United States Court of Appeals 

for the Federal Circuit ______________________ 

THE GOVERNMENT OF QUEBEC, MARMEN INC., 

MARMEN ENERGIE INC., MARMEN ENERGY CO., 

THE GOVERNMENT OF CANADA,

Plaintiffs-Appellants

v.

UNITED STATES, WIND TOWER TRADE 

COALITION,

Defendants-Appellees

THE GOVERNMENT OF ONTARIO,

Defendant

______________________ 

2022-1807

______________________ 

Appeal from the United States Court of International 

Trade in Nos. 1:20-cv-00168-GSK, 1:20-cv-00170-GSK, 

1:20-cv-00172-GSK, Judge Gary S. Katzmann.

______________________ 

Decided: June 21, 2024

______________________ 

NANCY NOONAN, ArentFox Schiff LLP, Washington, 

DC, argued for plaintiff-appellant Government of Quebec. 

Also represented by MATTHEW CLARK, JESSICA R. DIPIETRO. 

 JAY CHARLES CAMPBELL, White & Case LLP, Washington, DC, argued for plaintiffs-appellants Marmen Inc., 

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2 GOVERNMENT OF QUEBEC v. US

Marmen Energie Inc., Marmen Energy Co., Government of 

Canada. Marmen Inc., Marmen Energie Inc., and Marmen 

Energy Co. also represented by RON KENDLER, ALLISON 

KEPKAY. 

 JOANNE OSENDARP, Blank Rome LLP, for plaintiff-appellant Government of Canada. Also represented by 

CONOR GILLIGAN, ALAN KASHDAN, TYLER J. KIMBERLY. 

 JOSHUA E. KURLAND, Commercial Litigation Branch, 

Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. 

Also represented by REGINALD THOMAS BLADES, JR., BRIAN 

M. BOYNTON, ROBERT R. KIEPURA, PATRICIA M. MCCARTHY; 

ALEXANDER FRIED, United States Department of Commerce, Washington, DC. 

 MAUREEN E. THORSON, Wiley Rein, LLP, Washington, 

DC, argued for defendant-appellee Wind Tower Trade Coalition. Also represented by THEODORE PAUL BRACKEMYRE,

TESSA V. CAPELOTO, ROBERT E. DEFRANCESCO, III, LAURA 

EL-SABAAWI, DERICK HOLT, ELIZABETH S. LEE, ALAN H.

PRICE, JOHN ALLEN RIGGINS. 

______________________ 

Before LOURIE, PROST, and REYNA, Circuit Judges.

REYNA, Circuit Judge. 

Marmen Inc., Marmen Énergie Inc., Marmen Energy 

Co., the Government of Québec, and the Government of 

Canada appeal from a decision of the U.S. Court of International Trade, which sustained the final affirmative determination of the U.S. Department of Commerce in a 

countervailing duty investigation concerning imports of 

certain utility scale wind towers from Canada. We affirm

the judgment of the U.S. Court of International Trade. 

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GOVERNMENT OF QUEBEC v. US 3

BACKGROUND 

The Tariff Act of 1930, as amended, authorizes the U.S. 

Department of Commerce (“Commerce”) to impose countervailing duties on imports that benefited from illegal subsidies provided by a foreign government. See 19 U.S.C. 

§ 1671(a). Such duties form trade relief to U.S. domestic 

industries injured by the subsidized imports. E.g., Al 

Ghurair Iron & Steel LLC v. United States, 65 F.4th 1351, 

1355 (Fed. Cir. 2023). If Commerce determines that a 

countervailable subsidy exists and the U.S. International 

Trade Commission (“ITC”) determines that a domestic industry is materially injured or is threatened with material 

injury by virtue of the subsidized imports, Commerce may 

impose countervailing duties on the subject imports equal 

to the amount of the net countervailable subsidy. See 19 

U.S.C. § 1671(a).

The trade statute provides that a countervailable subsidy exists if: (1) a foreign government provides a “financial 

contribution;” (2) a “benefit” is thereby conferred upon a recipient in connection with the manufacture or export of the 

subject merchandise; and (3) the subsidy is “specific” to a 

foreign enterprise or industry, or a group of such enterprises or industries. See id. §§ 1677(5), (5A). To calculate 

a subsidy rate, Commerce divides “the amount of the benefit allocated to the period of investigation” by the “sales 

value” of the subject merchandise during the same period, 

the latter referred to as the sales denominator. 19 C.F.R. 

§ 351.525(a). The larger the sales denominator, the lower 

the subsidy rate. 

This case involves (1) Commerce’s final determination 

that the Government of Canada and the Government of 

Québec provided countervailable subsidies to producers 

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4 GOVERNMENT OF QUEBEC v. US

and exporters of utility scale wind towers1 imported from 

Canada to the United States, and (2) Commerce’s calculation of the subsidy rate of 1.18% ad valorem.2 Generally, a 

subsidy rate of less than 1% is considered de minimis, 

which Commerce will disregard, and no countervailing duties are assessed. 19 U.S.C. § 1671b(b)(4). Appellants argue that Commerce erred in its assessment of three of the

investigated programs and its computation of the sales denominator used to calculate the subsidy rate. According to 

Appellants, the subsidy rate should have been de minimis. 

I. The Investigation and Commerce’s Determination

In July 2019, Appellee Wind Tower Trade Coalition 

(“WTTC”) petitioned Commerce to initiate a countervailing 

duty investigation of certain imports of utility scale wind 

towers from Canada. See Utility Scale Wind Towers from 

Canada, Indonesia, and the Socialist Republic of Vietnam: 

Initiation of Countervailing Duty Investigations, 84 Fed. 

Reg. 38216, 38216 (Aug. 6, 2019). WTTC contended that 

imports of the subject merchandise, the merchandise under 

investigation, received countervailable subsidies from the 

Government of Québec and the Government of Canada

through various government programs. See id. 

Commerce initiated a countervailing duty investigation, the period of investigation covering January 1, 2018–

December 31, 2018. Id. at 38217. Commerce selected, as 

1 Generally, wind towers are steel towers with wind 

turbines that are used to convert the kinetic energy from 

wind to electrical power. See Gov’t of Québec v. United 

States, 567 F. Supp. 3d 1273, 1277 (Ct. Int’l Trade 2022). 

