WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/TPR/M/112/Add.1
16 June 2003
(03-3166)
Trade Policy Review Body
12 and 14 March 2003Original:  English/
                 anglais/
                 inglés
TRADE POLICY REVIEW
CANADA
Minutes of Meeting
Addendum
Chairperson:  H.E. Mrs. Mary Whelan (Ireland)
This document contains the advance written questions, and replies provided by Canada.1
__________________________________________________________________________________
Organe d'examen des politiques commerciales
12 et 14 mars 2003
EXAMEN DES POLITIQUES COMMERCIALES
CANADA
Compte rendu de la réunion
Addendum
Présidente:  S.E.  Mme Mary Whelan (Irlande)
Le présent document contient les questions écrites communiquées à l'avance et les réponses
fournies par le Canada.1
__________________________________________________________________________________
Órgano de Examen de las Políticas Comerciales
12 y 14 de marzo de 2003
EXAMEN DE LAS POLÍTICAS COMERCIALES
CANADA
Acta de la reunión
Addendum
Presidente:  Excma. Sra. Mary Whelan (Irlanda)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito,
junto con las respuestas facilitadas por Canada.1
                                                     
1 In English only./En anglais seulement./En inglés solamente.WT/TPR/M/112/Add.1
Page 3
ADVANCE WRITTEN QUESTIONS BY MEMBERS AND REPLIES
PROVIDED BY CANADA
SWITZERLAND
Question 1
Canadian monetary policy, in contrast to US monetary policy, has become more restrictive. This is
justified based on the more positive cyclical developments in Canada as well as on recent pricedevelopments. To what extent might the increase in Canadian interest rates resulting from a more
restrictive monetary policy stance constrain investment in Canada, as the lower US interest rates
make investments in the US relatively cheaper? (TPR, § 15, Section I)
Response
Canada is a net recipient of foreign investment, with liabilities exceeding assets by $203.4 billion in
2001. This is a small increase from $202.5 billion in 2000, but down substantially from $290.2 billion
in 1997. This decline in Canada's foreign investment deficit is a result of the booming US economy,which during the late 1990s, acted as a magnet, attracting foreign as well as Canadian investment. In
2001 the decline began to reverse as the Canadian economy started to accelerate, and in 2002
Canadian growth was stronger than that of the US. Already, Canadian interest rates have begun to rise
while they continue to fall in the US, which is likely to further increase the attractiveness of Canada as
a destination for foreign investment. Therefore, we do not feel that this is a constraint on investmentin Canada.
Question 2
Could you explain the fluctuations of the Cana dian dollar toward the US dollar between 2000 and
2002 as well as the effects on trade? (TPR, § 17, Section I)
Response
Between 2000 and 2002, the Canadian dollar moved in a fairly narrow range against the US dollar
from a high of US$0.69 at the start of 2000 to a low point of between US$0.62 and US$0.63.   For the
most part, these fluctuations can be seen as movements within a trading band centered on about
US$0.65 established following the global rise of the US dollar in the context of the emerging market
crises of the late 1990s.
During the period 2000-2002, the Canadian dollar was relatively stronger within this band when
capital flows into US dollar-denominated securities slowed and when factors considered to be
supportive of the Canadian dollar in currency markets (e.g., commodity prices) moved in a favourable
direction; and, of course, vice versa.  The impacts of fluctuations in the Canadian dollar in this range
did not likely have any discernible impacts on Canadian trade flows, which were driven primarily bygrowth trends in the United States.
Insofar as the valuation of the dollar played a role in Canada's trade performance in this period, it was
in terms of its persistent under-valuation compared to what might be considered its longer-term
equilibrium value as indicated by purchasing power parity estimates (estimates place the Canadian
dollar's PPP exchange rate in the low US$0.80 cent range).
The comparatively low market value of the Canadian dollar in 2000-2002, in comparison to the PPP
standard and also in comparison to judgements based on the sound and improving fundamentals of theCanadian economy, undoubtedly enhanced the competitiveness of Canadian exporters and import-WT/TPR/M/112/Add.1
Page 4
competing industries vis-a-vis US competitors and played some role in determining the size of
Canada's trade surplus during this period.
Question 3
Could you comment on the relationship between the negotiations for the Free Trade Area of the
Americas including all the countries of the Western Hemisphere except Cuba and exploratory
discussions toward possible negotiations for free-trade agreements with CARICOM, the countries ofthe Andean Community and the Dominican Republic? (TPR, §36, Section II)
Response
Canada is committed to the Free Trade Area of the Americas (FTAA) process, which is our top
regional priority.  The exploratory discussions toward possible negotiations for free trade agreements
(FTAs) with CARICOM, the countries of the An dean Community, and the Dominican Republic - as
well as the agreement currently under negotiation with four Central American countries (El Salvador,
Guatemala, Honduras and Nicaragua) - will allow Canada the possibility of forging closer bilateraltrade links and negotiating more compact, bilateral agreements with these countries.
In our view, bilateral negotiations can provide momentum to the FTAA negotiations and build
alliances based on the mutual knowledge and trust that is developed through sub-regional
negotiations.  These initiatives can serve as building blocks for the FTAA, not least in their treatment
of free trade between large and small economies.
Question 4
In its free-trade agreement with Chile, Canada has renounced raising anti-dumping duties against
Chile and vice versa without the competition legislations being harmonised. How did Canada come to
this result and what are the first experiences? (TPR, § 44, Section II)
Response
The Canada - Chile Free Agreement contains a chapter on Competition law (chapter J), which says in
part:
"Each Party shall adopt or maintain measures to proscribe anti-competitive business conduct and
take appropriate action with respect thereto, recognizing that such measures will enhance the
fulfilment of the objectives of this Agreement. To this end the Parties shall consult from time to timeabout the effectiveness of measures undertaken by each Party. Each Party recognizes the importance
of cooperation and coordination among their authorities to further effective competition law
enforcement in the free trade area."
Competition rules were not harmonized as a result of the free trade agreement because the Parties did
not feel that this was going to be an issue in view of the inconsequential level of integration betweenthe two economies, most dramatically reflected in the geographic distance between the two countries.
To date, this arrangement has not been an issue between the Parties.
Question 5
Would Canada be ready to consider reciprocal access to sub-central government level with GPA
Members including sectors of priority to Canadian suppliers and without particular provisions on
small business and sets aside? (TPR, § 215, Section III)WT/TPR/M/112/Add.1
Page 5
Response
Paragraph 215 fully reflects Canada's position, which has also been stated in the WTO Committee on
Government Procurement.  Canada will only consider sub-federal coverage if other parties are
prepared to include sectors of priority interest to Canadian suppliers, such as steel and transportation,
to agree to circumscribe the use of small business and other set asides, and to agree to eliminate other
discriminatory measures.
Question 6
What impact on the domestic textiles and clothing in dustry is expected with the elimination of import
quotas by 31 December 2004 under the WTO Agreement on Textiles and Clothing? What adjustments
are made to prepare for this liberalisation? (TPR, § 52, Section IV)
Response
The Agreement on Textiles and Clothing (ATC) is but one of the many initiatives affecting the
Canadian textiles and clothing industries. Other initiatives, such as the full implementation of theUruguay Round tariff reduction, our bilateral trade agreements, Canada’s Market Access Initiative for
Least Developed Countries, and initiatives by our major trading partners also play a great role in the
future of these sectors.  It is our view that is olating the specific impact of the ATC is therefore
impossible and it would be inappropriate to try to fo recast what will happen in 2005 to the textiles and
clothing industries in Canada on the basis of the ATC alone.
The Government of Canada recently introduced the Canadian Apparel and Textile Industries Program
(CATIP).  This program will focus on projects that help our textile and apparel companies and their
industry associations by strengthening marketing st rategies, identifying high-potential niche markets,
developing e-business capabilities, diversifying  products, and by applying new technologies to
improve productivity.  Further information on the program can be found at www.strategis.gc.ca/catip.(This program was developed from the Strategic Framework mentioned in Chapter 4, paragraph 62 of
the Secretariat Report)
In addition, the government has established a joint government-industry Working Group on Textiles
and Apparel to help identify high-risk issues affecting the long-term competitiveness of the textile and
apparel industries and to recommend, on an ongoing basis, measures that the government might taketo assist these industries in addressing these issues.
Question 7
Section IV, p. 102 of the TPR mentions that: “Export subsidies were scheduled by Canada under the
WTO Agreement on Agriculture for 11 product groups comprising cereals, oilseeds, dairy products,
and vegetables, and were made subject to distinct reduction commitments.  Canada's latest WTOexport subsidy notification was made in March 2001 for the year 1999/00.
1  As in the three previous
years, Canada notified no subsidies for any of the scheduled products, with the exception of dairy
products”. Are these 11 product groups exhaustive and what are Canada’s future reductions plans?
Response
The 11 product groups listed in our export subsidy notifications, the most recent being
G/AG/N/CAN/31 (March 2001) is a complete listing of  all product categories for which Canada has
export subsidy reduction commitments.  As notified, Canada has not provided export subsidies for
any of the scheduled products, with the exception of dairy products since August 1, 1995. In the WTO
                                                     
1 WTO document G/AG/N/CAN/41, 14 March 2001.WT/TPR/M/112/Add.1
Page 6
Agriculture negotiations, Canada is seeking the elimination of all export subsidies on agricultural
products as quickly as possible.
Question 8
Do Canada’s provinces have particular compet ences referring to price or product support?
Response
In Canada, agriculture is a shared jurisdiction betw een the federal and provincial governments.  All
domestic support to agriculture, including support by the federal and provincial governments as wellas support provided through joint federal and provincial programs, is reported in Canada’s annual
notification of domestic support to the Committee on Agriculture of the World Trade Organization.
Question 9
The Canadian Wheat Board (CWB) and the Canadi an Dairy Commission (CDC) benefit from a
dominant position and privileged treatment on the ma rket. Independently from future developments in
the WTO negotiations, does Canada foresee to disengage in this area to provide freedom of action to
the market and the private sector?
Response
Both the Canadian Wheat Board (CWB) and the Canadian Dairy Commission (CDC) have been
notified as state trading enterprises under GATT 1994 Article XVII.  The CWB and the CDC fully
respect the obligations in Article XVII, as well as WTO obligations more generally.
NEW ZEALAND
Tariffs
Question 1
The Secretariat’s report (WT/TRR/S/112, Table III.1) shows that in 2002 the average applied MFN
tariff in Canada was 4.2% for non-agricultural goods, 21.7% for agricultural goods overall; and
237.7% for dairy products.  Tariffs in the agricultural sector, and in particular, the dairy sector arethus vastly disproportionate to MFN tariffs for non-agricultural goods.  How does Canada plan to
reduce prohibitive tariffs in the dairy sector, and agricultural tariffs in general to a level
proportionate with non-agricultural products?
Response
The comparison cited ignores the MFN tariff at which most trade occurs, the in-quota tariff for
products subject to tariff quotas.  Imports of products subject to tariff quotas generally enter at very
low in-quota rates, averaging about 3% on an MFN basis, which is comparable to the rates for non-
agricultural goods.  The 21.7 average duty cited for agricultural goods includes the over-quota tariffs,
which average 139 percent.
In the WTO agriculture negotiations, Canada has called for an ambitious harmonizing reduction
formula to achieve maximum reductions from final bound tariffs and substantial reduction of tariff
disparity between competing products and tariff escalation from the raw to processed form of the
product.  Such a formula should lower tariffs to a more uniform level, but for particularly sensitive
products Members should have the option to achieve market access improvements in other ways -WT/TPR/M/112/Add.1
Page 7
such as providing a specified quantity of duty-free access to all Members through tariff quotas.
Where a Member chooses to provide access improvements through tariff quotas, a significant
improvement in market access can be achieved through commitments that expand access, eliminate
in-quota tariffs, and ensure clear rules so that tariff quota administration does not impede access.
Local Content Requirements and State-Owned Enterprises
Question 2
Market distortions in the wines and spirits sector in Canada persist via local content requirements at
the provincial level (WT/TRR/S/112, para 182) and monopoly sales by provincial state-owned
marketing enterprises (WT/TRR/S/112, paragr aphs 191-198).  Could the Canadian authorities
provide detailed reassurance as to the WTO compatibility of the policies underpinning these market
distortions?
Response
The Provincial Liquor Boards (PLBs) in Canada were established before the GATT was created, and
their existence and activity is consistent with the provisions of GATT Article XVII [“State Trading
Enterprises”].  In accordance with that Article, they are notified to the WTO as STEs.  The PLBs
operate as businesses whose decisions are based solely on commercial considerations and market
forces. In Alberta, responsibility for the selection, retailing, warehousing, and distribution of liquor
rests with the private sector.  The alcoholic beverage-producing countries, which are major exportersto Canada, have accepted the policies of Provincial liquor agencies through various bilateral
agreements.  Canada's commitments under these agreements are implemented on an MFN basis.
Imported products compete with domestic products in the PLB retail stores, and enjoy a large share of
the Canadian market.  By volume, imported spirits accounted for 31.2% of the market in 1999, rising
to 32.4% in 2001; imported wines held 65.4% of the market in 1999, rising to 67.0% in 2001.  Boththe value and market share of wine and spirit imports continue to increase.
Where local content requirements exist, they actually have the effect of limiting the volume of wine,
which can be sold in the private retail outlets, due to the limited potential of grape production in
Canada.
Agriculture
Question 3
In tandem with prohibitive tariff rates, Canada maintains small tariff rate quotas for several
agricultural products.  The Secretariat has noted (WT/TPR/S/112, paragraph 32, page 102) that
imports account for less than 5% of domestic c onsumption for some of these products (using the
domestic consumption base period for the Uruguay Round commitments); for example, there are no
imports of skim milk powder within the tariff-r ate-quota.  When does Canada intend to provide in-
quota access of 5% for all agricultural products subject to tariff rate quotas?
Response
For most of the products listed, imports actually exceed 5% of consumption.  Also, as noted in
paragraph 32, for agricultural products subject to tariff quotas, the fill rates have been above the
average when compared to the fill rate of TRQs across all WTO Members and for many, fill rates
consistently achieve 100 percent.  Some exceptions include wheat, barley and margarine, products forwhich Canada is highly competitive internationally and a significant exporter.WT/TPR/M/112/Add.1
Page 8
For some products subject to tariff rate quotas, supplementary import permits are issued for the
importation of products at the low in-quota tariff in quantities that are outside the bound tariff quota
volume commitment. The result is that for a number of products with tariff quotas, total imports
exceed five percent of consumption for the base period established as part of the Uruguay Round.
Canada considers the approach taken to the establishment of tariff quotas in the Uruguay Round to be
seriously flawed, with the result that there are considerable inequities in the access levels provided bycountries.  Canada has suggested that this issue needs to be addressed in the current negotiations.
In the WTO agriculture negotiations, Canada has called for tariff quota volumes to be expanded to a
common minimum end point of at least 5% of current consumption in a recent period.  As well, tariff
quota volumes should be determined and established on a product basis (e.g., pork, not meat; barley,
not feed grains).  This process must only expand existing tariff quotas; no tariff quota volume would
be reduced from final bound levels.  All in-quota tariffs should be eliminated.  Clear rules are needed
so that tariff quota administration does not impede access.
Question 4
Dairy industry representatives in Canada claim that an increase in tariff rate quota access for dairy
products to 10% of domestic consumption would “s pell the end of supply management”.  Does the
Government of Canada officially oppose the expansion of tariff rate quota access volumes to 10%, or
more, of domestic consumption for dairy and other agricultural products? If so, for what policyobjective?
Response
In the WTO agriculture negotiations, Canada has called for tariff quota volumes to be expanded to a
common minimum end point of at least 5% of curr ent consumption in a recent period, on a product
basis. Canada has serious concerns about the Uruguay Round approach to tariff quotas, and thesignificant inequities that resulted in the levels of access provided by countries.  For example, the
establishment of tariff quotas at 5% of current consumption on a product basis would result in far
more access in many markets than 10% on a Uruguay Round basis.  Canada has raised this issue in
the current negotiations.
Question 5
What policies does Canada intend to im plement to facilitate adjustment s in the dairy sector so as to
avoid quantitative restrictions and “allow producers to respond better to the global marketplace and
compete on the basis of their competitive advantage” (Government of Canada report,
WT/TPR/G/112, paragraph 96)?
Response
Canada’s dairy sector continues to adapt to changes in Canadian domestic dairy markets within the
existing supply management framework that applies to production for that market.  Production for
export outside of that framework has recently been discontinued in response to a dispute settlement
finding by the WTO. The Canadian dairy sector will thus have less involvement in future international
dairy markets and will focus its efforts on maintaining its competitiveness in domestic dairy markets.
Question 6
The Canadian Dairy Commission, an STE, has a monopoly on imports of butter within Canada’s
scheduled tariff rate quota (WT/TPR/S/112, paragraph 31, page 102).  The CDC sells imported butter
to further processors in Canada.  Can Canada commi t to providing figures for the mark-up used to
determine the price charged by the CDC to processors  of imported butter, or alternately, the resaleWT/TPR/M/112/Add.1
Page 9
price for the butter, as required by Article XVII of the GATT?  How does Canada ensure that the
resale price represents only a “reasonable profit” for the CDC?
Response
Canada submitted a new and full notification pursuant to GATT 1994 Article XVII in November 2002
(G/STR/N/4/CAN).  Statistical information provided therein included the average import price, as
well as the average representative domestic sales price of relevant commodities.  Canada will continueto respect its obligations under Article XVII.
Steel
Question 7
The incidence of anti-dumping and safeguards investigations on steel imports into Canada has
continued to increase since the last TPR of Canada in 2002, yet the share of imports in total
consumption decreased from 44% in 2000 to less than 37% in 2001 and the first half of 2002
(WT/TPR/S/112, Table IV.5).  Such investigations ca n be costly and disruptive for small, unsubsidised
producers such as New Zealand, which has a small,  longstanding export trade to Canada. How does
Canada plan to minimise the disruption to normal trade in such cases?
Response
On the issue of volumes, annual import volumes for the entire year 2002 (6.3 million tonnes) were the
third highest level on record - below only the level achieved in 2000 (7.9 million tonnes) and in 1998(6.7 million tonnes). In 2002, domestic steel consumption in Canada rose 4.2% above the levels in
2001 but imports increased by 13.5% over the same period.
With respect to investigations, Canada has and will continue to conduct anti-dumping investigations
on steel, as it would on any other product, in full accordance with its international trade obligations
and its own domestic law, when its domestic industry makes a properly substantiated request.
With respect to Canada’s recent steel safeguard inve stigation, the Government is still considering its
response to the recommendations by the Canadian International Trade Tribunal.  The issue of whether
"normal trade" is or is not disrupted by trade remedy measures is not germane to the issue of whether
such measures are legitimate and have been imposed in accordance with trade agreement obligations.
