Special Import Measures Regulations (SOR/84-927)

Income Tax Credits, Refunds and Exemptions

32 Where the subsidy in relation to any subsidized goods is contingent on the export of those goods and in the form of a credit against, a refund of or an exemption from income taxes levied during any period, the amount of subsidy shall be determined by dividing

• (a) the amount of the credit, refund or tax not paid by reason of the exemption, as the case may be,

by

• (b) the quantity of goods exported during the period.

Deferral of Income Taxes

33 Where the subsidy in relation to any subsidized goods is contingent on the export of those goods and in the form of a deferral of income taxes, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, the amount determined in accordance with section 34 over the quantity of goods exported during the period for which taxes would have been paid had the taxes not been deferred.

• 34 (1) The amount for the purpose of section 33 is the present value of the interest that would have been payable, by the recipient of the deferral of income taxes, on a commercial loan in an amount equal to the amount of the deferred taxes, for a period equal to the period of the deferral, and with repayment terms similar to those in the payment schedule that applies to the deferred taxes, such present value being determined as of the date the deferral of income taxes came into effect in respect of the recipient of the deferral and by reference to the discount rate determined in accordance with subsection (2), and the interest rate in respect of such a loan being equal to the rate that is

  • (a) the prevailing interest rate in the territory of the government that permitted the deferral of income taxes, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that the recipient of the deferral could have obtained and that have a period the same or substantially the same as the period of the deferral and repayment terms comparable to those in the payment schedule applicable to the deferred taxes;

  • (b) where the interest rate described in paragraph (a) cannot be ascertained or where there is no such interest rate, the prevailing interest rate in the territory of the government that permitted the deferral, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that the recipient of the deferral could have obtained and that have a period that most closely approximates that of the period of the deferral and repayment terms that most closely approximate those in the payment schedule applicable to the deferred taxes; or

  • (c) where the interest rates described in paragraphs (a) and (b) cannot be ascertained or where there are no such interest rates, the prevailing interest rate in the territory of the government that permitted the deferral, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that

    • (i) producers of like goods, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained,

    • (ii) where subparagraph (i) is not applicable, producers of goods of the same general category, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained, or

    • (iii) where subparagraphs (i) and (ii) are not applicable, producers of goods of the group or range of goods that is next largest to the category referred to in subparagraph (ii), whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained,

    and that have a period that most closely approximates that of the period of the deferral and repayment terms that most closely approximate those in the payment schedule applicable to the deferred taxes.

• (2) The discount rate for the purposes of subsection (1) is the same as the interest rate determined in accordance with that subsection.

Excessive Relief of Duties and Taxes on Exported Goods

35 Where the subsidy in relation to any subsidized goods is contingent on the export of the goods and is in the form of an exemption from or remission, refund or drawback equal to an amount greater than the duties or taxes levied on the production, purchase, distribution, transportation, sale, export or import of the goods, the amount of subsidy shall be determined by deducting the amount of duties or taxes levied on or in respect of the exported goods, or the amount of duties or taxes that would have been levied on or in respect of the goods if they had not been exported, from the amount of the exemption, remission, refund or drawback that was granted in connection with the goods, and dividing the result by the quantity of goods, in relation to which the exemption, remission, refund or drawback was granted, that were exported during the period for which the duties or taxes were exempted, remitted, refunded or drawn back.

Excessive Relief of Duties and Taxes on Inputs

• 35.01 (1) Where the subsidy in relation to any subsidized goods is contingent on the export of the goods and is in the form of an exemption from or remission, refund or drawback equal to an amount greater than the duties or taxes levied on goods consumed in the production of the exported goods, the amount of subsidy shall be determined by deducting the amount of duties or taxes levied on or in respect of the consumed goods from the amount of the exemption, remission, refund or drawback that was granted in connection with the consumed goods, and dividing the result by the quantity of goods, in relation to which the exemption, remission, refund or drawback was granted, that were exported during the period for which the duties or taxes were exempted, remitted, refunded or drawn back.

• (2) For the purpose of subsection (1), the only goods considered to be consumed in the production of the exported goods are

  • (a) energy, fuel, oil and catalysts that are used or consumed in the production of the exported goods; and

  • (b) goods incorporated into the exported goods.

Acquisition of Shares

35.1 Where the subsidy in relation to any subsidized goods is in the form of the acquisition of shares, by a government, in a corporate enterprise, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, over the estimated total quantity of subsidized goods to which the subsidy is attributable, the difference between

• (a) the amount the government paid or agreed to pay for the shares, and

• (b) the fair market value of those shares immediately before the government’s decision to acquire the shares became public.