2 The 1.18% rate represents the aggregate subsidy 

rate calculated based on eight of the investigated programs 

that Commerce found countervailable. As noted infra, this 

rate was subsequently reduced to 1.13% to account for ministerial errors not at issue here. 

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GOVERNMENT OF QUEBEC v. US 5

mandatory respondents,3 Marmen Inc. and Marmen Énergie Inc. (collectively, “Marmen”), the two largest and 

cross-owned Canadian exporters of the subject merchandise during the period of investigation. During the investigation, Commerce issued initial countervailing duty 

questionnaires and supplemental questionnaires, to which

Marmen, the Government of Québec, and the Government 

of Canada submitted responses. See J.A. 8387. 

In December 2019, Commerce reached a preliminary 

affirmative determination that countervailable subsidies 

were being provided to Canadian producers of wind towers 

through eight of the investigated programs. Utility Scale 

Wind Towers from Canada: Preliminary Affirmative Countervailing Duty Determination, and Alignment of Final Determination with Final Antidumping Duty Determination, 

84 Fed. Reg. 68126, 68126 (Dec. 13, 2019) (“Preliminary Affirmative Determination”); J.A. 8386–8408 (decision memorandum for the Preliminary Affirmative Determination). 

3 In countervailing duty investigations, if a large 

number of exporters or producers are involved, Commerce 

may select, and limit the investigation to, a small number 

of mandatory respondents. 19 U.S.C. § 1677f-1(e)(2). Mandatory respondents are compelled to participate in the investigation. Other exporters or producers of the subject 

merchandise may volunteer to participate in the investigation, and Commerce may accept voluntary respondents at 

its discretion. Id. § 1677m(a); 19 C.F.R. § 351.204(d). 

Mandatory respondents’ failure to properly cooperate in 

the investigation may adversely affect the countervailing 

duty rates assessed for them. See 19 U.S.C. § 1677e(b). 

The calculated subsidy rates for the mandatory respondents may determine the countervailing duty rates applicable to other exporters and producers that are not 

individually investigated during the investigation. 

19 U.S.C. §§ 1671d(c)(5), 1677f-1(e)(2). 

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6 GOVERNMENT OF QUEBEC v. US

For the eight countervailable programs, Commerce calculated a total countervailable subsidy rate of 1.09% ad valorem. Preliminary Affirmative Determination, 84 Fed. 

Reg. at 68127. In calculating the subsidy rate, Commerce

used the 2018 “Applicable Sales Value” Marmen reported

as the sales denominator. See J.A. 8428; J.A. 2907. 

After Commerce issued the Preliminary Affirmative 

Determination, Marmen submitted a “ministerial error” 

comment,4 alleging that Commerce erred in not adjusting 

the sales denominator to include a year-end “exchange rate 

adjustment” that Marmen’s auditor made. J.A. 8434–35; 

J.A. 8436 (citing line item “Year-end auditor adjustment to 

General Ledger (revenue) for exchange rate gain(loss)”). 

According to Marmen, this adjustment was to translate all 

foreign-currency sales recorded in its general ledger to Canadian dollars (“CAD”). J.A. 8434–35. Using the “correct[ed] sales denominator” that includes this adjustment, 

according to Marmen, would change the preliminarily calculated subsidy rate from above de minimis (1.09%) to below de minimis (0.95%). J.A. 8436. Commerce declined to 

amend its Preliminary Affirmative Determination based on 

Marmen’s allegation because the record information did 

not support that the alleged error was “ministerial” as defined in the regulations. J.A. 8453; see 19 C.F.R.

§ 351.224(f). 

4 Generally, after Commerce discloses its calculations in its preliminary determinations, a party to the proceeding may submit comments concerning “ministerial 

errors” contained in Commerce’s calculations. 19 C.F.R. 

§ 351.224(c). Commerce will analyze such comments and

make corrections where appropriate. Id. § 351.224(e). According to the regulations, a “ministerial error means an 

error in addition, subtraction, or other arithmetic function, 

clerical error resulting from inaccurate copying, duplication, or the like.” Id. § 351.224(f). 

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GOVERNMENT OF QUEBEC v. US 7

In February 2020, Commerce conducted a verification 

of the information Marmen submitted during the investigation. See Verification of Questionnaire Responses of Marmen Inc., Marmen Énergie Inc., and Gestion Marmen,

J.A. 8654–8708 (“Verification Report”). Verification refers 

to the process by which Commerce “verif[ies] the accuracy 

and completeness” of factual information submitted by interested parties, before Commerce makes a final countervailing duty determination. 19 C.F.R § 351.307(d). If the

submitted information “cannot be verified,” Commerce 

may make determinations based on “the facts otherwise 

available” on the record. 19 U.S.C. § 1677e(a)(2)(D); 19 

C.F.R. § 351.308(a). 

At verification, relevant to the auditor’s adjustment, 

Commerce discussed with Marmen the U.S. dollars 

(“USD”) sales Marmen identified as needing to be converted to CAD and reviewed the underlying sales records. 

J.A. 8679–80. This process revealed several discrepancies 

in the requested adjustment. Specifically, Commerce 

found that the adjustment included sales classified as USD

sales but recorded in European currency, the EURO, in

Marmen’s general ledger. Id. Upon reviewing the underlying records, Commerce discovered that two of the EUROcoded sales in the general ledger were shown in the original 

sales documentation as transacted in CAD. Id. These sales 

were thus inappropriately included in the USD-CAD conversion as part of the auditor’s adjustment. 

In June 2020, Commerce reached a final affirmative 

countervailing duty determination. Utility Scale Wind 

Towers from Canada: Final Affirmative Countervailing 

Duty Determination and Final Negative Determination of 

Critical Circumstances, 85 Fed. Reg. 40245, 40245 (July 6, 

2020) (“Final Affirmative Determination”). In the Final Affirmative Determination, Commerce maintained its determination that eight of the investigated programs were 

countervailable. Issues and Decision Memorandum for the 

Final Determination of the Countervailing Duty 

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8 GOVERNMENT OF QUEBEC v. US

Investigation of Utility Scale Wind Towers from Canada, 

J.A. 74–130. 