AUSTRALIA
Steel
Question 1
We note that Canadian steel imports account for a smaller percentage of consumption than they did
at the time of the last trade policy review (37 per cent versus 44 per cent).  Despite this, anti-dumping
and safeguard actions on steel have increased. The Government has yet to respond to the CanadianInternational Trade Tribunal report of August 2002 which recommended remedies to safeguard steel.
How does Canada plan to promote adjustment in the steel industry?
Response
On the issue of volumes, annual import volumes for the entire year 2002 (6.3 million tonnes) were the
third highest level on record - below only the level achieved in 2000 (7.9 million tonnes) and in 1998WT/TPR/M/112/Add.1
Page 10
(6.7 million tonnes). In 2002, domestic steel consumption in Canada rose 4.2% above the levels in
2001 but imports increased by 13.5% over the same period.
Regarding the CITT recommendations, the Government is still considering its response and has not
implemented any safeguard measure.
On the question of adjustment, since no safeguard action has been put in place, the steel industry has
not undertaken any specific action to adjust to new competitive conditions.   On this issue, Canadaconsiders its support for and participation in the OECD steel process to discipline government
intervention in the steel sector as adjustment action. In our view, multilateral disciplines on steel
subsidies should reduce worldwide overcapacity and reduce trade fiction.
We are optimistic about prospects for an agreement on steel subsidies.
Regional and Bilateral Initiatives
Question 2
We note that Canada is extremely active in expanding its network of preferential trade agreements,
including through its participation in negotiations to establish the Free Trade Area of the Americas
(FTAA).  Australia welcomes Canada’s assurance th at its multilateral and bilateral initiatives are
designed to be mutually supportive, and that its bilateral efforts do not detract from multilateral
efforts.  How does Canada’s elaborate network of free trade agreements complement and support
trade liberalisation through the WTO, and the Doha Round negotiations in particular?
Response
Canada is of the view that bilateral and regional free trade initiatives can complement and reinforce
multilateral liberalization by generating political momentum, by developing and refining elements of
the trade regime, and by preparing domestic industries for the further opening of markets.  By
ensuring that such arrangements are consistent with  WTO rules, these initiatives also help strengthen
the multilateral system.  Regional and sub-regional agreements, moreover, can play a positive role in
advancing global negotiations either by flagging new issues and helping to place them on the global
agenda, or by providing innovative solutions to trade problems that can subsequently be elevated and
adapted from the bilateral or regional to the multilateral arena.
The bilateral and regional free trade agreements that Canada has negotiated contain some innovative
features through which we have tried to enhance cooperation, strengthen institutional capacity, and
promote long-term economic growth through increased economic exchanges.  One example of this is
the North American Free Trade Agreement (NAFTA), in which certain provisions, such as services
and intellectual property, were ahead of the multilateral curve at the time the agreement was signed.
A more recent example is the Canada-Costa Rica Free Trade Agreement (FTA), which is the firstbilateral FTA containing innovative stand-alone provisions on trade facilitation.
In addition, closer economic relations, as well as the closer governmental relations forged by the
negotiations process, contribute to progress on the broader social, political and environmental fronts.
As such, bilateral and regional initiatives can be an important element of a country’s development
efforts.  Engaging developing countries in FTAs also helps to build their capacity in trade
negotiations.WT/TPR/M/112/Add.1
Page 11
Services
Question 3
Canada is continuing the process of gradually reforming its services sector and is an active
participant in the services negotiations.  However, despite a Review process favourable to
multilateral air transport liberalisation (para. 131 of Secretariat’s Report refers), Canada continues
to oppose negotiations on air transport services under the General Agreement on Trade in Services(GATS).  Would Canada explain why it opposes negotiations and indicate if its MFN exemptions
relating to air transport services are still necessary?
Response
With respect to air transport services, Canada no tes that extensive liberalization is already being
achieved under the current system of bilateral agreements.  While there may be some merit in
considering alternatives to the bilateral process for negotiating air traffic rights, Canada believes that
the bilateral process works efficiently and effectively, offering much flexibility in terms of further airliberalization.  The bilateral process will likely remain the key method for dealing with international
air services for the foreseeable future.
With respect to services not directly related to ai r transport services, Canada has participated in the
review of the Air Transport Annex of the GATS and examined closely the question of whether certain
services not directly related to traffic rights mi ght be included for coverage by the GATS under the
Annex. The Special Session of the Council in Trade in Services decided in 2002 to defer further
deliberations with respect to appropriate coverage pending the convening World Air Transport
Conference of ICAO (International Civil Aviati on Organization) March 24 to 28, 2003, which will
address future directions for air transport relations.
Canada currently has an MFN exemption for maintenance and repair services as well as for sales and
marketing of air transport services.  Canada believes that the exemption for repair and maintenance is
still necessary because it wants to reserve the right to selectively negotiate agreements with other
aeronautical authorities or service providers to recognize their accreditation of repair, overhaul and
maintenance facilities and certification by such facilities of work performed on Canadian-registered
aircraft and other related aeronautical products.  It believes that the exemption for sales and marketingis still necessary because the rules and obligations for the selling and marketing of scheduled
international air services are negotiated in Canada ’s bilateral air agreements while the selling and
marketing of all international air services (including unscheduled) must be in general accordance with
Canadian laws and regulations.
Question 4
With regard to professional services (ie, accountancy, architecture, engineering and law), Canada
maintains a number of citizenship and residency requirements for accreditation at the sub-federal
level in its GATS schedule of commitments.  Would Canada explain the policy rationale for these
limitations?  Would Canada also indicate whether th ere are any review processes in place (either at
the federal or sub-federal level) to examine whether there are less trade restrictive means of
achieving the policy objectives underlying these limitatio ns?  If not, is Canada prepared to review the
ongoing need for these limitations in the context of the current Doha Development round?
Response
Canada is in the process of consulting with its relevant professional associations to review the extent
of liberalization undertaken since the Uruguay Round of GATS negotiations and whether there is
scope for liberalization in the context of the Doha Round.WT/TPR/M/112/Add.1
Page 12
In 1998, Canada notified the Council for Trade in Services of the elimination of a number of
citizenship, permanent residency and residency requirements in the professional services sector.
These changes to the requirements for licensing for a number of professionals resulted from regular
policy reviews undertaken by the respective licensing authorities.
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND
MATSU
Recent Economic Developments
Question 1   (p. 4 paragraph 2)
Maintaining a low inflation rate has always been the main goal of Canadian monetary policy, and the
recent surge in oil prices will surely bring new inflationary pressures. A tighter monetary policy is
usually considered the best tool for tackling this problem, but in light of the dismal economic outlook,
a more stringent monetary policy might have an adverse affect on Canada’s economic growth. How
does Canada determine what is the most effective monetary policy at this critical time?
Response
While economic growth in Canada eased in the last  quarter of 2002 (largely owing to lower exports),
final domestic demand continued to expand at a robust pace. It continues to be the view of the Bank
of Canada that the level of aggregate economic activity in Canada remains near full production
capacity and that the persistence of above-target rates of inflation has raised the risk of a rise ininflation expectations.
While there are considerable geopolitical and global economic uncertainties overhanging the short-run
economic outlook, the Bank still expects demand for Canadian output to strengthen after mid-2003, as
global uncertainties diminish.  Even with the latest increase of 25 basis points in the target for the
overnight rate, the Bank still feels that further reductions in monetary stimulus will be required toreturn inflation to the 2 per cent target over the medium term.
The timing and pace of increases in policy interest rates will depend on the following factors: the
strength of demand pressures, changes in inflation expectations, the impact on confidence of
geopolitical and global economic uncertainties, and the way in which developments in the Middle
East affect demand and inflation, both globally and in Canada. The Bank will continue to monitorclosely all of these factors.
Standards, technical regulations, and sanitary and phytosanitary measures
Question 2  (p. 51 paragraphs 89, 90)
According to our understanding, Canada has been applying measures under the Telecommunication
Terminal Equipment Supplier’s Declaration of Conformity (TTESDoC), since 2002. Would Canada
please describe for us the current status of  its implementation of the TTESDoC measures?
Response
Canada has had the Telecommunication Terminal Equipment Supplier’s Declaration of Conformity
(TTESDoC) measures in full implementation since January 19, 2002.WT/TPR/M/112/Add.1
Page 13
Sanitary and phytosanitary measures
Question 3   (p. 56-57 paragraph 114)
Chronic Wasting Disease (CWD) is a Transmissible Spongiform Encephalopathies (TSE).  In 1996,
CWD was diagnosed on 39 game ranches in Saskatchewan and one in Alberta, Canada.
Nevertheless, as of March 2002, the number of CWD cases confirme d by the laboratory in Canada was
225. Recently, the presence of CWD has even been recognized in the free-ranging deer population of
Saskatchewan.  The information has indicated an increased prevalence of CWD in the Canadian-
farmed elk industry. As a trading partner, we would appreciate having Canada’s responses to the
following questions:
What is the current state of CWD in Canada?  What ac tion has been taken by the Authorities to prevent
its spread?
Response
Since 1996, CWD has been reported on 40 elk farms in Saskatchewan and 1 elk farm and 1 white tail
deer farm in Alberta respectively.  To date, the Canadian Food Inspection Agency (CFIA), in
conjunction with provincial government authorities, have identified 231 CWD-positive farmed
cervids and destroyed 8,675 farmed cervids due to exposure to positive animals.
CWD is a reportable disease in Canada and the CFIA has implemented a Control and Eradication
Program.  Full details on the Control and Eradication Program can be found on the CFIA website:www.inspection.gc.ca
Any cervid showing signs of CWD (neurological difficulties) is subject to lab analysis.  To encourage
reports, the CFIA has a farm compensation program in place for animals ordered destroyed.  If CWD
is confirmed, all cervids exposed to a known CWD positive are destroyed.
More generally, all TSE diseases in livestock are reportable in Canada under federal law.  The entire
herd is quarantined if a TSE disease is suspected to be present in an animal in the herd.  If a herd is
determined to be infected, all infected or exposed animals are destroyed and all products from
infected animals would be traced back with the aim of removing them from the animal and human
food chain.
How do the Authorities treat CWD-infected mate rials, including animal products, by-products and
incinerated/rendered meals, to prevent the spread of contamination by TSE agents in the food chain?
Response
The CFIA has regulations that prohibit feeding ruminant rendered meat and bone meal from other
ruminants.  Any animal ordered destroyed by the CFIA due to a TSE disease is not allowed to be
rendered.  TSE positive and exposed animals are destroyed by incineration or burial according toCanadian sanitary and environmental standards.
Any animal slaughtered in the federally regulated meat inspection system are subject to ante-mortem
inspection.  Animals showing nervous system disease or clinical signs consistent with TSE diseases
are rejected for human food.    The CFIA in conjunction with provincial authorities has a national
surveillance system for TSE diseases.
The Canadian rendering industry also has a voluntary standard where cervids and their by-products
are not considered for rendering.WT/TPR/M/112/Add.1
Page 14
The Canadian cervid industry also has a standard of  identification for velvet that allows the velvet to
be traced back to the farm and animal of origin.
While there are currently no known infected herds, the provincial based surveillance programs in
Alberta, Manitoba, and Saskatchewan which require the submission and testing of brains from all elk
that are slaughtered or die, is an essential part in the continued search for CWD leading to Canada's
freedom from Chronic Wasting Disease.
What sanitary measures should have been taken c oncerning these animals and related products in order
to ensure safe trade?
Response
Please refer to the above mentioned measures which protect products traded both domestically and
internationally.
Local-content requirements
Question 4  (p.74 paragraph 187, 188)
Please could Canada provide a description of the relevant measures it has taken since 15 February,
2001, to conform to the WTO Agreement. Please also describe the impact that these measures have
had on the Canadian automobile industry.
Response
On September 17, 2000 the government repealed the Auto Pact’s production-to-sales ratio
requirement, as recommended by the WTO panel.  The government repealed on February 18, 2001
the remaining Auto Pact measures (i.e. the Motor Vehicle Tariff Order (1998) and the Special
Remission Orders).  In doing so, Canada complied fully with the WTO ruling in the autos case.
Canada's auto sector is internationally competitive and highly productive for reasons independent of
the Auto Pact.  At the time the Auto Pact was revoked, Canadian assemblers were building almost twocars for every one purchased in Canada, well above the production-to-sales obligations set out in the
Agreement.  The automotive sector accounts for about 12% of Canada's manufacturing GDP and, in
2002, sustained over 165,000 direct manufacturing jobs  and total employment of over 490,000.  More
than 60% of Canadian parts production and about 90% of Canadian vehicle production is exported,
mostly to the United States, which remains Canada's largest automotive market.  Canada recorded anet automotive sector trade surplus of $13.4 billion in 2001, on exports of motor vehicles and parts
totalling $85.2 billion.
Companies, including from the automotive industry, invest in Canada because of our highly- skilled
and productive labour force, competitive labour costs and excellent business climate.  A recent study
indicates that Canadian facilities enjoy a significant cost advantage over their U.S. counterparts.These are key factors in investment decisions, which bodes well for the future of the industry.
State-owned enterprises
Question 5   (p.75-78 paragraph 189-198)
Is it necessary for those who sell alcoholic beverages to register with the Canadian government? If
not, how does the Canadian government oversee the retail sale of alcoholic beverages?WT/TPR/M/112/Add.1
Page 15
Response
The Canadian Government does not generally register sellers of alcoholic beverages, nor does it
“oversee” retail sales.  However, there is federal legislation which applies in this product area.  The
detailed substance relating to this question was given in Canada’s last notification under GATT
Article XVII, State Trading Enterprises, as set out below:
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
In Canada, the importation of and inter-provincial trade in alcoholic beverages is governed by the
federal Importation of Intoxicating Liquors Act  (IILA). The objective of the IILA relates to the control
of the consumption of alcoholic beverages in Canada for the purpose of protecting public health and
morals.
B. Summary of legal basis for gaining the relevant exclusive or special rights or privileges, including
legal provisions and summary of statutory or constitutional powers.
The IILA provides the provinces, within their respecti ve jurisdiction, with control over the sale of
intoxicating liquor, and over the importation, sending, taking or transportation of such liquor into the
provinces. The provinces (except for Alberta) have delegated this activity to the provincial liquor
control authorities. In Alberta, responsibility for the selection, retailing, warehousing and distribution
of liquor rests with the private sector.  The statute expressly provides that nothing in the IILA forbids
the importation, sending, taking or transportation of intoxicating liquor for sacramental or medicinal
purposes, or for manufacturing or commercial purposes not related to the use of liquor as a beverage.
As well, under the IILA, an exception exists for persons licensed by the Government of Canada under
the Excise Act  to carry on the business or trade of a distiller or brewer where the intoxicating liquor is
imported solely for the purpose of being used for blending with or flavouring the products of the
business or trade of that person.
Description of the functioning of the state trading enterprises
A. Summary statement providing overview of operations of the state trading enterprise.
The provincial liquor control authorities deal with the importation and sale of alcoholic beverages
within their respective jurisdictions. Exportation of alcoholic beverages is a private matter of beveragemanufacturers.
B. Specification of exclusive or special rights or privileges enjoyed by the state trading enterprise.
The IILA provides the provincial liquor control authorities with the delegated authority to import
alcoholic beverages in Canada.
C. Types of entities other than state trading enterprises that are allowed to engage in
importation/exportation and conditions for participation.
Private traders are allowed to import if they are licensed by the Government of Canada under the
Excise Act  to carry on the business or trade of a distiller or brewer where  the intoxicating liquor is
imported for the purpose of being used for blending with or flavouring the products of the business or
trade of that person.  Alcoholic beverages may be sold through stores operated by the provincial
liquor control authority or through provincially authorized private retailers or a combination of both.
The private trade determines its own criteria pertaining to exports.WT/TPR/M/112/Add.1
Page 16
D. How import/export levels are established by the state trading enterprise.
Provincial liquor control authorities purchase or permit the purchase of alcoholic beverages in line
with market needs as related to such commercial considerations as price, quality, availability,
marketability, transportation, and other conditions of purchase or sale.
Question 6
Paragraph 196 states: “Private retail operations are authorized for domestic wine but not for
imported products. A private company also sells domes tic and foreign beer.” Please clarify how these
regulations regarding the sale of domestic wine are in line with the WTO’s national treatment
principle.
Response
The Provincial Liquor Boards (PLBs) in Canada were established before the GATT was created, and
their existence and activity is consistent with the provisions of GATT Article XVII [“State Trading
Enterprises”].  In accordance with that Article, they are notified to the WTO as STEs.  The PLBs
operate as businesses whose decisions are based solely on commercial considerations and market
forces. The alcoholic beverage-producing countries, which are major exporters to Canada. have
accepted the policies of Provincial liquor agencies through various bilateral agreements.  Canada's
commitments under these agreements are implemented on an MFN basis.
Imported products compete with domestic products in the PLB retail stores, and enjoy a large share of
the Canadian market.  By volume, imported spirits accounted for 31.2% of the market in 1999, rising
to 32.4% in 2001; imported wines held 65.4% of the market in 1999, rising to 67.0% in 2001.  Both
the value and market share of wine and spirit imports continue to increase.
Where local content requirements exist, they actually have the effect of limiting the volume of wine
which can be sold in the private retail outlets, due to the limited potential of grape production inCanada.
Intellectual Property Rights
Question 7   (p. 86 paragraph 238-247)
Having the proper framework for the protection of in tellectual property rights is an important factor
in attracting foreign investment. We understand that the Canadian government has established alegislative regime for enhancing intellectual property rights protection. In this connection, we would
appreciate an update on the status of IPR enforcement in Canada.
Response
Right holders in Canada remain eligible to take legal action through the judicial system to protect
their intellectual property rights. Possible remedies include statutory damages, the seizure of goods,and a "wide injunction," which covers a broader range of copyright materials than usual injunctions.
Copyright owners who decide to enforce their intellectual property rights through the courts can take
advantage of summary procedures that are more expedient and less expensive than regular court
actions. Canada also has criminal enforcement m echanisms in relation to criminal trade-marks
counterfeiting and copyright piracy on a commercial scale.WT/TPR/M/112/Add.1
Page 17
Textiles and Clothing
Question 8  (p. 105 paragraph 52 & p. 106 Table IV.3)
It is noted that among the classifications of Customs Import Tariffs used by Canada, the General
Preferential Tariffs (GPT) are lower than Most-Favoured Nation (MFN) tariffs.
For textiles and clothing imports to Canada, products  of Taiwan are subject to the MFN tariff, while
similar products from some other Asian WTO Members at a comparable level of economic
development to Taiwan are subject to GPT. We would therefore appreciate  information from Canada
on the criteria used for granting GPT to its trade partners and on how the GPT system is applied. We
consider that Taiwan’s high-quality and competitively-priced textiles and clothing products could be
of further benefit to Canadian manufacturers and co nsumers if they were classified under its GPT
system.