Purchase of Goods

35.2 Where the subsidy in relation to any subsidized goods is in the form of the purchase, by a government, of goods, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, over the estimated total quantity of subsidized goods to which the subsidy is attributable, the difference between

• (a) the amount the government paid or agreed to pay for the goods, and

• (b) the fair market value of the goods in the territory of that government.

Goods or Services Provided by a Government

36 Where the subsidy in relation to any subsidized goods is in the form of the provision, by a government, of goods or services, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, over the estimated total quantity of subsidized goods to which the subsidy is attributable, the difference between

• (a) the fair market value of the goods or services in the territory of the government providing the subsidy, and

• (b) the price at which the goods or services were provided by that government.

36.001 Where there is a significant difference between the amount of subsidy in relation to goods as otherwise determined under this Part and the future value, on the date of sale of the goods, of the amount of subsidy so determined, the amount of subsidy shall be the future value, on the date of sale, of the amount of subsidy as otherwise determined under this Part.

PART II.01Dispute Settlement Respecting Goods of a CUSMA Country

36.01 In this Part,

American Secretary

American Secretary means the person designated to serve as Secretary to the American Section of the Secretariat; (secrétaire américain)

Mexican Secretary

Mexican Secretary means the person designated to serve as Secretary to the Mexican Section of the Secretariat; (secrétaire mexicain)

Secretariat

Secretariat means the Secretariat established pursuant to paragraph 1 of Article 30.6 of the Canada–United States–Mexico Agreement. (Secrétariat)

36.02 For the purposes of the definition government of a CUSMA country in subsection 2(1) of the Act, the following are prescribed departments, agencies or other bodies:

• (a) for the purposes of subsection 77.011(1), subsection 77.011(6) of the English version, subsections 77.015(5), 77.017(1) and (3) and 77.019(6) of the Act,

  • (i) in respect of Mexico, the office of the Mexican Secretary, and

  • (ii) in respect of the United States, the office of the American Secretary;

• (b) for the purposes of subsections 77.011(4) and 77.013(3) of the Act,

  • (i) in respect of Mexico, the Secretaría de Economía (Secretariat of Economy), and

  • (ii) in respect of the United States, the Department of State; and

• (c) for the purposes of subsection 77.023(1), section 77.025 and subsections 77.028(1) and 77.031(1) and (2) of the Act,

  • (i) in respect of Mexico, the Secretaría de Economía (Secretariat of Economy), and

  • (ii) in respect of the United States, the office of the United States Trade Representative.

36.03 A government of a province of Canada or of a state of the United States that is aggrieved by a definitive decision is deemed to be a person who is entitled to file a request with the Canadian Secretary under subsection 77.011(2) of the Act.

36.04 For the purposes of subsection 77.012(1) of the Act, notice of an intention to make an application or to appeal in respect of a definitive decision that is to be given to every person who, but for section 77.012 of the Act, would be entitled to make such an application or to appeal shall be given by publication in the Canada Gazette of a notice to that effect and, if service of such a notice is required pursuant to the rules of procedure adopted or maintained pursuant to paragraph 14 of Article 10.12 of the Canada–United States–Mexico Agreement, by service of that notice in the prescribed manner under those rules.

• 36.05 (1) In this section, administrative record has the same meaning as in Article 10.8 of the Canada–United States–Mexico Agreement.

• (2) For the purposes of section 77.015 of the Act, a panel has the powers, rights and privileges of a superior court of record in respect of the compelling of production, and the examination, of the administrative record in respect of a definitive decision, other than any portion thereof that is government information within the meaning of the rules relating to panel reviews.

36.06 For the purposes of section 77.019 of the Act, a committee has the powers, rights and privileges of a superior court of record in respect of

• (a) the compelling of production, and the examination, of the record of a panel review; and

• (b) where the grounds for an extraordinary challenge proceeding before the committee are the grounds set out in subparagraph 13(a)(i) and paragraph 13(b) of Article 10.12 of the Canada–United States–Mexico Agreement,

  • (i) the compelling of production, and the examination, of documents relevant to those grounds,

  • (ii) the summoning and enforcement of attendance of witnesses and the compelling of those witnesses to give oral or written evidence on oath or on solemn affirmation, and

  • (iii) the administering of oaths and affirmations.