Based on the eight countervailable programs, Commerce calculated an aggregate countervailable subsidy 

rate of 1.18% ad valorem for Marmen and assigned the 

same rate for all other producers. Final Affirmative Determination, 85 Fed. Reg. at 40246. In calculating the subsidy 

rate, Commerce again did not include Marmen’s auditor’s

adjustment in the sales denominator. J.A. 116. Because

“Commerce found multiple improperly identified and improperly converted [sales] values in the calculation of the 

auditor’s adjustment at verification,” Commerce determined the adjustment to be “unverified and unreliable.” 

Id. Commerce explained that it lacked the ability to check 

each sale, and instead, the checks it performed at verification were to “test the broader reliability of reported information.” Id. Commerce thus relied on Marmen’s reported 

sales information excluding the unverified auditor’s adjustment. Id.; see 19 U.S.C. § 1677e(a)(2)(D). 

Along with five other programs, Commerce determined 

that the following three programs provided countervailable 

subsidies, each contributing to the ultimately assessed aggregate subsidy rate of 1.18%. See J.A. 78–80. We provide 

an overview of each of the three programs below. As noted 

above, to be countervailable, a subsidy must satisfy three 

criteria: (1) a program provides a financial contribution; 

(2) a benefit is thereby conferred on a recipient; and (3) the 

subsidy is specific to a foreign enterprise or industry, or a 

group thereof. By finding the three programs at issue

countervailable, Commerce found they each satisfy all 

three criteria. For each program, Appellants challenge 

Commerce’s assessment of one or two criteria. Consequently, in the overview below, we focus on the criteria that 

the parties dispute in this appeal. 

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GOVERNMENT OF QUEBEC v. US 9

i. Additional Depreciation for Certain Class 1 Assets

The Canadian tax regulations provide property depreciation deductions from taxable income, called the Capital 

Cost Allowance (“CCA”). J.A. 8037–38; J.A. 2513. Under

the CCA program, assets are divided into different classes, 

each assigned a respective deduction rate. For Class 1 assets, a generally applicable CCA rate is 4%, but taxpayers 

can claim a higher rate for certain subsets of Class 1 assets

acquired after March 2007. As relevant here, taxpayers 

can claim an additional 6% (for a total of 10%) if at least 

90% of an eligible building’s floor space is used for manufacturing. J.A. 2514. Similarly, an additional 2% (for a total of 6%) may be claimed for other non-residential 

buildings. Id. The additional allowances are intended to 

reflect the shorter useful life of buildings used for manufacturing or other non-residential purposes. Id.; see 

J.A. 2522–82 (“Economic Depreciation and Retirement of 

Canadian Assets: A Comprehensive Empirical Study”) 

(“StatCan Study”).

To be eligible for the additional allowances, “a building 

will be required to be placed into a separate class.” 

J.A. 2514. “If the taxpayer forgoes the separate class,” the 

standard 4% rate applies. Id.; J.A. 8037. Marmen, for certain buildings, elected to claim the 10% depreciation deduction, which reduced its taxable income during the period of 

investigation. 

Commerce determined that the additional allowance 

provided a countervailable subsidy and calculated a subsidy rate of 0.07% ad valorem. J.A. 79. As relevant here, 

Commerce determined that the additional allowance provided a financial contribution and that it conferred a benefit equal to the resulting tax savings. J.A. 97–98. 

Commerce reasoned that absent the additional allowance, 

Marmen would have paid more taxes under the 4% standard rate. J.A. 98. The appropriate benefit, Commerce concluded, was the “tax savings of the difference between the 

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10 GOVERNMENT OF QUEBEC v. US

deduction calculated using the basic rate” and the deduction “using the total depreciation rate” that Marmen 

claimed. J.A. 98–99.

ii. GASPÉTC Tax Credit

The GASPÉTC program provides a tax credit to promote employment in certain regions in Gaspésie and certain maritime regions of Québec. J.A. 2182. This program 

allows employers to claim a 15% tax credit for total wages 

paid to eligible employees. Id. An employer can claim the 

credit when filing tax returns for the previous year. At the 

same time, the previous year’s credit is considered taxable 

income, which the employer must then pay taxes on in the 

following year. In 2018, Marmen claimed the GASPÉTC

tax credit on its year-2017 tax return and paid taxes for the 

GASPÉTC credit it received for year-2016. J.A. 2871. 

Commerce determined that the GASPÉTC credit provided a countervailable subsidy and calculated a subsidy 

rate of 0.78% ad valorem. J.A. 80. As relevant here, in 

quantifying the benefit conferred under this program, 

Commerce used the amount of credit Marmen received for 

2017. J.A. 126–27. Commerce declined to reduce that

amount by the taxes Marmen paid for the credit it received 

for 2016. Id. In doing so, Commerce cited the regulatory 

directive under 19 C.F.R. § 351.503(e): “[i]n calculating the 

amount of a benefit, [Commerce] will not consider the tax 

consequences of the benefit.” J.A. 126. Commerce also explained that its calculation here was consistent with its 

past “treatment of other tax credits which ha[d] similar 

consequences.” Id. 

iii. On-the-Job Training Tax Credit

The on-the-job training program encourages businesses to hire trainees, such as students or apprentices. 

J.A. 1970. The program allows businesses to claim a tax 

credit for 24% of wages paid to trainees, and a higher percentage if the trainee is a person with a disability or is an 

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GOVERNMENT OF QUEBEC v. US 11

immigrant. Id. To be eligible for this credit, an employer 

must satisfy several criteria, including, among others, engaging in a qualified business and having received the required certification. J.A. 1976–77. 

Commerce determined that the on-the-job training 

credit provided a countervailable subsidy and calculated a 

subsidy rate of 0.01% ad valorem. J.A. 79–80. As relevant 

here, Commerce found that this program provided a subsidy that is de facto (as a matter of fact) specific. J.A. 129. 

Commerce determined that, during the period of investigation, the actual number of recipients that benefited from 

this program was “limited in number on an enterprise basis.” Id. In reaching this determination, Commerce compared “the actual number of companies that received the 

tax credit in 2018 to the total number of tax filers, inclusive 

of corporations and individuals in business, within Québec 

for 2018.” Id. 