Response
During the Uruguay Round Canada committed itself to major trade liberalization with respect to
textiles and apparel.  In 1994, the Most Favoured Nation (MFN) tariffs on textiles were between 16 -
22%.  These rates have been progressively reduced and will be between 12-14% on January 1, 2004.
For apparel, the 25% MFN tariff of 1994, will be down to 18% on January 1, 2004.  Furthermore, all
quotas on textiles and apparel are being abolished by January 1, 2005.  Canada’s commitments under
the Uruguay Round continue to provide improved access into the Canadian market for textiles andapparel from Chinese Taipei.
The Canadian textile-manufacturing sector, having transformed itself in the last two decades through
substantial and sustained capital investment, provides quality jobs for thousands of Canadians.  The
Canadian apparel sector is predominated by small firms, with approximately three quarters of firms
having fewer than 50 employees.  Given the relative sensitivity to imports of both the Canadian textileand apparel sectors, Canada extends General Preferential Tariff (GPT) treatment to few textile
products and virtually no apparel products.
As stated on the WTO website: “That a WTO member  announces itself as a developing country does
not automatically mean that it will benefit from the unilateral preference schemes of some of the
developed country members such as the Generalized System of Preferences (GSP). In practice, it isthe preference giving country which decides the list of developing countries that will benefit from the
preferences.”
Canada’s GPT is a bilateral instrument meant to assist access to Canada’s markets by those countries
and territories most in need.  Canada does not seek reciprocity in extending GPT treatment. Canada
unilaterally decides which developing countries will benefit from GPT.  Canada has concluded thatChinese Taipei does not require GPT given its status as a major trading economy and its high GDP
per capita.
Telecommunication and Audio-visual Services
Question 9  (p.114 paragraph 78)
According to the Telecommunications Act of C anada, the combined maximum allowed for foreign
ownership of voting shares in facilities-based telecommunication service providers is 46.7%, i.e. 20%
direct plus 26.7% indirect. Does Canada have any plans to relax this restriction on foreignownership?WT/TPR/M/112/Add.1
Page 18
Response
Canada's Telecommunications Act requires that  telecommunications common carriers be Canadian
controlled and limits direct investment to 20% of the voting shares.  The limit on the voting shares for
holding companies is 33 and 1/3%.  The maximum investment by foreign entities in an operating
company is 46.7% (i.e. 20% of the operating company and 26.7% of the holding company (33 and
1/3% of the remaining 80%)).
The Minister of Industry announced on November 19, 2002 that he is seeking the views of Canadians
on foreign investment restrictions in the telecommunications industry and that he had asked the Chair
of the House of Commons Standing Committee on Industry, Science and Technology to undertake a
review.
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participation
in Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.A report from the Committee to the Government is expected in the spring of 2003.  The Government
will then decide on what action, if any, it might wish to take.
Audio-visual Services
Question 10   (p. 116 paragraph 87- 89)
Paragraph 87 states that “no broadcasting licence may be granted to a non-Canadian” and that
“This restriction concerns all broadcasting companies.” Paragraph 89 indicates that foreign
programming services must be approved for carr iage by the CRTC and “listed” on the List of
Eligible Satellite Services before they can be accessed by Canadian distributors. Please specify the
difference between a “broadcasting company” as used in Paragraph 87 and a “distributor” as used
in Paragraph 89.
Response
Paragraph 89 should have used the term, "broadcasting distributor", or more accurately, broadcasting
distribution undertakings. The foreign investment re strictions described in Para 87 apply to all
broadcasting undertakings, including broadcasting distribution undertakings such as a cable system or
DTH service. The Lists of Eligible Satellite Services referred to in paragraph 89 apply only tobroadcasting distribution undertakings. (The other broadcasting undertakings –  radio, TV, specialty
services, pay-TV, and pay-per-view services –  are not distributors.)
Question 11
Paragraph 90 states that the CRTC “is not disposed to remove a non-Canadian service from the List
of Eligible Satellite Services”. However, in order to protect the vested interests of investors, pleasespecify the conditions required for a service to be  removed from the list. Furthermore, Paragraph 85
states that “in order to foster Canadian cultur al content and diversity, Canada maintains a number of
regulations that affect foreign participation in the audio-visual sector”. How do these regulations
relate to the removal of a non-Canadian service from the List of Eligible Satellite Services?
Response
Paragraph 85 seems to refer in a general sense to the entire basket of tools, regulations and regulatory
policies that are designed to ensure the Canadian broadcasting system achieves the cultural and socialobjectives of the Broadcasting Act. The Lists of Eligible Satellite Services, collectively, constitute oneWT/TPR/M/112/Add.1
Page 19
of these tools. There are no regulations specifically that deal with the removal of services from the
Lists.
The CRTC has not specifically ruled on this matter. It has provided some clarity in the "Public Notice
CRTC 1997-96 Revised Lists of Eligible Satellite Services", Paragraph 30. "The Commission wishes
to reaffirm the continuing elements of its policy regarding the inclusion of competitive non-Canadian
services on the lists. Specifically,
a) it will not authorize non-Canadian services that can be considered either totally or partially
competitive with existing Canadian pay or specialty services; and
b) it will consider the removal of existing non-Canadian services from the lists if they undergo a
change in format so as to become competitive with a Canadian pay or specialty service.
Insurance Services
Question 12  (p. 130 paragraph 155)
It is stated in Paragraph 155: “In an attempt to achieve uniformity among provincial regulatory
regimes in the life and health insurance sector, the provinces have worked through the Canadian
Council of Insurance Regulators to establish the Uniform Life Insurance Act, which is a model law
governing insurance contracts and beneficiary rights”. All provinces excluding Quebec have adopted
the Uniform Act.
In addition to the life and health insurance sectors,  please clarify whether it is the intention of the
Canadian authorities to apply the practice to all other insurance sectors (e.g. P&C insurance,
reinsurance, agents, brokers) among the various provincial regulatory regimes in order to achieve
overall uniformity. We are particularly interested in knowing about such aspects as incorporation
requirements and shareholding limits.
Response
Foreign insurance firms seeking to establish a subsidiary in Canada can do so federally or
provincially, and most do so federally.  Under the federal regime, foreign firms enjoy national
treatment under uniform incorporation and owners hip rules.  With respect to incorporation
requirements and shareholding limits for provinci ally incorporated insurance firms, rules and
regulations do vary somewhat  between provinces given that provinces have constitutional authority to
incorporate insurance companies and exercise that authority according to the legislative and policy
circumstances of a particular province.  However, many provincial incorporation and prudential
regulation rules for insurance firms are substantially  similar to the federal Insurance Companies Act.
In practice, the substantial differences in principles relating to incorporation and regulation of
property and casualty insurers are limited, other than in the area of automobile insurance where there
are wide variations due to different economic and political preferences.  For example, in some
provinces, automobile insurance is delivered through government agencies while in other provinces it
is underwritten and marketed by private sector insurers and insurance agents.
Similar to the efforts undertaken in the life and health insurance sectors, a project has also been
initiated through a committee of provincial regulators  working with industry to identify streamlining
and harmonization efforts as they pertain to the property and casualty insurance industry (agent and
adjuster licensing).  In addition, a number of provinces are currently, or will soon be, conductingreviews of their financial services regulatory regimes with a view to further rationalization of polices.WT/TPR/M/112/Add.1
Page 20
BRAZIL
Trade and Investment Policy Framework
Question 1
As stated in page 13 of the Secretariat Report (Chapter II; (2); § 7), "In order to mitigate the effect of
these policy differences on internal trade, the Agreement on Internal Trade (AIT), which came into
effect in 1995, aims to 'reduce and eliminate, to th e extent possible, barriers to the free movement of
persons, goods, services and investment within Canada, and to establish an open, efficient and stable
domestic market' ". Is there any province that has not joined the AIT? Is there any international
provision that has not been implemented by a province?
Response
Except for Nunavut, all provinces and territories are signatories to the Agreement on Internal Trade.
Nunavut, which was created after the Agreement was signed, is considering becoming a party to the
Agreement.
Question 2
"The purpose of the Act (Investment Canada Act - ICA)  is to encourage investment that contributes to
economic growth and employment, and to provide for the review of significant investments by non-
Canadians to ensure such benefits.  Investments are judged by criteria such as their impact on
competition, productivity, compatibility with national and provincial policies, and the participation ofCanadians."(Chapter II; (3); § 14). According to this  point of view, should the review be considered
as being a kind of screening and/or performance requirement?
Response
The purpose of the Investment Canada Act is to encour age investment in Canada so as to contribute to
economic growth.  Under the Act, significant investments, such as foreign acquisitions of Canadiancompanies worth over $223 million, are subject to review  in order to ensure 'net benefit' to Canadians.
During the review process, the likely impact of the investment is assessed (e.g., the effect of the
investment on economic activity, productivity, competition, etc.).  In practice, most transactions
reviewed under the Investment Canada Act proceed.  The review process is relatively quick and the
Investment Canada Act sets out strict time limits within which the reviewing authority must respond.This is to ensure that the legislation does not unduly delay any investment in Canada.  Further
information on the Investment Canada Act is available at http://investcan.ic.gc.ca/ .
Measures directly affecting imports
Question 3
What is understood by "supply managed agricultural products"? Which "supply managed agricultural
products" does Canada closely restrict? In which ways does Canada limit imports of certain "supply
managed agricultural products" (WT/TPR/S/112, para. 25, p. 98)?
Response
Supply-managed products include dairy, poultry, a nd egg products.  Dairy products include products
such as butter, cheese, fluid milk, yogurt, and ice cream; poultry includes chicken and chicken
products, turkey and turkey products; egg products include fresh eggs and egg products, broiler
hatching eggs, and chicks.WT/TPR/M/112/Add.1
Page 21
Under supply management, producers control –  through their provincial marketing boards and
national marketing agencies –  the amount of product (supply) produced in Canada.  Once the national
agency determines demand requirements, it issues an allotment (production quota) to each provincial
marketing board.  The provincial marketing boards then divide their quota among individual
producers.
Imports of supply-managed products are managed through tariff quotas (TRQs) in accordance with
the commitments in Canada’s Schedule V.
Question 4
According to paragraph 25 of the Secretariat Report, page 32, 4.2% of the MFN tariff lines are "non-
ad valorem" tariffs. Is there any intention of the Canadian government to alter this situation? What is
the Canadian position in relation to what the discussions in the WTO about the transformation of
specific tariffs in "ad valorem" tariffs?
Response
Canada does not envisage modifying its customs tariff with respect to how agriculture and agri-food
tariffs are expressed (e.g., in ad valorem or non-ad valorem terms). In the WTO negotiations on
agriculture, Canada believes the focus should be on securing improvements in market access
reductions in tariffs, rather than focusing on changing how a tariff is expressed.
Question 5
What kind of measures may be taken as a consequence of observations made by the steel import-
monitoring programme (item 73 of WT/TPR/S/112, p. 113)?
Response
The import-monitoring program for steel was established to provide an early indication of general
import trends in specific product categories as well as an early warning system regarding possiblydumped and/or subsidized imports that may be injuring Canadian industry. However, it should be
emphasized that potential petitioners for trade remedy investigations must provide evidence of
dumped and/or subsidized imports, as well as evidence of injury to domestic industry. Regarding
imports, actual as opposed import permit data, which reflects intentions to import as opposed to actual
imports, is used as evidence in considering whether to initiate an investigation.
Question 6
What are the terms of the 2001 Framework for Conducting Environmental Assessments of Trade
Negotiations (item 106 of WT/TPR/S/S112)?
Response
We are responding on the assumption that in asking about the "terms" of the Framework, the member
is referring to the scope of Canada's assessment.
Assessments carried out under Canada's Framework are domestic in scope.  They are intended to
inform Canadian negotiators of the likely and significant environmental effects of trade negotiations
in Canada.  Assessments are also intended to address public concerns by documenting how
environmental considerations are being taken into account in the course of trade negotiations.WT/TPR/M/112/Add.1
Page 22
The environmental assessments are being conducted in an open and transparent fashion. Canada
recently presented its Initial Environmental Assessment of the WTO negotiations at the WTO
Committee on Trade and Environment.  The document is available on-line at: http://www.dfait-
maeci.gc.ca/tna-nac/consult1-en.asp#wto.
Measures directly affecting exports
Question 7
What are the advantages in establishing a Government-to-Government basis commercial sale through
the Canadian Commercial Corporation (CCC), as  stated in item 143 of WT/TRP/S/S112? How does
the CCC help Canadian exporters win sales in private-sector markets?
Response
For many governments around the world, buying on a government-to-government basis is the
preferred approach to sourcing internationally as the risk of non-performance is perceived to be lower
than dealing directly with an unknown foreign supplier.  When the Canadian Commercial Corporation(CCC) is the prime contractor in an export sale, it acts as an agent of the Government of Canada and
provides the assurance to the buyer that the Government of Canada stands behind the contract’s
completion.
Canadian exporters selling in private-sector markets can use the Corporation’s contracting expertise to
negotiate better terms and conditions.  CCC’s backing of an export sale increases the credibility of theCanadian exporter, which in turn, decreases the buyer’s perceived risk for the transaction.
All CCC’s services are offered on a fee for service basis, with the exception of any sales to the United
States Department of Defense and NASA by vi rtue of the 1956 US-Canada Defense Production
Sharing Agreement and the 1960 Letter of Agreement with NASA.
Trade policies in selected sectors
Horticultural Import Restrictions
Question 8
Canada continues to restrict international trade of bulk produce. Although importers may request
waivers, Canadian federal and provincial authorities may deny such requests. On what grounds can a
waiver be denied?
Response
The Fresh Fruit and Vegetable Regulations, under the Canada Agricultural Products Act, are designed
to ensure that all fresh fruits and vegetables entering into Canada or domestic supplies comply with
Federal health and safety, quality, packaging and labeling regulations.
Processors or packers are free to source their supplies from the area or supplier of their own choice,
including imports, provided those supplies comply with all the requirements of the Act and the
Regulations.
In circumstances when adequate quality and quantity of compliant products are not available,
processors or packers may apply to the Minister  for an exemption to obtain non-complying products
from another province or another country.  Health and safety requirements will not be waived under
any circumstance.WT/TPR/M/112/Add.1
Page 23
The Minister or a delegate of the Minister, when there is a shortage in Canada of a type of product,
may exempt such products from the minimum quality (i.e., grade), labeling or packaging requirements
in order to provide packers and processors with the supplies necessary to meet their needs.
The CFIA decides whether a shortage exists based on evidence submitted by the applicant. A waiver
is denied only if a true shortage does not exist. If  product is available in sufficient quantity with the
appropriate characteristics, the ministerial exemption process is not triggered.
In order to ensure consistency and transparency in the application of Ministerial Exemptions, detailed
guidelines for such requests are available on CFIA's website:
http://www.inspection.gc.ca/english/plaveg/fresh/meguide.shtml
Question 9
Canadian regulations on fresh fruit and vegetable im ports prohibit consignment sales of fresh fruit
and vegetables in the absence of a pre-arranged buyer. Can it not be argued that such regulations
constitute a limitation to foreign trade (WT/TPR/S/112, p.50, para. 85)?
Response
The Canadian Licensing and Arbitration Regulations prohibit consignment selling of both domestic
and imported fresh fruits and vegetables. Sales between buyers and sellers are permitted as long as
there is a contracted price. Moreover, there is no restriction on changing prices after the contract has
been signed. These provisions apply to all federally regulated shipments, whether domestic orimported.
Wines and spirits
Question 10
In what sense are the conditions for local wine less restrictive than those for foreign products (item 12
of the Report by the Secretariat)?
Response
Wineries in the Provinces of Ontario, British Columbia, and Nova Scotia are permitted to sell their
wines directly to consumers at the winery where they are made and through a limited number of off
site locations within the province.
Services
Question 11
In modes 1 and 2, Ontario applies tax measures that result in differences of treatment with respect to
payments for management services made to affiliat ed non-residents and the requirement to appoint an
Ontario agent for the service of legal documents. Please, clarify this regime.
Response
The limitations of concern relate to two separate measures.
The first limitation, "Tax measures resulting in diff erences of treatment with respect to payments for
management services made to affiliated non-residents", effectively imposes a 5% tax on management
fees paid by an Ontario corporation to a non-arm's length non-resident person. This is accomplished
by disallowing a portion of the management fee as a deduction in arriving at the Ontario corporation'sWT/TPR/M/112/Add.1
Page 24
Ontario taxable income.  This makes the payment to the non-arm's length non-resident person more
expensive for the Ontario corporation, than if the fee had been paid to any one else (e.g., an arm's
length non-resident). A non-arm's length person is a person that is related to the Ontario corporation
(e.g., a foreign company that owns an Ontario company is dealing at non-arms length).
The second limitation, "Foreign corporations carrying on business in Ontario must appoint an Ontario
agent for service of legal documents", requires that corporations incorporated under the laws of ajurisdiction outside of Canada must always have (a) an Ontario resident 18 years of age or older
appointed to act as its agent for service of process, notices or other proceedings, or (b) have a head
office or registered office in Ontario appointed to perform these functions (it is common for the
Ontario agent to be the General Manager of an Ontario branch firm, an Ontario law firm, or an
Ontario accountancy firm).
Question 12
In the mode 3 horizontal commitments:
Part A:  There is an "unbound" for subsidies related to research and development. Please, clarify the
scope and applicability of the regime.
Response
The scope of Canada's mode 3 NT reservation "unbound for subsidies related to research and
development" is horizontal in nature and therefore applies across all sectors.
Part B.  The control acquisition of a Canadian business or establishment of a new business related to
Canada's cultural heritage or national identity by a non-Canadian is subject to approval. Please,
specify the criteria for approval.
Response
The acquisition of a Canadian business or establishment of a new Canadian business related to
Canada's cultural heritage or national identity (as referred to in subsection 15(a) of the Investment
Canada Act (the Act)) by a non-Canadian is subject to notification under the Act. The Act has
established rules that allow the Minister to review all investments by non-Canadians in the cultural
sector. A review will be undertaken once an Order-in-Council directing a review is issued.
Section 20 of the Act sets out specific provisions to guide the Minister in her decision as to whether a
given investment is of net benefit to Canada, namely the effect of the investment on: the level and
nature of economic activity in Canada; the degree and significance of participation by Canadians in
the Canadian business; productivity, industrial efficiency, production innovation, etc.; domestic
competition; compatibility of the investment with national industrial, economic and cultural policies;
and, Canada's ability to compete in world markets.
In addition to and consistent with the provisions se t out in the Act itself, the Department of Canadian
Heritage, in its review of applications, takes into account foreign investment guidelines for the book,
periodical, magazine, film, and video sectors.
Part C:  Measures related to the supply of services required to be offered to the public may result in
differential treatment in terms of benefits or pric e. Please, clarify the scope and applicability of the
regime.WT/TPR/M/112/Add.1
Page 25
Response
Under Mode 3, if a person wants to access the services listed in this reservation (e.g., social security)
they may not be granted national treatment.
