regulatory objective" sought by 
Canada.  Regulatory requirements must be specified  in terms of performance rather than design or 
descriptive characteristics "where possible".  Federal authorities must give "positive consideration" to 
requests for the recognition of foreign technical regula tions, to the extent that such regulations fulfil 
the objectives of Canadian technical regulations.93  The authorities indicate that there is no system for 
collecting data on foreign technical regulations recognized by Canada, but they are exploring 
approaches toward setting up such a system. 
105. Canada does not maintain a catalogue of technical regulations.  However, the Canada Gazette  
contains a consolidated index of federal statut ory instruments, including technical regulations, 
adopted since January 1955.94  In addition, the SCC maintains an on-line searchable database (known 
                                                      
87 WTO document G/TBT/N/CAN/137, 21 July 2005. 
88 Appendix B, Government of Canada Regulatory Policy, November 1999. 
89 Appendix A, Government of Canada Regulatory Policy, November 1999. 
90 Appendix A, Government of Canada Regulatory Policy, November 1999. 
91 Treasury Board of Canada Secretariat (2004). 
92 Sections 9-11, Statutory Instruments Act. 
93 Appendix A, Government of Canada Regulatory Policy, November 1999. 
94 Canada Gazette.  Viewed at:  http://canadagazette.gc.ca. Canada WT/TPR/S/179 
 Page 47 
 
 
as RegWatch) of all standards incorporat ed into Canadian federal regulations.95  There is no catalogue 
of technical regulations adopted by the provinces. 
106. Some provinces and territories have additional technical regulations for certain products, 
including margarine, bottled water, and maple syrup.96 
107. The elimination of technical regulations involv es the same process as their adoption.  The 
authorities indicate that they are developing a regulatory review framework that would examine regulations that no longer serve their purpose. 
108. The 2002 Speech from the Throne introduced Smart Regulation, a regulatory reform 
initiative.
97  In this context, the Government set up an External Advisory Committee on Smart 
Regulation in May 2003 which, among other things , recommended:  the inclusion of international 
regulatory cooperation "as a distinct component of Ca nadian foreign policy";  the creation of a more 
"seamless" regulatory environment across federal, provincial, and territorial authorities;  better 
coordination among federal regulatory authorities;  the development of a government-wide approach 
to risk management;  and the developm ent of a new federal regulatory policy.98  The Committee also 
noted that the absence of cooperation between fede ral and provincial regulatory authorities, and 
between provincial regulatory authorities, results in "significant costs" to the Canadian economy.99  
According to the authorities, various efforts are unde r way to address this situation:  for example, 
parties to the Agreement on Internal Trade are ne gotiating principles for regulations and standards 
that affect inter-provincial trade. 
109. The process for the development and adopt ion of mandatory conformity assessment 
procedures is the same as for technical regulations (see above).  Federal authorities may reference in 
federal regulations ISO/IEC standards adopted at the national level, and rely on SCC-accredited 
bodies for conformity assessment.  Mandatory conform ity assessment may also be carried out directly 
by federal and provincial authorities. 
110. The SCC is Canada's national accreditation bod y.  It accredits standards development 
organizations, testing and calibration laboratories,  certification bodies, quality and environmental 
registration organizations, inspection bodies, pe rsonnel certification bodies, and auditor course 
providers and certifiers.  In doing so, the SCC follo ws policies and procedures that are the same as 
international standards, or are based on such standards.100 
111. As a general rule, type approval is used for low-risk products, whereas individual testing and 
certification is used for higher risk products, fo r example medical devices.  Voluntary conformity 
assessment is carried out by SCC-accredited bodies, which are mostly private entities.  The 
conformity assessment activities of the SCC rela te primarily to third-party assessment.  The 
                                                      
95 SCC online information.  Viewed at:  http:// www.scc.ca/en/news_events/subscriptions/regwatch. 
html. 
96 CFIA online information, "Guide to Importing Food Products Commercially".  Viewed at:  
http://www.inspection.gc.ca/e nglish/fssa/imp/guide1e.shtml. 
97 Privy Council Office online information, "Speech fr om the Throne to Open the Second Session of 
the 37th Parliament of Canada."  Viewed at:  h ttp://www.pco-bcp.gc.ca/default.asp?Language=E&Page= 
sftddt&doc=sftddt2002_e.htm [4 September 2006]. 
98 External Advisory Committee on Smart Regulation (2004). 
99 External Advisory Committee on Smart Regulation (2004). 
100 Standards Council of Canada (2006a). WT/TPR/S/179 Trade Policy Review 
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authorities note that Canada relies on a wide variety of strategies to ensure compliance with technical 
regulations.101 
112. There are 31 SCC-accredited product also certifi cation bodies, of which 12 are in Canada and 
19 in the United States.  There are also 7 accred ited inspection bodies (5 in Canada and 2 in the 
United States), and 364 accredited laboratories (351 in Canada, 1 in Peru, and 12 in the 
United States).102 
113. Canada has negotiated several bilateral and multilateral mutual recognition agreements on 
conformity assessment (Table AIII.3).  Internatio nal product certification schemes are used with 
respect to electrical equipment;  three certification bodies in Canada are members of the IEC System 
for Conformity Testing and Certification of El ectrical Equipment.  Suppliers' declaration of 
conformity is used in electromagnetic compatib ility and telecommunication terminal attachment 
equipment.103 
114. Four organizations are accredited by SCC to de velop (voluntary) standards:  the Canadian 
General Standards Board, the Canadian Standards As sociation, Underwriters' Laboratories of Canada, 
and the Bureau de normalisation du Québec.  These organizations administer the technical committees 
that define the content of standards (and volunta ry conformity assessment procedures).  The SCC is 
responsible for reviewing standa rds submitted by standards devel opment organizations, and following 
the completion of any recommended revisions, appr oving them as National Standards of Canada.  
These standards should be consistent with or should  incorporate "appropriate" international standards 
and "pertinent" national standards, and must be  made available for public review during their 
development.104  SCC-accredited standards development organizations must allow at least 60 days for 
public review of a draft standa rd.  Around two thirds of the 921 National Standards of Canada 
approved by the SCC between fiscal years 2002/03  and 2005/06 were the same as or based on 
international standards.  Each of the SCC-accr edited standards development organizations issue 
notices of public review for draft standards, and notices of adopted standards.105  The SCC maintains 
an e-mail notification service (known as Standards Alert) on changes to  Canadian (and international) 
standards.106 
115. The SCC adopted Annex 3 of the TBT Agreement in 1999.107  The work programmes of the 
SCC-accredited standards development organizati ons on whose behalf the SCC notified its acceptance 
of the Code are available from each organization.108  The Canadian authorities indicated that Annex 3 
of the TBT Agreement has been inco rporated into the Canadian Pro cedural Documents (CAN-Ps) that 
are applied by the SCC when accrediting standards development organizations. 
                                                      
101 See, for example, Standards Council of Canada (undated). 
102 SCC online information, "Direct ory of Accredited Product and Service Certification Bodies".  
Viewed at:  http://www.scc.ca/en/programs/produc t_cert/accredited_clients.sh tml [23 August 2006]. 
103 WTO document G/TBT/W/210, 20 June 2003. 
104 Standards Council of Canada (1992). 
105 These notices are available on SCC online info rmation.  Viewed at:  http://www.scc.ca/en/ 
news_events/public-review/index.shtml. 
106 SCC online information.  Viewed at:  http:// www.scc.ca/en/news_events/subscriptions/standards_ 
alert.shtml. 
107 WTO document G/TBT/CS/N/110/Rev.1, 27 October 1999. 
108 ISO/IEC (2006). Canada WT/TPR/S/179 
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(ix) Sanitary and phytosanitary measures 
116. Health Canada is responsible  for establishing standards and policies governing the safety and 
nutritional quality of all food sold in Canada.  Sp ecifically, Health Canada engages in research, food-
safety risk assessment, pre-market review and eval uation of all issues related to food safety and 
nutrition, and regulation and registration of pest cont rol products and veterinary drugs used in food-
producing animals.  Health Canada is also res ponsible for assessing the effectiveness of the food-
safety-related activities of the Canadian Food Inspec tion Agency (CFIA).  The CFIA is responsible 
for enforcing the food safety and nutritional quality standards and policies set by Health Canada, and 
all federally mandated food inspecti on, compliance, and quarantine services.  The CFIA also sets and 
enforces regulations on animal health and plant protection. 
117. The main federal legislation covering food saf ety is the Food and Drugs Act.  The Act is 
supplemented by the Food and Drug Regulations.  Ot her federal legislation may reference the Food 
and Drugs Act and stipulate additional requirements.   Examples include the Pest Control Products 
Act, Canada Agriculture Products Act, Meat Inspecti on Act, Fish Inspection Act, Seeds Act, Fertilizer 
Act, and Feeds Act.  The Health of Animals Act and the Plant Protection Act with their associated 
regulations are the main statutes governing animal and plant health issues. 
118. Canada's enquiry point and national notifica tion authority under the SPS Agreement is the 
SCC (section (viii)).109  Canada made numerous notifications of SPS measures to the WTO between 
July 2002 and mid-August 2006 (Table III.7);  it did not notify any SPS measures adopted by sub-
federal authorities.  According to the Canadian au thorities, this is because such measures have not 
exceeded federal measures.  In this context, the authorities note that the federal, provincial, and 
territorial governments discuss SPS measures and shar e information on a broad range of animal and 
plant health and food safety issues through various  committees, for example the Federal-Provincial-
Territorial Regulatory Assistant Deputy Ministers' Committee and the Federal-Provincial-Territorial Agri-Food Inspection Committee.  In addition, th e authorities note that there are various sector-
specific working groups, including the National Li aison Group on Dairy, comprising representatives 
of the federal, provincial, and territo rial governments, industry, and academia. 
119. Around 23% of the SPS measures notified by Cana da since July 2002 are Notices of Interim 
Marketing Authorizations (NIMAs).  These are enabling instruments that allow producers or 
manufacturers to sell foods that are not in complia nce with certain provisions of the Food and Drug 
Regulations while the Regulations are being amended.
110  According to the Canadian authorities, 
NIMAs are issued only when the scientific evaluation concludes that consumption of the food will not 
be harmful to consumers.  NIMAs are used only when expanding the use of food additives;  
veterinary drugs;  agricultural chemicals;  and v itamins, mineral nutrients, and amino acids that are 
already listed in the Food and Drug Regulations.  NIMAs appear in the Government Notices section 
of Part I of the Canada Gazette  and are effective on the date of publication. 
120. Chinese Taipei has raised concerns in the SPS Committee regarding an SPS measure adopted 
by Canada.  The measure consisted of import rest rictions on growing media;  Chinese Taipei was 
concerned by the application of this measure to enoki mushrooms.111  The authorities indicate that (at 
end 2006), Canada and Chinese Taipei ar e working to resolve this issue. 
                                                      
109 WTO documents G/SPS/ENQ/19, 25 January 2006, and G/SPS/NNA/8, 20 December 2004. 
110 Interim Marketing Authorization (IMA), Schedul e 923.  Viewed at:  http://www.hc-sc.gc.ca/fn-
an/legislation/ima-amp/interim_market_authorization-autorisation_mise_marche_e.html. 
111 WTO document G/SPS/GEN/204/Rev.6/Add.1, 19 May 2006. WT/TPR/S/179 Trade Policy Review 
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Table III.7 
WTO notifications of SPS measures, July 2002-mid August 2006 
 2002 2003 2004 2005 2006 
Total notificationsa 18 38 47 26 21 
Of which:      
 Emergency measures 1 6 6 7 4 
 International standardsb 2 6 7 4 1 
Agencies responsible (as % of total):      
 Health Canadac 86 61 80 50 71 
 CFIA 11 39 18 48 29 
 Other 3 0 2 2 0 
Objectives (as % of total):      
 Food safety 83 63 78 54 71 
 Plant protection 17 34 15 35 24 
 Animal protection 0 3 5 10 5 
 Other 0 0 2 2 0 
 
a Excluding notifications in documents with the symbols Add and/or Corr. 
b Identical to or based on international standards. 
c Including the Pest Management Regulatory Agency. 
 
Source:  WTO Secretariat. 
121. Canada is a member of the Codex Alimentari us Commission and the World Organisation for 
Animal Health (OIE), and a contracting party to th e International Plant Protection Convention (IPPC).  
The Canadian authorities indicate that, consistent with the Government of Canada Regulatory Policy 
and Canada's obligations under the SPS Agreement, federal regulatory authorities must use available 
international standards, guidelines, and reco mmendations where those standards achieve the 
regulatory objective sought by Canada. 
122. The CFIA often concludes product-specific arra ngements on food safety and animal and plant 
health issues with foreign governments, including memoranda of understanding and protocols.  An 
exhaustive list of these agreements was not available. 
123. The CFIA maintains a searchable database of the import requirements for animals, plants, and 
their products.112  SPS-related import permits are required for some products;  they specify the 
conditions under which the product can be imported into Canada.  Import conditions may include 
treatment at origin, testing, inspection, quarantine, and/or certification. 
124. SPS requirements applied to imports are establishe d on the basis of the disease or pest risks 
associated with these imports.  A ccording to the authorities, SPS impor t requirements that entail a full 
risk assessment are most commonly those related to animal and plant health.  As a general rule, the 
authorities conduct a risk assessment prior to first-time im ports of an animal, plant, or animal or plant 
product from a particular country. 
125. The CFIA is the lead agency fo r risk assessments for animal health and plant protection.  It 
requests a risk assessment from Health Canada when  food safety issues are involved for which Health 
Canada has not established guidelines, policies, or st andards.  The frameworks used by the CFIA and 
Health Canada to address risks are available to the public.113  According to the Canadian authorities, 
both frameworks are consistent with approaches de veloped by the Codex Alimentarius Commission, 
                                                      
112 CFIA online information, "Automated Import Refe rence System (AIRS)".  Viewed at:  http://airs-
sari.inspection.gc.ca/airs/airs-sari.asp. 
113 CFIA (undated a) and Health Canada (2000). Canada WT/TPR/S/179 
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the OIE, and the IPPC.  Occasionally, provinces c onduct their own plant health risk assessments to 
determine the need to implement provincial require ments, but generally they rely on federal risk 
assessments.  CFIA representatives may visit the ex porting country as part of the risk assessment. 
126. The CFIA has developed a process to determine the priority assigned to import requests that 
require a risk assessment.  Priority is determined  on the basis of estimates of the imported product's 
immediate impact on health.  For imports not likely to have any immediate health impact, the CFIA 
examines other "relevant" factors to determin e priority, including "the impact on proponent and 
opponent industries", "economic and social impact s on the general public", "trade impacts", and 
"urgency".114 
127. Evaluations of requests to import animals and animal products that entail a risk assessment 
may take up to a year to process115;  relevant statutes do not define a time limit.  Factors determining 
the time needed to evaluate an import request in clude the availability of risk assessments for product-
country combinations presenting the same risk as the requested import, and the quality of information 
available.  The CFIA informs the person making th e import request whether a full risk assessment is 
required, normally within three weeks of receiving th e request.  The requester bears some of the cost 
of the risk assessment.  The Canadian authorities do not  maintain data on the cost of risk assessments. 
128. The CFIA maintains lists of countries free of OIE List A diseases.116  These lists are generally 
established on the basis of country assessments conduc ted by the CFIA.  The authorities indicate that 
Canada takes into account the OIE lists of c ountries recognized free of foot-and-mouth disease, 
rinderpest, BSE, and contagious bovine pleuropneum onia, but reserves the right to conduct its own 
science-based risk assessments on a case-by-case basis for all diseases.  Although the CFIA normally 
evaluates disease risks on a country-wide basis, it has occasionally recognized certain regions within 
countries as "disease free".117  The CFIA also publishes a list of an imal health hazards associated with 
particular species or commodities.118  According to the Canadian authorities, Lists A and B of the OIE 
are the principal lists of diseases for conducting h azard identification for imports of animals and 
animal products;  other criteria for identif ying hazards are used on a case-by-case basis. 
129. The CFIA maintains lists of plant and plant material from certain countries that must not be 
imported into Canada, and of regulated pests.119  The Canadian authorities indicate that the List of 
Prohibited Plants and Plant Materials from Countries  Other than the Continental United States is in 
line with IPPC pest risk analysis guidelines, and th at the List of Pests Regulated by Canada follows 
the relevant IPPC standard.120 
130. Based on the results of risk assessment, the CFIA  may allow imports, subject to certain SPS 
requirements.  For animals and animal products, these requirements are often included in import 
                                                      