After Commerce issued the Final Affirmative Determination, the ITC reached a final affirmative determination 

that a domestic industry was materially injured by the subsidized wind towers imported from Canada. Utility Scale 

Wind Towers from Canada, Indonesia, Korea, and Vietnam, Inv. Nos. 701-TA-627-629, 731-TA-1458–1461 

USITC Pub. 5101 (Aug. 2020) (Final). Based on these two 

affirmative determinations, Commerce issued a countervailing duty order imposing countervailing duties on the 

imports of wind towers from Canada. Utility Scale Wind 

Towers from Canada, Indonesia, and the Socialist Republic 

of Vietnam: Amended Final Affirmative Countervailing 

Duty Determination and Countervailing Duty Orders, 85 

Fed. Reg. 52543, 52543 (Aug. 26, 2020). The 1.18% subsidy 

rate assessed in the Final Affirmative Determination was 

subsequently reduced to 1.13%, to account for ministerial 

errors not at issue here. See id. at 52544. 

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12 GOVERNMENT OF QUEBEC v. US

II. Appeal to the U.S. Court of International Trade

In September 2020, the Government of Québec filed 

suit in the U.S. Court of International Trade, challenging

various aspects of Commerce’s Final Affirmative Determination. Gov’t of Québec v. United States, 567 F. Supp. 3d 

1273, 1280 (Ct. Int’l Trade 2022) (“CIT Decision”). The 

Government of Canada joined as plaintiff-intervenor and 

WTTC joined as defendant-intervenor. Id. Marmen and 

WTTC subsequently filed separate appeals. Id. The appeals were consolidated. Id. The Government of Québec, 

the Government of Canada, Marmen, and WTTC each 

moved for judgment on the agency record. Id. 

The Court of International Trade sustained Commerce’s Final Affirmative Determination, finding that the 

Final Affirmative Determination was in accordance with 

law and supported by substantial evidence. Relevant here 

are the court’s affirmances of (1) Commerce’s computation 

of the sales denominator used to calculate the subsidy rate, 

and (2) Commerce’s assessment concerning the additional 

depreciation allowance, GASPÉTC tax credit, and the onthe-job training credit. 

Regarding the sales denominator, the Court of International Trade concluded that Commerce properly excluded 

Marmen’s requested auditor adjustment as unreliable after identifying multiple errors at verification. Id. at 1285. 

In reaching this conclusion, the court rejected Marmen’s 

contention requiring Commerce to identify compelling evidence before rejecting the auditor’s report, finding such a 

contention lacked support in law. Id. The errors identified 

through verification, the court reasoned, undermined the 

broader reliability of the requested adjustment and supported Commerce’s determination to exclude the adjustment as unreliable. Id. at 1286. 

As to the assessment of the three subsidy programs at 

issue here, the Court of International Trade affirmed Commerce’s determination in all challenged aspects. We 

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GOVERNMENT OF QUEBEC v. US 13

provide below an overview of the Court of International 

Trade’s decision, focusing on the challenged aspects at issue here. 

i. Additional Depreciation for Certain Class 1 Assets

As to the additional depreciation for certain Class 1 

manufacturing buildings, the Court of International Trade

affirmed Commerce’s determination that the additional 6% 

allowance provided a financial contribution conferring a 

benefit. Id. at 1293. The court rejected the Canadian parties’ argument that the additional allowance reflected the 

actual shorter useful life of manufacturing buildings so it 

constituted neither a “financial contribution” or “benefit.” 

Id. at 1294–95. The court concluded that Commerce’s determination was in accordance with the statutory definition of “financial contribution”5 and the pertinent 

regulations on “Direct Taxes” benefits.6 Id. The Court of 

International Trade also rejected the argument that Commerce erred by declining to directly engage with the 

StatCan Study, an empirical analysis on building depreciation the Canadian parties relied on. Id. at 1295–96. According to the court, “where a taxpayer can opt-in to more 

favorable treatment, it is reasonable for Commerce to confine its analysis to the comparisons provided for by law, 

5 Under 19 U.S.C. § 1677(5)(D), “financial contribution” includes “(i) the direct transfer of funds, such as 

grants, loans, and equity infusions,” and as relevant here, 

“(ii) foregoing or not collecting revenue that is otherwise 

due, such as granting tax credits or deductions from taxable income.” 

6 Regarding benefits provided through direct taxes,

19 C.F.R. § 351.509(a)(1) (“Exemption or remission of 

taxes”) provides that “a benefit exists to the extent that the 

tax paid by a firm as a result of the program is less than 

the tax the firm would have paid in the absence of the program.” 

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14 GOVERNMENT OF QUEBEC v. US

even if the more favorable treatment better reflects economic reality.” Id. at 1296.

ii. GASPÉTC Tax Credit

Regarding the GASPÉTC tax credit, the Court of International Trade affirmed Commerce’s determination to exclude increased tax liabilities in calculating the benefit 

Marmen received under the program. Id. at 1292–93. The 

court found unpersuasive the Government of Québec and 

Marmen’s assertion that 19 C.F.R. § 351.509(a)(1) directed 

Commerce to consider and exclude the previous year’s tax 

liabilities from the benefit calculation. Id.; see also 19 

C.F.R. § 351.509(a)(1) (“[A] benefit exists to the extent that 

the tax paid by a firm as a result of the program is less than 

the tax the firm would have paid in the absence of the program.”). The regulations, the court reasoned, did not require treating “tax liabilities from a previous year’s use of 

the program [as] a component” of the “result of the program.” CIT Decision, 567 F. Supp. 3d at 1293. The court 

added that Commerce’s determination was consistent with 

its uniform past practice of disregarding tax consequences 

when assessing benefits provided through direct taxes. Id. 

iii. On-the-Job Training Tax Credit

The Court of International Trade also sustained Commerce’s determination that the on-the-job training tax 

credit provided a de facto subsidy. Id. at 1291. The Government of Québec and the Government of Canada argued 

that Commerce’s specificity determination violated the 

statutory requirements and that its comparison was

“methodologically unsound.” See id. at 1290. The court

disagreed. First, the court explained Commerce’s approach

assessed both whether “the actual recipients of the subsidy” were “limited in number,” 19 U.S.C. 