Part D:  Priority is given by the Alberta Opportunity Fund to service suppliers owned and operated
by Canadian citizens in Alberta. Please, clarify the scope of the Alberta Opportunity Fund.
Response
Alberta Opportunity Company (AOC) was establis hed in 1972 (with a maximum fund size of $300
million) with the object of promoting the development of resources and the general growth and
diversification of the economy of Alberta.  AOC was designed to provide financing for viable Alberta
small businesses, which are unable to find the financing they need through conventional financial
institutions.  The AOC was designed to address the gap in the financial marketplace that exists for
new and expanding entrepreneurial ventures. Often, banks and other conventional lenders are
reluctant to take that extra measure of risk imp licit in making loans to small business in smaller
centres.  As of April 1, 2002, the Alberta Opportunity Company was subsumed into the Alberta
Agricultural Financial Services Corporation.
Question 13
There are indirect tax measures related to retailing services that result in different treatment with
respect to delivery by mail of goods in Canada. Please, clarify such restriction.
Response
This reservation, taken on national treatment under mode 1, refers to a customs user fee of $5.00
(handling charges) which is permitted under GATT Article VIII.  The fee charged, as well as any
increments, is limited in amount to the approximate cost of the services rendered and, according to
Canadian Customs Act, must not represent indirect protection of domestic production or taxation ofimports for fiscal purposes.
This user fee applies only to postal services; courier services are not obliged to collect the $5.00 fee
and may charge different fees.
Question 14
Please, indicate the legislation regarding Economic  Needs Tests applied to the following services:
Commercial courier services (CPC 75121) for Nova Scotia and Manitoba (mode 3);
Retail sales of motor fuel/retailing of petroleum (CPC 613) for Prince Edward Island (mode 3);
Banking and other financial services for Ontario, New Brunswick and Nova Scotia (mode 3);
Road transport Passenger transportation on taxis and rental services with drivers (mode 3);
Road transport Passenger transportation on interurban bus transport and scheduled services forBritish Columbia, Alberta, Prince Edward Island, Saskatchewan, Manitoba, Ontario, Quebec, Nova
Scotia, Newfoundland and Northwest Territories (mode 3);
Highway freight transportation (CPC 71231, 71232, 71233, 71234) for British Columbia, Prince
Edward Island, Saskatchewan, Manitoba, Ontari o, Quebec, Nova Scotia, Newfoundland (mode 3);
Response
The ENTs listed above are provincial measures. We will consult the provinces and provide the
information as soon as possible.WT/TPR/M/112/Add.1
Page 26
Question 15
Canada scheduled commitments across a range of services under the GATS. However, there are no
commitments for the following:
postal services;
courier services for goods;
audio-visual services;tourist guides services;
commission agents' services for sales on a fee or contract basis of food products, beverages and
tobacco; and sales on a fee or contract basis of pharmaceutical and medical goods;
wholesale trade services of agriculture and live animals; fisheries products; alcoholic beverages;
musical scores, audio and video recordings; books, magazines, newspapers, journals, periodicals and
other printed matter; pharmaceutical and medica l goods; and surgical and orthopaedic instruments
and devices;food retailing services of liquor, wine and beer;
non-food retailing services of music scores, au dio and video records and tapes; books, magazines,
newspapers and periodicals; pharmaceutical, medical and orthopaedic goods; and printed music.
Are there restrictions of Market Access, National Treatment and domestic regulation that limit the
provision of those services?
Response
Canada has no commitments for the above sectors and areas.  Canada intends to submit its GATS
initial offer of market access commitments with other WTO trading partners on March 31, 2003.
Rules
Question 16
Relating to paragraph 59 p. 41 of the Report, could Canada elaborate on the "quasi-judicial" nature
of the CITT?
Response
The Tribunal is an administrative tribunal operating within Canada's trade remedies system. It is an
independent and quasi-judicial body that carries out its statutory responsibilities in an autonomous and
impartial manner. Its decision-making Members are appointed for fixed terms by the Governor inCouncil and are independent of government oversight or interference.
In carrying out its responsibilities, the Tribunal conducts hearings that are open to the public. The
Tribunal has rules and procedures that are similar to those of a court of law, but not quite as formal or
strict. The CITT Act gives the Tribunal the power to subpoena witnesses and require parties to submit
information. The CITT Act also contains comprehensive provisions for the protection of confidentialinformation.
Decisions of the CITT may be reviewed, in certain circumstances, by the Federal Court of Canada or,
in the case of decisions affecting a NAFTA partner, by a binational panel.
Question 17
Considering the information presented in Table III.4, which indicates that the United States are
contemplated with the largest quota for stee l, could Canada explain the reasons for theWT/TPR/M/112/Add.1
Page 27
recommendation to adopt a safeguard referred to in Article XIX of the GATT-94, instead of a NAFTA
safeguard mechanism?
Response
The NAFTA safeguard mechanism which allowed a "snap back" of duties is no longer operational
since regular duties are now zero.
Question 18
Relating to paragraph 68, could the Canadian authorities elaborate more about the "prospective
system" in which exporters are informed of the normal value for the products that they export to
Canada? Could Canada explain in which way this mech anism is in conformity with Art. 9.3, which
establishes that anti-dumping duties shall not exceed the dumping as established under Article 2?
Response
Article 9 of the Anti-dumping Agreement does not indicate a preference between the prospective or
the retrospective methods of duty assessment nor does it provide detailed rules respecting how thesemethods of duty assessment are to be applied.  Accordingly, the choice and implementation of a duty
assessment system is left to individual Members.
A Prospective  approach establishes  normal values in advance of importation of subject goods thereby
allowing the determination of the amount of duty liability at the time of importation. Generally,
known exporters of subject goods are advised of the normal values applicable to their goods inadvance of importation. When goods are imported, the Canada Customs and Revenue Agency
(CCRA) determines whether or not the goods are, in fact, subject to an injury finding.  If the subject
goods are priced at or above the applicable prospective  normal value at the time of importation, no
anti-dumping duties are levied.  However, if the export price is below the normal value, anti-dumping
duties equal to the difference between the normal value and the export price must be paid.
The normal values established may be specific to individual products or general in nature.  General
normal values may be, for example, the declared selling price plus a specified amount.
The “margin of dumping” under Article 9.3 is the price difference set out in Article 2.1.  Such a margin
by definition varies in accordance with the pricing strategy of an exporter found to have engaged in
dumping.  An export price that equals or exceeds the normal value does not attract an antidumping duty.At the same time, an export price below the normal value will attract an amount equal to the difference
between the normal value and export price of those goods (that is, the actual margin of dumping).
Administrative reviews conducted by the CCRA, normally on an annual basis, provide updated
normal values and export prices.  Exporters may also request administrative reviews because of
changes in market conditions which impact on norma l values or for purposes of establishing normal
values for new products.  The updated values, which are made known to exporters at the conclusion of
the review, are then applied to subsequent importations.
In accordance with sub-paragraph 9.3.2 of the Anti-dumping Agreement, the redetermination
provisions in the Special Import Measures Act (SIMA) allow importers to request a review of the
normal value or the export price, or to determine whether the goods are in fact subject goods.  This
provides a mechanism to refund any anti-dumping duties that may have been imposed in excess of the
margin of dumping.WT/TPR/M/112/Add.1
Page 28
Question 19
Paragraph 74 indicated that, on average, in cases where final duties were applied, provisional duties
have been historically as high or higher than final duties. Could the Canadian authorities explain
how these duties are refunded?
Response
Where the CITT makes a finding of injury, the goods covered by the finding are subject to review for
anti-dumping or countervailing duty purposes. For those goods that were released during the
provisional period, the CCRA makes a final assessment of the anti-dumping or countervailing duty
payable. In accordance with section 55 of the SIMA, the CCRA's determination must be made within
six months of the date of the Tribunal's finding.
Where the normal value, the export price, or the amount of subsidy established at the final
determination is not considered a reasonable basis for the assessment of duty for goods imported
during the provisional period because of significant changes in the exporter's costs and/or marketconditions, a re-investigation will be initiated. The purpose of the re-investigation is to establish new
values, or amounts of subsidy based on the changed costs and/or conditions. These new values will be
used to make the assessments of anti-dumping or countervailing duty for goods imported during the
provisional period. While the section 55 decision will not result in an assessment of duty greater than
the amount of provisional duty paid or payable, it may result in a reduced assessment. In this case,refunds are issued promptly.
Question 20
Canada Customs and Revenue Agency (CCRA) initiated a reinvestigation of normal values and
exports prices on January 27, 2003 in respect to certain corrosion-resistant steel sheet products
originating in or exported from Brazil and other countries. What is the difference between theprocedures of a "reinvestigation" and that of a "review"?
Response
The terms "reinvestigation" and "review" when used in the context of normal values and export
prices, are interchangeable terms used to describe the process for updating or revising these values
and prices.  In other anti-dumping systems this process may be called "an administrative review".This process is distinct from the expiry review process.
Under the Canadian system two issues are considered in the expiry review process:  Firstly, the
Canada Customs and Revenue Agency (CCRA) will consider whether there is a likelihood of
continued or resumed of dumping.  Where the CCRA  finds that there is a likelihood of continued or
resumed dumping, the Canadian International Trade Tribunal (Tribunal) will then conduct an inquiryto determine if the continued or resumed dumping is likely to result in material injury or retardation.
If the Commissioner determines that the expiry of the findings in respect of any goods is unlikely to
result in the continuation or resumption of dumping, the Tribunal will not consider those goods in its
subsequent determination of the likelihood of material injury or retardation and will issue an order
rescinding the finding(s) with respect to those goods.
Competition Policy
Question 21
Document WT/TPR/S/112, page 65, paragraph 149, reads: "with respect to enforcement, in non-
criminal matters the Commissioner may file an application with the Competition Tribunal, aWT/TPR/M/112/Add.1
Page 29
specialized quasi-judicial body, that hears and decides all applications made under relevant parts of
the Competition Act." According to Canada TPR, this Competition Tribunal has the authority to
award costs regarding matters subject to review, to make summary provisions when it finds no merit
to the case or no genuine defense, and to hear references (questions involving a specific aspect of a
case or interpretation of the law). The same document, referring to Canada Competition Law - The
Competition Act  (Amended in 2002) - continues: "the 2002 Act also allows private parties to applydirectly to the Competition Tribunal to address matters regarding refusal to deal, tied selling,
exclusive dealing, and market restrictions." How does the Competition Bureau, which reports to the
Government, deal with these private actions? Which are the policies, systems and conditions, if there
are any, undertaken by the Bureau in order to keep close attention to such private demands and
preserve its responsibilities of impartial market monitoring and investigation?
Response
The 2002 amendments to the Competition Act introduced provisions allowing private parties to apply
directly to the Competition Tribunal if they are directly and substantially affected by the conduct of
another party. Private access to the Competition Tribunal is only available for conduct reviewable
under sections 75 (refusal to deal) and 77 (exclusive dealing, tied selling, and market restriction) of
the Competition Act .
The Competition Bureau is currently developing an internal document, which discusses the
Competition Bureau’s procedure following the filing of an application for leave to file a private action
with the Competition Tribunal.
Under the Competition Act, the Commissioner of Competition has three opportunities to provide his
input during private action procedures.
First, the Commissioner must certify if the matter for which leave is sought is the subject of an inquiry
under the Act or that an inquiry has been discontinued due to a settlement.
Second, the Commissioner may make written representation to the Tribunal at the Application for
leave.
Lastly, the Commissioner may intervene in any private proceeding once an Application has been filed
following leave being granted.
To this date, only one Application for Leave has been filed ( The National Capital News Canada v.
The Honourable Peter Milliken, M.P. 2002 Comp. Trib. 41 ). The Tribunal did not grant leave. This
decision is currently under appeal.
The private access provisions of the Competition Act  exist to complement the enforcement activities
of the Competition Bureau and will not affect the Competition Bureau’s role as the agencyresponsible for the application of the Competition Act .
Question 22
How does the Canadian legislation deal with export cartels?
Response
In order to encourage and foster the benefits of international trade, section 45(5) of the Competition
Act exempts export cartels from the domestic competition regime so long as the agreement does not
trigger the following effects specified under section 45(6):WT/TPR/M/112/Add.1
Page 30
it had resulted in or is likely to result in a reduction or limitation of the real value of exports of a
product;
it has restricted or is likely to restrict any person from entering into or expanding the business for
exporting products from Canada; or
it has prevented or lessened or is likely to prevent or lessen competition unduly in the supply of
services facilitating the export of products from Canada.
Question 23
Canada considers that, since the rise in world trade and investment flows has also increased the
possibility for concurrent jurisdiction of two or more competition authorities over the same
international economic activity, it is necessary for competition authorities to co-operate
internationally. Are there sectoral exemptions in the Canadian competition policy legislation?
Response
As a general rule, the Competition Act  applies to all competitive business activity in Canada, with a
few exemptions as follows:
(a) Specific Exceptions
There are a number of exceptions contained in the Competition Act .  These include section 4 of the
Competition Act , which exempts certain conduct of collective bargaining units and fishermen; section
5(1) which exempts certain conduct as between travel agents and certain domestic air carriers; section
5(1) which exempts underwriters;  and section 6(1) which exempts amateur sport.  Also, the
conspiracy provision exempts export cartels in subsection 45(5).
There is also other legislation, which contain exemptions from the application of some or all the
provisions in the Competition Act .  For example, section 70 of the Copyright Act  provides that section
45 of the Competition Act  does not apply to certain agreements on royalties or related terms if the
agreement is filed in accordance with the Copyright Act .  Section 33 of the Energy Supplies
Emergency Act  provides that the Energy Board, after consulting with the Minister of Industry may, by
order, exempt persons from the application of the Competition Act  in respect of an agreement deemed
necessary during periods of national emergency caused by shortages or market disturbances.  Section
32 of the Farm Products Agencies Act  provides that nothing in the Competition Act  applies to any
contract, agreement or arrangement where the regulatory agency has authority over the personsinvolved under the Farm Products Agencies Act  or any other Act.  The Artists Act  excludes certain
associations from application of the Competition Act.   T h e  Shipping Conferences Exemption Act
exempts certain agreements involving ocean shipping from the application of the Competition Act .
Another exemption relates to specialization agreements. Under section 86 of the Act, specialization
agreements can be registered by private parties with the Tribunal provided they meet certain criteria.In the event that a specialization agreement is registered, section 90 of the Act provides that section 45
does not apply to specialization agreements nor does section 77 as it applies to exclusive dealing.
(b) Overriding the Application of the Competition Act
Under certain sector-specific statutes it is possible to override the application of certain provisions of
the Competition Act  provided particular conditions are met.  Two major examples are in the areas of
transportation and bank mergers.
There are several specific provisions within the Canada Transportation Act (“CTA”) that deal with
the interaction between the Competition Act  and the CTA.  The effect of these sections is to allow for
the application of the Competition Act  to the transportation sector except in certain specificWT/TPR/M/112/Add.1
Page 31
emergency situations.  Thus, section 4(2) of the CTA provides that "Nothing in or done under the
authority of this Act affects the operation of the Competition Act ."  Yet, section 47 provides that the
Governor in Council may take any action considered "essential to stabilise the national transportation
system" and that “notwithstanding subsection 4(2), this section and anything done under the authority
of this section prevail over the Competition Act ”.  While specific mention is made in the section to
arrangements to address capacity and pricing issues, the wording of the section allows for broaderapplication than in just those areas.  In effect, the provision is broad enough to allow for the
suspension of the Competition Act  for a period of 90 days.
With regard to merger reviews, under section 94 of the Competition Act , the Competition Tribunal
shall not make an order under section 92 in respect of a merger or proposed merger under the Bank
Act, the Trust and Loan Companies Act  or the Insurance Companies Act  in respect of which the
Minister of Finance has certified to the Commissioner the names of the parties thereto and that the
merger is in the best interest of the financial syst em in Canada.  In such an instance, the parties are
also exempt from filing pre-merger notification information under Part IX of the Competition Act .
The Tribunal is also precluded from issuing an order under section 92 in respect of a merger or
proposed merger approved under subsection 56.2(6) of the Canada Transportation Act and in respect
of which the Minister of Transport has certified to the Commissioner the names of the parties.
(c) The Regulated Conduct DoctrineThe RCD describes certain situations where the Competition Act  becomes inoperative due to
operational conflict with a statutory regulatory regime.  In the instances of operational conflict
between the Competition Act  and the regulatory regime, where to obey one piece of legislation
requires one to disobey another, the conduct in question is governed by the regulatory regime rather
than the Competition Act .  That is, the conflict must be such that obedience to one law means
contravention of another.  The RCD is a matter of limited application and only comes about when
conflict between the  Competition Act  and the regime cannot be avoided.  In general such situations are
rare and in most cases the Competition Act  and the regulatory regime will be able to simultaneously
co-exist.
Government Procurement
Question 24
As far as government procurement is concerned, what  are the main differences between the conditions
offered by Canadian provinces to suppliers from Canada and those offered to suppliers outside
Canada (item 14 of the Report by the Secretariat)?
Response
The Ontario government does not direct ministries and agencies covered under its directives to offer
preferences based on origin of supplier.  One exception is with regards to steel products, to mirror
preferences found in the US.
Regarding the procurement of goods, the Alberta Government's Central Procurement Agency
maintains no differential treatment policy with respec t to the suppliers of goods from inside or outside
of Canada. The procurement of services is carried out in a decentralized environment whereby the
Central Procurement Agency encourages the same open, fair and competitive process with respect to
Alberta Government service contracts. Notwithsta nding, that under the Agreement on Internal Trade,
provinces are not obliged to treat foreign suppliers on an equivalent basis to those that are based in
Canada.WT/TPR/M/112/Add.1
Page 32
Question 25
Do customs duties or charges apply to government procurement of goods? If affirmative, are they
actually levied or just considered for the evaluation of foreign tenders?
Response
The Federal Government process regarding customs duties as they apply to government procurement
of goods can be found in Standard Clause A0221T at the following web-site:http://sacc.pwgsc.gc.ca/sacc/index-e.jsp
Question 26
Do Canadian governmental entities accept foreign documentation in the process of qualifying
suppliers in a tendering procedure? On what basis?
Response
Canada fully complies with its international obligations.  Federal government entities determine on a
case-by-case basis what documentation will be accepted as evidence of compliance. Acceptabledocumentation is clearly stated in the bid documents.
Question 27
Is there a national electronic system that allows suppliers to access all legislation concerning federal
and sub-federal procurement? If affirm ative, please indicate the site.
Response
Information on federal government procurement legislation can be found at
http://canada.justice.gc.ca/ and information on the federal government’s procurement policy,
procedures, notices and circulars is available at: http://www.tbs-sct.gc.ca/cmp/home-accueil.
asp?Language=EN
Question 28
Which are the offsets allowed in the Canadian bidding process?
Response
Canada fully complies with its international obligations, and thereby does not apply offsets for
procurement covered by the GPA.