114 CFIA (undated a). 
115 CFIA (2006). 
116 CFIA online information, "Country Freedom Recognition Tables".  Viewed at:  http://www. 
inspection.gc.ca/english/anima/heasan/disemala/recotab/listae.shtml. 
117 WTO document G/SPS/GEN/ 613, 16 December 2005. 
118 CFIA online information, "Animal Health Hazards Associated with Imported Animals".  Viewed at:  
http://www.inspection.gc.ca/englis h/sci/ahra/rianfrwk/appe.shtml. 
119 CFIA online information, "Prohibited Plants and Plant Materials from Countries Other than the 
Continental United States".  Viewed at:  http://www.ins pection.gc.ca/english/plaveg/oper/prohibintere.shtml;  
and "Pests Regulated by Canada".  Viewed at:  http://www.inspection.gc.ca/ english/ plaveg/protect/ 
listpespare.shtml. 
120 IPPC Secretariat, "Guidelines on lists of  regulated pests" (ISPM No. 19), April 2003. WT/TPR/S/179 Trade Policy Review 
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protocols;  for plants and plant products the CFIA normally issues D-memos.121  In response to urgent 
situations of health protection, for example chemi cal contamination of food products, Health Canada 
may develop guidelines to aid in the interpretation of the Food and Drugs Act. 
131. Other SPS requirements are contained in regulatio ns.  In this case, their development and 
adoption is subject to the requirements, including on public notice, contained in the Regulatory Policy 
(see section (viii)).  Temporary or permanent ad hoc advisory bodies (e.g., the Canadian Plant 
Protection Advisory Committee) might be establishe d to consult with stakeholders on proposed SPS 
regulations. 
132. Canada does not have a formal mechanism for a party to challenge SPS requirements.  The 
authorities indicate that interested parties can su bmit comments to responsible agencies through their 
websites.  These agencies also hold regular meetings  and consultations with industry and stakeholder 
associations.  Moreover, Health Canada has est ablished food safety and management committees to 
review concerns identified with existing regul ations and make recommendations on possible 
revisions. 
133. Meat imports are subject to a special approval system managed by the CFIA.122  Upon 
request, the CFIA reviews all pertinent statutes on a country's meat inspection system.  If these are 
deemed equivalent, the CFIA carries out on-site audits of individual meat establishments.  
Establishments approved by the CFIA must submit sa mples, formulations, and labels of meat products 
for registration before they can export to Canada.  The CFIA conducts period ic audits of approved 
establishments.  The CFIA has approved meat in spection systems from 38 countries or territories.123  
Canada requires all shipments of imported meat to be inspected at the border. 
134. The Canadian authorities indicate that before agricultural products of biotechnology are 
approved for sale in Canada, they undergo a process that assesses potential environmental, human health, or animal health risks.  The CFIA regulat es novel agricultural products (e.g., plants, livestock 
feeds, fertilizers and supplements, and veteri nary biologics), including those derived through 
biotechnology, through a regulatory process that stipul ates what data must be submitted by developers 
who are seeking approval of their products, and how CF IA scientists must examine the data.  Health 
Canada regulates novel foods, including foods derive d from genetically modified organisms, through 
a mandatory pre-market notification requirement, as  stipulated in the Food and Drug Regulations.  
Specific criteria for evaluating the safety of foods derived through genetic modification are laid down in Health Canada's Guidelines for the Safety A ssessment of Novel Foods Derived from Plants and 
Microorganisms.  According to the authorities, th e Guidelines are based on internationally established 
scientific principles, and are consistent with the risk analysis principles and safety assessment guidelines developed by the Codex Ad Hoc Interg overnmental Task Force on Foods Derived from 
Biotechnology. 
135. Health Canada reviews, evaluates, and monitors  the safety, efficacy, and quality of veterinary 
drugs, sets standards, and promotes their prudent use.   The authorities note that veterinary drugs are 
                                                     
 
121 CFIA online information, "Plant Protection Policy Directives".  Viewed at:  http://www.inspection. 
gc.ca/english/plaveg/protect/dir/directe.shtml. 
122 CFIA (undated b). 
123 Argentina, Australia, Austria,  Belgium, Brazil, Ch ile, China, Croatia, Cyprus, Czech Republic, 
Denmark, Estonia, Finland,  France, Germany, Greece, Hu ngary, Ireland, Israel, Italy, Japan, Luxembourg, 
Mexico, Netherlands, New Zealand, Poland, Portugal, Puerto Rico, Roma nia, Slovakia, Slovenia, Spain, 
Sweden, Switzerland, Thailand, the United Kingdom, Uruguay, and the United States.  CFIA online 
information, "Meat Hygiene Directives for 2006".  Viewed at:  http://www.inspection.gc.ca/english/anima/ meavia/mmopmmhv/direct/directe.shtml. Canada WT/TPR/S/179 
 Page 53 
 
 
authorized for sale in Canada only after a review process finds that the product, when used according 
to label instructions, does not pose undue health risks to humans eating food products from treated 
animals.  Health Canada has approved six hormonal growth promoters for use in beef cattle.  The 
authorities indicate that this decision is supporte d by the evaluations and recommendations of the 
Joint FAO/WHO Expert Committee on Food Additiv es and the standards established by the Codex 
Committee on Residues of Veterinary Drugs in Foods. 
136. The CFIA is responsible for all federally mandated food, and animal and plant health 
inspection services, except for initial import inspecti ons at the border, which are carried out by 
Canada Border Services Agency.  The CFIA char ges fees for its services in accordance with the 
Canadian Food Inspection Agency Fees Notice.  The extent of import inspection depends on the 
outcome of the risk assessment performed by the CFIA .  In support of its enforcement functions, the 
CFIA manages several laboratories. 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
137. Under the Customs Act, goods exported from Canada  must be reported to the Government of 
Canada.  The three main objectives of export repor ting are to:  control the export of strategic, 
dangerous goods, and other contro lled and regulated goods;  collect accurate information on Canadian 
exports;  and control the outbound movement  of goods in transit through Canada.124 
138. Goods exported to the United States for consum ption do not have to be  reported on an export 
declaration.125  However, if the goods exported to the United States are controlled, regulated or 
prohibited (i.e. restricted) by other government de partments or agencies, the appropriate permit must 
be presented to the Canada Border Services Agency. 
139. Exports of non-restricted goods valued at Can$2, 000 or more to destinations other than the 
United States must be reported on an export declaration.   Regardless of their value, restricted goods to 
non-U.S. destinations must be reported by presentin g both an export declaration and the appropriate 
permit to the CBSA.  Conveyances (e.g. vehicles, mo torcycles, boats) that are permanently exported 
to destinations other than the United States must be  reported by submitting an export declaration, plus 
information on the Vehicle Identification Number (V IN), Hull Identification Number (HIN) or serial 
number of the vehicle.  There are some exceptions to export reporting.126 
140. A business number is required to complete an e xport declaration.  Exporters of commercial 
goods, including non-resident exporters, must a pply to the Canada Revenue Agency for both a 
business number and an import/export account (RM acc ount), which must be activated for exports.  
Export declarations may be submitted in any of  four ways:  the Canadian Automated Export 
                                                      
124 For more information on exporting from Canada see D20-1-0.  Viewed at http://www.cbsa-
asfc.gc.ca/E/pub/cm/d20-1-0/READM E.html;  CBSA (undated a);   D20-1-1.  Viewed at:  http://www.cbsa-
asfc.gc.ca/E/pub/cm/d20-1-1/README.html;   and D20-1-1.  Viewed at:  Interim Export Reporting 
http://www.cbsa-asfc.gc.ca/E/pub/ cm/d20-1-1-interi m/README.html. 
125 Export declarations are not required for goods e xported to the United Stat es, Puerto Rico or the 
United States Virgin Islands, with th e exception of exports of trains.  Canada receives export information on 
goods destined for the United States directly from Un ited States import data, under a bilateral agreement 
between the two countries.  Goods in transit through the United States to another country are subject to the same 
requirements as if they were travelling directly to the other country. 
126 For a detailed list of exceptions to exporter repo rting, see section 6 of D20-1-0. Viewed at:  
http://www.cbsa-asfc.gc.ca/E/pub/cm /d20-1-0/README.html;  Memorandum  D20-1-1, paragraphs 30-32. 
Viewed at:  http://www.cbsa-asfc .gc.ca/E/pub/cm/d20-1-1/d20-1-1-e. pdf#search='Memorandum%20D2011. WT/TPR/S/179 Trade Policy Review 
Page 54 
 
 
Declaration (CAED);  G7 Electronic Data Interc hange (EDI) Export Reporting;  form B13A, Export 
Declaration;  or a Summary Report.127  The exporter is ultimately responsible for ensuring that the 
goods are reported.  Exporters are required to k eep accurate records in Canada for six years. 
141. Export declarations, permits and any other re quired documentation must be submitted within 
specific timeframes as per the Reporting of Export ed Goods Regulations.  These timeframes vary 
depending on the mode of transport used to ex port the goods from Canada.  Export reports for live 
animals, perishable goods, bulk goods, homogenous  goods or time-sensitive goods, which are not 
controlled, regulated or prohibited, do not follo w the mode-specific reporting time frames and may be 
made immediately before export. 
142. Carriers and customs service providers are also subject to export reporting requirements.128  
As per the Customs Act, CBSA officers may insp ect export goods reported to the Government of 
Canada. 
143. If export-reporting requirements are not met, e xporters and/or carriers may be subject to 
penalties under the Administrative Monetary Penalty  System (AMPS).  Penalty amounts range from 
CAN$100 to $25,000 depending on the seriousness of th e infraction and the number of times it has 
been committed.129 
(ii) Export taxes, charges, and levies 
144. Export duties are imposed on Canadian-manufactur ed tobacco products and, as of 12 October 
2006, on softwood lumber destined for the United States.  Export duties may be imposed under the Export Act on certain ores, but no such taxes were levied as of mid 2006.
130 
145. As outlined in the Secretariat Report for Ca nada's previous review, under the Excise Act 
2001, exports of Canadian-produced cigarettes, toba cco sticks, and other manufactured tobacco to all 
destinations are subject to a two-tiered tax, with di fferent rates for exports up to a threshold of 1.5% 
of a manufacturer's annual production (Can$0.075 pe r cigarette) and for exports above the threshold 
(Can$0.178 per cigarette).  The tax on exports up to the 1.5% threshold is refundable to the foreign 
importer and Canadian manufacturer  upon proof of payment of taxes.  The tax on exports over the 
1.5% threshold is not refundable and approximates the total federal and pr ovincial taxes otherwise 
applicable in the lowest-tax juri sdiction in Canada.  The purpose of the export tax scheme is to reduce 
the incentive to smuggle Canadian-produced toba cco products back into Canada from export 
markets.131 
146. On 12 September 2006, Canada and the United St ates signed an agreement with respect to 
exports of Canadian softwood lumber.  This follo wed a long-running trade dispute regarding U.S. 
anti-dumping and countervailing duties on imports of Canadian softwood lumber, which had been the 
                                                      
127 The hard copy method is Form B13A; the two av ailable options for electronic reporting are the 
Canadian Automated Export Declaration and the G7 Electronic Data Interchange Export Reporting.  The 
Summary Reporting Program is reserved for exporters of low-risk goods who export on a regular basis and who 
have met specific CBSA requirements. 
128 CBSA Memorandum D20-1-0, Reporting of Exported Goods Regulations, paragraphs 9-14.  See 
also D3-1-8 Cargo-Export Movement at h ttp://www.cbsa-asfc.gc.ca/ formspubs/menu-e.html. 
129 Details of export-related penalties may be vi ewed at:  http://www. cbsa-asfc.gc.ca/export/ 
amps_export _mpd-e.pdf. 
130 Export Act. Viewed at:  http://la ws.justice.gc.ca/en/E-18/55273.html. 
131 Press release of 5 April 2001, "Government Announces Comprehensive Strategy to Discourage 
Smoking".  Viewed at: http://www .fin.gc.ca/news01/01-039e.html. Canada WT/TPR/S/179 
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subject of challenges in the U.S. courts, under the WTO's Dispute Settlement Understanding, and 
under NAFTA Chapter 19.  The Agreement entered in to force on 12 October 2006, with amendments 
to provisions relating to the termin ation of certain litigation and the re fund of duty deposits.  As part 
of this agreement, the United States revoked th e anti-dumping and countervailing duty orders, and 
refunded over 80% of the duty deposits collected si nce 2002.  Canadian softwood lumber exporters 
will pay an export charge when the agreed refere nce price of lumber is at or below US$355 per 
thousand board feet.  The Canadian regions covere d by the agreement (British Columbia, Alberta, 
Saskatchewan, Manitoba, Ontario, and Quebec) may choose between two regimes:  either an export 
charge that varies with price;  or a lower export ch arge plus volume restraint, where both the rate and 
the volume restraint vary with the price.  The export charge revenues will be collected by the 
Canadian Government and returned to the provinces based on the origin of the softwood.  The funds 
may not flow back to the industries from which they were collected.  Some exemptions and 
exclusions apply.132 
147. Under the NAFTA and Canada's FTAs with  Chile (CCFTA), Costa Rica (CCRFTA) and 
Israel (CIFTA), Canada has undertaken not to ma intain any duty, tax or other charge on goods 
exported to the territory of the party(s) unless such  levies are adopted or maintained on such goods for 
domestic consumption.133  Under the CIFTA, however, Canada has scheduled certain exceptions to 
this provision, inter alia , relating to controls on the exports  of logs and unprocessed fish (under 
certain provincial statutes). 
(iii) Export prohibitions, restrictions, and licensing 
148. Most Canadian export controls are in pl ace under the Export and Import Permits Act, 
administered by the Export and Import Control Bureau.  Other export controls fall under the respective responsibilities of the Canadian Wheat Bo ard;  Health Canada;  Agriculture Canada;  
Canadian Heritage;  Superintendent of Financ ial Institutions;  Natural Resources Canada;  and 
Environment Canada. 
149. Section 3 of the Export and Import Permits Act, the Export Control List (ECL), (Table III.8) 
contains articles controlled for any of the following  purposes:  to ensure that any action taken to 
promote and encourage the further processing in Cana da of a natural resource that is produced in 
Canada is not rendered ineffective by reason of th e unrestricted exportation of that natural resource 
(included in Group 5 ECL);  to limit or keep unde r surveillance the export of any raw or processed 
good that is produced in Canada in circumstances of  surplus supply and depressed prices and that is 
not an agricultural product (included in Group 5 ECL);  to implement an intergovernmental 
arrangement or commitment;  to ensure that there is  an adequate supply and di stribution of the article 
in Canada for defence or other needs;  or to cont rol the export of arms, ammunition, implements or 
munitions of war or articles of a strategic nature or  value the use of which might be detrimental to the 
security of Canada.
134 
150. The vast majority of controlled exports are c ontrolled pursuant to international agreements 
that Canada has signed.  Amendments were made to the ECL in 2003 and 2006, largely to implement 
Canada's commitments under various internationa l agreements.  In addition, in 2003, some goods 
                                                      
132 Foreign Affairs and International Trade Canada online information.  Viewed at:  http://www.dfait-
maeci.gc.ca/trade/eicb/sof twood/SLA-main-en.asp. 
133 NAFTA, Article 314 and Annex 314;  CCFTA , Article C-12; CCRFTA Article III.10 and 
Annex III.10;  and CIFTA, Article 4.7 and Annex 4.1. 
134 Foreign Affairs and International Trade Canada online information.  Viewed at: 
http://laws.justice.gc.ca/en/E-19/237065.html. WT/TPR/S/179 Trade Policy Review 
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were added to Group 5 of the ECL.135  In 2006, key amendments included the removal of Group 8, 
which included chemicals for the production of illicit drugs, since Health  Canada had assumed full 
export control on the items included in this Group as of January 2004.  In addition, softwood lumber  
products where the province of first manufacture wa s Ontario, Quebec, British Columbia or Alberta 
(Item 5104)136, were removed to reflect the expiry of the 1996-2001 Canada-U.S. Softwood Lumber 
Agreement.137 
151. An export permit is required before an item included in the ECL (Table III.8) may be 
exported, except (in most cases) for exports to the United States.138 Exporters may apply for export 
permits and certificates online through the Export Controls On-Line (EXCOL) tracking system, which 
replaced an earlier permit tracking system in 2006.139  Nominal fees are charged for export permits, 
and different validity periods apply.140  In addition to export permit requirements under the Export and 
Import Permits Act, individuals wishing to export mo st items listed in Group 2,  and all items listed in 
Group 6 and described under Export Control List it em 5504 must be registered with the Controlled 
Goods Program of Public Works and Government Services Canada.141  In addition to Export and 
Import Permits Act controls, exporte rs of items in Groups 3 and 4 ( nuclear and nuclear-related) items 
must comply with export obligations under the Nuclear Safety and Control Act .142 
152. Under the Export and Import Permits Act, contro ls may be placed on exports to particular 
countries listed on the Area Control List.  As of the end of 2006, Myanmar and Belarus were the only countries on the Area Control List, with Belarus be ing added to the list in December 2006 (Angola 
was removed from it in 2003).  In addition, the Ac t covers re-exports of goods originating in the 
United States, in order to enforce U.S. restricti ons on exports of controlled goods as well as U.S. 
embargoes on certain countries.  Automatic firear ms may be exported only to countries with which 
Canada has intergovernmental defence, research,  development, and produc tion arrangements, which 
are listed on the Automatic Firearms  Country Control List (AFCCL).
143  Canada also prohibits the 
                                                      