§ 1677(5A)(D)(iii)(I), and whether the subsidy is 

“truly . . . broadly available and widely used throughout 

[the] economy.” Id. at 1291. The court concluded that Commerce’s approach was in accordance with the statute and 

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GOVERNMENT OF QUEBEC v. US 15

the aims of the specificity test as set out in the Statement 

of Administrative Action accompanying the Uruguay 

Round Agreements Act (“SAA”).7 Id. (citing SAA, H.R. Doc. 

No. 103-316, at 929 (1994), reprinted in 1994 U.S.C.C.A.N. 

4040). Second, the court determined that Commerce did 

not err in using all corporate tax filers as the comparator 

group in assessing specificity. Id. The court explained that 

it was “reasonable to think that [such] a comparison” would 

be “instructive” in assessing whether the subsidy was 

widely used. Id. 

Accordingly, the Court of International Trade sustained in full Commerce’s Final Affirmative Determination. 

Marmen Inc., Marmen Énergie Inc., Marmen Energy Co., 

the Government of Québec, and the Government of Canada 

appeal to this court. We have jurisdiction pursuant to 

28 U.S.C. § 1295(a)(5).

STANDARD OF REVIEW

We review de novo the Court of International Trade’s

decisions involving Commerce’s countervailing duty determinations, reapplying the same substantial evidence review standard applied by the Court of International Trade. 

Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi A.S. v. 

United States, 992 F.3d 1348, 1352 (Fed. Cir. 2021). We 

uphold Commerce’s determination unless it is unsupported 

by substantial evidence or is otherwise not in accordance 

with law. 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence means such relevant evidence that a reasonable 

mind may accept as adequate to support a conclusion. 

7 The SAA “shall be regarded as an authoritative expression by the United States concerning the interpretation and application of the Uruguay Round Agreements 

and [the Uruguay Round Agreement Act] in any judicial 

proceeding in which a question arises concerning such interpretation or application.” 19 U.S.C. § 3512(d). 

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16 GOVERNMENT OF QUEBEC v. US

Consol. Edison Co. v. N.L.R.B., 305 U.S. 197, 229 (1938). 

In conducting our review, we “will not ignore the informed 

opinion of the Court of International Trade,” which often 

serves as a starting point of our analysis. Suramerica de 

Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 

983 (Fed. Cir. 1994); see Nippon Steel Corp. v. United 

States, 458 F.3d 1345, 1351 (Fed. Cir. 2006). 

DISCUSSION

Appellants raise two categories of challenges to Commerce’s Final Affirmative Determination. First, as to the 

subsidy rate calculation, Appellants challenge Commerce’s 

exclusion of Marmen’s auditor’s adjustment from the sales 

denominator. Second, Appellants challenge Commerce’s 

assessment concerning the three programs at issue, specifically: (1) Commerce’s finding that the additional depreciation deduction for certain Class 1 assets constituted a 

financial contribution conferring a benefit; (2) Commerce’s 

determination to exclude increased tax liabilities when calculating the benefit conferred under the GASPÉTC program; and (3) Commerce’s finding that the on-the-job 

training tax credit provided a de facto specific subsidy. Because Commerce’s determinations are supported by substantial evidence and in accordance with law, we affirm. 

I. The Sales Denominator 

We first address Commerce’s determination not to 

adopt Marmen’s auditor’s adjustment in computing the 

sales denominator. Appellants argue that Commerce “unreasonabl[y]” determined that the auditor’s adjustment 

was “unverified and unreliable.” Appellants Br. 25. Appellants further argue that Commerce’s determination contravenes its past practice and its obligation to accurately 

calculate subsidy rates. Id. We disagree. 

Based on errors identified through verification, Commerce reasonably determined that Marmen’s auditor’s adjustment was unreliable. Marmen claimed that the 

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GOVERNMENT OF QUEBEC v. US 17

adjustment was to convert USD sales recorded in its general ledger to CAD, and the auditor used a single annual 

average USD-CAD exchange rate. J.A. 8676–77. Commerce’s verification revealed that the auditor’s adjustment

erroneously included sales denominated in a non-USD foreign currency (the EURO) in the general ledger, and two of 

these sales were transacted in CAD and thus erroneously 

coded. J.A. 8679–80. Based on these “improperly identified and improperly converted” sales, it was reasonable for 

Commerce to determine that “the auditor’s adjustment was

not accurate or reliable.” J.A. 116. 

Appellants take issue with Commerce’s statement that 

Commerce “discovered” the five EURO-coded sales through

“spot-checking.” Appellants Br. 32. Appellants contend 

that Marmen self-identified these sales to Commerce because, in the USD-sales listings Marmen prepared, these

EURO-coded sales were listed as such and were thus

flagged for Commerce.8 E.g., id. at 33. These errors, Appellants claim, account for less than 0.2% of the total requested adjustment and Commerce’s spot-checking beyond 

these errors did not reveal additional “EURO-coded sales.” 

Id. at 34, 36. According to Appellants, because Commerce 

found no additional errors and concluded the verification 

early, it was “unreasonable for Commerce to infer that additional errors were likely.” Id. at 34–35. 

8 Countering Appellants’ argument, the United 

States contends that Marmen never alerted Commerce to 

the “second type of error—sales included as USD in the adjustment and recorded in Marmen’s ledger as Euro that 

were actually in CAD.” United States Br. 24. According to 

Appellees, it was Commerce that identified this “second 

type of error” when “it spot-checked documentation for the

Euro-coded sales.” Id.; WTTC Br. 25; see Verification Report, J.A. 8579–80. 

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18 GOVERNMENT OF QUEBEC v. US

Regardless of whether Commerce completely independently discovered those problematic sales or used Marmen’s submitted listings as a clue, these errors undeniably 

exist and undermine the reliability of the adjustment. 

When Commerce inquired about the errors relating to the 

EURO-coded sales, Marmen attributed them to its accounting firm’s “sales classification” or its “internal coding mistake.” J.A. 8680. The fact that Commerce’s verification did 

not reveal additional EURO-coded sales does not compel a 

conclusion that the auditor’s adjustment contains no other 

errors. Marmen’s explanation for the identified errors does 

not support that all errors are fully accounted for by the

identified EURO-coded sales, whether attributed to “sales 

classification,” “coding mistake[s],” or other causes. This 

evidence supports Commerce’s reasonable inference that

the auditor’s adjustment may contain other errors. See 

CIT Decision, 567 F. Supp. 3d at 1286 n.11. As Commerce

explained, it lacked the ability to verify each sale and exhaustively examine all underlying sales documentation. 