Question 29
Does Canada use the Build-Operate-Transfer (BOT) as a purchasing method? Is the Build-Operate-
Transfer (BOT) included in the coverage of commercial agreements?
Response
The federal government may use any procurement method that complies with the Treasury Board
Contracting Policy:http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/Contracting/contractingpol_2_e.asp#10-7WT/TPR/M/112/Add.1
Page 33
Question 30
What are the criteria used to characterize small and minority businesses?"
Response
The federal government has no set definition of small business.  For procurement, Canada maintains a
carefully circumscribed set-aside program for Aborig inal Business.  The definition of an Aboriginal
Business for purposes of this set-aside is:
An Aboriginal business is an enterprise that is:
a) a sole proprietorship, limited company, cooperative, partnership, or not for profit organization
in which Aboriginal persons have majority owners hip and control meaning at least 51 percent, and
in which, in the case of a business enterprise with six or more fulltime employees, at least 33 percentof the fulltime employees are Aboriginal persons, or
b) a joint venture or consortium in which an Aboriginal business or Aboriginal businesses as defined
in (a) have at least 51 percent ownership and control, and
c) which certifies in bid documentation that it meets the above eligibility criteria, agrees to comply
with required Aboriginal content in the performan ce of the contract, and agrees to furnish required
proof and comply with eligibility auditing provisions.
JAPAN
Trade and investment policy framework
Foreign investment regime
Investment
Question 1
Since the definition of foreign direct investment (FDI) is different from country to country, Japan
would like to know how FDI is defined in Canada.
Response
For data collection purposes, foreign direct investment is generally identified by ownership of at least
ten per cent of the equity in an enterprise, and covers claims intended to remain outstanding for more
than one year.  Enterprises in which there is foreign direct investment are classified as directinvestment enterprises, and can be incorporated or unincorporated entities.  The foreign direct
investment flows include reinvested earnings of direct investors.  Short-term transactions by foreign
direct investors are also included in these series.
For more details, the Statistics Canada publication entitled. “Canada's International Investment
Position” (Catalogue number 67-202) should be consulted and is found at http://www.statcan.ca.
Question 2
According to Japan’s understanding, there exits a limitation on the board members of Canadian
companies (i.e., 25% and even more of the board members shall be Canadians).  Considering the
globalization of the economy, Japan is of the view that this limitation should be lifted.  In this respectWT/TPR/M/112/Add.1
Page 34
we have heard that this limitation has been relaxed through amendment of the Canadian Business
Corporation Act.  Does Canada have any intention to further relax this limitation?
Response
In 2001, following a complete review of the Canada Business Corporations Act, the Act was
amended.  This was the first major revision of the Act since it came into force in 1975.   As a result of
this review, the residency requirement for boards of directors was relaxed.   Under the new CBCAlegislation, the Canadian residency requirement was reduced to 25% except for certain sectors (e.g.,
uranium mining, book publishing, and film and video distribution) and for certain corporations (e.g.,
Air Canada, Petro-Canada) where there were statutory ownership restrictions –  in these cases the
simple majority requirement continued to exist.  It is, however, estimated that at least 99% of all
CBCA corporations are covered by the new 25% requirement.
This liberalization was intended to provide more flex ibility to corporations, enabling them to put the
best qualified people on their boards, allowing Canadian export-oriented corporations to more easilydevelop foreign markets by adding foreign directors, and removing the incentive for corporations to
incorporate in one of the 6 Canadian provinces that do not impose residency requirements for boards
of directors.  At the same time, by maintaining the requirement that 25% of the board be resident in
Canada, it was still possible to ensure that a Canadian viewpoint was maintained even for boards
where the corporations were controlled by non-residents.  At this time, Canada has no plan to furtherliberalize this requirement.
Question 3
Japan would like to have Canada’s view on the ne cessity of an examination by the Canadian
Government in the case of Canadian companies be ing acquired by non-Canadian nationals.  Indeed,
if we are to take the example of 2001, out of the 649 cases notified in accordance with the CanadianInvestment Act, only 44 cases were examined and none of those were rejected.  Thus, Japan finds little
necessity to carry out such examination mechanism on a horizontal basis.  Please comment.
Response
The purpose of the Investment Canada Act is to encour age investment in Canada so as to contribute to
economic growth.  Under the Act, significant investments, such as foreign acquisitions of Canadiancompanies worth over $223 million, are subject to review  in order to ensure 'net benefit' to Canadians.
In practice, most transactions reviewed under the Investment Canada Act proceed.  The review
process is relatively quick and the Investment Canada Act sets out strict time limits within which the
reviewing authority must respond.  This is to ensure that the legislation does not unduly delay any
investment in Canada.   Further information on the Investment Canada Act is available at
http://investcan.ic.gc.ca/.
III. Trade policies and practices by measure
Measures directly affecting imports
Tariffs
Question 4
Japan hopes that Canada will consider favourably the reduction of tariffs on automobile (completely
manufactured), spark plugs, and cosmetics so as to meet requests by Japanese industries.
ResponseWT/TPR/M/112/Add.1
Page 35
The Doha Declaration states that product coverage in the non-agricultural market access negotiations
shall be "comprehensive and without a priori exclusions". Just as certain Japanese industries wish to
obtain better access to Canada, Canadian industries have very specific interests with respect to the
Japanese market.  With good will and hard work on both sides, we believe we can arrive at a result
that is mutually beneficial.
Technical regulations
Question 5
Under Ontario’s building code, specific factory in stallations of mechinery and equipment must be
carried out under the authorization of an Ontari o professional engineer.  Other provinces, in
contrast, permit such installations to be carried out under the authorization of professional engineers
licensed in other provinces.  Please explain why ju st the province of Ontario has a different system.
Response
The Ontario Building Code (OBC) regulates the c onstruction of buildings, including the equipment
and machinery necessary for the proper functioning of the building services, such as HVAC
equipment, elevators, and fire protection systems.  Section 2.3 of the OBC requires that the design and
general review of certain buildings, depending on size and occupancy characteristics, be undertaken
by a "professional engineer".  The OBC defines a professional engineer as a person who holds alicence or a temporary licence under the Professional Engineers Act.
The OBC, however, does not regulate the installa tion of other machinery and equipment, such as
machinery for the production of goods in factories. This machinery is not considered part of the
"building fabric" and is beyond the jurisdiction of the OBC.
The Professional Engineers Act governs the engineer ing profession in Ontario.  Many Ontario statutes
and regulations make reference to the Act, requiring licensed engineers to undertake certain tasks,
such as under the OBC, as noted above, and certifying the design of pressure vessels and elevators
under the Technical Standards and Safety Act.  Note that these regulations generally require the
design of equipment to be certified by a professional engineer.  Installation of such equipment is
generally required to be done by licensed trades persons, not engineers.
The Professional Engineers Ontario (PEO) is responsible for licensing of engineers in the province.
For Canadian resident engineers who are already licensed in another province, the PEO has an
expedited process for issuing a temporary Ontario license that requires the completion of the
application, payment of fees and written varification of registration or membership with another
provincial association.  The PEO is a party to the Mutual Recognition Agreement (MRA) forengineers under the Agreement on Internal Trade.  The MRA provides greater labour mobility for
engineers within Canada.  In practice, therefore, Ontario is as open as other provinces.
Measures directly affecting exports
Export control, regulation and charges
Question 6  (p.57, paragraph 118; p.60, paragraph 125)
Japan would like to point out that measures taken by some provinces for limiting the exports of logs is
designed “to encourage the further processing of certain natural resources in Canada”, and thusthat, this is highly likely to violate Article XI of the GATT.  Japan considers that the Canadian
Government should “take such reasonable measures as may be available to it to ensure observance of
the provisions”, in accordance with Article XXIV:12 of the GATT.  In this regard, has the CanadianWT/TPR/M/112/Add.1
Page 36
Government already taken such measures, and if not, does the Government have any intention to do
so in the future?
Response
We believe that the relevant provisions of provincial legislations are consistent with Canada's WTO
obligations.
State-owned enterprises
Question 7  (p. 76, paragraph 196)
Japanese industries complain that, due to the monopoly by the Liquor Control Board of Ontario
(LCBO) on the sale of liquor, their sake, traditional liquor in Japan, cannot be sold or imported
freely.  In particular, the importers (or transpor ters) designated by the LCBO are unable to properly
maintain the quality of the Japanese liquor for which the freshness is highly important.  Please
indicate Canada’s prospects for relaxing the m onopolized system on the sales of liquors including
regulations on liquor importers /transporters.
Response
Canada has no plans to modify the current system relating to the importation and distribution (sales)
of alcohol beverages.  With reference to the issue of the freshness of sake when it is placed on the
market in Canada, we have consulted with the Liq uor Control Board of Ontario which is aware of the
shelf life issue relative to sake and have assured us that they do all in their power to get the product tothe market as soon as possible.  They are only awar e of one incident last Christmas where product was
delayed due to a labour action in California, which was beyond their control.  They have agreed to
address the issue should representations be made to them by the importing agent in Ontario.
Intellectual property rights
Question 8  (p. 85, paragraph 236)
How can Canada explain the consistency between Section 31 of the Copyright Act, together with its
draft amendment, and Article 13 of the Rome Convention?
Response
Section 31 of the Copyright Act, as amended, is still not in force but is compliant with Canada's
international obligations. The recent amendment is intended to clarify the scope of the retransmissioncompulsory license with regards to literary, musical, dramatic, or artistic works used on the Internet.
It does not address Rome Convention subject matter, such as that of Article 13.
Question 9  (p. 85, paragraph 236)
The bill to amend Section 31 excludes Internet-b ased retransmission of broadcast signals from
compulsory licensing regulations.  In such a case, how can intellectual property rights andneighboring rights (i.e. the provisions of the right to make available and the obligation concerning
technological measures) be protected under Canada’s Copyright Act?
Response
The 31 compulsory license applies only to copyright works contained in a broadcast and to the
broadcast day as a  compilation.  It is limited to simultaneous retransmission of works contained inWT/TPR/M/112/Add.1
Page 37
wireless broadcast signals. This does not limit the making available right or any future obligations
concerning technological measures.
Canada's Copyright Act already provides a making av ailable right in the form of an exclusive right to
communicate copyright works to the public. As part of the implementation of the WIPO Copyright
Treaty and the WIPO Performances and Phonograms Treaty, Canada is considering the granting of an
exclusive making available right to performers and phonogram producers and protection oftechnological measures for authors, performers, and phonogram producers.
Question 10   (p. 85, paragraph 236)
Japan would like to have information on the current situation for ratifying or acceding the WCT and
the WPPT.
Response
The Government is committed to bringing the C opyright Act into conformity with the WCT and
WPPT once the issues involved are thoroughly analyzed, subject to appropriate consultations. Thatprocess is part of the short-term agenda for Canada's copyright reform.
Question 11   (p. 86, paragraph 242)
Is right to export to copyright holders and neighboring right holders provided for in Canada’s
Copyright Act?  If it is so, please indicate in which Article this is stipulated.
Response
The Copyright Act does not provide for an export right "strictu sensu."
Question 12  (p. 85, paragraphs 235 and 236)
Please provide information on the following reports, mentioned in paragraphs 235 and 236. (If
possible, we would like to consult all documents in full (the URL of the website would be adequate):
A Framework for Copyright Reform;Consultation Paper on Digital Copyright Issues;
Consultation Paper on the Application of the Copyright Act’s Compulsory Retransmission Licence to
the Internet; and
the report initiating Parliamentary Review mentioned on line 10 of paragraph 236.
Response
A Framework for Copyright Reform
http://strategis.ic.gc.ca/epic/internet/incr p-prda.nsf/vwGenerate dInterE/rp01101e.html
Consultation Paper on Digital Copyright Issues
http://strategis.ic.gc.ca/epic/internet/incr p-prda.nsf/vwapj/digital.pdf/$FILE/digital.pdf
Consultation Paper on Application of Copyright Ac t's Compulsory Retransmission Licence to the
Internet
http://strategis.ic.gc.ca/epic/internet/incrp-
prda.nsf/vwapj/retransmissione.pdf/$FILE/retransmissione.pdf
The report initiating Parliamentary Review mentioned on line 10 of paragraph 236
http://strategis.ic.gc.ca/pics/rp/section92eng.pdfWT/TPR/M/112/Add.1
Page 38
IV. Trade policies in selected sectors
Agri-food
State trading enterprises, export credits
Question 13  (pp. 103-104, paragraphs 38-43)
In the case where a decrease in production due to a poor crop is predicted (or has already occurred),
Japan considers that it is natural for Canada, which adopts the system of export state trading, to
fulfill its responsibility, as one of the world’s largest food exporters, by maintaining the same level of
stock as that of other countries adopting the tr ading system by private companies.  Thus, Japan
considers that Canada should always retain sufficient level of stock for the above case.  Please
comment.
Response
Canadian wheat producers operate in a commercial environment, with the marketplace dictating the
types and quantities of crops produced.  Neither the Canadian government nor the CWB influenceproducers’ planting decisions or the quantities of grai n that they wish to market.  Canada has no stock
policy dictating whether a particular level of stocks should be maintained.
Japan is one of Canada’s best customers for high quality CWRS wheat .  The CWB has worked with
the Japanese Food Agency to meet Japanese demand even in a low production year such as 2002-03.
Canada believes that the food-security concerns underlying Japan’s question are best met through an
open and well-functioning international market, with supplies from production and imports, diversity
of sources of supply in the international market place, and allowing producers to respond to market
signals providing the best, most reliable basis for addressing variations in production due to weather
in any particular producing country.
Question 14
Please provide the following informatio n regarding the price of wheat and barley:
Part A  How are determined the domestic producers’ price (i.e. the price with which producers sell to
collectors) and the distribution price (i.e. wholesale and retail prices) on wheat and barley produced
in Canada?  According to which level are they fixed?  Please provide the latest data on such prices,
should these be available to the public.
Response
The domestic producers’ price for wheat and barley (except feed wheat and feed barley in the
domestic market) is based on average pooled returns from the world and domestic market for the crop
year.  At the start of the crop year, an initial payment equal to 70% to 75% of expected pool returns is
set.  The producer receives this initial payment when he delivers his wheat or barley.  Throughout thecrop year, this initial payment may be adjusted upward if market conditions warrant.  Farmers will
receive any increases to the initial payment as adjustments are made.  After the close of the crop year,
any money remaining in the pool accounts after deducting CWB marketing costs is paid to the
producer in a final payment.
Feed wheat and feed barley for sale in the domestic market can be marketed directly by producers.WT/TPR/M/112/Add.1
Page 39
The CWB determines prices for sales to Canadian flour mills and maltsters (the “distribution price”)
based on the North American market.  The CWB has indicated that its wheat sales price is based on
the Minneapolis Grain Exchange.  For malting barley, the domestic price is similarly based on cash
prices quoted in the US.
Part B  How are the export prices of wheat and barley determined and according to which level are
they fixed?  If the prices vary from country to country, please indicate the price for each country.
Response
Export prices for Canadian wheat and barley are determined by the CWB competing with prices
offered by other exporters.  The CWB publically quotes an export price. This is an offer price only,
with actual sales potentially negotiated at other prices.
Part C  Please describe the process of the collection system in Canada.  Are there any differences
between the crops for domestic consumption and those for export?
Response
The western Canadian “collection system” for wheat and barley marketed through the CWB is based
on a series of three delivery contracts entered into by the CWB with individual producers.  The
producer offers a quantity of wheat or barley to the Board, the Board decides what percentage of the
total quantity offered by all producers that it can market during the contract period, and informs the
producer of the percentage of his offer that will be accepted.  In the case of Board deliveries, there isno difference in how grain is assembled for sale between grain for export versus grain for domestic
consumption.  For feed wheat and feed barley, there are no restrictions on delivery.
Question 15  (p. 103, paragraph 39)
What regulations exist in Canada if a private company is to deal with wheat exportation?
Response
Just under half of the wheat exported from Canada is sold through accredited exporters which act as
agents of the CWB.  Although these companies can seek out wheat markets around the world, and
negotiate the grade and other sales contract terms, the sales price is determined by the CWB.
Question 16   (p. 104, paragraphs 40-43)
Please provide information on the schemes and levels of any official support, including subsidies,
export credit, financing support and others provided by the Canadian Federal Government and
certain public entities to the producers of wheat and barley for exportation.
Response
Canada does not provide any export subsidies to producers of wheat and barley.
Financial services
Banking services
Question 17
Other than the regulation mentioned on page 128 of  the Report, Japanese companies in Canada wish
to request the relaxation of the nationality requirement on board members (i.e. 50% and even more),WT/TPR/M/112/Add.1
Page 40
as well as on the executives of subsidiaries of foreign banks.  Does Canada have any intention to
relax this limitation?
Response
The board of directors requirement is in place to 1) ensure that a Canadian viewpoint is expressed at
board meetings of foreign-owned institutions; 2) to fa cilitate the enforcement of directors’ liabilities
under various legislation; and 3) because the Canadian regulatory regime places a significantemphasis on corporate governance, it is reasonable to have a residency requirement for directors.
The 50% requirement for boards of directors of  federally incorporated foreign financial
institutions is actually better than national treatment, as two thirds of the board of directorsfor federally incorporated Canadian FIs must  be Canadian reside nts.  Canada is not
considering changing these rules.
Question 18  (p. 129, paragraph 146)
The Report notes that "[t]he C-8 legislative framework provides for authorized foreign banks to
engage in these activities [specialized business management or advisory services]; however,
implementing legislation has yet to be drafted".  In this context, what kind of financial services, other
than banking services, are currently allowed to be provided by foreign banks, either through their
subsidiaries or by themselves?  Also, what is th e time-frame for the "implementing legislation" to be
submitted to the Diet?
Response
Prior to Bill C-8, the specialized business management and advisory services power was linked to the
power of a bank to invest in Canadian commercial entities (via a “specialized financing entity”).  A
bank could undertake specialized business management in its specialized financing entity.  Foreignbank branches did not have this power, as a branch is not a vehicle to invest in Canadian entities.
Bill C-8, for technical reasons, split the specialized business management power from the specialized
financing entity, and allowed banks to do specialized business management in-house.  It was expected
that specialized business management would still only occur in commercial entities the bank invested
in through the specialized financing investment power.
Branches are not permitted to invest in Canadian entities, and so would not normally be given the
power to undertake specialized business management, a type of business closely linked to the
investment power.  However, in the event that a branch identified an opportunity to engage in
specialized business management or advisory services without investing in a company, C-8 permitted
a branch to undertake the business so long as the appropriate regulations were drafted.
To date, no foreign bank branch has approached us about specialized business management or
advisory services. If a branch did approach us, Canada will consider drafting the regulations.