135 Including blinding laser weapons,  nuclear fusion reactors, anti-pe rsonnel mines, other strategic 
goods and goods for certain uses.  Th e most recent amendment is Order am ending the Export Control List, 
SOR/2003-196, 20 September 2006.  Vi ewed at: http://canadag azette.gc.ca/partII/2006/ 20060920/h tml/sor196-
e.html.  The respective international agreements include: Wassenaar Arrangement; Inter-American Convention 
Against the Illicit Manufacturing and Trafficking in Firearms, Ammunition, Explosives, and other Related 
Materials; Nuclear Suppliers' Group;  Missile Technology Control Regime;  Australia Group. 
136 As specified in the ECL the "province of firs t manufacture" means the pr ovince where the mill at 
which a softwood lumber product was first manufactured into such a product is situated. 
137 Item 5105, softwood lumber products, remains in force and will be amended to reflect the scope of 
the 2006 Canada-U.S. Softwood Lumber Agreement;  it will be renumbered 5104. 
138 Atomic material and equipment, automatic firear ms, logs, softwood lumber, pulpwood, roe herring 
and red cedar bolts and blocks are among the goods requiring permits for export to the United States.  (Foreign Affairs and International Trade Cana da online information.  Viewed at:  http://www.dfa it-maeci.gc.ca/eicb/ 
military/epe-en.asp). 
139 Foreign Affairs and International Trade Canada online information.  Viewed at:  http://www.dfait-
maeci.gc.ca/trade/eicb /EXCOL/intro-en.asp. 
140 Foreign Affairs and International Trade Canada online information.  Viewed at:  
http://laws.justice.gc.ca/en/E-19/SOR-97- 204/100299.html.  Fees are laid out in the Export and Import Permits 
Act of 19 May 1995 (SOR/95.245).  Viewed at:  http://laws.justice.gc.ca/en/E-19/SOR-05-245/text.html.  
Financial administration rules are set out in Notice No. 138, 16 May 2003.  Viewed at:  http://www.dfait-maeci.gc.ca/eicb/noti ces/ser138-en.asp. 
141 Foreign Affairs and International Trade Canada online information.  Viewed at:  
http://laws.justice.gc.ca/en/E- 19/SOR-97-204/100299.html. 
142 Canadian Nuclear Safety Commission online inform ation.  Viewed at: http://www.nuclearsafety. 
gc.ca/eng/regulatory_information/regulations/index.cfm. 
143 AFCCL online information.  Viewed at:  http://la ws.justice.gc.ca/en/E-19/SOR-91-575/text.html.  
The countries on the list are:  Australia ;  Belgium;  Botswana;  Denmark;  Fi nland;  France;  Germany;  Greece;  Canada WT/TPR/S/179 
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sale of military goods to Pakistan via a policy ban.144  The sale of military goods is also prohibited in 
accordance with United Nations Security Council R esolutions, implemented in Canada by various 
regulations under the United Nations Act;  as at end 2006, these prohibitions covered the Republic of 
the Congo and the Democratic Republic of North Korea.145 
Table III.8 
Export control list, 2006 
 Products 
Group 1 – Dual Use List Advanced materials;  ma terials processing;  electronics;  computers;  
telecommunications;  information security;  se nsors and lasers;  navigation and avionics;  
marine;  propulsion 
Group 2 – Munitions List All munitions 
Group 3 – Nuclear Non-Proliferation List All supplies and technology for nuclear production 
Group 4 – Nuclear-Related Dual Use List All supp lies and technology relate d to nuclear production 
Group 5 - Miscellaneous Goods Pancreas glands of cattle and calves (all destinations);  human serum albumin (all 
destinations);  logs of all species of wood (all destinations);  pulpwood of all species of 
wood (all destinations);  blocks, bolts, pla nks, boards and any other material or product 
of red cedar that is suitable for use in the manufacture of shakes or shingles (all 
destinations);  softwood lumber products (United States);  peanut butter that is classified 
under tariff item No. 2008.11.10 of Schedule I to  the Customs Tariff (all destinations);  
roe herring (all destinations);  sugar-containing products (United States);  sugars, syrups 
and molasses (United States and U.S. Forei gn Trade Zones);  U.S. origin goods (all non-
U.S. destinations);  goods in transit;  prohi bited weapons; nuclear fusion reactors; anti-
personnel mines; strategic goods; goods for certain uses 
Group 6 - Missile Technology Control 
Regime List Items that are used or could be used in the proliferation of systems capable of delivering 
chemical, biological or nuclear weapons 
Group 7 – Chemical and Biological Weapons Non-Proliferation List Chemicals, precursors, biological agents, and related, including dual use equipment 
 
Source: Department of Foreign Affairs and International Trade 2005, " A Guide to Canada's Export Controls .  Viewed at:  
 http://www.dfait-maeci.g c.ca/eicb/military /documents/exportcontrols-en.pdf. 
153. Export restrictions for environmental purpo ses are generally maintained pursuant to 
multilateral environmental agreements (MEAs), or to national environmental and resource 
conservation programmes.  In addition, exports of certain substances are controlled under the 
Canadian Environmental Protection Act (CEPA).  Th e affected substances are included in the Export 
Control List, a schedule of CEPA.146  Canada's obligations under the Convention on International 
Trade in Endangered Species of Wild Fauna and Fl ora (CITES) are implemented under Canada's Wild 
Animal and Plant Protection and Regulation of International and Interprovincial Trade Act.147  
Provinces and territories also have in place export controls for certain wild animals and plants.148 
154. Canada's obligations with respect to the tr ansboundary movement of hazardous wastes and 
recyclables is implemented through the Export a nd Import of Hazardous Wastes and Hazardous 
                                                                                                                                                                     
Italy;  Latvia;  Netherlands;  New Zealand;  Norway;  Poland;  Portugal;  Saudi Arabia;  Spain;  Sweden;  
United Kingdom and United States. 
144 Foreign Affairs and International Trade Canada online information.  Viewed at:  http://www.dfait-
maeci.gc.ca/eicb/military/I ndiaDisclaim-en.asp. 
145 Foreign Affairs and International Trade Canada online information.  Viewed at:  http://www.dfait-
maeci.gc.ca/trade/sanctions-en.asp. 
146 Environment Canada online information.  Viewed  at:  http://www.ec.gc. ca/CEPARegistry/subs_list 
/Export.cfm.  
147 Canadian CITES Control List.  Viewed at:  http://www.cites.ec.gc.ca/listedecontrole/index. 
cfm?lang=e&fuseaction=cList.swOptions.  
148 See Memorandum D19-13-1, June 15, 2001.  Vi ewed at:  http://www.cbsa-asfc.gc.ca/E/pub/cm/ 
d19-13-1/d19-13-1-e.html. WT/TPR/S/179 Trade Policy Review 
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Recyclable Material Regulations (the E xport and Import Regulations), under the CEPA.149  These 
regulations entered into force in 2005, replacing the former E xport and Import of Hazardous Waste 
Regulations (EIHWR).  Under the Controlled Drugs and Substances Act150, implementing regulations 
require permits for the export of certain controlled substances and precursor chemicals, by licensed 
dealers.151  Export permits are issued by the Office of Controlled Substances.  Canada participates in 
the Kimberly Process Certification Scheme for international trade in rough diamonds.152 
155. Under the Cultural Property Export and Im port Act, and implementing regulation153, permits 
are required for exports listed under the Cana dian Cultural Property Export Control List. 
(iv) Export finance, insurance, and guarantees 
156. Export Development Canada (EDC) is Canada's official export credit agency.  EDC, a Crown 
Corporation under the responsibility of the Minister of  International Trade, is governed by the Export 
Development Act.154  EDC's mandate is to support and develop, directly or indirectly, Canada's export 
trade and Canadian capacity to engage in that  trade and to respond to international business 
opportunities.155  It offers various finance, insuran ce and guarantee programmes related to export 
transactions (Table III.9). 
157. EDC finances its activities through fees for services, charging interest on loans, and 
borrowing in the commercial market under a govern ment guarantee.  In addition, EDC may make a 
request to the Minister of Finance to borrow m oney out of the Consolidated Revenue Fund.  EDC 
does not pay income or corporate taxes, does not normally pay dividends, and benefits from a 
sovereign credit rating.  Business volume supported by EDC programmes increased from nearly 
Can$51 billion in 2002 to ju st over Can$57 billion in 2005.156 
158. In 2005, 6,828 Canadian companies were assisted by EDC; around 90% of EDC's customers 
were small and medium-sized busin esses.  The main sectors of exposure for EDC's commercial loan 
and insurance portfolios are listed in Table III.10.   Total EDC exposure by geographic market has 
remained relatively unchanged since 2003.  In 20 05, North America and the Caribbean accounted for 
68%;  Europe, 9%;  Asia/Pacific, 8%;  Middle Eas t/Africa, 8% and South America/Central America, 
7%.157 
                                                      
149 The obligations include the Basel Convention, the OECD Decision of Council on the Control of 
Transboundary Movements of Wastes Destined for Reco very Operations, and the Canada-U.S.A.  Agreement on 
the Transboundary Movement of H azardous Wastes.  See also Environm ent Canada online information.  
Viewed at:  http://www.ec.gc.ca/tmb/eng/tmbregs_e.html. 
150 Controlled Drugs and Substances Act.  Viewed a t:  http://laws.justice.gc.ca/en/C-38.8/index.html. 
151 These implementing regulations include:  Benzodiazepines and other targeted substances 
regulations; Industrial hemp regulations; narcotic control regulations; and precursor control regulations.  Viewed 
at:  http://laws.justice.gc.ca/en/C-38.8/index.html. 
152 Natural Resources Canada online informati on.  Viewed at:  http://mmsd1.mms.nrcan.gc. 
ca/kimberleyprocess/note_e.asp. 
153 Cultural Property Export Regulations.  Viewed at:  http://pch.gc.ca/progs/mcp-bcm/regs-e.cfm;  
Canadian Cultural Property Export Control List.  View ed at:  http://www.pch.gc. ca/progs/mcp-bcm/list-e.cfm. 
154 Export Development Act.  Viewed at:  http://laws.justice.gc.ca/en/E-20/57033.html. 
155 EDC (2005). 
156 EDC (2005). 
157 EDC (2005). Canada WT/TPR/S/179 
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Table III.9 
EDC finance, insurance and guarantee programmes, 2006 
Products Features 
Insurance  
Accounts Receivable 
Insurance Protects policyholders against commercial credit risk  such as non-payment by their buyers, whether due 
to insolvency, default, repudiation of  goods or termination of contracts, as well as against political risks 
such as difficulty in converting or transferring cu rrency, cancellation of export or import permits, and 
war-related risks.  Coverage is available for co mpanies of all sizes and some products have been 
streamlined to meet the needs of small and medium-sized enterprises 
Export Protect Provides online single-transacti on insurance coverage on a foreign buyer 
Documentary Credits 
Insurance Protects banks in Canada confirming or negotiating irrevocable letters of  credit (ILCs) issued by foreign 
banks to exporters of Canadian go ods and services.  The policy provides insurance against the risk that 
the foreign bank may fail to pay the insured bank for payments due to the exporter under the ILC.  This 
enables the exporter to look to a bank in Canada for payment rather than the buyer’s bank abroad 
Contract Frustration 
Insurance Tailored coverage used for one-off g oods, services, and project contracts 
Political Risk Insurance Protects Canadian companies with inve stments in foreign countries and/or lenders that finance 
investments pursued by Canadian companies abroad . Traditional policies cove r investors or lenders 
against currency conversion and/or transfer diffic ulties, expropriation by the host government, and 
political violence.  Availability of  political risk insurance can also  allow companies to leverage 
additional financing for projects.  The political ri sk insurance programme in cludes the non-honouring of 
a sovereign payment obligation to a lender; the non-paymen t to an investor of an arbitral award against a 
sovereign entity; and coverage  of the rights associated with mobile assets.  In addition, EDC has made a 
number of changes to the programme to accommodate small business transactions 
Financing  
Line of credit Enables exporters to conclude sales via pre- arranged financing facilities set up between EDC and 
foreign banks or corporations.  That is, EDC may le nd to a foreign bank for on-lending to buyers of 
Canadian exports, or EDC can establish a line with a major foreign corporation that is purchasing from 
one or more Canadian exporters 
Loan Loans between EDC and a buyer/borrower can be a rranged for any export transaction.  Two basic types 
of loans are available: 
(i) Buyer Credit involves a financing arrangement be tween EDC and the buyer (or a separate borrower 
on behalf of the buyer) to finance Canadian expor ts generally related to a specific export contract. 
(ii) Supplier Credit transactions are structured to  provide the exporter (supplier) with the ability to 
provide its buyer with extended payment terms. 
EDC can provide pre-shipment financing to exporters , in conjunction with their bank, to finance costs 
directly related to an export contract.  EDC may also provide financing to  Canadian companies to 
support their export business or their foreign investments 
Project finance Provides limited recourse  financing to fund the construction of industrial and infrastructure projects 
across various sectors in support of Canadian expor ts to, or Canadian sponsor investments in, such 
projects.  EDC also arranges project finance tr ansactions in cooperation with other lenders 
Guarantee Provides a guarantee to a fi nancial institution to cover loans to foreign borrowers fo r the purchase of 
Canadian exports, or to exporters to provide fina ncing to support their export business or their foreign 
investments 
Equity and other forms of 
related investments  Provides equity and/or other form s of related investments (includi ng fund investments) in support of 
next generation Canadian exporters and to facilita te globalization of existing Canadian companies 
Bonding  
Performance Security 
Guarantee Provides a bank with coverage against any calls pursu ant to the guarantee issued on an exporter's behalf 
Performance Security 
Insurance Protects exporters from wrongful calls made on their bank letters of guarantee 
Foreign Exchange Facility 
Guarantee Provides a second demand guarantee to the financial in stitution (FI) for the collateral provided to the FI 
with respect to the exporter’s forw ard contracts facility, in the event that the exporter does not close the 
forward contract on the “settlement date” 
Financial Security Guarantee Provides the bank with a second de mand guarantee to secure exporters' obligations in respect of 
suppliers and offshore working capital facilities 
Surety Risk Sharing When an exporter, with existing but limited  surety lines, is required to post surety bonds instead of bank 
letters of guarantee, EDC offers su rety capacity in the form of Sure ty Re-Insurance to licensed sureties 
to increase capacity to facilitate  the issuance of  such bonds 
Surety Fronting Services Available to exporters when financia l profiles or volume of business does not meet normal surety 
underwriting guidelines.  Surety bonds are thus issued by  licensed sureties with the full support of EDC.  
This allows smaller exporters to access a surety market that is not typically available to them 
 
Source:  Export Development Canada. WT/TPR/S/179 Trade Policy Review 
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Table III.10 
Main areas of EDC exposure:   commercial loan and insurance portfolios, 2002-05 
(Per cent) 
 2002 2003 2004 2005 
Commercial loans     
Aerospace 33 34 33 33 
Surface transportation 21 21 35 35 
Energy (equipment) 13 14 13 13 
Short-term insurance     
Forestry 29 35 33 28 
Base and semi-manufactured goods 30 23 19 22 
Advanced technology (and manufacturing) 21 9 23 9 
 
Source: EDC. 
159. EDC maintains two accounts, the Corporat e Account and the Canada Account.  The 
Corporate Account may compete with private-sector financing or may provide services that are not generally available from the private sector such  as insurance and guarantee services to small and 
medium-sized enterprises (SMEs).  EDC reports qua rterly on its aggregate insurance and financing 
services transactions (excluding the Canada Account).
158  It also reports certa in individual information 
on transactions related to its  signed financing support. 
160. The Canada Account has been used to suppor t transactions that the Federal Government 
deems to be in the "national interest" but that EDC cannot support under the Corporate Account for 
reasons of capacity and risk.  National interest  involves considerations such as the employment 
generated or sustained by the transaction;  the impor tance of the transaction to the exporter;  foreign 
policy considerations;  and the importance of th e market to Canada.  Each Canada Account 
transaction requires ministerial authorization, a nd those exceeding Can$50 million or of a sensitive 
nature require Cabinet approval.  There were 11 export transactions unde r the Canada Account 
between October 2001 and end-Nove mber 2006.  Among the most significant in value terms were 
with respect to the sale of Bombardier aircraft to the United States.159 
161. Canada's support to the regional aircraft industry  through the EDC has been the subject of two 
disputes under the WTO's Dispute Settlement Understanding, with Brazil as complainant.160 
162. The second trade dispute, in 2001, related to cl aims by Brazil that subsidized export credits 
and loan guarantees were being extended to Canada's  regional aircraft industry by both the Corporate 
Account and the Canada Account, notably in th e case of a sale of Bombardier aircraft to 
Air Wisconsin Airlines of the United States.  Among the Panel's findings were that five of the 13 specific transactions challenged by Brazil, incl uding Canada Account fina ncing to Air Wisconsin 
and Air Nostrum and three Corporate Account tran sactions with Comair, c onstituted prohibited export 
subsidies.  At the Dispute Settlement Body meeti ng of 22 May 2002, Canada indicated that it did not 
consider that it was required to take any further steps to comply with the DSB's recommendations in 
respect of aircraft delivered prior to 20 May 2002,  but that Canada was open to working with Brazil 
on a forward-looking resolution of the dispute while  honouring its commitments in respect of existing 
contracts in the matter of undelivered aircraft.
161  In the context of this Review, the authorities noted 
                                                      