J.A. 116. Here, the verification demonstrated that the requested adjustment contained errors, which undermined 

“[its] broader reliability.” Id. We agree with the Court of 

International Trade that “[w]hile the impact of the discovered errors, taken alone, on the proposed foreign currency 

adjustment may be small, Commerce could reasonably infer that there may remain other errors.” CIT Decision, 567 

F. Supp. 3d at 1286. 

We also find unpersuasive Appellants’ assertion that 

Commerce’s action here contradicts its past practice or its 

legal obligations. See Appellants Br. 37. Appellants contend that, by conducting verification of “an independent 

auditor’s” analysis, Commerce took an erroneous “extraordinary” action departing from its past practice and the law. 

Id. at 39–40. 

Verifying the parties’ submission and rejecting inaccurate and unverifiable information is consistent with, and 

required by, Commerce’s statutory obligation to calculate 

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GOVERNMENT OF QUEBEC v. US 19

subsidy rates “as accurately as possible.” See id. at 41; see 

also 19 U.S.C. § 1677m(i). Marmen requested the auditor’s 

adjustment in a ministerial error allegation after Commerce reached the Preliminary Affirmative Determination 

based on the sales value Marmen itself reported. J.A. 114. 

To support its allegation, Marmen pointed to a line item 

“Year End auditor adjustment in [General Ledger] 40000 

for Gain(loss) exchange rate,” which had little accompanying explanation. See id.; J.A. 8436; J.A. 8092; J.A. 8118. 

Given the timing and nature of Marmen’s request and the 

lack of corroborating explanation in the record, it was reasonable for Commerce to decide to investigate the accuracy 

of the requested adjustment. 

Lastly, we reject Appellants’ argument that Commerce 

should have, but failed to, “cite compelling evidence” to disregard the auditor’s adjustment. Appellants Br. 40. To 

support its proposition, Appellants cite SeAH, a decision by 

the Court of International Trade in an unrelated proceeding, and certain statements in a previous administrative 

proceeding referenced in SeAH. Id. at 39 (citing SeAH Steel 

VINA Corp. v. United States, 269 F. Supp. 3d 1335, 1352 

(Ct. Int’l Trade 2017)); see also id. (citing statements from 

memo accompanying Certain Stainless Steel Butt-Weld 

Pipe Fittings from Taiwan, 71 Fed. Reg. 67098 (Nov. 20, 

2006)). Appellants’ arguments lack merit. 

SeAH involves Commerce’s evaluation and selection of 

one set of surrogate financial statements over the other, 

where Commerce “had reason to trust the reliability” of the 

one it selected and explained its “basis for rejecting” the 

other. SeAH, 269 F. Supp. 3d at 1351–52. One of the reasons supporting Commerce’s selection was that the selected set contained an auditor’s opinion and registration 

information, while the other did not. Id. In that context, 

the Court of International Trade observed that Commerce 

can “accept the independent auditor’s report as reliable unless ‘compelling evidence’ exists that the auditor is not in 

‘good standing.’” Id. at 1352. This observation does not 

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20 GOVERNMENT OF QUEBEC v. US

stand for Appellants’ proposed rule requiring Commerce to 

provide “compelling evidence to set aside information provided by an auditor.” See CIT Decision, 567 F. Supp. 3d at 

1285. Further, as the Court of International Trade noted, 

the facts here are readily distinguishable from those in 

SeAH. See id. In SeAH, no evidence “contradicted the independent auditor’s conclusions” accompanying the selected surrogate statements; here, in contrast, Marmen’s 

own auditor’s adjustment was “shown to be at least partially in error.” Id. Appellants’ reliance on the out-of-context statements from the Butt-Weld Pipe Fittings

proceeding fails for similar reasons. See id. (explaining the 

differences between the determination involved in ButtWeld Pipe Fittings and Commerce’s evaluation here). 

Accordingly, we agree with the Court of International 

Trade that Commerce’s exclusion of Marmen’s requested 

auditor adjustment was supported by substantial evidence 

and in accordance with law. 

II. Program Assessment

i. Additional Depreciation for Certain Class 1 Assets

Appellants challenge Commerce’s determination that 

the additional 6% depreciation Marmen claimed for certain 

Class 1 assets provided a countervailable subsidy. Appellants contend that the additional depreciation does not provide a “benefit” nor result in a “financial contribution” in 

the form of foregone revenue. Appellants Br. 42, 49. According to Appellants, the additional depreciation merely 

reflects the actual shorter useful life of manufacturing

buildings and the normal rate at which they depreciate. 

E.g., id. at 42–43, 53–54. We are unpersuaded. 

To find a countervailable subsidy, there must be a governmental “financial contribution” that conferred a “benefit.” See 19 U.S.C. § 1677(5). As relevant here, financial 

contribution includes “foregoing or not collecting revenue 

that is otherwise due, such as granting tax credits or 

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GOVERNMENT OF QUEBEC v. US 21

deductions from taxable income.” 19 U.S.C. 

§ 1677(5)(D)(ii). And in cases involving direct taxes, “a benefit exists to the extent that the tax paid by a firm as a 

result of the program is less than the tax the firm would 

have paid in the absence of the program.” 19 C.F.R. 

§ 351.509(a) (emphasis added). 

In accordance with the governing statute and regulations, Commerce reached a determination that is supported by substantial evidence in the record, including the

Canadian tax regulations themselves. Before the Canadian tax regulations implemented additional allowances 

for certain subsets of Class 1 assets, a single standard or 

default 4% rate applied for all Class 1 assets. J.A. 2514. 

Around 2007, the Canadian tax regulations added additional allowances for two subsets of Class 1 assets, including as relevant here, “an additional allowance of 6% (total 

10%)” for certain eligible buildings acquired after March 

2007 and used for manufacturing. Id. To be eligible for 

this additional allowance, “a building will be required to be 

placed into a separate class,” and “elections have to be 

filed.” Id.; J.A. 9539; see also J.A. 9548 (“If you do not file 

an election to put it in a separate class, the 4% rate will 

apply.”). Marmen filed its election to claim this additional 

allowance (of 6%) and thereby further reduced its taxable 

income during the 2018 period of investigation. 