Insurance services
Question 19   (p. 130, paragraph 154)
The Report indicates that "some provinces (e.g. New Brunswick) rely on OSFI for market regulation
as well as financial solvency regulation".  Please provide the names of the provinces which “rely on
OSFI for market regulation”.WT/TPR/M/112/Add.1
Page 41
Response
The information provided in Paragraph 154 is inaccurate.  OSFI does not undertake any market
conduct regulation.
Question 20  (p. 130, paragraph 155)
The Report states that "the provinces through the Canadian Council of Insurance Regulators have
established the Uniform Life Insurance Act".  Is it correct to understand that foreign or domesticinsurers are exempt from applying for product approval in a province which has adopted the Uniform
Life Insurance Act, provided that such insurers have previously applied and obtained approval for the
same products in another province? How many times a year is held the Canadian Council of
Insurance Regulators, and what function does it perform?
Response
Each provincial jurisdiction maintains small differences in its product approval regime, and therefore,
the above characterization is not accurate.
Information about the CCIR, including its mission and the timing of meetings, can be found at
http://www.ccir-ccrra.org/
Question 21  (p. 130, paragraph 156)
The Report describes certain tax measures for life insurance companies established in Canada as
being “designed to ensure that Canadian life insu rance companies can compete in foreign markets”.
Is there any legislation or regulation which stipulates this objective? If those measures are designed
for that purpose, is it considered to be subsidiary to Canadian life insurers?
Response
No legislation or regulation stipulates this objective.  Canadian resident multinational life insurers
have historically carried on their insurance business outside Canada through foreign branches.Income earned from foreign insurance branches is exempted from tax in Canada as Canadian insurers
could not compete in other countries if Canada imposed the normal income tax rules on profits earned
in a country that taxes on the basis of premiums or investment revenue only.  The rules for this
exemption are contained in the Income Tax Act and Income Tax Regulations.  It should be noted that
Canadian resident insurance corporations now operate abroad mostly through subsidiaries.  Thegeneral taxation rules for the repatriation of profits apply to these corporations.
Question 22  (p. 130, paragraph 157)
Why does Canada think that capital requirements under the Branch Adequacy of Assets Test (BAAT)
are more onerous than those under the Deposit Adequacy Test (DAT)? If such is the case, what is the
rationale for imposing harsher capital requirements on foreign insurance companies?
Response
Paragraph 157 is not accurately drafted.  On an industry level, the BAAT requirements are designed
to be no more onerous than the DAT requirements.  However, individual firms may find that BAAT
requirements are more or less onerous.WT/TPR/M/112/Add.1
Page 42
Question 23   (p. 132, paragraph 164)
The Report indicates that “a federal excise tax of 10% is applicable on premiums paid to
unauthorized foreign direct non-life insurers (except marine insurance) on risks within Canada”. Is
this tax treatment also applicable to reinsurance? Is there any bilateral taxation treaty which enables
exemption from this tax treatment?
Response
The 10% federal excise tax applies to premiums for the insurance of Canadian risks, other than
premiums for life insurance, personal accident insurance, sickness insurance, marine insurance,
reinsurance contracts, and insurance that is not available within Canada.  Canada’s tax treaties do not
have any provisions to allow for exemption from this tax.
Question 24
In addition to relaxing the regulation on reinsurance services on page 132 of the Report, Japanese
companies in Canada request a harmonization betwee n the federal and provincial regulations on the
activities of foreign insurance companies, as well as on the rationalization regarding the renewal of
business licenses, which is required annually.  Please provide Canada’s intention for improving this.
Response
In general, provincial insurance legislation is very similar and the regulatory frameworks of both the
federal government and the provinces are closely integrated.  For example, a federally registeredinstitution is automatically accepted for registration in Alberta.
PEOPLE’S REPUBLIC OF CHINA
Contingency Measures
Question 1
As indicated in Chart III.4, China was the third largest target of the anti-dumping measures by
Canada till the end of 2001, which affected China’s export for a volume of USD 100 million. It is
expected that Canada will streamline and, to the extent possible, simplify the relevant procedures and
will explain the consistency of its applied measures on anti-dumping with WTO principles. Besides, it
is hoped that the efforts and achievements made by China in market economy reform will be
recognized and taken into account in the process of anti-dumping investigations by the Canadian
government.
Response
As a result of the Accession of the People's Republic of China to the WTO on 10 November 2001,
Canada reviewed its relevant procedures with respect to anti-dumping investigations involving goods
from the People's Republic of China. This review resulted in changes to Canada's domesticlegislation, which came into force on September 30, 2002, and changes in relevant procedures with
respect to investigations into alleged dumping of goods from China.
The change to the Canadian legislation removed the requirement to examine whether the government
of China has a monopoly or substantial monopoly of its export trade.  However, where there are
allegations and evidence to suggest that there is involvement by the government of China in the
domestic market of the industry sector in ques tion, Canadian authorities will contact both the
government of China and the Chinese producers to determine whether or not domestic prices areWT/TPR/M/112/Add.1
Page 43
substantially determined by the government of China and whether there is sufficient reason to believe
that these prices are not substantially the same as they would be if they were determined in a
competitive market.
Canada has revised the questionnaires to both the government of China and to the exporters as a result
of these changes so that the producers in China can exercise their rights to demonstrate that market
economy conditions prevail in the sector producing the like goods. Canada will continue, whereappropriate and possible, to revise or simplify relevant procedures as this is mutually beneficial to all
interested parties. Canada conducts its investigations and applies its anti-dumping measures in full
conformity with its international trade obligations and its domestic law.
Standards, technical regulations, and SPS measures
Question 2
China attaches great importance to the technical cooperation with Canada with regard of the SPS
measures on scientific basis and in consistence with the WTO rules. We would like to have Canada’sview on the compatibility with scientific value and WTO rules of the following measures:
Part A:  Chinese casing processors licensed by Canadian government can only export to Canada
casings made with materials originating from cert ain members, while casings made with materials
from other members, including China, are denied of access to the Canadian market. Please explain
the scientific basis for this measure.
Response
Based on its risk assessment, the Canadian Food Inspection Agency (CFIA) has approved for
importation only casings, which have been processed from inputs originating in countries that the
CFIA has determined to be free of foot and mouth disease (FMD).  Natural casings are pathways of
transmission.  CFIA does not consider China to be free of FMD and it has similar requirements forother countries it does not consider free of this disease.  The CFIA provided its Casings Risk
Assessment to Chinese authorities and invited comments from China.
Canada's requirements for imports of foods of an imal origin, including those on Chinese products, are
based on science and are consistent with our rights and obligations under the WTO. Detailed
information regarding Canadian import requirements for these products are freely available to thepublic, including Chinese exporters, at the Canadian Food Inspection Agency`s web site
www.inspection.gc.ca.
With regard to the import of food of animal origin, it’s expected that Canada can provide the criteria
for food safety of these products, especially honey and shrimp, which will help the exporters meet
these requirements.
Although the question is general, it does specifically mention honey and shrimp from China. With
respect to honey and shrimp from China, CFIA tests these products on arrival, in particular for the
presence of the veterinary drug chloramphenicol.  This drug is banned by many countries, including
and Canada and, indeed, China itself, because, scie ntifically, it is a known carcinogen.  Following the
detection of this carcinogen by Canada in imports  of these products from China, CFIA elevated its
level of testing and rejected products with positive results.
Our measures are designed to protect Canadian c onsumers from Chinese imports which clearly violate
Canadian and Chinese requirements and do so in the least trade restrictive manner.  We began
immediately to share information with China in a cooperative effort to mitigate the risk at source in
China and to reduce testing based on Chinese controls and appropriate Chinese assurances to that
effect.WT/TPR/M/112/Add.1
Page 44
Based on this approach, we have reduced the level of testing on shrimp and are prepared to reduce it
further once we receive further technical informa tion and assurances from China.  With respect to
honey, we continue to test at a 100% level but, based on bilateral technical discussions, are prepared
to reduce the level of testing once we receive science-based certification modalities from China.
As many members will know, Canada is not alone in taking measures against the presence of this
banned carcinogen in exports of these products from China.  We consider our measures to beeffective, based on science, and far less onerous than measures taken by some other members with
respect to these products.
Part B:  Could Canada provide relevant information on the risk assessment, which leads to the import
suspension against the poultry and rabbit meat from China?
Response
Poultry:  CFIA has not suspended imports of poultry meat product from China as stated in the
question.  In fact, poultry meat has never been ap proved by the CFIA.  The CFIA provided Chinese
authorities questionnaires as part of the approval process but China has not yet replied with answers.
It is unlikely that CFIA could approve poultry meat from China at this time for valid animal health
reasons.
The CFIA does not consider China to be free of Newcastle Disease and Highly Pathogenic Avian
Influenza. These are serious poultry diseases, which appear on list A of the Office Internationale des
Epizooties (OIE). These diseases, if introduced to  Canada, would be detrimental to Canadian poultry
flocks and related economic sectors.  Until CFIA receives science-based information from Chinese
animal health authorities demonstrating otherwise, imports of poultry cannot be allowed.
Rabbit:  The CFIA approved imports of Chinese frozen rabbit carcasses several years ago.  Recently,
CFIA became aware of the possible presence of rabbit heamorrhagic disease in China and requested
that certain control measures be certified as amendments to the official Chinese meat export
certificate.  These attestations are:
"The meat derived from rabbits which were born and kept in premises where no cases of rabbit
heamorrhagic disease was reported during 60 days prior to slaughter."
"The rabbits and their meat have not been in contact with any animals, products or equipment of a
lesser zoosanitary health status during their transportation and processing."
Rabbit heamorrhagic disease is an OIE List B disease, which does not occur in Canada.  Canada has
requested appropriate safeguards, consistent with OIE recommendations.
We are looking forward to a Chinese response that might serve as the basis for resuming these exports
to Canada.
HONG KONG, CHINA
Customs Procedures
Question 1  (WT/TPR/S/112, P. 28 -29, Para. 10-12)
Note that the Canada Customs and Revenue Agency (CCRA) has introduced a new system, the
Customs Self-Assessment (CSA), to ensure smooth flow of trade and avoid delays at the border.WT/TPR/M/112/Add.1
Page 45
According to the Secretariat Report, the CSA invo lves screening, risk assessing, and pre-approving
importers, carriers, and drivers that are deemed to be low-risk.  So far, all pre-approved carriers are
involved in trade with the US carried by road.  Th e CCRA’s online information further reveals that at
present, eligible goods for the CSA include only t hose imported from the U S.  We would like to know
if there is any schedule for the CSA to expand to cover goods from other supplying ends.
Response
The Customs Self-Assessment (CSA) program was expanded in 2002 to include goods transported to
the United States by other modes of transportation (rail and air), as well as automotive goods from
Mexico.  Free and Secure Trade (FAST) is a harmonized commercial process (between the United
States and Canada) that builds on the concepts and principles of the CSA program. Although there has
been discussion to further expand the CSA program, there are no other plans for expansion at the
present time.
Anti-dumping
Question 2  (WT/TPR/S/112, P. 44-45, Para. 72-73)
We note that there has been an increase in the use of anti-dumping measures by Canada in recent
years.  We are mindful of this trend and are concerned that the proliferation of anti-dumping
measures would pose unnecessary barriers to trade and nullify the benefits of market access
liberalization.  We are interested to know Cana da’s view on the main reason for this rising trend.
Response
One of the main reasons for any increase in trade remedy actions and particularly anti-dumping
measures, are the prevailing conditions in the international steel market.  Over the last several years,
the significant overcapacity in world steel production and the increasing number of new entrants to
the international market have resulted in a proliferation of trade actions, not just in Canada but inmany countries.
Question 3  (WT/TPR/S/112, P. 45, Para. 74)
According to the Secretariat Report, provisional measures were applied in 43 of the investigations
initiated by Canada in 2000 and 2001 (93.5% of the total).  Among these cases, 16 were ended with a
final determination of no injury and no final measures.  We are concerned about the trade distortingeffects caused by the mere initiation of anti-dumping investigations and imposition of provisional
measures.  We would like to know  Canada’s views in this respect.
Response
Canada is very aware that any initiation of an anti-dumping investigation has a significant impact on
the concerned exporters and their customers. As noted in paragraph 75 of the report, the high numberof investigations where provisional measures were applied reflects the high proportion of complaints
that never make it to the initiation stage because they are rejected by the Canada Customs and
Revenue Agency.
Question 4  (WT/TPR/S/112, P. 46, Table III.5; and P. 47, Para. 76)
We also note that in some cases, anti-dumping duti es are applied on imports that account for a fairly
small share of the domestic market.  We wonder if these dumped imports, which represent only a
small share of the Canadian market could cause mate rial injury to the relevant domestic industries.
We are interested to hear Canada’s views regarding this observation.WT/TPR/M/112/Add.1
Page 46
Response
As noted in Paragraph 76, the volume of dumped imports is only one factor examined when
determining injury.  The prices of the dumped imports and their effect on the domestic market are also
examined.  Sometimes small volumes of low-priced imports, or even low-price offerings can have
significant effects on prices in the domestic market in terms of price erosion or price suppression,
causing material injury to the domestic producers of like products.
Quantitative Restrictions on T&C Products
Question 5  (WT/TPR/S/112, P. 105, Para. 48; P. 107, Para. 54-57)
We note from the Secretariat Report that Canada’ s textiles and clothing industries “have benefited
from a variety of import protection measures an d adjustment assistance over the past quarter-
century”.  The report also states that
integration of the most sensitive clothing products have been left to the end of the (ATC)
implementation period;over the two years 2000-01, clothing  imports from all sources have grown at an accelerated annual
growth rate compared with 1994-99; and
imports of products for which quotas had been freed also expanded at a rapid rate.
Could Canada provide specific information regarding its efforts in implementing Article 1.5 of the
ATC which requires Members to allow for continuous autonomous adjustment and increasedcompetition in their markets to facilitate the integration process, particularly in the light of
accelerated textiles and clothing imports into the country in the past few years, and the observation
that the bulk of the quotas for the more sensitive clothing products will remain in place until after
termination of the ATC.
Response
Canada is also fully committed to the full integration of the textile and clothing sector into GATT
1994 disciplines by 1 January 2005 under the Agreement on Textiles and Clothing (ATC) and the
elimination of all remaining quotas by that date. The ATC also provided a negotiated 10-year
transition process to allow domestic industry to adjust - this represents a fundamental commitment
Canada made to its industry.
Canada has met and exceeded its obligations under the ATC transition arrangements (apparel imports
from restrained exporters are up over 80% from 1994 to 2001 (and domestic share held by the
restrained importers is up from 31% to 45% from 1994 to 2001).
In addition, Canada has just implemented a major market access liberalization package for LDCs
(except Myanmar (Burma)) to full quota-free and duty-free treatment for almost all products of LDCorigin (i.e., other than supply-managed agricultural goods), including all textile and apparel products
(and apparel alone accounts for more than half of the LDC’s exports to Canada). The rules of origin
for apparel, for this initiative, are designed to develop trade; they reflect the production capacity of
LDCs, and allow LDCs to use imports of fabric and yarn originating in other LDC and developing
countries (and Canada).
Canada’s commitments under the Uruguay Round continue to provide improved access into the
Canadian market for textile and apparel exports from developing countries.WT/TPR/M/112/Add.1
Page 47
Question 6   (WT/TPR/S/112, P. 107, Para. 54)
Will Canada confirm its commitment that all existing textile quotas will be removed on 1 January
2005 on termination of the ATC, and that its trade on textiles and clothing will be fully integrated into
GATT 1994?
Response
Canada is fully committed to the full integration of the textile and clothing sector into GATT 1994
disciplines by 1 January 2005 under the Agreement on Textiles and Clothing (ATC) and the
elimination of all remaining quotas by that date.
Telecommunications
Question 7  (WT/TPR/S/112, P. 114-115, Para. 78-79)
We note that the maximum cumulative total foreign investment of voting shares in Canada’s facility-
based telecommunications services providers is 46.7%.  Such restrictions were considered necessary
for reasons of national security and economic, social and cultural well-being in the last review.  Wewould like to know whether these considerations still prevail.  We also urge Canada to remove all
these market access limitations in the current round of services negotiations.
Response
Canada's Telecommunications Act requires that  telecommunications common carriers be Canadian
controlled and limits direct investment to 20% of the voting shares.  The limit on the voting shares forholding companies is 33.3%.  The maximum investment by foreign entities in an operating company
is 46.7%, i.e., 20% of the operating company and 26.7% of the holding company (33.3% of the
remaining 80%).
The Minister of Industry announced on November 19, 2002 that he is seeking the views of Canadians
on foreign investment restrictions in the telecommunications industry and that he had asked the Chairof the House of Commons Standing Committee on Industry, Science and Technology to undertake a
review.
Further details can be found online at
http://www.innovationstrategy.gc.ca/cmb/innovation.nsf/MenuE/Invest00)
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participation
in Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.
A report from the Committee to the Government is expected in the spring of 2003.  The Government
will then decide on what action, if any, it might wish to take.
Insurance Services
Question 8   (WT/TPR/S/112, P. 130, Para. 154-155)
We note that all insurance companies, whether federally or provincially incorporated, must be
licensed in each province where they do business.  We would like to know the reasons for such a
provincial licensing system.  Would Canada consider simplifying the practice by issuing a single
licence applicable to the whole country?WT/TPR/M/112/Add.1
Page 48
Response
In Canada, financial sector regulation is split between the federal and provincial governments, with
provinces maintaining responsibility for much of the market conduct regulation for insurance firms,
including licensing.  In general, the provincial licensing requirements are very similar and the
regulatory frameworks of the federal government and the provinces are closely integrated.
Provincial efforts are underway in both the life & health and property & casualty insurance industriesto identify areas where harmonization can be promoted, but a single national licensing regime is not
being actively contemplated.
However, the Canadian Council of Insurance Regulators (CCIR), an inter-jurisdictional association of
regulators of insurance, has developed the Life License Qualification Program (LLQP) that
establishes a common set of qualifications that life insurance agents must meet before being licensed.
The LLQP is currently being implemented across Canada (excluding Quebec, which recently updated
its relevant standards).  More information on this can be found at http://www.ccir-ccrra.org/.
ARGENTINA
V) MEDIDAS ESPECIALES
Si bien la Argentina no se vio afectada directamente por la aplicación de salvaguardias a los
productos siderúrgicos, preocupa lo que se advierte como una tendencia del gobierno canadiense de
reforzar los procedimientos y la aplicación de medidas antidumping, de derechos compensatorios yde salvaguardias al comercio del acero. El Informe de la Secretaría da cuenta de esa tendencia en los
párrafos 73 y siguientes del  punto III(v)(b). ¿Podría explicar Canadá las razones que motivan dicha
tendencia?.
English Translation:
Contingency Measures
Question 1
Even if Argentina was not affected by safeguards on steel, the Canadian trend to reinforce process
and application of antidumping and countervailing measur es and safeguards is of concern to it. Para
73 of the Secretariat Report mentions this trend. Can Canada explain its reasons?