158 It reports aggregations of its business volume by:  Canadian industry sector; country or region in 
which business was concluded; Canadian region of exporter;  and type of EDC support provided.  For more information on EDC's disclosure policy see http://www.edc.ca/english/disclosure.htm. 
159 EDC online information.  Viewed at:  ht tp://www.edc.ca/english/ disclosure_9239.htm. 
160 See WTO (2003). 
161 WTO document WT/DSB/M/124, 13 June 2002. Canada WT/TPR/S/179 
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that Canada had not changed the terms of cont racts it had assumed before the DSB adopted its 
recommendations, but that going forward it was governmental policy that all Canada Account 
transactions should be consistent with Canada's in ternational obligations.  Following arbitration, in 
March 2003 Brazil was granted authorization by the DSB to suspend the application of obligations 
(under Article VI:6(a) of GATT 1994 and under th e Agreement on Import Licensing Procedures, and 
of tariff concessions and related obligations unde r GATT 1994) covering trade in a total amount of 
US$247,797,000.162  No retaliation has been imposed by Brazil to date (mid 2006). 
163. Further to a comprehensive strategic review of EDC and its activities, two working groups 
were established to examine the strategic issues around the short-term cred it insurance programme 
and bank guarantees.  The review found that EDC could more actively encourage bank participation 
in the trade finance area and changes to EDC’s ba nk guarantee programme were implemented.  With 
respect to the short-term insurance programme, b ased on this review, EDC concluded an agreement 
with COFACE in 2005 to provide complementary support to customers for their domestic and foreign accounts receivable business).
163  EDC also works with other priv ate insurers to help them expand 
their role in meeting the accounts receivabl e insurance needs of Canadian companies. 
164. Export guarantees are also provided by the Canadian Commercial Corporation (CCC), a 
crown corporation.  CCC's main role is to allow Canadian companies direct access to U.S. defence 
and aerospace markets under the Canada-U.S. De fence Production Sharing Arrangement (DPSA):  
this represents around 67% of CCC's contract billings.164  Although the CCC specializes in sales to 
foreign governments and international institutions, it also helps Canadian exporters win sales in 
private-sector markets.  In this regard, th e CCC provides foreign buyers a government-backed 
guarantee of contract performance, through its  International Prime Contractor Service.165  U p  u n t i l  
FY 2005/06, CCC also provided export credits th rough its Progress Payment Programme.  This 
programme was discontinued in FY 2005/06 to a void duplication with the services offered by EDC. 
165. Initiatives to provide export finance, insurance,  and guarantees have also been taken at the 
provincial level.  Thus, Investissement Québ ec Small and Medium Business Financial Program 
provides loans and loan guarantees (covering up to 80% of the net loss) for a range of export-related 
projects as well as export credits.  The Business New Brunswick Trade Assistance Programs and 
Services (TAPS) provides financing to  assist in the development of new export markets .166  The 
Government of British Columbia is a shareholder in Northstar Trade Finance Inc., which  provides 
loans of between Can$100,000 and Ca n$5 million to finance export sales.167  The Enterprise Cape 
Breton Corporation promotes and assists the development of regional industry through repayable 
contributions and other forms of investment to  projects which support economic growth in its 
mandate area.  Conditions attached include that these projects must provide employment outside the coal-producing sector and broaden the base of the local economy.  In the case of food processing, 
conditions attached include, that the market for th e output of this project must be import substitution 
or export orientated.
168  Nextrade Finance, established by  the Saskatchewan Trade and Export 
                                                      
162 WTO document WT/DSB/M/145, 7 May 2003. 
163 The Coface Group is a private s ector company providing trade risk  management services.  Online 
information viewed at:  http://www.coface.com. 
164 CCC (2006), Annual Report 2005-06 . 
165 CCC online information.  Viewed at:  http ://www.ccc.ca/eng/abo_ab outCCC_CCCGuarantee.cfm. 
166 Business New Brunswick online information viewed at:  http://www.gnb.ca/0398/menu/abo/ 
fa/TAPS/index-e.asp. 
167 Northstar Trade Finance Inc. online information.   Viewed at:  http://www.northstar.ca/index.php. 
168 Enterprise Cape Breton Corporation online in formation.  Viewed at:  http://www.ecbc.ca/e/ 
aboutecbc.asp. WT/TPR/S/179 Trade Policy Review 
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Partnership provides  pre- and post-shipping financing of  up to US$150,000 to qualifying 
Saskatchewan exporters.169 
(v) Export promotion and marketing assistance 
166. There are a range of programmes and activities to promote exports and provide marketing 
assistance in Canada, at the federal and provincial  levels.  Some assist companies to get "export" 
ready, and others, such as the Canadian Trad e Commissioner Service (see below) build on these 
efforts to assist them, when ready to export, to access business opportunities abroad. 
167. A network of government departments and agenci es, (formerly known as Team Canada Inc.), 
have cooperated to provide a single point of access  to government services (federal, provincial, and 
municipal) through Export Source.ca, its on-line res ource for export information.  Foreign Affairs and 
International Trade Canada’s (DFAIT) Internationa l Business Opportunities Centre provides sourcing 
services, matches export opportunities provided by Canada's trade commissioners working in Canada's posts abroad (see be low);  and disseminates business  leads daily via an online database, the 
Virtual Trade Commissioner, to registered Canadian companies across industrial sectors.
170  Export 
Development Canada's representatives abroad are also  active in identifying and developing business 
opportunities for Canadian companies. 
168. DFAIT reaches Canadian companies through th e  Trade Commissioner Service with twelve 
regional offices within Canada (and 100 staff), as we ll as through the trade programme located in over 
140 Canadian Embassies and High Commissions abroad .  The Trade Commissioner Service (TCS) is 
a worldwide network of more than 800 professionals  in international business development.  Its 
purpose is to deliver services integral to helping Canadian clients make better business decisions in 
order to achieve their goals abroad.171 
169. At the regional level, TCS offices work with the regional development agencies, cooperating 
on export service delivery to their clients.  The A tlantic Canada Opportunities Agency undertakes 
activities to strengthen and assist the international ma rketing efforts of enterprises, particularly SMEs, 
and attract foreign direct investment.  Support for its trade strategy is provided through the agency’s 
Atlantic Trade and Investment Partnership;  International Business Development Program; and 
Business Development Program.172 
170. The Business Development Bank of Canada, in  collaboration with the TCS regional offices 
also provides consulting advice on operational efficiency; marketing strategy;  market research;  and export planning and assessing growth potential.
173 
171. Western Economic Diversification Canada provides export advisory services to SMEs in 
Western Canada, through the Western Canada Busi ness Service Network;  strategically supports 
selected trade and investment missi ons together with fede ral and provincial partners;  undertakes trade 
and investment research of specific interest to west ern Canada;  and is involved in advocacy activities. 
                                                      
169 Nextrade online information.  Vi ewed at:  http://www.nextrade.ca. 
170 Foreign Affairs and International Trade Canada  online information.  Viewed at:  http://www.e-
leads.ca/cancompanies/default-e.asp. 
171 Foreign Affairs and International Trade Canada online information.  Viewed at:  
http://www.infoexport.gc.ca/regions/menu-en.html. 
172 The Canada/Atlantic Provinces Agreement on International Busine ss Development.  Viewed at:  
http://www.acoa-apeca.gc.ca/e/i bda/agreement/agreement.shtml. 
173 Business Development Bank of Canada online information.  Viewed at:  http://www.bdc.ca. Canada WT/TPR/S/179 
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172. Canada Economic Development for Québec Re gions (CED-Q), in partnership with the 
Government of Québec, assists SMEs by, among other things, helping them to expand business 
opportunities through expert advice, seminars, trade missions, networking, an d referrals.  FedNor, a 
regional development organizati on within Industry Canada, work s with not-for-profit, business-
oriented community organizations through its International Business Centre, to assist Northern 
Ontario SMEs to develop export skills and enhance international business opportunities. 
173. Provincial governments, often in  partnership with the private sector and their federal 
counterparts, have been active in providing marke ting and other assistance to exporters and potential 
investors.  To avoid duplicati on and overlap of the services provided at the federal, regional and 
provincial levels, Regional Trade Networks (RTNs) were created, which include representatives from 
government departments such as DFAIT, Industr y Canada, Agriculture and Agri-Food, regional 
development agencies (ACOA, WD, Developpe ment Economique Canada , and FedNor), the 
provinces, and some national associations.  The Expo rt Souce.ca website provides links to the services 
offered by RTN members, including the full range  of provincial export assistance initiative and 
programmes.174 
(vi) Other measures affecting exports 
174. Exported goods (other than excisable goods), services (with some exceptions)175, and 
intellectual property are zero-rated under the GST/HST (see section (2)(v))176, and under the 
provincial sales taxes. 
175. Under the Export Distribution Centre Program, eligible persons may obtain a certificate from 
the Minister of National Revenue allowing them to import or acquire domestically produced goods on 
a GST/HST-free basis.177  As outlined by the Canada Revenue Agency, the benefits to businesses that 
export substantially all their output is that the tax does not have to be paid at the time of acquisition or 
importation of the goods and later claimed back as an input tax credit.178 
176. Relief from payment of the GST/HST for imported goods that will eventually be exported is 
also available to processing service companies179 through the Exporters of Processing Services 
(EOPS) Program.  In addition, the Export Trading House Program allows authorized businesses 
                                                      
174 For more information on services provided at the provincial level see:  http://exportsource.ca/gol/ 
exportsource/site.nsf/en/es01956.html. 
175 Exceptions from the general provision for zero-rated status include:  a service supplied to non-
resident person if the service is rendered to an individual while that individual is in Canada;  an advisory, 
consulting, or professional service;  a postal service;  a service performed in respect of real property located in 
Canada;  a service performed in respect  of goods that are located in Canada  when the service is performed;  a 
transportation service;  and a telecommunication service.   However, there may be circumstances under which 
these services are also zero-rated. 
176 Canada Revenue Agency (2006a). 
177 Eligibility criteria include that:  the person will not engage in the substantial alteration of the 
property in the year;  either the pers on's percentage value added attributable to non-basic services in respect of 
customers' goods for the year will not exceed 10% or th e person's percentage total value added in respect of 
customers' goods for the year will not exceed 20%;  and the person's export revenue percentage for the year will 
be at least 90%. 
178 Canada Revenue Agency online information.  Viewed at:  http://www.cr a-arc.gc.ca/E/pub/gm/b-
088/b-088-e.html. 
179 Manufacturing service companies are businesses that perform ma nufacturing services, such as 
assembly, manufacture, alteration etc. on goods or materials that they do not own, for which they charge a fee.  
Canada Border Services Agency online information.  Viewed at:  http://cbsa-asfc.gc.ca/import/duty_deferral/ 
tab7-e.html. WT/TPR/S/179 Trade Policy Review 
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engaged exclusively in the export of goods to acquire goods for export on a GST/HST-free basis.  The 
authorities indicate that a range of other relie f measures address specific import-export scenarios. 
177. The Duty Deferral Program offers businesses ma ny of the same duty and tax incentives as 
those found in free-trade zones around the world.  Two of the programme’s options are the Duties 
Relief Program and the Duty Drawback Program.  Under the drawback option, businesses that have 
paid the duty and taxes on imported goods that are subsequently exported may request a refund of 
those duties and taxes.  Duties may only be refunde d after the goods have been exported.  Under the 
Duty Relief Program, goods destined for export may be imported duty free, even if these goods 
undergo a wide range of processing and ma nufacturing activities while in Canada.180  The GST 
portion may qualify for relief under a GST program, Exporters of Processing Systems (EOPS) 
(Chapter III(3)(vi)). 
178. Under the drawback and relief programmes, du ties relieved or deferred include:  customs 
duties;  anti-dumping and countervailing duties;  and ex cise taxes (other than the GST).  Excise taxes 
are not relieved on certain designated goods as define d in the Customs Act (e.g. gasoline).  Under 
both programmes, to benefit from duty relief or defe rral, goods must be expor ted from Canada within 
four years of the date of release of the goods.181  Imported goods may be exported either in the same 
condition, or after having been used, consumed  or expended in the processing of other goods. 
179. NAFTA obligations limit firms' use of the two programmes when exporting to Mexico or the 
United States.  Relief of customs duties is only allo wed in an amount equal to the lesser of (i) the 
amount of customs duties owed on the goods when imported into Canada and (ii) the amount of 
customs duties owed on the end-products when exported to Mexico or the United States.182 
180. Certain remission programmes, including the Ca nadian Goods Abroad programme, allow for 
the partial or full relief of payment of duties of goods exported for repair, additions, or work done 
abroad that are then returned to Ca nada, provided certain conditions are met.183 
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for business 
181. Forms of legal business structure in Canada in clude the corporation, sole proprietorship, 
partnership, and cooperative.  Join t ventures, branch offices, and subsidiaries are variations on these 
basic business structures.  Foreign firms may carry  out activities in Canada through a branch or 
incorporate in Canada as a subsidiary.  Branch o ffices of foreign companies must comply with the 
Investment Canada Act and provincial registration and licensing requirements.  Branch offices or 
subsidiaries of foreign corporations must comply  with the relevant incorporating statute and 
provincial registration and licensing requirements. 
182. Entities may incorporate as corporations federally, or  in one of the provincial and/or territorial 
jurisdictions.  The Canada Business Corporations Act (CBCA) is the overarching federal statute for 
the incorporation of business corporations.  Incorpor ation under this Act confer s the right to carry on 
business anywhere in Canada.  A ll types of businesses may incorporate under the CBCA with the 
                                                      
180 Memorandum D7-4-1.  Viewed at:  http://www.cbsa-asfc.gc.ca/E/pub/cm/d7-4-1/d7-4-1-e.pdf. 
181 Imported spirits used to manufacture distilled sp irits must be exported within five years. 
182 The following are exceptions to this rule:  goods exported in the same condition as imported;  
NAFTA originating imports;  certain specified products (e.g. citrus products between Canada and the United 
States). 
183 Memorandum D8-2-1.  Viewed at: http://www.cbsa-asfc.gc.ca/E/pub/cm/d8-2-1/d8-2-1-e.html. Canada WT/TPR/S/179 
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exception of banking, insurance, trust and loan busin esses (Chapter IV(6)(ii) and (iii)).  Federal, not-
for-profit corporations are incorporated under the Ca nada Corporations Act.  Federally incorporated 
companies may also be required to register in th e provinces or territories in which they undertake 
business. 
183. Under the CBCA, entities may file fo r federal incorporation online.184  Online filing fees are 
Can$200;  regular fees (for non-online filing) are set at Can$250.  Canada operates a same-day service for processing incorporation certificates.   
184. CBCA companies must have a registered office w ithin Canada.  At least 25% of the directors 
of a corporation must be resident Canadians and if th e corporation has less than four directors, then at 
least one must be a resident Canadian.
185  Corporations in sectors subject to ownership restrictions 
(including airlines and telecommunications) and in  certain other sectors (uranium mining, book 
publishing and distribution, book sale, film and video di stribution) must have a majority of resident 
Canadian directors.186 
185. Entities may also incorporate federally as cooperatives under the Canada Cooperatives Act 
and must be organized and opera te on a cooperative basis according to Section 7 of the Act.187  The 
citizenship and residency requirements for director s of cooperatives are the sa me as for directors of 
corporations. 
186. In 2006, Canada ranked fourth overall out of the 155 economies analysed in the World Bank's 
ease of doing business index.  It scored particularly  high ratings for starting and closing a business 
and protecting investors.188 
187. The Canadian Government has undertaken a number of initiatives to make the business 
environment more efficient and transparent.  Examples include:  the development of a Government Directive on Regulating, to clarify how the governme nt regulates;  and the launch of the Paperwork 
Burden Reduction Initiative, to reduce the costs of  paperwork and regulatory compliance for small 
businesses.  The Government is also expanding an  online service, BizPal, to provide customized 
listings of the permits, licences, and fees required at  all layers of government to start and grow a 
business.
189 
188. Businesses are subject to taxation by federal,  provincial and territorial governments.  The 
administration of federal and some provincial and territorial tax programmes is the responsibility of 
the Canada Revenue Agency (CRA).190  The tax mix and burden varies across provinces, reflecting 
the differences in tax rates across provinces and the Atlantic Investment Tax Credit.  The Atlantic 
                                                      
184 Corporations Canada online information.  Vi ewed at:  http://corporationscanada.ic.gc.ca/cgi-
bin/sc_mrksv/corpdir/corpFiling/register.cgi?lang=e. 
185 Canada Business Corporations Act, Subsection 105(3). 
186 Canada Business Corporations Act, Subsection 105(3.1). 
187 The features of cooperatives in clude:  open membership;  one member, one vote;  no proxy voting 
for members;  limited interest on member loans;  limited dividends on membership shares; to the extent feasible, 
members provide capital;  distribution of surplus funds to develop the business, improve common services, and 
provide reserves (to pay interest on member loans, to pay dividends on membership shares and investment shares, for community welfare, or for distribution among members as a patronage return);  and cooperative 
education. 
188 World Bank online information.  Viewed a t:  http://www.doingbusiness.org/EconomyRankings/ 
Default.aspx. 
189 BizPal online information.  Viewed at: http://www.BizPal.ca.   
190 Quebec, Ontario and Alberta administer their own corporate income tax systems.  All other 
provinces and territories legislate their corporate income tax provisio ns, but the CRA administers them. WT/TPR/S/179 Trade Policy Review 
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Investment Tax Credit (ACTIC) applies only to qu alified assets acquired for use in the Atlantic 
Provinces, the Gaspé region in Quebec, and their asso ciated offshore areas.  The credit is 10% of the 
capital cost of new machinery and equipment and buildings in manufacturing and processing, mining, 
oil and gas, logging, farming and fishing activities.  Credits that exceed federal tax payable can be 
carried back to reduce the federal tax in the previo us three years or forward up to 20 years.  The 
ACTIC is partially refundable for small Canadian-c ontrolled private corporations.  The ACTIC is the 
only regional tax credit provided by the Federal Government.  Small businesses benefit from lower 
tax rates both at the federal and provincial levels. 
189. Over the period under review, corporate tax reduc tions have been implemented at the federal 
level.191  The general corporate income tax rate was reduced to 21% from 28% in 2000, and the rate 
will drop to 18.5% by 2011.  In addition, the fe deral capital tax was eliminated in 2006 and the 
corporate surtax will be eliminated for all corporatio ns in 2008.  Tax reductions  have been provided to 
small businesses, which will benefit from a reducti on in the small business rate, to 11% from 12%, by 
2009, and from an increase in the income threshol d upon which the small business rate applies, to 
Can$400,000 from Can$300,000, by 2007.  Firms inco rporated in Canada, or with central 
management and control in Canada, are liable fo r tax on their worldwide income.  In FY 2005/06, 
corporate income tax revenues accounted for  14.3% of total federal government revenues. 
190. Foreign branch offices are subject to a branch ta x of 25%, unless this rate is reduced by a tax 
treaty. 
191. According to the authorities, the weighted average provincial corporation tax was 12.2% in 
2006. 
192. Additional taxes incurred by businesses in clude:  capital taxes in some provinces192;  payroll 
taxes;  property taxes on industrial and commercial properties (as well as excise taxes and sales taxes 
(section III(2)(v)).  Various tax credits are offere d at both the federal and provincial levels 
(section III(4)(ii)). 
(ii) Incentives and other assistance to business 
(a) Introduction 
193. As reported by the authorities, the main focus of the Government of Canada's efforts to 
stimulate economic activity and the competitiv eness of the Canadian economy is through tax 
measures and through supporting innovation, particul arly given relatively weak levels of private 
sector research and development.  Canada mainta ins a number of assistance programmes that include:  
tax incentives;  assistance targeted at research and development;  support for regional development;  
repayable and non-repayable financial contributions;  as well as sector-specific programmes in shipbuilding, textiles (Chapter IV(4)), defence, fisheries, and energy.  Other programmes support cultural priorities related to promoting language, litera ture, film, TV, new media, and music.  Various 
programmes are also operated by provincial government s, and some are cost-shared with the Federal 
Government.  This section focuses on non-agri-f ood sectors (for agri-food, see Chapter IV(2)). 
                                                     