Absent the additional allowance, the generally applicable 4% standard rate would have applied. Marmen would 

have paid more taxes and the Canadian governments 

would have collected more revenue. The additional 6% allowance claimed and received by Marmen thus represents 

revenue that the Canadian governments could have collected but forewent, which constitutes a “financial contribution.” 19 U.S.C. § 1677(5)(D)(ii); see J.A. 99. And 

because of this additional 6% allowance, “a benefit exists” 

as “the tax paid by [Marmen] as a result of the program is 

less than the tax [Marmen] would have paid in the absence 

of the program.” 19 C.F.R. § 351.509(a)(1); see J.A. 97–99. 

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22 GOVERNMENT OF QUEBEC v. US

We find unpersuasive Appellants’ contention that 

Commerce committed a “fundamental error” by failing to 

consider that “the depreciation rate is based on the average 

useful life of a particular asset.” Appellants Br. 47, 49. 

Commerce based its determination on how the Canadian 

tax regulations explicitly structured the additional depreciation allowance, applying the explicit definitions of “benefit” and “financial contribution” provided in the governing

statute and regulations. See J.A. 97–99. The governing 

statutory and regulatory provisions do not require Commerce to base its determination on whether a program at 

issue accurately aligns with the economic reality of building depreciation. 19 U.S.C. § 1677(5)(D)(ii); 19 C.F.R. 

§ 351.509(a)(1); see CIT Decision, 567 F. Supp. 3d at 1295. 

We thus agree with the Court of International Trade that 

Commerce’s determinations are in accordance with law 

and supported by the tax regulations themselves. See CIT 

Decision, 567 F. Supp. 3d at 1294–96. 

Relatedly, we reject Appellants’ contention that Commerce ignored or failed to adequately address the StatCan 

Study. See Appellants Br. 47, 49. Appellants relied on the 

StatCan Study to support their characterization that the 

additional depreciation allowance reflected the economic 

reality. See J.A. 93–94. As discussed above, Commerce

based its assessment on a comparison of the different depreciation deduction rates provided in the Canadian tax 

regulations. See CIT Decision, 567 F. Supp. 3d at 1296. In 

doing so, Commerce rejected Appellants’ contrary contention that would require Commerce to compare the deduction rate(s) to what would be justified by the economic 

reality. See J.A. 98. By rejecting that overarching contention, Commerce adequately engaged with the StatCan

Study evidence Appellants cited to support their underlying characterization of the depreciation allowance. 

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GOVERNMENT OF QUEBEC v. US 23

ii. GASPÉTC Tax Credit

Appellants next challenge Commerce’s benefit assessment under the GASPÉTC tax credit program. In calculating the benefit Marmen received under this program in 

2018, Commerce used the tax credit Marmen claimed for

2017 without offsetting it by the income tax Marmen paid 

for the credit it received in 2016. Appellants contend that 

the regulations require Commerce to consider the “total tax 

effect of the program” that, in Appellants’ view, requires a 

reduction by the tax Marmen paid for the prior year’s 

credit. Appellants Br. 57. We are not persuaded. 

Under 19 C.F.R. § 351.509(a)(1), in cases involving 

“[e]xemption or remission of taxes,” “a benefit exists to the 

extent that the tax paid by a firm as a result of the program 

is less than the tax the firm would have paid in the absence 

of the program.” In excluding the tax Marmen paid as a 

result of the prior year’s credit from its benefit assessment,

Commerce followed the directive under 19 C.F.R. 

§ 351.503(e). Section 351.503 is the “Benefit” section under 

“Subpart E—Identification and Measurement of Countervailable Subsidies,” and it contains various subsections on 

benefit assessment. Subsection (e) instructs that “[i]n calculating the amount of a benefit, [Commerce] will not consider the tax consequences of the benefit.” 19 C.F.R. 

§ 351.503(e) (emphasis added). 

Appellants argue that 19 C.F.R. § 351.503(e) is inapplicable because, in their view, it provides a general rule 

whose application would contravene the “specific rule” provided in 19 C.F.R. § 351.509(a)(1). See Appellants Br. 60–

61. We discern no contravention. Section 351.509(a)(1) directs Commerce to calculate the benefit received under a 

program in the year at issue, here the 2018 period of investigation. The regulatory language does not address taxes 

resulting from prior year(s)’ credit, let alone instruct that 

such resulting taxes be subtracted from the benefit 

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24 GOVERNMENT OF QUEBEC v. US

received in the year at issue. This section thus does not

contradict the instruction contained in 19 C.F.R. 

§ 351.503(e). 

Additionally, further supporting Commerce’s determination are the statutory limitations on the circumstances 

where offsets are applied. See 19 U.S.C. § 1677(6). Specifically, section 1677(6) explicitly lists a narrow range of scenarios where Commerce may apply offsets in calculating

countervailable subsidies. Id. These include, among other 

scenarios, cases involving fees paid to receive a subsidy and 

“loss in the value” of the subsidy due to delayed receipt. Id. 

The enumerated scenarios do not include, as relevant here,

tax consequences from prior year’s benefit. Id.; see Kajaria 

Iron Castings Pvt. Ltd. v. United States, 156 F.3d 1163, 

1174 (Fed. Cir. 1998) (discussing permissible offsets under 

§ 1677(6)). 

Accordingly, we agree with the Court of International 

Trade that Commerce acted in accordance with law when 

it excluded taxes incurred from the previous year’s credit 

in computing the benefit Marmen received under the

GASPÉTC program. 

iii. On-the-Job-Training Tax Credit

Lastly, Appellants challenge Commerce’s determination that the Québec on-the-job training tax credit was de 

facto specific under 19 U.S.C. § 1677(5A)(D)(iii). Appellants Br. 62. As noted supra, to be countervailable, a subsidy must be “specific” to a foreign enterprise or industry, 

or a group of foreign enterprises or industries. 19 U.S.C. 

§ 1677(5)(A). Specificity can be de jure (as a matter of law), 

or de facto. Id. § 1677(5A)(D). As relevant here, a subsidy 

is de facto specific if Commerce finds “one or more of the 

following factors”: 

(I) The actual recipients of the subsidy, whether 

considered on an enterprise or industry basis, are 

limited in number.