Response
Although paragraph 73 refers to 46 initiations during the period of January 2000 to December 2001,
only 33 new measures were put in place, including one undertaking.  Most of the investigations
concerned steel where annual import volumes for the entire year in 2002 (6.3 million tonnes) were the
third highest level on record - below only the level achieved in 2000 (7.9 million tonnes) and in 1998
(6.7 million tonnes). In 2002,  domestic steel consumption in Canada rose 4.2% above the levels in2001 but imports increased by 13.5% over the same period.
Canada has, and will continue to conduct anti-dumping investigations on steel, as it would on any
other product, only when its domestic industry makes a properly substantiated request, in full
accordance with Canada's international trade obligations and the domestic law.
(vi) RESTRICCIONES Y CONTROLES CUANTITATIVOS
En el párrafo 85, punto III (vi)(a) “Productos Agroa limentarios”, el Informe de la Secretaría señala
que Canadá restringe las importaciones y el movimiento interprovincial de productos hortícolas agranel que no reúnan las condiciones estipuladas por Canadá en materia de calidad, etiquetado yWT/TPR/M/112/Add.1
Page 49
envasado. No obstante, se menciona que se otorgan excepciones a estas normas si el abastecimiento
interior es deficitario. ¿Cómo define Canadá “deficitario” y cómo se informa de esta situación a los
socios comerciales?.
English Translation:
Quantitative Restrictions and Controls
Question 2
Chapter III, (vi) (a), paragraph 85 mentions that Canada restricts imports and interprovincial
movement of bulk produce that do not meet quality, labelling and packaging standards. However, it
mentions that an exception can be made if there is a shortage of domestic supply. How does Canada
define "shortage of domestic supply"? How are trade partners informed of this?
Response
The Fresh Fruit and Vegetable Regulations, under the Canada Agricultural Products Act, are designed
to ensure that all fresh fruits and vegetables entering into Canada or domestic supplies comply withFederal health and safety, quality, packaging and labeling regulations.
Processors or packers are free to source their supplies from the area or supplier of their own choice,
including imports, provided those supplies comply with all the requirements of the Act and the
Regulations.
In circumstances when adequate quality and quantity of compliant products are not available,
processors or packers may apply to the Minister  for an exemption to obtain non-complying products
from another province or another country.  Health and safety requirements will not be waived under
any circumstance.
The CFIA decides whether a shortage exists based on evidence submitted by the applicant. Domestic
supply shortage is oriented to the specific use and characteristics of the product as well.  This is oftena key determinant of the shortage.  As such, shortage is not "notified" as many factors need to be
taken into consideration.  The shortage is identifi ed by the importer/repacker/processor relative to the
precise product specifications
they need.
In order to ensure consistency and transparency in the application of Ministerial Exemptions, detailed
guidelines for such requests are available on CFIA's website:
http://www.inspection.gc.ca/english/plaveg/fresh/meguide.shtml
FINANCIACION DE LAS EXPORTACIONES Y OTRAS FORMAS DE ASISTENCIA
En el punto III.4.(ii) del Informe de la Secretaría se indica que Canadá cuenta con una serie de
instituciones que intervienen para ayudar a exportar a las empresas industriales, entre las que figurala EDC, el organismo oficial de crédito a la exportación. El funcionamiento de las líneas de crédito
ofrecidas por esta institución han sido cuestionada en el ámbito de Solución de Diferencias de la
OMC. ¿Podría Canadá detallar las condiciones que debe reunir una transacción para ser
considerada de “interés nacional” y poder hacer uso de la “Cuenta del Canadá”?.
English Translation:
Export financing and other assistanceWT/TPR/M/112/Add.1
Page 50
Question 3
In Chapter III, (ii) Export financing and other assistance, the Secretariat Report mentions that
Canada has in place a series of institutions to suppo rt export activities of industrial companies. EDC
is one of these. The function of EDC's lines of credit has been investigated by the Dispute Settlement
Body of the WTO. Could Canada detail the conditions that a transaction must meet to be considered
of "national interest" and to be able to use the Canada Account?
Response
"Canada Account" consists of the class of transa ctions undertaken by Export  Development Canada
(EDC or the Corporation) pursuant to Section 23 of the Export Development Act (the Act). Under
Canada Account, the Government of Canada is able to provide support for transactions which, on the
basis of EDC's risk management practices, could not be supported under EDC's Corporate Account.
The eligibility considerations applied to transactions considered under the Canada Account program
include:
In addition to falling within EDC's mandate, EDC's usual lending or insurance criteria (Canadian
content, financial and technical capability of the exporter, technical and commercial viability of the
project);
The government's general willingness to cons ider the country risk in question and the
creditworthiness of non-sovereign borrowers, and;National interest considerations such as:
economic benefits and costs to Canada, including the employment generated or sustained by the
transaction;
importance of the export market to Canada; and
foreign policy implications, including Canada's bilateral relationship with the country in question.
Please note that the WTO panel in WT/DS222/R decided to:
reject Brazil's claim that the EDC Corporate Account and Canada Account
programmes "as such" constitute prohibited export subsidies contrary to
Article 3.1(a) of the SCM Agreement;
reject Brazil's claim that the EDC Corporate Account and Canada Account
programmes "as applied" constitute prohibited export subsidies contrary to
Article 3.1(a) of the SCM Agreement;
NORWAY
Telecommunications services
Question 1
Canada applies restrictions on foreign ownership  in Canadian telecom companies. What does
Canada intend to do in order to reduce or eliminate the restrictions on foreign ownership?
Response
Canada 's Telecommunications Act requires that telecommunications common carriers be Canadian
controlled and limits direct investment to 20% of the voting shares.  The limit on the voting shares for
holding companies is 33.3%.  The maximum investment by foreign entities in an operating companyWT/TPR/M/112/Add.1
Page 51
is 46.7% (i.e., 20% of the operating company and 26.7% of the holding company (33.3% of the
remaining 80%).
The Minister of Industry announced on November 19, 2002 that he is seeking the views of Canadians
on foreign investment restrictions in the telecommunications industry and that he had asked the Chair
of the House of Commons Standing Committee on Industry, Science and Technology to undertake a
review. (Further details can be found online at http://www.innovationstrategy. gc.ca/ cmb/
innovation.nsf/MenuE/Invest00)
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participation
in Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.
A report from the Committee to the Government is expected in the spring of 2003.  The Government
will then decide on what action, if any, it might wish to take.
Maritime transport services
Question 2
Under the Coasting Trade Act cabotage is reserved for Canadian-flagged ships. This law requires the
carriage of goods and passengers as well as any other marine activities of a commercial nature in
Canadian waters, to Canadian registered, duty-pai d vessels (Ref. WT/TPR/S/112, page 120). What is
Canada doing in order to give foreign flagged ships access to its cabotage?
Response
The Coasting Trade Act allows for the temporary importation of a non-Canadian registered or non
duty-paid Canadian registered vessel, when no Cana dian registered duty-paid vessel is available or
suitable to carry out the activity.  When the carriage of passengers is involved, a determination is also
based on the availability of identical or similar adequate marine service from persons operating one ormore Canadian vessels .
Energy-related services
Question 3
Canada is using local contents requirements in oil- and gas production, which in practice
discriminate against foreign production companies and sub-contractors. What is Canada doing in
order to improve market access for foreign oi l and gas companies and sub-contractors in this
industry?
Response
Canada is in the process of consulting with associations and working closely with the provinces to
review the extent of liberalization undertaken since the Uruguay Round of GATS negotiations and
whether there is scope for liberalization in the context of the Doha Round.
BANGLADESH
Question 1
The Government of Canada has taken a comm endable decision to provide LDCs with
enhanced market access. The new initiati ve of Canada, effective from 1 January 2003,WT/TPR/M/112/Add.1
Page 52
significantly increased the number of duty free items that include a wide range of
agricultural, textiles, apparel and footwear pr oducts. This new measure is also accompanied
by favourable rules of  origin requirement.
The decision taken by the Canadian authorities clea rly demonstrates their commitment to the
Doha mandate to provide LDCs increased ma rket access. We hope this decision will
encourage other developed countries to make further improvements in their preferential
scheme for LDCs. As the spokesperson of  the LDC Group, we express our appreciation and
thanks to the Canadian Government for their gene rous decision to further improved market
access for LDCs = products.
In order to comprehend the new scheme, we would like to request the Canadian authorities to explain
in detail the new market access initiative for LDCs including the rules of origin requirements.
Response
The Canada Customs and Revenue Agency has prepared a detailed guide to the LDC Market Access
Initiative which includes information on rules of origin. This Guide was made available to members atthe 7 March WTO Committee on Trade and Development meeting. It can also be accessed at
www.ccra-adrc.gc.ca/whatsnew  by clicking on archive  and then December 2002 .
Background information re New rules of origin for apparel and textiles are for:
a)  full accumulation of input formed in LDCT beneficiary countries or Canada; orb)  full accumulation of input formed in GPT beneficiary countries or inputs from Canada, provided
the value added in the LDCT beneficiary country is 25%.
In both rules, the apparel would have to be assembled in an LDCT beneficiary country from fabric
cut or knit to shape in that country.
The rules of origin for  fabrics and yarn  allow for full accumulation of originating input from LDCT
or GPT beneficiary countries or Canada.
Apparel cut and sewn in an LDCT beneficiary coun try from input formed in another LDCT country or
Canada would qualify for preferential treatment.  Apparel using input formed in a GPT beneficiarycountry would also be eligible for preferential tr eatment if the LDCT beneficiary country met the 25%
value-added requirement in producing the new article.  Any input from Canadian sources would also
be counted toward the LDC % value.  Fabric has to be made from territorially (LDC, Canada or GPT
countries) produced yarns and must be spun or extruded in the territory.  There is no value-added rule
for fabric
The previously existing general rules of origin will continue to apply for other products. These call for
a minimum of 40 percent of the content of an eligible good to originate in least-developed countries
(which can be accumulated) or Canada. [Cumulati on provisions allow up to half of the 40% to be
input from any other developing countries that are eligible for the Canadian General Preferential
Tariff Scheme (or GSP) and not just from other least-developed countries.  At least half of the 40%will still need to originate from least developed countries or Canada.]
Question 2
We thank the Canadian Government for a detailed account of their TRTA/CB programmes. The
TRTA/CB programmes are of vital importance to LDCs in understanding and implementingWT/TPR/M/112/Add.1
Page 53
multilateral trade rules as well as in building institutions and productive capacity to effectively
participate in world trade.
We are pleased to see the Government of Canada attach high importance to the institutional and
supply side capacity of our countries in the delivery of their assistance. However, from the report it is
not clear how much of expenditures in TRTA/C B programmes are devoted to LDCs. Could the
Canadian authorities elaborate on the TRTA/CB pr ogrammes specially designed/targeted to the
LDCs? Could they also explain how the TRTA/C B programmes are expected to benefit the LDCs,
particularly in generating a supply side response ?
Response
Canada thanks Bangladesh for its interest in Canada's trade-related technical assistance and capacity
building (TRTA/CB) programmes.  Canada believes in the importance of assisting developing and
least-developed countries (LDCs) in building their own capacity to more fully participate in, and
benefit from, the global trading system, and to use trade as a means to reduce poverty.  Canadianapproaches to TRTA/CB therefore focus on helping th ese countries inter alia to effectively negotiate
in the current round of WTO and other regional/bilateral fora, mainstream trade into national
development/poverty reduction plans, and benefit form a more open economy.  Canada recognises the
particular challenges faced by LDCs in the global trading system and therefore believes that
TRTA/CB must respond to the needs as identified by these countries.
While it is difficult to calculate exactly what share of Canada's TRTA/CB expenditures are directed at
LDCs, it is important to note that LDCs are a priority area for Canada, as evidenced by our recent
LDC market access initiative and our commitment to the Africa Action Plan, further to the G8
Summit in Kananaskis. Contributions to several multilateral and regional agencies also illustrate
Canada’s commitment to addressing the trade-related needs of LDCs.  Examples include (but are notlimited to):
$2 million to the Integrated Framework for trade- related technical assistance for least-developed
countries;
$1.5 million to the WTO's Doha Development Agenda Global Trust Fund for the Secretariat's
coordinated technical assistance plan, for which LDCs are a priority;over $7.3 million to the Joint Integrated Technical Assistance Program (JITAP), which includes
assistance to LDCs;
$8.5 million to the Asia-Pacific Economic Integration Program which as extended assistance to
LDCs;
$900,000 to the Commonwealth Trade and Investment Access Facility.
Canada is one of the leading donors for the Integrated Framework (IF), as well as an active donor
representative on the IF Working Group.  The overall focu s of the IF is to assist LDCs in integrating
trade and TRTA/CB into overall development pl ans, which, depending on the LDC, can identify
supply-side constraints as priority area for future follow-up assistance by the donor community and
other TRTA/CB programs.  Canada is also an active supporter of JITAP, which has as one of its main
objectives, to enhance the capability of enterprises to export to new/existing markets, such as through
the formulation of product sector strategies (addressing the supply-side).
Bangladesh may also be interested to know th at the Canadian International Development Agency
(CIDA) is very active in TRTA/CB programming specifically in Bangladesh.  In recent years CIDA
has contributed $2 million to "Monitoring the Impact of the WTO", a project to assist women engaged
in the garment industry with a range of health and social services.  Additionally, CIDA has funded a
$4.1 million project to facilitate the export-oriented industries of Bangladesh.  A new project relatedto private sector competitiveness is under design, with extensive discussions with civil society and theWT/TPR/M/112/Add.1
Page 54
Government of Bangladesh having recently taking place. The project will be likely well over $4
million, with direct links to trade, and is expected to be operational by early 2004.
INDIA
Regional Trade Initiatives
Question 1
Canada participates in a number of regional trade agreements. Nearly 80 % of Canada’s trade takes
place with its preferential partners.   These regional free trade agreements result in an elaborate and
complex system of preferential tariffs and preferenti al rules of origin. Although Article XXIV of GATT
1994 permits derogation of MFN principle, it requires the countries party to a preferential trade
arrangement to ensure that the trade of non-party member countries is not adversely affected on
account of such an arrangement. Is there any syst em in place in Canada to objectively assess the
impact of the RTAs it has concluded on the trade of non-party member countries?
Question 2
Has Canada made any study or assessment of the likely effect on its non-preferential trading partners
and especially the developing countries of its regional trade initiatives?
Response to Questions 1 and 2
Canada and its free trade partners have been careful to ensure that the free trade agreements (FTAs)
that have been negotiated are consistent with relevant WTO requirements, do not raise new barriers tothird parties (whether tariffs or other regulations of commerce), and reinforce multilateral
liberalization efforts now underway.  Canada monitors  its trade performance on an ongoing basis, and
has examined the issue of trade diversion.
Canada has consistently participated in MFN trade liberalization, and the use of bilateral or regional
free trade agreements in no way diminishes the fact  that the multilateral trading system remains the
cornerstone of Canada’s trade policy.  In fact, successive rounds of multilateral negotiations have
resulted in significant decreases in Canada's MFN tariffs.  Our free trade agreements with developed
and developing countries are negotiated agreements that offer benefits to all parties of the agreement,
not only by opening Canada’s market but also allowing Canada’s FTA partners to fully enjoy the
benefits of free trade through their own market liberalization.  Like most countries, Canada views itsfree trade agreements as incremental and complementary steps towards wider liberalization to be
negotiated in a multilateral/WTO context.
In addition, consistent with Canada’s commitment to ensuring that developing countries are able to
participate fully in the international trade regime, the Prime Minister of Canada, the Right Honourable
Jean Chrétien, announced in June 2002 steps that Canada would take to reduce poverty in the world'spoorest countries.  Key among these initiatives were steps to help the world's least-developed
countries (LDC) strengthen economic growth throug h trade by eliminating tariffs and quotas on most
of their exports to Canada, except for certain agricultural products.  These changes came into effect on
January 1, 2003.  Canada also provides unilateral tariff preferences to developing countries under the
General Preferential Tariff (GPT) and under the CARIBCAN Agreement (Chapter III(2)(iii)).  For
further information, please refer to the website of Canada’s Department of Foreign Affairs and
International Trade:http://www.dfait-maeci.gc.ca/tna-nac/social-en.asp#developmentWT/TPR/M/112/Add.1
Page 55
Question 3
What percentage of Canada's external trade/imports are with/from countries with which Canada is in
the process of negotiating PTA/FTAs?
Response
Canada is currently negotiating Free Trade Agreements (FTAs) with the FTAA region, the EFTA
group of 4 countries, the Central America Four (E l Salvador, Guatemala, Honduras, and Nicaragua)
group, and Singapore.
Canadian exports to the 33 other countries of the FTAA region accounted for 88.84% of Canada's
total merchandise exports in 2002.  However, the majority of the trade is accounted for by our
NAFTA partners and Chile (for which we already have established FTAs in place), which accounts
for 88.10 of the 88.84 total percentage points, leaving only 0.74%.  Of this 0.74 percentage points,
0.05 percentage points are accounted for by the Central America Four, who are also part of the FTAA
region.  Singapore and the EFTA group account for a further 0.50% of total exports.  Thus a net of1.24% of total Canadian exports is under FTA negotiation, after existing FTAs and duplication are
factored out of the totals to avoid double counting.
On the imports side, the FTAA region accounted for 69.69% of total Canadian merchandise imports
in 2002, of which 66.45 percentage points must be factored out on the account of trade with our
NAFTA partners and Chile, leaving 3.24%.  (The Ce ntral America Four account for 0.11% of total
imports, but are already included under the non-NAFTA/Chile FTAA total.)  EFTA accounts for an
additional 1.58% of total imports and Singapore 0.28%.  Thus a net of 5.10% of total Canadian
imports is under FTA negotiation.
Note that Canada also has an FTA with Costa Rica ; however, Canada's trade with this country was not
factored out from the above, as the agreement only came into effect on November 1, 2002.
Question 4
In some of the preferential trade agreements, there are provisions concerning trade remedial
measures (anti-dumping/countervailing duties and safeguard duties), which deviate from specific
provisions of the corresponding multilateral WTO agreements.  We would like Canada to present
information with regard to such deviations and its assessment whether such a situation puts non-preferential trading partners into a doubly disadvantageous situation with respect to   tariffs and also
non-tariff instruments like trade remedial rules. For example under NAFTA, different injury
determination standards in a safeguard investigation have been prescribed for regional partners
compared to the corresponding rules in th e WTO Agreement on Safeguards.  How would Canada
justify inclusion in its regional trade agreements of provisions deviating from the correspondingprovisions in the relevant multilateral WTO agreements?
Response
The position of the Parties to the North American Free Trade Agreement (NAFTA), the Canada Israel
Free Trade Agreement (CIFTA) and the Canada Chile Free Trade Agreement (CCFTA) is that the
exclusion from another Party's application of a global safeguard action under certain circumstances,
does not conflict with GATT Article XIX and the WTO Agreement on Safeguards in the context of a
free trade agreement conforming to GATT Article XXIV.