 
191 Department of Finance online information.  Viewed at:  http://w ww.fin.gc.ca/budget00/ 
pdf/taxe.pdf. 
192 Federal capital taxes were abolished as of 1 Janu ary 2006.  Of the six prov inces that imposed capital 
taxes as at mid 2006, four had announced their phase out:  New Brunswick, Nova Scotia, and Saskatchewan by 
2010, and Ontario by 2012.  Quebec is reducing its capital tax and Manitoba plans to do so if balanced budget 
requirements are met (OECD, 2006) Economic Survey of Canada (excerpt on Chapter II, Business Taxation).  Viewed at:  http://www.oecd.org/dataoecd/29/21/36960925.pdf. Canada WT/TPR/S/179 
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194. Information on subsidy programmes is also pr ovided in Canada's notifications under the 
Agreement on Subsidies and Countervailing Measur es (SCM);  the most recent largely covers 
FY 2002/03 and FY 2003/04.193  The notification lists around 50 programmes providing subsidies, all 
at the federal level (Table III.11).  No province or territory has indicated to the federal government 
that it has subsidies subject to the notifi cation requirements of the SCM Agreement. 
195. The European Communities and United States ha ve requested clarification from Canada on 
certain aspects of its subsidies programmes, incl uding the ship-building, fisheries and aquaculture, 
aircraft, and film industries, as well as programme s providing research and development, adjustment 
assistance regional assistance as well as provincial subsidy programmes.194  Canada has provided 
answers to these questions.195 
Table III.11 
Programmes notified to the WTO, FY 2003/04a 
Type Number of 
programmes Forms of support Total 
(Can$, million) 
Industrial 33 Grants and non-repayable contributions, loans 
and non-repayable contributions, advisory 
assistance and technical advice;  loan 
guarantees credit insurance;  equity financing;  
share capital;  business and information 
programmes and services 141.4 
Cultural 5 Loans, subsidized  mail rates;  grant 93.6 
Fisheries 4 Adjustment assistance;  retirement of 
commercial licences, vessels and gear and issuing of new licences to aboriginal groups;  
construction of new vessels;  training 46.7 
 
a Excludes subsidy programmes to agriculture, discussed in Chapter IV(2). 
 
Source: WTO document G/SCM/N/123/CAN, 1 August 2005. 
196. With respect to adjustment assistance, the General Adjustment Assistance Regulations196 are 
on the books but, according to the authorities, they have not been in use for a number of years.  
Specific adjustment programmes that were operati onal over the period under review for communities 
facing particular economic difficulties resulting from industry closures and other external factors have expired.
197  Under Section 14 of the Department of Industry Act (1995), the Minister of Industry may 
develop and implement programmes to provide special assistance to industries or categories of persons, inter alia,  to restructure, adjust or rationalize.  According to the authorities, no such 
assistance is provided. 
197. An additional source of information on gove rnment assistance to business is the Tax 
Expenditures and Evaluations Report, prepared by the Department of Finance.  The Report provides 
estimates of the revenue consequences of tax e xpenditures (exemptions, de ductions, rate reductions, 
rebates, deferrals, credits and carry-overs).
198  As tax expenditures refl ect benefits available on a 
                                                      
193 WTO document G/SCM/N/123/CAN, 1 August 2005. 
194 WTO documents G/SMC/Q2/CAN/20, 24 January 2006;  G/SCM/Q2/CAN/22, 26 April 2006;  and 
G/SCM/Q2/CAN/22/Corr.1, 15 May 2006. 
195 WTO documents G/SCM/Q2/CAN/21, 15 March 2006, and G/SCM/Q2/CAN23, 12 September 
2006. 
196 Department of Justice online information.  Viewed at:  http://laws.justice.gc.ca/en/I-9.2/C.R.C.-
c.971/92052.html. 
197 These programmes can be found in WTO document G/SCM/N/123/CAN, 1 August 2005. 
198 Tax expenditures are described as forgone tax revenues due to special exemptions, deductions, rate 
reductions, rebates, credits, and deferrals that reduce the amount of tax that would otherwise be payable. WT/TPR/S/179 Trade Policy Review 
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selective basis to businesses (and individuals), th e report adds transparency and accountability (see 
section (b)).199 
198. Over the period under review, Canada has continued to participate actively in WTO 
negotiations to clarify and improve discip lines on subsidies and countervailing measures.200  T h e  
Canadian authorities indicate that, with respect to th e issue of fisheries subsidies specifically referred 
to in the Doha Ministerial Declaration, Cana da is supporting the deve lopment of improved and 
focussed disciplines that ar e transparent, workable, and enforceab le.  Canada makes a non-negligible 
contribution to global fishery subsidies.201 
(b) Federal measures and programmes 
199. The Federal Government provides a number of  tax credits and deductions from Corporate 
Income Tax (see Table III.12).  In the 2006 Budget, the Government also introduced a tax credit of up 
to Can$2,000 for employers who hire apprentices, as  part of a package of measures designed support 
a more skilled and educated workforce.202 
200. One of the Federal Government's major r esearch and development programmes has been 
Technology Partnerships Canada (TPC), a technology investment fund that invests in private sector 
companies.  As reported upon in Canada's previ ous Review, the TPC was the subject of a WTO 
dispute settlement case in 1999 where it was found th at the TPC provided subsidies to the Canadian 
regional aircraft industry that were contingent upon exportation.  As a result, Canada made 
adjustments.  In September 2005, it was announced that the existing TPC R&D programme would be 
phased out, with the exception of funding for the aerospace and defence sectors, which would 
continue until the terms and conditions of the programme expired on 31 December 2006.  As at 
November 2006, Industry Canada was reviewi ng its options with respect to any new R&D 
programme.  A potential replacement, the Transfor mative Technologies Program, was shelved as part 
of that review. 
201. The Federal Government also operates a tax in centive scheme, the Scientific Research and 
Experimental Development (SR&ED) programme  to encourage Canadian businesses to conduct 
research and development in Canada that will lead  to new, improved, or technologically advanced 
products or processes.  According to the Canada Revenue Agency, this programme is the largest 
single source of federal government support for industrial research and development.203 
202. Other federal government assistance programme s targeted at research, technology, and 
innovation are listed by research area in Table AIII.4. 
                                                      
199 Department of Finance (2005a). 
200 WTO documents:  TN/RL/GEN/112/Rev.1, 17 May 2006;  TN/RL/GEN/95, 19 January 2006;  
TN/RL/GEN/86, 17 November 2005;  TN/RL/GEN/85, 17 November 2005;  TN/RL/GEN/73, 17 October 2005;  
TN/RL/GEN/61, 15 September 2005;  TN/RL/GEN/111, 21 April 2006;  TN/RL/GEN/48, 30 June 2005;  TN/RL/GEN/37, 23 March 2005;  TN/RL/GEN/26, 1 December 2004;  TN/RL/GEN/21, 19 October 2004;  
TN/RL/GEN/14, 15 September 2004;  TN/RL/GEN/6, 14 July 2004;  TN/RL/GEN/7, 14 July 2004;  
TN/RL/GEN/3, 14 July 2004;  TN/RL/W/112, 6 June 2003. 
201 WTO (2006). 
202 Department of Finance (2006c). 
203 Canada Revenue Agency online information.  Viewed at:  http://www.c ra-arc.gc.ca/taxcredit/ 
sred/menu-e.html. Canada WT/TPR/S/179 
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Table III.12 
Tax credits and deductions from co rporate income tax, 2001 and 2006 
Programmea Estimated expenditure (2001) 
(Can$ million) Projected expenditure (2006)b 
(Can$ million) 
Partial inclusion of capital gains 4,095 2,240 
Low tax rate for small businesses 3,185 3,185 
Scientific research and experimental development 
investment tax credit 2,321 2,610 
Manufacturing and processing allowance 1,380 -c 
Exemptions for non-resident corporations 1230 1311 
Atlantic investment tax credit 343 339 
Resource sector credits and exemptions (other than the 
corporate mineral exploration tax credit) 278 45 
Canadian film or video production tax credit  175 225 
Film or video production services tax credit 80 135 
Low tax rate for credit unions 75 72 
Expensing of advertising costs 63 40 
Accelerated rate reduction for small businesses 50 -c 
Deduction of allowable small bus iness investment losses 28 24 
Corporate mineral exploration tax credit -d 55 
Other measures 11,451 7,469 
 
a Excludes charities, gifts and contributions; federa l-provincial financing arra ngements, and farming. 
b Projected expenditures are provisiona l and may be subject to change. 
c These tax expenditures were eliminated on 1 January 2004, when  the general corporate income tax rate was reduced to 21%. 
d This tax credit was introduced in the 2003 budget and applies to 20 03 and subsequent tax years.  It was phased in at 5% in 20 03, 
 7% in 2004, and 10% in subsequent years.  
Source: Department of Finance Canada, Tax Expenditures and Evaluations 2005 .  Viewed at:  http ://www.fin.gc.ca/toce/ 
 2005/taxexp05_e.html.  
203. A number of federal programmes provide assistance for regional economic growth, 
diversification and development.204  The authorities note that assistance to small and medium-sized 
enterprises is the predominant feature of this programming.  
204. Various federal programmes to assist businesses in Atlantic Canada (New Brunswick;  
Newfoundland and Labrador;  Nova Scotia;  and Prince Edward Island) fall under the legislative 
framework of the Atlantic Canada Opportuniti es Agency Act (ACOA).  These include: the ACOA 
Business Development Program;  the Community Futu res Program for the Atlantic Provinces;  and a 
Cooperation Program (terminated in 2006), which in cluded expenditures under a cost-shared federal-
provincial agreement.  Other programmes for the Atlantic region include the  Atlantic Innovation 
Fund (extended in 2005 for a further five-year period);  the Strategic Community Investment Fund (terminated in 2005, but for which expenditures will be made into 2007);  and the Innovative 
Communities Fund (a five-year programme that co mmenced in 2005).  Spending under the Business 
Development Program includes assistance for the de velopment of entrepreneurship, business skills, 
and trade and investment objectives.  Funding under these programmes equalled Can$297 million in 
FY 2005/06 (excluding Can$29 million on the Infrastructure Canada Program). 
205. Programmes to provide assistance to West ern Canada (British Colombia, Alberta, 
Saskatchewan, and Manitoba), fall under the le gislative framework of the Western Economic 
Diversification Act and include:  the Western Diversification Program;  the Western Economic 
Partnership Agreements, which ar e cost-shared between federal a nd provincial governments;  the 
Service Delivery Network Program;  and the Community Futures Program for Western Canada.  No government approvals commitments were made under the Innovation and Community Investment 
                                                     
 
204 WTO document G/SCM/N/123/CAN, 1 August 2005. WT/TPR/S/179 Trade Policy Review 
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Program after 2005.  In FY 2005/06, funding under these programmes amounted to nearly 
Can$108 million. 
206. Federal assistance to Ontario includes th e Northern Ontario Development Program205, the 
Eastern Ontario Development Program206 and the Ontario Community Futures Programme, which 
serves rural and Northern Ontario207;  all are administered by IC-FedNor.  Programmes to assist 
businesses in Quebec include:  the Innovation, Deve lopment, Entrepreneurship and Access Program 
for SMEs (IDEA-SME)208;  and the Quebec Community Futures Programme.209 
207. The Regional Strategic Innovation Program, which, inter alia,  had provided repayable 
contributions to SMEs across Canada was concl uded in 2006.  Expenditures in FY 2003-04 were 
Can$94.7 million. 
(c) Provincial assistance schemes 
208. As noted, provinces also extend financial a nd other assistance to business in support of 
employment, economic development, investment, and other objectives. 
209. Most provinces offer tax incentives to businesses that may take the form of tax credits, tax 
exemptions or tax holidays, in areas such as the fi lm and TV industry, to generate employment or 
stimulate investment, manufacturing capacity, minera l exploration or to assist SMEs.  In addition a 
number of provinces and territories (e.g. Alberta,  Manitoba, New Brunswick, Nunavut, Yukon) offer 
fuel tax exemptions or rebates for certain commerc ial activities (Table AIII.5).  Most provinces also 
provide funding for resear ch and development.210 
(iii) Government procurement 
210. Canada last notified annual statistics unde r Article XIX:5 of the WTO Agreement on 
Government Procurement in October 1998.211 
211. In 2004, the latest year for which data are avai lable, the estimated annual value of contract 
awards by federal government depa rtments and agencies was Can$19 billion212, a 50% increase over 
the 2001-03 time period.  The increase is attribut able mainly to increas ed procurement by the 
Department of National Defence.  Over FY 200 3-04, total procurement by Canadian provinces and 
territories was estimated at Can$9 billion.213  Data were not available on procurement by 
                                                      
205 Northern Ontario Development Program online in formation.  Viewed at:  http://www.fednor.ic. 
gc.ca/epic/internet/infednor-fednor.nsf/en/h_fn02348e.html.  
206 Eastern Ontario Development Program online info rmation.  Viewed at:  http://www.fednor.ic.gc. 
ca/epic/internet/infednor-fednor.nsf/en/h_fn02359e.html. 
207 Community Futures online information.  Viewed  at:  http://www.fednor.ic.gc.ca/epic/internet/ 
infednor-fednor.nsf/en/h_fn01468e.html or http://www.ontcfdc.com. 
208 IDEA-SME online information.  Viewed a t:  http://www.ded-ced.g c.ca/asp/programmes 
Services/prg_idee_PM E.asp?LANG=EN#1. 
209 The Quebec Community Futures Programme online in formation.  Viewed at:  http://www.reseau-
sadc.qc.ca/en/index.php. 
210 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/inrti-rti.nsf/ 
en/h_te02391e.html. 
211 WTO document GPA/21/Add.1, 16 October 1998. 
212 Treasury Board of Canada Secretariat (2005). 
213 Marcan online information.  Viewed at:  http://www.marcan.net/english/main_procedure.htm, plus 
additional estimates provided by Canada fo r provinces/territories not yet reporting. Canada WT/TPR/S/179 
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municipalities, municipal organizations, publicly fund ed academic institutions, and health and social 
services entities (MASH entities). 
212. There have been few changes to Canada's  overall institutional and legal framework 
on government procurement at the federal level during the review period.  The Treasury Board 
Contracting Policy was amended in 2005 to includ e a list of ten mandatory commodity groups for 
which all federal government departments and agenci es must use standing offers of Public Works and 
Government Services Canada (PWGSC) to acquire these products at established prices.214  T h e  
authorities note that standing offers allow the federa l government to leverage its buying power to get 
the best possible prices.  Savings over a five-year period are estimated at Can$1.1 billion. 
213. According to the authorities, standing offers ar e put in place using open competition, in most 
cases in accordance with the requirements of th e WTO Agreement on Government Procurement, 
NAFTA Chapter 10, and the Agreement on Internal  Trade.  Procurement notices and detailed bid 
documents are posted on MERX, the Government El ectronic Tendering System.  The length of time 
that a standing offer is in place is established at the time of the competition and varies in accordance 
with the nature of the commodity and the conditions in  the marketplace;  the authorities indicate that it 
would generally be 2-3 years or less.  The supplier that wins a competition for a standing offer agrees 
to provide the commodity at the price or prices they  have bid, under the conditions set out in the bid 
documents, for the term of the standing offer, wh en called upon by any of the federal government 
departments and agencies. 
214. In April 2006, the Government introduced a Federal Accountability Act and Action Plan, 
which would lead, inter alia , to the creation of a Procurement Auditor.215  It is anticipated that the 
mandate of the Procurement Auditor would be to review the Government's procurement process to 
ensure fairness and transparency and make recomme ndations for improvements. It would also review 
vendor's complaints and manage an alternative dis pute resolution process for contract disputes that do 
not fall within the jurisdiction of the Canadian International Trade Tribunal. 
(a) Institutional and legal framework 
215. The Financial Administration Act is the key statute that underpins all contracting 
activities and associated financial arrangements a nd obligations.  The main rules on government 
procurement in Canada are set out in the Govern ment Contract Regulations (GCRs) and the Treasury 
Board's Contracting Policy.216  PWGSC publishes the Supply Manual217 and the Standard Acquisition 
Clauses and Conditions Manual218, which are based on the FAA and other laws, regulations, and 
policies that may have an impact on procurement,  and provide guidance for both procurement officers 
and suppliers. 
                                                      