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GOVERNMENT OF QUEBEC v. US 25

(II) An enterprise or industry is a predominant 

user of the subsidy.

(III) An enterprise or industry receives a disproportionately large amount of the subsidy.

(IV) The manner in which the authority providing 

the subsidy has exercised discretion in the decision 

to grant the subsidy indicates that an enterprise or 

industry is favored over others. 

Id. § 1677(5A)(D)(iii). In assessing de facto specificity, 

Commerce examines the factors enumerated in 19 U.S.C. 

§ 1677(5A)(D)(iii) sequentially. 19 C.F.R. § 351.502. “If a 

single factor warrants a finding of specificity, [Commerce] 

will not undertake further analysis.” Id. § 351.502(a). 

Here, Commerce found the on-the-job training tax credit to 

be de facto specific based on factor (I), namely the actual 

number of recipients was “limited in number” on an enterprise basis. J.A. 129. 

Appellants raise two primary challenges to Commerce’s specificity determination. Appellants first contend 

that Commerce erred in not conducting a de jure specificity 

analysis, which Appellants argue should inform the de 

facto analysis. Appellants Br. 64. Appellants also argue 

that Commerce’s comparison approach in its “limited in 

number” analysis was methodologically unsound and contravened the SAA’s directive regarding the purpose of the 

specificity determination. Id. at 71–78. We disagree. 

First, contrary to Appellants’ contention, the statute 

does not make a de jure analysis a prerequisite inquiry for

a de facto analysis. Rather, the statutory language is clear 

that specificity can be either de jure or de facto. 19 U.S.C. 

§ 1677(5A)(D)(ii)–(iii). The de jure specificity inquiry is 

separate from the de facto inquiry and the two are based 

on different factors. Id. Commerce thus did not err in finding specificity based on its de facto analysis without a separate de jure analysis. 

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26 GOVERNMENT OF QUEBEC v. US

Second, Commerce did not err in using the total corporate tax filers as a comparator in assessing whether the 

credit recipients are limited in number. The governing 

statute and the implementing regulations do not prescribe

any mandatory method that Commerce must employ in assessing de facto specificity or analyzing the listed factors. 

See 19 U.S.C. § 1677(5A)(D)(iii); 19 C.F.R. § 351.502. Rather, it is a fact-intensive and case-specific inquiry, where

the factors involved and the weight accorded to them vary 

from case to case. Royal Thai Gov’t v. United States, 436 

F.3d 1330, 1335–36 (Fed. Cir. 2006); see SAA, H.R. Doc. No. 

103-316, at 929. In conducting this inquiry, Commerce exercises the necessary latitude afforded it in choosing the 

appropriate approach. 

We agree with the Court of International Trade that 

Commerce did not exceed that latitude here. In assessing 

specificity, Commerce considered that the on-the-job training program is to encourage businesses to take on trainees. 

J.A. 8400. Both corporations and individuals engaging in 

business activities can avail themselves of this program 

and claim the tax credit. Id. The Government of Québec 

reported that during the 2018 period of investigation, 4,930

of 387,949 corporate entities, roughly 1.27%,9 received the 

on-the-job training credit. J.A. 1982; J.A. 2173. Commerce 

thus concluded that the credit recipients were “limited in 

number” on an “enterprise” basis. J.A. 129. As the Court 

of International Trade pointed out, Commerce has taken 

similar comparison approaches to assess specificity of tax 

credit programs in past investigations. CIT Decision, 567 

9 This percentage is based on a comparison of the 

number of credit recipients to the number of corporate tax 

filers, J.A. 1982, excluding individual tax filers engaging

in business. The United States contends that this percentage would be even smaller if such individual tax filers were 

included. United States Br. 60–61, 61 n.7. 

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GOVERNMENT OF QUEBEC v. US 27

F. Supp. 3d at 1291–92; see also United States Br. 76–77. 

While the facts in other cases may call for different approaches or considerations, the nature of the program and 

the small percentage of recipients here support Commerce’s “limited in number” assessment.10 See CIT Decision, 567 F. Supp. 3d at 1292. 

Contrary to Appellants’ assertion, Commerce’s approach does not conflict with the SAA’s directive regarding

the purpose of the specificity determination. See, e.g., Appellants Br. 72, 74. As stated in the SAA, the specificity 

determination serves to “winnow out only those foreign 

subsidies which truly are broadly available and widely 

used throughout an economy.” SAA, H.R. Doc. No. 

103-316, at 929. It ensures that countervailing duties are 

not improperly levied against subsidies that are generally

available and widely used across the economy, such as certain public infrastructure-related programs. Id. at 929–30. 

Commerce’s comparison of the on-the-job training credit recipients to corporate tax filers aligns with this intended 

purpose of the specificity determination. As the Court of 

International Trade noted, Commerce’s comparison is “instructive in determining whether the subsidy is widely 

spread throughout the economy.” CIT Decision, 567 F. 

Supp. 3d at 1291. Given the nature of the program, the 

10 For similar reasons, we find unpersuasive Appellants’ reliance on Mosaic Co. v. United States, 659 F. Supp. 

3d 1285 (Ct. Int’l Trade 2023), which Appellants submitted 

as a supplemental authority. In Mosaic, the Court of International Trade rejected Commerce’s de facto specificity

analysis concerning a different and unrelated penalty relief

program. Mosaic, 659 F. Supp. 3d at 1314. As the Court 

of International Trade itself explained in Mosaic, the program at issue there was “distinguishable” from the on-thejob training program we are evaluating in this case. Id. at

1315 n.10. 

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28 GOVERNMENT OF QUEBEC v. US

limited number of recipients (about 1.27% of corporate entities) demonstrates that the on-the-job credit is not one of

widespread availability and use throughout the economy. 

Accordingly, we agree with the Court of International 

Trade that Commerce’s de facto specificity determination 

of the on-the-job training credit is supported by substantial 

evidence and is otherwise in accordance with law. 

CONCLUSION 

We have considered Appellants’ remaining arguments 

and find them unpersuasive. For the reasons set forth 

above, we conclude that Commerce’s Final Affirmative Determination is supported by substantial evidence and in accordance with law. Accordingly, the Court of International 

Trade’s decision sustaining Commerce’s Final Affirmative 

Determination is affirmed. 

AFFIRMED

COSTS 

Costs against Appellants. 

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