214 These groups included:  inform ation processing and related telecom services;  professional, 
administrative and management support services;  ground effect vehicles, motor vehicl es, trailers and equipment 
(including firmware), software, supplies and support eq uipment;  furniture;  office machines, text processing 
systems and visible recording equipmen t;  office supplies and devices;  clothi ng, accessories and insignia;  fuels, 
lubricants, oils and waxes 
215 Federal Accountability Act and Action Plan onlin e information.  Viewed at:  http://www.faa-
lfi.gc.ca/fs-fi_e.asp. 
216 Treasury Board online information.  Viewed at:  http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/ 
contracting/contractingpol_e.asp. 
217 PWGSC online information.  Viewed at:  http ://www.pwgsc.gc.ca/acquisitions/text/sm/sm-e.html. 
218 PWGSC online information.  Viewed at:  http://sacc.pwgsc.gc.ca/sacc/index-e.jsp. WT/TPR/S/179 Trade Policy Review 
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216. The Treasury Board Contracts Directive sets out the basic contracting limits for ministers and 
special authorities, above which Treasury Bo ard approval is required (Table AIII.6). 
217. As outlined in the Contracting Policy, the objec tive of government procurement is to acquire 
goods and services and to carry out construction in  a manner that enhances access, competition, and 
fairness and results in best value or, if appropria te, the optimal balance of overall benefits to the 
Crown and Canadian people.  It also specifi es that procurement should be carried out, inter alia , to 
encourage competition and to support long-term industrial and regional development and other 
appropriate national objectives, including aborig inal economic development as well as complying 
with the Government's obligations under rele vant national and inte rnational agreements. 
218. The Minister of Public Works and Government Services has exclusive authority to buy goods 
for other departments and agencies and to de legate this authority to other Ministers.219  Public Works 
and Government Services Canada is the Government's principal purchasing arm.  Departments and 
agencies must use PWGSC for procurement of goods,  although authority to acquire low-dollar-value 
items, of up to Can$5,000 (Can$25,000 in some cases) h as been delegated to departments.  Ministers 
are authorized to purchase services and construction up to the thresholds outlined in Table AIII.6.  
Procurement through the PWGSC of services and construction is optional.   In March 2004, the 
Government announced a new policy on the manda tory publication of contracts over Can$10,000.220 
219. For procurements not subject to NAFTA Chapter 10 or to the GPA, the Federal Government 
is of the view that its procurement activities should be consistent with and s upportive of such national 
objectives as industrial and regional developm ent, aboriginal economic development, the 
environment, and other socioeconomic objectives.  To this end, it requires that all federal 
procurements in excess of Can$2 million are reviewed  for potential regional and industrial benefits.  
For the most part, this review is achieved admi nistratively by an interdepartmental Procurement 
Review Committee. 
220. Canada has been a party to the WTO Agreem ent on Government Procurement (GPA) since 
1 January 1996.221  Canada grants national treatment to fo reign suppliers in respect of procurement 
covered by the GPA and NAFTA Chapte r 10.  Government procurement in  Canada is also affected by 
provisions in the Agreement on Internal Trade (T able III.13).  A procurement chapter in the FTA 
between Canada and Chile has been signed but it had not yet entered into force as at November 2006.  
The Canada-Korea Telecommunications Equipm ent Procurement Agreement (CKTEA) was 
terminated on 1 September, 2005 due to the privati zation of Korea's covered entity, Korea Telecom.  
In addition, Canada has signed industrial secur ity memoranda of understanding with 12 countries, 
which permit private-sector industries in the signato ry countries to participate in each other's sensitive 
government contracts and projects.222 
                                                      
219 The basis of this authority is The Department of Public Works and Government Services Act.  
Viewed at:  http://laws.justice.gc.ca/en/p-38.2/text.html. 
220 Treasury Board online information.  Viewed a t:  http://www.tbs-sct.gc. ca/pd-dp/index_e.asp. 
221 Canada notified the Committee on Government of its national legislation to implement the GPA in 
March 1997.  WTO document GPA/13, 27 March 1997. 
222 These countries are:  Australia;  France;  Germany;  Italy;  Israe l;  Netherlands;  New Zealand;  
Norway;  United Kingdom;  United States;  Sweden, and Switzerland. Canada WT/TPR/S/179 
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Table III.13 
Agreements covering government procurement 
Agreement Coverage, exclusions, a nd selected features Thresholds 
AIT 
(Chapter 5)  Equal market access opportunity to procurement of "Canadian" 
suppliers (meaning those that have a place of business in Canada, as defined under Article 518 of the AIT) 
Covers 97 federal government departments and agencies, 10 
provincial governments and two terr itories (excludes Nunavat)  
Also covers MASH entities (except in Yukon) 
Covers 38 of the 43 federal crown corporations 
Does not apply to procurement related to cultural industries or aboriginal culture For procurement not subject to the GPA or NAFTA:  tenders may be 
limited to Canadian goods or suppliers; also a preference (up to 10%) 
for Canadian value a dded may be required 
Provinces may have their own proc urement agencies, thresholds and 
policies under the general framework of the AIT  
(Annex 502.3 for entities of a commercial  or industrial nature or that 
have been granted exclusive rights (Crown Annex);  Annex 502.4 for 
the MASH sector
a Federal departments and Agencies 
 
Goods:  Can$25,000   
 
Services and construction:  Can$100,000 
 
Federal Crown Corporations 
 
Goods and services:  Can$500,000 
 
Construction:  Can$5,000,000  
 
MASH entities 
 
Goods and services:  Can$100,000 
 
Construction:  Can$250,000 
NAFTA 
(Chapter 10) Equal market access opportunity to procurement subject to thresholds 
and exclusions Covers 100 Federal government depa rtments and agencies and 11 of 
the 43 crown corporations 
Excludes procurement by provinces and territories A number of specific goods and services are excluded (similar to 
GPA below) Federal departments and agencies 
 
Goods:  Can$32,400  
(Canada-United States);   
Can$84,000  
(Canada-Mexico) 
 
Services:  Can$84,000  
 
Construction:  Can$10,900,000  
 
Crown Corporations 
Goods and Services:  Can$420,000  
 
Construction:  Can$13,400,000 
WTO GPA Applies only to federal procur ement and does not include sub-federal 
procurement, MASH entities or crown corporations 
In addition to general exceptions, a number of specific goods and 
services are excludedb 
Canada also extends the benefits  of the GPA to least developed 
countries Goods and services:   
SDR 130,000 (Can$245,000)c 
 Construction contracts:   
SDR  5,000,000 Can$9,400,000c 
 
a MASH entities include: municipalities, academic institutions, social  service agencies and hospitals.  Not all of the provisio ns of 
 the AIT apply to MASH entities (permissible discrimination is treat ed in part F.2 of Annex 502.4 of the AIT).  Provisions of t he 
 Annex may also not apply to procurem ents under certain circumstances (Parts I and L of Annex 502.4) or for economic 
 development purposes under exceptional circumstances (Part K of Annex 502.4). 
b These include: shipbuilding and repair; urban rail and transpor tation components; transportation services; some communication s, 
 detection and coherent radiati on equipment; oil purchases related to any strate gic reserve requirement; purchases made in supp ort 
 of safeguarding of nuclear materials; dredging work; and some office equipment and special industry machinery for the 
 Departments of Transport, Communications, and Fisheries a nd Oceans;  research and development; utilities; and health and 
 social, financial, communicati ons, photographic, mapping, printi ng and publications services. 
c Threshold values in national currency for 2006-07 as notifie d by the Canadian authorities to the WTO (WTO document 
 GPA/W/295/Add.3). 
 
Source: WTO Secretariat;  and the Canadian authorities. 
(b) Bidding process 
221. As specified in the Government Contracts Regul ations (Section 5), the contracting authority 
must solicit bids before any contract is entere d into, although certain exceptions are permitted. 
222. Competitive contracting can take one of thr ee forms:  (i) open tendering using electronic 
bidding, whereby notices are posted on the Government's electronic tendering service (GETS, which operates under the name MERX);  (ii) traditional bi dding, which in most cases involves either inviting 
bidders directly to submit bids or advertising in newspapers or trad e publications; and (iii) through an WT/TPR/S/179 Trade Policy Review 
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advance contract award notice (ACAN).  ACANs are used when it is considered possible that only 
one supplier can perform the work.  Electronic tendering is used where required under trade 
agreements and encouraged for all requirements th rough higher delegation levels (see Table AIII.6).  
Traditional competitive process may be used when consistent with trade agreements and where 
market conditions would make it more effective than electronic tendering. 
223. Sole sourcing or non-competitive contracting may be used:  in the event of pressing 
emergency;  when the estimated expenditure is  less than Can$25,000 for goods and services, or 
Can$100,000 for architectural and engineering services or for the Canadian International 
Development Agency (CIDA) service contracts rela ted to international development programmes or 
projects;  a competition is not in the public interes t;  or only one supplier is capable of performing the 
work.  The authorities note that Canada's intern ational commitments may mean that these factors 
cannot be used in a given procurement. 
224. In 2004, the total value of contracts awarded below Can$25,000 was around Can$1.3 billion;  
the value of non-competitive awards was around Ca n$1.4 billion and the value of competitive awards 
was around Can$16.3 billion.  For the contracts aw arded through competiti ve methods, contracts 
with a total value of around Can$7.5 billion we re awarded through electronic bidding, around 
Can$5.9 billion through traditional bidding, and around Can$710 million through ACANs.223 
225. There are a number of programmes to assist suppliers in accessing federal procurement 
opportunities, for example, Business Access Canada.224  Other programmes assist businesses in 
particular regions of Canada, such as the A tlantic Canada Opportunities Agency and Western 
Economic Diversification.225  In Western Canada, Western Econom ic Diversification Canada works 
with government and business partners to seek o pportunities for western companies arising from 
government procurement opportunities.  Set-aside  programmes exist for Aboriginal Business. 
(c) Dispute resolution 
226. Complaints involving alleged federal government breaches of the AIT, the GPA, and the 
NAFTA may be brought to the Canadian Internatio nal Trade Tribunal (CITT) by potential suppliers.  
When a complaint is found to be valid, the CITT de termination may contain recommendations such as 
re-tendering, re-evaluation or providing compensati on.  The CITT may also award reasonable costs to 
the winning party to cover expenses for participati on in the proceedings, or to a complainant for bid 
preparation;  in this regard new guidelines were issued for complaints filed after 31 January, 2004.226  
The review process generally takes 90 days, with an express option of 45 days.  The CITT reviews 
only complaints involving procurement by the fe deral government, not by provinces or the MASH 
sector. 
227. Over the fiscal years 2003 to 2006, the CITT received on average 68 new complaints a year;  
according to the authorities, there are typically two or three complaints per year from foreign 
suppliers (Table III.14).  Most determinations with r espect to the validity of a complaint are related to 
breaches of the AIT, followed by the NAFTA then the GPA. 
228. With the exception of bid challenges, the PW GSC Contract Claims Resolution Board (CCRB) 
acts as an appeal/review agency for all procuremen t-related disputes and extra-cost claims arising 
                                                      
223 Treasury Board of Canada Secretariat (2005). 
224 Business Access Canada online information.  Vi ewed at:  http://www.contractscanada.gc.ca/en/ 
partne-e.htm. 
225 Western Economic Diversification Canada online in formation.  Viewed a t:  http://www.wd.gc.ca. 
226 CITT online information.  Viewed at:  h ttp://www.citt-tcce.gc.ca/ publicat/index_e.asp#4. Canada WT/TPR/S/179 
 Page 75 
 
 
from goods and services contracts, construction, and architectural and engineering services contracts.  
The CCRB administers the Contracts Settlement Board (CSB) and the Contract Disputes Advisory Board (CDAB).  The CSB is an independent review  body that resolves disputes concerning extra cost 
claims, which are referred to it by contractors providing goods and services to PWGSC.  The CDAB 
is an independent review board that provides non- binding advisory arbitration for contract-related 
disputes that are referred to the Minister.  This process is intended primarily for construction, and 
architectural and engineering consultant services.  In addition to recourse to courts in matters of 
contract law, suppliers, whether Canadian or foreig n have recourse to the Federal Court of Canada for 
judicial review of the administrative fairness of any contracting actions. 
Table III.14 
CITT procurement review activi ties (fiscal years 2003-06) 
 2003/04 2004/05 2005/06 
Number of complaints    
Carried over from previous fiscal year 15 11 8 
Received in fiscal year 83 62 58 
Remanded 3 1 1 
Total 101 74 67 
Cases resolved    
Withdrawn or resolved by the parties 8 6 4 
Abandoned while filing n.a. 3 2 
Subtotal 8 9 6 
Inquiries not initiated    
Lack of jurisdiction 7 2 3 
Late or improper filing 14 16 14 
No valid basis/no reasonable indica tion of a breach/premature 27 20 20 
Subtotal 48 38 37 
Inquiry results    
Dismissed 3 n.a. 3 
Complaint not valid 14 6 4 
Complaint valid or valid in part 15 10 10 
Remand decisions 2 3 n.a. 
Subtotal 34 19 17 
Outstanding at end of fiscal year 11 8 7 
 
n.a. Not applicable. 
 
Source:  CITT Annual Report.  Viewed at:  http ://www.citt-tcce.gc.ca/ publicat/index_e.asp#4. 
229. Procurement at the sub-federal level, is ruled by provincial or other sub-federal government 
laws and procurement regulations.  Under Annex 2 of its GPA commi tments, Canada initially offered 
to cover entities in all ten provinces on the ba sis of commitments obtained from provincial 
governments;  the initial provincial entities list was to be specified on or before 15 April 1994 and the 
final list within eighteen months after the conc lusion of the Government Procurement Agreement.227  
Since then Canada has taken the position that it is pr epared to table an offer at the sub-central level 
only if other parties are prepared to include sectors of priority to Canadian suppliers, such as steel and 
transportation, and to agree to circumscribe the use of small businesses and other set-asides.  In particular, Canada considers that U.S. federal gove rnment policies must be addressed to assure market 
access and non-discriminatory treatment for suppliers to U.S. state and municipal governments before 
tabling a schedule at the sub-federal level.
228 
230. Under the general framework of the AIT, provinces may have their own procurement 
agencies and thresholds, as well as their own procurem ent policies.  For procurement within the scope 
of the AIT, the provinces grant similar access conditi ons to procurement from the rest of Canada, but 
                                                      
227 WTO document WT/Let/330, 1 March 2000. 
228 WTO document WT/GPA/51, 18 June 2001. WT/TPR/S/179 Trade Policy Review 
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do not extend this automatically to procuremen t from foreign suppliers.  Some provinces grant 
provincial or regional preferences to procurement no t falling with in the scope of the AIT or other 
internal procurement agreements, since such practices are not covered by the GPA or NAFTA.229 
(iv) State-trading, state-owned companies, and privatization 
(a) State-trading enterprises 
231. Canada's state-trading enterprises (STEs) were  notified to the WTO Working Party on State 
Trading Enterprises in 2002.  They  include:  the Canadian Wheat Board (CWB), the Canadian Dairy 
Commission (CDC), the Freshwater Fish Marketing Co rporation, the ten provincial liquor boards, and 
the Ontario Bean Producers Marketing Board (Table III.15).230  The activities of the CWB and CDC 
are described in Chapter IV. 
Table III.15 
Key features of state-trading enterprises 
STE and applicable legislation Key features 
Freshwater Fish Marketing 
Corporation (FFMC) The FFMC has the exclusive right to market and se ll (both inter-provincial and export trade) fish 
caught in the waters of the agreement areas (nor th-western Ontario, Alberta, Saskatchewan and 
Manitoba).  It has no role with respect to imports and competes with private traders of fish sourced 
from non-agreement areas or from imports.  The FFMC is required to operate on a self-sustaining 
basis. 
Liquor boards 
 
Importation of Intoxicating 
Liquors Act (IILA), 1928 Under the Importation of In toxicating Liquors Act (IILA)a each province and two territories have 
monopolies on the introduction of all alcoholic beverage s into their territories both from abroad and 
from other provinces.  Under the IILA, liquor, incl uding wine, considered intoxicating by provincial 
law may be imported only by a board, commissi on, officer, or governmental agency legally 
authorized to sell intoxicating liquor.  Distri bution and warehousing services for importers are 
generally also reserved for the provincial liquor  boards.  The IILA has been scheduled as a 
quantitative restriction maintained  as an exception to the free-tr ade provisions of NAFTA, and the 
Chile and Costa Rica FTAs. The Alberta Ga ming and Liquor Commission does not make 
commercial decisions on the product selections fo r alcoholic beverages which are imported, nor on 
the quantities of those products. 
As reported in Canada's last reviewb, eight of the twelve provincial liquor jurisdictions in Canada 
apply a higher services charge to  imported products.  According to  the authorities, the difference 
reflects higher carrying costs (e.g. the interest cost of holding product in inventory) as well as higher 
operational costs associated with imported products.  
Ontario Bean Producers 
Marketing Board The Board purchases the entire crop  of white pea beans produced in Ontario.  It then offers the 
products to privately owned and operated licensed dealers who then sell domestically or on export 
markets depending on the prevailing market circumst ances.  The Board has the exclusive authority to 
market Ontario white pea beans.  The Government  of Canada has a role in providing payment 
guarantees.  The Board has no role in imports and does not have a monopoly on the export of white 
pea beans from Canada. 
a Department of Justice online information.  Vi ewed at:  http://laws.justice.gc.ca/en/I-3/247874.html. 
b WTO document WT/TPR/S/112/Rev.1,  19 March 2003. 
Source:  WTO document:  G/STR/N/ 4/CAN, 5 November 2002. 
(b) State-owned enterprises 
232. As reported by the OECD, Canada has around 100 state-owned enterprise;  the total asset 
value of these enterprises was over US$50 billion (PPP)  in 2003, calculated as being relative to over 
5% of GDP.231 
                                                      
229 For more details on procurement by provincial governments see WTO document 
WT/TPR/S/112/Rev.1, 19 March 2003, Chapter III(4)(v). 
230 WTO document G/STR/N/4/CAN, 5 November 2002. 
231 OECD (2005c). Canada WT/TPR/S/179 
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233. State-owned enterprises in Canada include 44 pa rent crown corporations and three deemed 
parent subsidiaries, which are all wholly owned by  the crown (Table AIII.7).  No information was 
available on sub-federal state-owned enterprises.  Cr own corporations operate in various areas of the 
Canadian economy and fall under the responsibility of  different ministries.  The largest crown 
corporations are:  Canada Mort gage and Housing Corporation;  Farm Credit Canada;  Business 
Development Bank of Canada;  a nd Export Development Canada.  Th ese four corporations held 
nearly 90% of the total assets of all crown corporations in 2003/04.  Most Crown corporations are self-financing;  however, 25 corporations receive  financial transfers from the federal government.
232  
Some crown corporations are conferred with "a gency status" which means that they enjoy the 
constitutional immunities, privileges, and prer ogatives enjoyed by the Crown, which includes 
immunity from federal an d provincial taxation. 
234. The Federal Government also has a stake in tw o enterprises that are also partially owned by 
other levels of government.233  Following the full privatization of  Petro-Canada in September 2004, 
when the Government divested the remaining 18.5%  of its shares, the Canadian Government no 
longer has a share in any enterprise toge ther with private-sector parties. 
235. The Financial Administration Act (FAA) require s the President of the Treasury Board to 
make an annual report to Parliament on both Crown co rporations and the other corporate interests of 
Canada.234  Crown corporations, falling under the FAA's provisions are also obliged to undertake self-
examinations every five years. 
(v) Competition policy and regulatory issues 
236. There have been no major changes to Cana da's legal and institutional framework for 
competition and regulation issues si nce its last Review.  Canada h as continued to pursue cooperation 
instruments with third countries and participat es actively in international competition fora. 
237. The OECD has reported extensively on Canada's competition regime.235  As noted in the 
OECD's 2002 report, competition enforcement in  Canada improved significantly with the 1986 
Competition Act.  At this time a more flexible process was introduced for addressing civil offences 
through application to the Competition Tribunal.  Ho wever, the report pointed out that enforcement of 
Canada's Competition Act remains a challenge in the area of horizontal agreements, as the statute's 
qualifying terms, "unduly" and "unreasonably" make proof complex.   Attention had also been drawn 
by the OECD to merger decisions in the areas of airlines, banking, and bookstores, and the perceived 
political priority attached to advancing "national champion" interests.  
238. Subsequently, the OECD's Economic and De velopment Review Committee and Competition 
Committee reviewed Canada's competition law a nd institutions during 2004.  The Competition 
Committee review follows up on the 2002 Regulatory Review of Canada.  The new reports evaluate 
                                                      
232 Of these 25 crown corporations, six accounted for nearly 80% of total funding in 2003/04:  Canada 
Mortgage and Housing Corporation (the largest recipient);  the Canadian Broadcasting Corporation;  the 
Canadian Air Transport Security Authority;  VIA Rail Canada Inc.;  the Canada Post Corporation;  and Atomic 
Energy of Canada Limited. 
233 These are:  North Portage Development Corp oration;  and Lower Churchill Development 
Corporation Limited, Treasury Boar d of Canada Secretariat (2004).  Annual report to Parliament- Crown 
Corporations and Other Corporate Interests of Canada .  Viewed at:  http://www.tbs-sct.gc.ca/report/CROWN/ 
04/cc-se-04_e.as. 
234 For more information on Crown Corporation Policies and Guidelines see http://www.tbs-
sct.gc.ca/ccpi-pise/polgui_e.asp;  and Reports to Par liament at: http://www.tbs-sct. gc.ca/ccpi-pise/parl_e.asp. 
235 Over the period under review, OECD reports have included:  Maher, and Shaffer (2005);  and 
OECD (2002), (2004a), (2004b), (2004c), and (2005). WT/TPR/S/179 Trade Policy Review 
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how the Competition Bureau has implemented th e policy recommendations from the 2002 review and 
makes additional recommendations on how to improve  competition law in Canada.  These additional 
recommendations included:  enhancing the Co mmissioner's decision-ma king independence;  
improving the Bureau's resources;  providing br oader rights of private action to enforce the 
Competition Act;  clarifying the anti-cartel provisions in  the substantive law;  providing stronger civil 
sanctions against abuse of dominance and other civi l reviewable conduct;  clarifying the efficiencies 
defence in merger cases;  and authorizing asset fre eze orders and restitution in deceptive advertising 
cases. 
(a) Institutional and legal framework 
239. The Commissioner of Competition heads the Co mpetition Bureau and is responsible for 
administering and enforcing the Competition Act, wh ich is the main law governing competition issues 
in Canada.236  The Competition Bureau falls under the ambit of Industry Canada for administrative 
matters237, however for enforcement matters, the Commissioner is independent.  The  Commissioner 
also has the statutory right to intervene before federal regulatory boards a nd tribunals, and before 
provincial regulatory boards and tribunals upon inv itation or with the consent of the board in 
question.238  The Act does not allow for the use of fo rmal investigative powers for own-initiative 
studies to assess the state of competition in particular sectors.  Enquiries may be launched to investigate businesses or individuals on the basis of  an assessment that, among other things, they are 
likely to have contravened the Act or are about to. 
240. With respect to promoting compliance with the civil provisions in the Competition Act
239, the 
Commissioner of Competition may engage in discussions to obtain voluntary compliance or may file 
an application for an order to remedy a situation.   For restrictive trade practices and mergers, the 
Commissioner applies to the Competition Tribunal to obtain injunctive relief.  The Tribunal cannot 
impose financial remedies or damages.  For decep tive marketing practices, the Commissioner can also 
apply to a Federal Court or a superior court of a province to obtain remedies.  These may include an 
injunctive order, a corrective notice, and an admi nistrative monetary penalty.  The most serious 
criminal matters are referred by the Competition Bureau to the Attorney General of Canada, and 
penalties include fines and prison sentences.240 
241. As mentioned in the Secretariat report for Cana da's previous Review, the Act to amend the 
Competition Act and the Competition Tribunal Act introduced substantive changes to Canadian 
competition law, most notably the introduction of a right for private parties to access the Competition 
Tribunal in certain matters involving refusal to su pply, exclusive dealing, tied selling, and market 
restriction.241 
                                                      
236 In addition to administering and enforcing the Competition Act, the Commissioner of Competition 
is responsible (formally since 1999), for the administration and enforcement of the Consumer Packaging and Labelling Act (except as it relates to food), the Textile  Labelling Act, and the Precious Metals Marking Act. 
237 Competition Bureau online information (including links to competition legislation).  Viewed at:  
http://www.competitionbureau.gc.ca. 
238 A complete listing of the Competition Bureau's interventions are contained in their annual reports.  
Viewed at:  http://www.competitionbureau.g c.ca/internet/index.cfm?itemID=184&lg=e. 
239 The civil provisions of the Competition Act incl ude restrictive trade practices, such as abuse of 
dominant position, refusal to supply, exclusive dealing, and tied selling.  There are also civil provisions that 
address deceptive ma rketing practices. 
240 The criminal provisions of the Competition Act include:  conspiracies that unduly lessen 
competition, bid rigging, price discrimination, predatory pricing, and price maintenance.  There are also some 
criminal provisions to address false or misleading representations and deceptive marketing practices. 
241 WTO document WT/TPR/S/112/Rev.1, 19 March 2003.  Subsection III(4)(i). Canada WT/TPR/S/179 
 Page 79 
 
 
242. In 2003, the threshold for notification of  mergers was increased from Can$35 million to 
Can$50 million.242  Also in 2003, the Competition Bureau issued guidelines on merger enforcement as 
applied to banks243;  in 2004, it introduced a revised vers ion of its general merger enforcement 
guidelines.244 
243. There have been two bills to amend the Co mpetition Act during the period under review 
(C-19 and C-249);  however both died upon dissolution of Parliament. 
(b) Enforcement 
244. The Competition Bureau reported a number of  enforcement actions taken in 2003/04 and 
2004/05, particularly with respect to deceptive mark eting practices;  fines were levied and prison 
sentences given to offenders.  A number of cases were also resolved with out the need for a full 
enquiry or judicial proceedings. 
245. Merger activity also increased during 2004/05 , following on from three previous consecutive 
years of decline.  In FY 2005/06 the Competiti on Bureau undertook 283 examinations, 20 of which 
were ongoing at the year end.  The size and scope of some of the mergers investigated over the period 
were notable, as was the complexity of the competition issues they raised, such as in the merger of the 
Canadian National Railway Company and British Columbia Rail Limited.245 
246. The Commissioner of Competition's enforcement and advocacy priorities for 2006-07:  
fighting cartels, particularly domestic ones that hurt competition in Canada;  combating mass 
marketing fraud;  finding better ways to enforce the Competition Act in the electronic market place, 
especially when pursuing fraudulent and misleadi ng health performance claims made through the 
Internet and SPAM;  and abuse of dominance.246  According to the authorities, with respect to 
advocacy, the Commissioner will focus on:  the hea lth sector, including a study related to generic 
pharmaceuticals;  the telecommunications sector;  an d the self-regulated professions.  In addition, the 
Bureau is examining tools that could be used to develop legislation with a view to limiting 
government intervention through the least intrusive means possible. 
(c) International cooperation 
247. Canada considers internati onal cooperation and enforcement of competition law as an 
important element in support of trade liberalizati on, and over the review period has strengthened and 
formalized its cooperation with competition agenci es abroad.  This has included the signing of 
information-sharing protocols, agreements with  other countries and coope ration arrangements with 
                                                      
242 Associated fees for merger notification filings and advance ruling certificate requests were increased 
from Can$25,000 to Can$50,000. 
243 Competition Bureau Canada (2003), The Merger Enforcement Guidelin es as Applied to a Bank 
Merger.  Viewed at:  http://www.competition bureau.gc.ca/internet/index.cfm?itemID=1253&lg=e. 
244 Competition Bureau Canada (2004), The Merger Enforcement Guidelines .  Viewed at:  
http://www.competitionbureau.gc. ca/in ternet/index.cfm?itemid=1245&lg=e. 
245 Competition Bureau Canada (2005).  Annual Report of the Commissioner of Competition for the 
year ending March 31st 2005 .  Viewed at:  http://www.competitionbu reau.gc.ca/internet/index.cfm?itemID 
=2097&lg=e. 
246 Competition Bureau online information.  Viewed  at:  http://www.competitionbureau.gc.ca/internet/ 
ndex. cfm?itemID=2201&1g=e>. WT/TPR/S/179 Trade Policy Review 
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agencies in other countries.247  The Competition Bureau participates in cooperation instruments on 
competition-related matters with ten trading partners.248 
248. Canada participates in both regional and mu ltilateral fora on competition policy.  These 
include:  the APEC Workshop on Competition Policy; the OECD Committees on Competition and 
Consumer Policy;  the Asia-Ec onomic Cooperation Competition Polic y and Deregulation Group;  and 
the International Competition Network.  Canada wa s also an active participant in the WTO Working 
Group on the Interaction Between Trade and Competiti on Policy before this work was placed on hold.  
The Competition Bureau is an active member of the International Consumer Protection and Enforcement Network (ICPEN). 
(vi) Intellectual property rights 
249. During the period under review there have been  various legislative changes affecting the 
protection of intellectual property (IP), most significantly in the patents area.  A number of ongoing reviews are, inter alia , considering amendments related to inte rnational conventions that Canada has 
signed.  Canada's legislation was review ed by the TRIPS Council between 1996 and 1998
249, and 
Canada provided responses to the checklist of issues on enforcement in 1997.250 
250. Canada updated its TRIPS contact  point in 2004 (the Director of the Intellectual Property 
Information and Technology Trade Policy Di vision of International Trade Canada).251  Canada has not 
been involved in any new IP-related dispute set tlement cases in the WT O as complainant or 
respondent since 2002. 
251. Foreigners have been active in filing appli cations for various forms of IP protection in 
Canada.252 
252. Canada has continued to participate actively in  the TRIPS Council.  During the review period 
it has provided a written description of the opera tion of its IP system, with respect to the 
implementation of the 30 August D ecision on TRIPS and Public Health253;  and reported on its 
implementation of Article 66.2 of the TRIPS Agr eement concerning technology transfer to least-
developed countries254, as well as its technical cooperation activities.255  In addition, in the Council's 
                                                      
247 Between January 2003 and June 2006, agreements were signed with (years signed/of entry in force 
between parenthesis):  Australia – Information sharing protocol (2004);  and Japan – Cooperation Agreement 
(2005);  the United Kingdom – Information sharing protocol (2004), and Cooperation Arrangement (2003);  and the United States – Agreement on the application of positive comity principles to the enforcement of 
competition law (2004), Alberta Partnership Against Cros s-Border Fraud (2003), Vancouver Strategic Alliance 
to Combat Against Deceptive Marketin g Practices (2004);  Atlantic Partne rship to Combat Cross-Border Fraud 
(2005);  and Korea-Cooperation Arrangement (2006). 
248 Australia, Costa Rica (through FTA provisions), Chile, European Union, Japan, Korea,  Mexico, 
New Zealand, United Kingdom, and United States. 
249 WTO documents:  enforcement (IP/Q4/CAN/1/Rev. 1, 12 December 1998) patents, layout-designs 
(topographies) of integrated circuits, protection of undisclosed information and control of anti-competitive 
practices in contractual licences (IP/Q3/CAN/1, 5 May 1998);  trade marks, geographical indications and 
industrial designs (IP/Q2/CAN/1, 20 June 1997);  and copyright and related rights (IP/Q/CAN/1/Add.1, 
23 May 1997;  IP/Q/CAN/1, 24 October 1996). 
250 WTO document IP/N/6/CAN/1, 18 February 1997. 
251 WTO document IP/N/3/Rev.8/Add.1, 24 November 2004. 
252 Full statistical information on applications for IP protection both filed and granted by country of 
origin are available in the CIPO annual reports.  Viewed  at:  http://strategis.gc.ca/sc_mrksv/cipo/corp/ allreport-
e.html. 
253 WTO document IP/C/W/480/Add.7, 20 November 2006. 
254 WTO document IP/C/W/476/Add.7, 10 November 2006. Canada WT/TPR/S/179 
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Special Session it has, along with other WTO Memb ers, put forward a Proposed Draft TRIPS Council 
Decision on the Establishment of a Multilateral System of Notification and Registration of 
Geographical Indications for Wines and Spirits.256 
(a) Institutional and legal framework 
253. Canada's system of intellectual property rights  is administered by The Canadian Intellectual 
Property Office (CIPO), which is a special operating agency of Industry Canada.257  The Plant 
Breeders' Rights Office, which falls under the Cana dian Food Inspection Agency (CFIA), administers 
the Plant Breeders' Rights Act and Regulations, whic h provide legal protection to plant breeders for 
new plant varieties.258 
254. Table III.16 provides summary information on Canada's IP legislation in force as well as the 
international agreements to which Canada is signatory. 
Table III.16 
National IPR legislation a nd international agreements 
Legislation and term of 
protection Scope and selected limitations International agreements 
Patents  
Patent Act 1985 (amended) 
Patent Rules 1996 (amended)  
 
 Protection for  up to 
20 years after filing
a Coverage:  new and useful invention or new and 
useful improvement of existing invention;  Inventions are defined to include:  art, process, 
machine, manufacture, composition of matter 
 May not be granted for any mere scientific 
principle or theorem 
Higher life forms may not be patented
b Paris Convention for the Protection of Industrial 
Property;  Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the 
Purposes of Patent Procedure;  Strasbourg Agreement 
Concerning the International Patent Classification; and Patent Cooperation Treaty (PCT);   
under the PCT, the CIPO began operations as an 
international search author ity and an international 
preliminary examination authority in July 2004; 
Patent Law Treaty, signed but not yet ratified 
 
Patented medicines 
(Notices of Compliance 
Regulations)  Provide for effective patent enforcement over 
new and innovative drugs and the timely market 
entry of competing generic products  Obligations to provide eff ective patent enforcement 
measures under NAFTA/TRIPS 
Data protection   
Data Protection provisions 
in the Food and Drug 
Regulations – 8 years of data protection 
 New pharmaceutical chemicals  
Pest Control Products Act  
 New agricultural chemicals  
Table III.16 (cont'd) 
                                                                                                                                                                     
255 WTO document IP/C/W/455/Add.3, 10 October 2005. 
256 WTO document TN/IP/W10, 1 April 2005.  Signatories of and co-sponsors to this document are:  
Argentina, Australia, Canada, Chile, Dominican Republic, Ecuador, El Salvador, Honduras, Mexico, 
New Zealand, Chinese Taipei and th e United States.  Paraguay, Costa Ri ca and Nicaragua signed on later. 
257 CIPO online information.  Viewed at:  http://s trategis.gc.ca/sc_mrksv/ci po/help/faq_cipo-e.html. 
258 Canadian Food Inspection Agency  online information.  Viewed at:  http://www.inspection.gc.ca. WT/TPR/S/179 Trade Policy Review 
Page 82 
 
 
Legislation and term of 
protection Scope and selected limitations International agreements 
Trademarks and geogra phical indications  
Trade-marks Act 1985 
(amended) Trade-marks Regulations 
1996 (amended) 
 Trade mark protection is 
for15 years, renewable for 
further 15-year terms on 
payment of renewal fees
c 
 Trade-marks include:  a mark used by a person 
for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, 
leased, hired or performed by him from those 
manufactured, sold, leased, hired or performed by others; a certification mark; a distinguishing 
guise;  or a proposed trade-mark.  Prohibited 
marks are listed in the Trade-marks Act (Articles 9-11);  criteria for registrable trade marks in 
Articles 12-15 
 Paris Convention for the Protection of Industrial 
Property 
Term of protection for GIs 
for other goods is the same 
for trade marks Act provides for protection of GIs for goods 
other than wines and spirits through certification 
marks (Article 23-25), which have the same scope of protection as trade marks, except that 
the owner cannot be involved in the manufacture, 
sale, leasing etc. of the goods indicated by the GI (Article 23)   
Copyright and related rights 
Copyright Act (1985) 
(amended) Copyright regulations 1997 
(amended) 
 Protection is generally for 
the author's life plus 50 
years (50 years from creation for some 
photographs and for non-
dramatic, photography, cinematographic works);  
(50 years from creation for 
sound recordings and performances;  the last 
author's death for works by 
more than one author) Applies to original literary, dramatic, musical, 
and artistic works;  performer's performance;  communication signals, and sound recordings 
 
Protection is provided to countries with whom Canada has a treaty or other agreement;  
exceptions to copyright infringement are outlined 
in Articles 29-32.2 of the Act.  The inter alia , 
relate to fair dealing; educational institutions, 
libraries, archives and museums;  computer 
programs;  ephemeral recordings; and persons with perceptual difficulties 
 
Levies are imposed on blank audio recording media sold in Canada (both domestically 
manufactured and imported);  levies raised 
Can $35 million in 2005. Berne Convention for the Protection of Literary and 
Artistic works;  Rome Convention for the Protection of Performers, Producers of Phonograms and 
Broadcasting Organizations; and UNESCO Universal 
Copyright Convention  
WIPO Copyright Treaty; WIPO Performances and 
Phonograms Treaty, and WIPO Film Register Treaty, signed but not yet ratified 
 
Industrial designs 
Industrial Design Act 1985 (amended) 
Industrial Designs Regulations 1999 
(amended). 
 Protection for up to 10 
years, from the date of 
registration of the design Applies to original industrial designs defined as 
features of shape, configuration, pattern or 
ornament, and any combination of those features that, in a finished article, appeal to and are 
judged solely by the eye 
 Protection is not extended to: features applied to 
a useful article that are dictated solely by a 
utilitarian function of th e article; or any method 
or principle of manufacture or construction  Paris Convention for the Protection of Industrial 
Property 
Integrated circuit topographies 
Integrated circuit 
topography Act 1990 
(amended) 
Integrated circuit topography regulations 
1993 (amended).  Protection is for the three-dimensional 
configuration of the materials that form 
integrated circuits, whether it has been embodied 
in an integrated circuit product or not.  Topographies that define only part of the 
structure needed to perform an electronic 
function may be registered.  Protection is extended to nationals of non-WTO Members on a 
reciprocal basis 
 None 
Table III.16 (cont'd) Canada WT/TPR/S/179 
 Page 83 
 
 
Legislation and term of 
protection Scope and selected limitations International agreements 
Protection for up to 
10 years, beginning on 
either the filing date or the date of first commercial 
exploitation, whichever is 
earlier.  The term ends on 31 December of the tenth 
year Exceptions to exclusive rights include:  
exhaustion of rights applying to integrated circuit 
products legitimately put on the market anywhere in the world with the authorization of the owner 
of the rights; unauthorized copying of a protected 
topography for the sole purpose of either analysis or evaluation, or of research or teaching with 
respect to topographies;  and reverse engineering  
Plant breeders' rights 
Plant Breeders' Rights Act 
(1990) (amended) 
Plant Breeders' Rights Regulations (1991) 
(amended) 
 Protection is up to 18 years 
effective from the date of 
issue of the rights certificate. Allows for protection of new varieties of plants;  
varieties must be new, distinct, uniform and 
stable.  All plant species , except algae, bacteria 
and fungi are eligible for protection.  Applicants 
may only be citizens of, residents of, or have a 
resident office in Canada or a UPOV member state 
 
Restrictions to the holders' rights include: protected varieties may be used for breeding and 
developing new plant vari eties; and farmers may 
save and use their own seed of protected varieties without infringing on the holder's rights (farmers' privilege) 1978 UPOV Convention;  1991 amendments signed 
but not yet ratified 
 a Under section 46 of the Patent Act, pate nts filed prior to 1 October 1989 (so-calle d "Old Act patents") and still existent as  of 
 July 2001, benefit from a term of protecti on of either 20 years from filing or 17 year s from grant, whichever is greater.  The re 
 were approximately 138,000 such pate nts still in force in January 2001. 
b This was the subject of a Supreme Court ruling in D ecember 2002, as reported in Canada's previous TPR. 
c Trade marks if not registered are still protect ed through Common Law if they have been used.
 
 
Source:  CIPO, CIFA. 
(b) Patents 
255. Two Acts have been passed to amend the Pa tents Act during the period under review:  Bill 
C-9 and Bill C-29.  Both of these legislative amen dments were notified to the WTO in June 2005.259 
256. Bill C-9, the Jean Chrétien Pledge to Africa Act260, now known as Canada's Access to 
Medicines Regime (CAMR)261, and subordinate regulation on the Use of Patented Products for 
International Humanitarian Purposes regulations262, came into force in May 2005.  The Act is 
intended to implement the 30 August 2003 decision of the WTO by providing the  legislative 
framework to allow Canadian manufacturers, under  certain conditions, to export pharmaceutical 
products produced under a compulsory licence to countries with insufficient or no pharmaceutical 
manufacturing capacity. 
257. Section 1 of Bill C-29, an Act to amend the Patent Act263 places the Schedules to the Jean 
Chrétien Pledge to Africa inside the Patent Act,  and provides for the equal participation of the 
Canadian Senate in assessing and recommending eligib le candidates for an expert committee charged 
with advising the government on pharmaceutical products  that should be eligible for export under this 
                                                      
259 WTO document IP/N/1/CAN/1/Add.2, 10 June 2005. 
260 Bill C-9, An Act to amend the Patent Act and the Food and Drugs Act.  Viewed at:  
http://www.parl.gc.ca/PDF/37/3/parlbus/cha mbus/house/bills/government/C-9_4.PDF. 
261 CAMR information.  Viewed at:  http://camr-rcam.hc-sc.gc.ca. 
262 Regulation on the Use of Patented Products for Inte rnational Humanitarian Pu rposes.  Viewed at:  
http://canadagazette.gc.ca/partII/2005/20050601/html/sor143-e.html. 
263 An Act to amend the Patent Act.  Viewed a t:  http://www.parl.gc.ca/PD F/38/1/parlbus/chambus/ 
house/bills/government/C-29_4.PDF. WT/TPR/S/179 Trade Policy Review 
Page 84 
 
 
initiative.  Section 1 of the Act entered into for ce in May 2005.  A second section of the Act, which 
entered into force in February 2006, includes cl arification of small entity provisions designed to 
provide relief to patent holders a nd applicants affected by the 2003 Federal Court of Appeal decision 
in the Dutch Industries case, and related provisi ons on information requirements and refunds.264 
258. As outlined in the Secretariat report for its prev ious review, Canada is the only country that 
explicitly issues regulations on drug prices through its pa tent legislation.  The Patent Act requires that 
maximum prices charged by manufacturers for patented medicines are regulated to ensure they are not excessive.  Under the Patented Medicines Regulations , patentees are required to file price and sales 
information twice a year.
265  All prices are reviewed regularly by the Patented Medicine Prices 
Review Board (PMPRB) to ensure they conform to  PMPRB's Excessive Price Guidelines.  If a price 
appears to be outside the Guidelines, the PMPRB may conduct an investigation.  In 2006, the PMPRB 
launched a review of the Excessive Price Guid elines, involving formal consultations;  in 
November 2006.266  In addition, the development of more specific time frames for the various stages 
of the price review process are under considerati on in context of the PMPRB's Timelines Review 
project, was partially completed by November 2006.  As noted by the PMPRB, the Patented 
Medicines Regulations need to be modernized  in some areas to carry out its mandated 
responsibilities.267  According to the PMPRB, patented drugs account for nearly 70% of total drug 
sales in Canada. 
259. In October 2006, the Patent Medicines (Noti ce of Compliance) Regulations (Table III.16) 
were amended to make it easier for generic drug co mpanies to predict when they might enter the 
market with a lower cost version of an innovative, pa tented drug.  According to the authorities, these 
amendments will accelerate the market entry of gene ric drugs once the relevant patents expire.  Also 
in October 2006, amendments were made to the data protection provisions in the Food and Drug 
Regulations in order to provide new and innova tive drugs with a guaranteed eight-year minimum 
period of market exclusivity.  A further six months of  protection is available for drugs that have been 
the subject of paediatric studies.  The authoriti es note that the objective of these changes is to 
encourage research in the area and improve drug information available to paediatric health 
professionals. 
(c) Trade marks 
260. In September 2003, an agreement was signed be tween Canada and the EC on trade in wines 
and spirits.  An order amending the relevant subsec tions of the Trade-Marks Act entered into force in 
April 2004.268  The agreement provides for the three-stage elimination of the use of European wines 
                                                      
264 See CIPO online information.  Viewed at:  h ttp://strategis.gc.ca/sc_mrksv/cipo/patents/c-29_intro-
e.html.  To encourage small businesses (50 or fewer empl oyees) to use the patent system, the fees paid by patent 
applicants and patentees vary according to the size of the entity.  The 2003 Federa l Court of Appeal decision 
might have left patent applicants and patent holders with no recourse to correct minor payment errors under this system, which would have possibly jeopardize the rights of patent applicants and patent holders. 
265 This reporting requirement does not now apply to patented veterinary drugs.  Following a trial 
period, the PMPRB agreed in 2003, to implement on a permanent basis a complaints-driven approach for the 
regulation of patented drug prices for veterinary use.  Under this approach, the PMPRB only reviews the prices 
of new patented medicines;  existing medicines are subject to review only when a substantiated complaint has been received. 
266 The release of a Discussion Guide for the Consu ltations on the Board's Excessive Price Guidelines 
marked the beginning of formal consultations.  This document provides information on the background to the review and its objectives.  Viewed at:  http://www .pmprb-cepmb.gc.ca/english/documents/DisGuide-e.pdf. 
267 PMPRB (20049). 
268 As outlined in Order Amending Subsections 11. 18(3) and (4) of the Trade-marks Act (SOR/2004-
85, 22 April 2004), The following names were removed from the list on date of entry into force of the Canada WT/TPR/S/179 
 Page 85 
 
 
and spirits names on Canadian labels  to allow European producers to apply for the protection of these 
names as geographical indications in Canada.  Ac cording to the authorities, in return for the 
commitment to phase out generic names from the Trade-Marks Act, Canada obtained significant 
concessions that will allow easier access to the EC ma rket for Canadian wines and spirits.  Other 
benefits to Canada included st ability in Canada's domestic mark eting and distribution practices and 
better bilateral relations betw een Canada and the EC by a ddressing a long-standing area of 
contention.269 
261. In February 2005, the CIPO requested feedb ack from the Canadian intellectual property 
profession on proposals for modernization of the Trade-Marks Act and Regulations, including 
Canada's possible future adherence to the Ma drid Protocol and the Trademark Law Treaty.270  
Currently, Canada is the only major industriali zed country not party to the Madrid Protocol. 
(d) Copyright 
262. As reported in Canada's previ ous Review, the Government of  Canada published a Framework 
for copyright reform in 2001 outlining the context and process for reform and setting out its intention 
to consider possible amendments that might be necessary to keep pace with technological 
developments.271  There followed a consultation process and legislative proposals. 
263. One outcome of this process was an amen dment to the Copyright Act passed in 
December 2002.  This prevents potential Internet -based retransmitters from using the compulsory 
licence for retransmission of broadcast programmes.   It also confirms that cable and satellite 
retransmitters of broadcasting signals who currently  benefit from compulsory licensing will continue 
to do so.272 
264. Further proposals stemmed from the mandated re view of the Copyright Act, which was 
initiated by a government report in October 2002.273  Following a parliamentary review of the report 
and a subsequent ministerial statement, a Bill to  Amend the Copyright Act (Bill-C60) was introduced 
in June 2005, however this died on the or der paper with the dissolution of Parliament. 
(e) Industrial designs and topographies of integrated circuits 
265. There have been no amendments to either the In dustrial Design Act or the Integrated Circuit 
Topography Act (ICTA) during the period under review .  A mandated review of the provisions and 
operation of the ICTA was undertaken, however, it w as concluded that the Act provided the necessary 
framework for the semiconductor industry to gr ow and that amendments were not needed.274  There 
are 49 active registrations under the ICTA (November 2006). 
                                                                                                                                                                     
Agreement:  Bordeaux, Chian ti, Claret, Madeira, Malaga, Marsala, Medoc, Médoc, Mosel and Moselle, as well 
as the spirit drink names Grappa and Ouzo.  Tokay was deleted on Hungary's accession  to the EU.  The names 
Bourgogne, Burgundy, Rhin, Rine, Saut erne, and Sauternes will be deleted on 31 December 2008.  Wine names 
Chablis, Champagne, Port, Porto and Sherry will be removed from the list on 31 December 2013. 
269 Canada Gazette online information.  Viewed at: http://canadagazette.gc. ca/partII/2004/20040505/ 
html/sor85-e.html. 
270 Strategis (2005). 
271 Strategis (2001). 
272 CIPO Press release, December 13 , 2002.  Viewed at:  http://strategis.gc.ca/ sc_mrksv/cipo/cp/billc 
11-e.html. 
273 Strategis (2002). 
274 CIPO online information.  Viewed at:  http://s trategis.ic.gc.ca/epic/internet/inippd-dppi.nsf/en/ 
ip00128e.html. WT/TPR/S/179 Trade Policy Review 
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(f) Plant breeders' rights 
266. Consultations were held during the review pe riod on amending the Plant Breeders' Rights Act 
to bring it into conformity with the 1991 versi on of the UPOV Convention and enable Canada to 
ratify it.  These consultations conc luded in March 2005 and as at November 2006, the PBR Advisory 
Committee was reviewing the results.  A previous in itiative, in 1999, to amend the Act, died on the 
order book.  According to the authorities, renewe d interest in pursing reform in this area was 
generated by a positive outcome of the Ten Year Re view of Canada's Plant Breeders' Rights Act in 
2002.275 
(g) Other issues 
267. Provisions for IP-related compulsory licensing exist under the Patent Act, the Integrated 
Circuit Topography Act, and the Competition Act.  Under the Patent Act, a compulsory licence may 
be granted in cases of abuse of exclusive rights.  Only one such licence has been granted since 1996.  
Under the Act, the federal and provincial governments may apply for non-exclusive use of patented 
inventions, subject to certain conditions, while under the Integrated Circuit Topography Act both 
governments may obtain authorization for the public non-commercial use of a registered topography.  
Section 32 of the Competition Act grants the Federal Court powers to limit certain rights used to 
restrain trade (those concerning patents, trade mark s, copyrights, and registered topographies) when 
those rights lead to unjustifiable anti-competitive activ ities.  None of those provisions has been used 
to date. 
268. The authorities note that goods manufactured in another jurisdiction by the same trade-mark 
owner as in Canada are not considered infringing goods simply because the goods have arrived in 
Canada and the trade-mark owner does not wish them to be distributed in Canada.  Parallel 
importation, however, may be prevented through ot her mechanisms including contractual rights and 
different standards requirements.  The situation with pa tents is similar to that of trade marks.  Imports 
of books without the consent of the copyright holder is prohibited, although this provision is subject to 
certain exceptions. 
269. Canadian customs services are not entitled to seize infringing imports ex-officio.  Under both 
the Copyright Act and the Trademarks Act, customs officials are authorized to detain goods only 
subject to a court order by the holder of the intellectual property right. 
                                                      
275 CFIA Discussion Paper.  Viewed at:  http ://www.inspection.gc.ca/english/plaveg/pbrpov/ 
updatmisee.shtml.