In two WTO dispute settlement cases, i.e., wheat gl uten and line pipe, the Appellate Body articulated
the rule of “parallelism”, pursuant to which the imports included in a serious injury determination
should correspond to the imports covered by the safeguard measure.  The Appellate Body went on toWT/TPR/M/112/Add.1
Page 56
say that ,  "although the safeguard measure was applied to imports from all sources, excluding Canada,
the USITC did not establish explicitly that imports from these same sources, excluding Canada,
satisfied the conditions for the application of a safeguard measure". The USITC was eventually
compelled to make a determination that imports from all sources excluding Canada, were an
important cause of serious injury.  The line pipe case essentially confirmed the wheat gluten case.
Canada has long held that the safeguard provision in NAFTA, the CIFTA and the CCFTA isconsistent with its obligations under the WTO and the provision has withstood the test of the dispute
settlement body.
Question 5
The Enabling Clause, which constitutes the legal basis for the GSP/GPT schemes, envisages that such
preferences have to granted in a ‘generalized, non-reciprocal and non-discriminatory ‘ way. Linking
the benefits to non-trade issues such as labour or environmental standards   introduces elements of
discrimination and reciprocity into such schemes.   Would Canada explain the justification for linking
its GPT scheme to non-trade issues?
Response
Canada’s General Preferential Tariff (GPT) treatment is a bilateral instrument meant to assist access
to Canada’s markets by developing countries.  Canada currently extends GPT to 184 countries.
Canada does not seek reciprocity in extending GPT treatment, nor does Canada link its GPT to thelabour or environmental standards of developing countries.
Question 6
The preferential rules of origin under various RTAs ensure that preferential trading conditions are
reserved for products originating in countries party to respective RTAs. Like in the textiles sector,
‘yarn forward rule’ in NAFTA provides that only textiles and clothing items produced from inputs
originating in the respective RTA partner, starti ng from yarn/fibre would fully benefit from the
preferential tariffs and rules. This effectively discourages Canadian exporters to procure inputs from
non-party trading partners. Moreover presence of tariff escalation, especially in sectors like textiles
where developing countries have crucial export interest, inhibits exports of downstream/final
products from non-preferential producers. How does Canada intend to rectify such a situation?
Response
The rules of origin under Canada’s preferential trade agreements, including those for textiles and
apparel products, only apply to trade among Canada and the Parties to the Free Trade Agreements
(FTA).  They do not modify the market access conditions for imports into Canada from countries
outside the FTAs.  There is no evidence that imports of textiles and apparel products from countrieswith which Canada does not have a FTA are being negatively affected.  Since 1995, non-FTA
countries have seen their share of Canada’s total imports of textiles and apparel increase, especially in
the apparel sector.
Question 7
Table III.2 on page 36 of the Secretariat Report mentions, interalia, that share of duty free lines in the
Canadian tariffs is the following:
 MFN- 48.4%,
 Products under GPT (developing countries)- 64%
 Products from LDC- 89.8%.WT/TPR/M/112/Add.1
Page 57
However the average of dutiable rate (other than zero tariff lines) against the above three category of
exportable goods are 13.1, 15.1 and 39.8 respectively.  This shows that most of the products of real
export interest of developing countries and LDCs are having exorbitantly high tariff rates. We would
like to hear the comments from the Canadian authorities on this aspect of discrimination against
imports from Developing countries and LDCs.
Response
The Doha Declaration states that product coverage in the non-agricultural market access negotiations
shall be "comprehensive and without a priori exclusions", aiming to reduce barriers “in particular on
products of export interest to developing countries.”   It is our goal to arrive at a result in the Doha
negotiations that respects the intent of that declaration.  We would note that, since January of this
year, LDCs have duty-free access to Canada for almost all goods, the only exceptions being over-
quota dairy products, eggs and poultry.  Our initiative is one of the most far-reaching LDC preference
schemes of any developed country in terms of the countries eligible, the products eligible, andadministrative simplicity.
With respect to textiles and apparel, rates have been progressively reduced.  Textile tariffs will be
between 12 and 14% on January 1, 2004, and apparel tariffs will be between 17 and 18%.  The
removal of quotas on these products in 2005 will improve access still further.  This is irrespective of
the outcome of the Doha negotiations.  With respect to these negotiations, we would note that, just asIndia wishes to obtain better access to the Canadian market for its exporters, Canada has export
interests with respect to the Indian market.  With good will and hard work on both sides, we believe
we can arrive at a result that is mutually beneficial.
Question 8
Para 38 of the Secretariat Report notes that tariff quotas are also used under FTAs to allow certain
volume of trade in specified textiles and clothing products that do not meet the rules of origin
required for preferential treatment. We would like to  know from Canada as to how it justifies evident
discrimination against non-party trad ing partners. We would also like to know whether the items
covered under such quotas are those already integrated into the GATT1994 or the ones under quota
maintained under the Agreement on Textiles.
Response
The preferential tariff treatment for non-originating textiles and apparel goods only applies to trade
between Canada and the Parties to the Free Trade Agreements (FTA).  They do not modify the market
access conditions for imports into Canada from countries outside the FTAs.  There is no evidence that
imports of textiles and apparel products from countries with which Canada does not have a FTA arebeing negatively affected.
There is no correlation between product covered under the WTO ATC and products identified for
preferential tariff treatment under FTAs.  Therefore products covered by FTAs include both products
that have been integrated into GATT 1994 and those which are still covered by the WTO Agreement
on Textiles and Clothing.
Question 9
Canada has generally been supportive of the developmental aspect of the multilateral trading system
and the case of developing countries for gaining   market access for their products. However, under
Canada’s Generalized Preferential Tariffs (GPT) scheme for developing countries, the excluded
products namely textiles, clothing, footwear, agricultural products are the ones that constitute theWT/TPR/M/112/Add.1
Page 58
export basket of most developing countries. Does Canada intend to review the product coverage
aspect of its GPT?
Response
Pursuant to section 36 of the Customs Tariff, Canada’s GPT will sunset on June 30, 2004, unless
extended.  A review of extending the GPT will commence later this year.
During the Uruguay Round, Canada committed itself to major trade liberalization with respect totextiles and apparel.  In 1994, the Most Favoured Nation (MFN) tariffs on textiles were between 16 -
22%.  These rates have been progressively reduced and will be between 12-14% on January 1, 2004.
For apparel, the 22-25% MFN tariff of 1994, will be down to 17-18% on January 1, 2004.  In
addition, over 40% of textile tariff items are duty-free. Furthermore, all quotas on textiles and apparel
are being abolished by January 1, 2005. Canada’s commitments under the Uruguay Round continue to
provide improved access into the Canadian market for textiles and apparel from developing countries.
The Doha Declaration states that product coverage in the non-agricultural market access negotiations
shall be "comprehensive and without a priori exclusions", aiming to reduce barriers “in particular on
products of export interest to developing countries.”   It is our goal to arrive at a result in the Doha
negotiations that respects the intent of that declaration.
In the case of agriculture, Canada’s GPT product coverage is taken into consideration in the context of
the WTO agriculture negotiations, as well as other initiatives and negotiations.  Significant portions ofagricultural tariff lines are already covered by GPT (65%), and of those lines over 70% are duty-free.
This does not account for the large number of products (almost 40% of all agricultural tariff lines)
which are already MFN-free.  This coverage largely responds to developing countries’ export
interests.  For example, Canada provides duty-free quota-free access for essentially all tropical
products.
Effective January 1, 2003, the Government of Canada has also extended duty free and quota free
access to imports from 48 of the world's least developed countries (LDCs), with the exception of
supply-managed agricultural products (dairy, poultry, and eggs).  This means that all eligible imports
from these countries would be assessed a tariff rate of zero, and all quotas on their eligible products
are now eliminated.  Our initiative is one of the most far-reaching LDC preference schemes of anydeveloped country in terms of the countries eligible, the products eligible, and administrative
simplicity.
Textiles
Question 10
Canadian government has started adjusting the Group-'A' limits for flexibilities invoked in Categories
9 and 31(a) from the year 1997 onwards. This does not appear reasonable for the following reasons-
There is no long standing practice of adjusting the level for Group-A while adjusting the restraint
level for Category 9 and Category 31 (a) for flexibilities, as such adjustments were not made by
Canadian authorities in 1995 or in 1996. The flexibilities for Category 9 and    3 l(a) were adjusted
against Group limit for the first time in 1997.
The clothing limit for Group A applies to category 1a to category 8b. Category 9, though a clothing
category, is clearly outside the Group A limit.
Furthermore, from 2001 the Canadian authorit ies have reduced the Group limits unilaterally
adjusting the abolished restraint level for category 6 which would affect the availability of
swing/carry over/carry forward flexibilit ies available to the exporting countries.WT/TPR/M/112/Add.1
Page 59
Are Canadian authorities considering reviewing their approach on the above issues?
Response
The administrative arrangements for the restraints of textiles and clothing products between Canada
and India provided for extensive flexibility. One flexibility mechanism provides for dealing with
market changes by swinging (transferring) quot a from an under-used category to another one in
greater demand. If India wishes to swing quota in or out of a group, then the group has to be adjustedaccordingly. To do otherwise would result in an absolute increase in the overall restraint level every
time a swing request were approved, which is not the intended purpose of the swing provision.
Adjustments for swing between one category and another is our standing practice for all our bilateral
agreements.
Canada is not aware of any lapse in the administra tion of this swing provision. We have reviewed our
records and indeed in 1995, we adjusted the Group Level for swing out from Sub-Category 1a to
Category 9 (133,701 mtk).  If India so wishes, Canada  is prepared to review it’s and India’s records
and make any necessary adjustments.
After eliminating its restraint on tailored collar (T/C) shirts, Canada did adjust India’s aggregate
restraint in order that the restraint level, which was normally used for T/C shirts would not be used for
other products under restraint and thus provide unintentional increases in the remaining restraint. The
ATC provides for this under Article 4.4. Canada did not, however, make any further adjustment in
1998 and in 2002 when it further eliminated a substantial number of restraint items even though it was
within its rights to do so.
Question 11
Under the Agreement on Textiles and Clothing (A TC), the Members are required to integrate
products from the list in the Annex to the Agreem ent in four stages. Canada   included a restrained
product in its integration programme for Stage 1. In Stage 2 also, it included an important restrained
product, namely, tailored collar shirts. In addition it partially liberalized restrictions on certain other
products. However, the preliminary examination of the Canada's third stage integration proposals
indicates that no major products of commercial significance to India are included in the integration
programme.
Some of the products (e.g. children's blouses and shirts, women's knitted blouses and shirts, women's
blouses and shirts of silk saris), which had been integrated under the 2
nd Stage of programme appear
to be included in the 3rd Stage integration programme notified by Canada. It seems that Canada has
chosen to liberalise quotas on a partial basis, liberalising some parts of particular quotas while
leaving the other parts under restriction until the end of the transition process.
In view of such selective liberalisation, Indi a's market access for apparel categories such as
T-shirts, knitted shirts, blouses and similar artic les, underwears etc., are affected. Would the
Canadian authorities consider removing the restraint on these items?
Response
Canada is also fully committed to the full integration of the textile and clothing sector into GATT
1994 disciplines by 1 January 2005 under the Agreement on Textiles and Clothing (ATC) and the
elimination of all remaining quotas by that date. The ATC also provided a negotiated 10-year
transition process to allow domestic industry to adjust – this represents a fundamental commitment
Canada made to its industry.WT/TPR/M/112/Add.1
Page 60
Canada has met and exceeded its obligations under the ATC transition arrangements (apparel imports
from restrained exporters are up over 80% from 1994 to 2001 and domestic share held by the
restrained importers is up from 31% to 45% from 1994 to 2001).
It should be noted that knitted shirts, blouses, and similar articles were all removed from quota on
January 1, 2002. Of interest to India, it would appear that only T-shirts and underwear remains subject
to quota.
Question 12
As per Article 1:4 of the ATC, the particular interests of cotton producing exporting members were to
be reflected in the implementation of the provision of the ATC. However, restraining countries like
Canada have entirely ignored the provision of Articl e 1-4 in their implementation of the ATC, with
adverse implications for the balance or rights accruing to the cotton producing exporting Members.
Will the Canadian authorities take appropriate remedial action to ensure that the provisions of
Article 1:4 of the ATC are fully implemented?
Response
In addition to complying fully with the ATC transitional requirements under the integration process,
Canada has also removed quota restrictions, including men’s tailor-collared-shirts in 1997; rainwear,
women’s and girl’s ensembles, selected women’s, girl’s and children’s blouses and shirts, and babies
winterwear in 1998; and baby wear, swimwear and other women’s and girls’ blouses and shirts in
2002.  These are commercially important products for many restrained exporting Members, including
the cotton-producing exporting countries such as China, India, and Pakistan.
Question 13
It is reported that the Canadian authorities have not debited the excess shipment of the year 2002
under Category 9 against the quota level of the year 2003 and asked for export licenses for 2003. Theproblem has been occurring during the last two yea rs. There is no process to automatically charge
the year-end excess shipments to the next year's quota, which results in held up consignments and
consequent loss to the exporters as well as importers. Will the Canadian authorities consider
introducing automaticity in this regard?
Response
Canada has debited the excess 2002 shipments against 2003 – we have done this and informed the
Indian Embassy in Ottawa. We will not agree to au tomatic debiting of over-shipments from year to
year, and we are very disappointment that for the second year in a row Indian authorities have over-
issued export certificates, this time for twice the amount of the previous year. Canadian authorities
will therefore be notifying Canadian importers that they should be monitoring Canadian import levelsfrom India to be sure they are not caught unaware of potential over-shipment problems and possible
delays .
Agriculture
Question 14
Canada is one of the largest exporters of agricultural  products.   However, it is noted that in Canada
a number of barriers exist to free trade in the farm sector. The production of dairy products, chicken,
egg etc is ‘supply managed’ and is subject to import restrictions.  Similarly, it is the agriculturesector, which has the distinction of enjoying the highest MFN tariff protection ranging up to 300%. A
number of MFN tariff lines in agriculture are having non-ad valorem rates, which further discourageWT/TPR/M/112/Add.1
Page 61
low priced agro-imports. How would Canada justif y such measures, which impede imports from
developing countries?
Response
The level of current Canadian MFN tariffs reflects the results of previous rounds of multilateral trade
negotiations in which Canada participated.  Overall, Canada has one of the world’s most liberal tariff
regimes.  In the WTO negotiations on agriculture, Canada has proposed real and substantialimprovements in market access for all agriculture and food products through a comprehensive
approach addressing tariffs, tariff quotas and tariff-quota administration.
Trade remedial measures
Question 15
As the Secretariat Report notes Canada is one of the most frequent users of anti-dumping measures.
Moreover, they are also initiating anti-subsidy inve stigations, many times in conjunction with the
anti-dumping measure for the same product, against trading partners. It is not only the definitive anti-dumping/countervailing duties that affect trade but even the rumour of initiation of such an
investigations affects the trade of the concerned country. Defending an anti-dumping/countervailing
investigation also involves heavy expenditure. There is, therefore, an urgent need to put in place a
mechanism to safeguard the interests of developing countries in ensuring their market access into the
investigating countries. We would like to have Canada’s comments on this issue.
Response
Canada recognizes that defending oneself in an anti-dumping or countervailing investigation can
involve the expenditure of considerable resources.  For that reason, Canada maintains a high standard
for properly documented complaints from Canadian industries and must be assured that complaints
are well documented before proceeding with the initia tion of an investigation.  Secure access to other
Members' markets is important to all WTO Members.  For that reason, Canada has proposed that
initiation standards for anti-dumping and subsidy-countervail investigations be examined in the
context of the current WTO rules negotiations.
Question 16
Article 15 of the Agreement on implementation of  Article VI of the GATT 1994 requires special
consideration to be given by developed countries to developing countries, and constructive remedies
to be explored before applying anti-dumping duties on developing country WTO members. India
would like to know the number and percentage of cases against exporters from developing countries
in which Canada explored constructive remedies, nature of such remedies explored and the final
outcome.
Response
Canada considers that price undertakings are a constructive measure that can be taken with respect to
anti-dumping measures under the Anti-dumping Agreement.  In this regard, all exporters are informed
of the possibility of price undertakings at the time the investigation is initiated. Any discussions
surrounding possible price undertakings would have been mentioned in the public notices issued by
the Canada Customs and Revenue Agency during the course of its investigations.WT/TPR/M/112/Add.1
Page 62
Services
Question 17
In the post-September11 scenario, the Canadian visa regime has become stricter and time consuming.
Indian exporters, particularly the Small and Medium  Entrepreneurs (SMES) who plan to visit Canada
for the first time to explore the market opportunities for their respective electronics and IT related
products and services sector face extreme difficulties in complying with the requirements laid downfor grant of business visa at a short notice. Is Canada considering granting adequate flexibility in
their visa regime so that  business visas are granted expeditiously to Indian SMEs proposing to
undertake market exploration tours to Canada ?
Response
Canada's regime on the temporary entry and stay of business people has been liberal for many years
and has become more facilitative since entry into force of the Immigration and Refugee Protection
Act and Regulations in June 2002.  Employees of Indian SMEs exploring business opportunities inCanada do not need to obtain a work permit.  They do, however, need to apply for a temporary
residence visa to visit Canada.  For more information, see
<http://www.cic.gc.ca/english/visit/index.html>.) This is an entry document, not a business visa, and
it is issued as quickly as possible, depending on the completeness of the application and the workload
of the Canadian visa office abroad.
Question 18
Canada's commitment under GATS provides that intra- corporate transfer visa can be obtained by
professionals covered, inter alia, under (a) Managers, (b) Executives, and (c) Specialists. However,
visa is often denied to the persons falling in the above categories. This acts as a barrier to market
access. Does the Canadian   government have any programme to disseminate its  legal commitmentsunder GATS  to its missions abroad so that visa is not denied to intra- corporate transferees?
Response
Canada issues work permits to qualified intra-company transferees consistent with its GATS
obligation or its general immigration provisions.  The Temporary Foreign Worker Guidelines/Foreign
Worker Manual contains a GATS appendix and other relevant information on the requirements andprocessing for legitimate intra-company transferees.  This administrative manual is used by Canada's
visa officers abroad and it is also available to the public on the website of Citizenship & Immigration
Canada at <http://www.cic.gc.ca/manuals-guides/english/fw/index.html>.
Question 19
One requirement by Canada for giving visa to in tra-company transferees is that they should be
employed by the transferring employer for at le ast one year prior to the application for visa, On
account of the fluidity, particularly, in the information technology sector, this regulation acts as a
market barrier for Indian professionals. Would Canada consider reducing the time frame of prior
employment to six month?
Response
An employee of only six months with a transferring company is not a legitimate intra-company
transferee.  Such an employee would not have had enough time to acquire the necessary experiencein, or knowledge of the transferring company and its foreign operations required of an executive, a
manager or a person with specialized knowledge, according to their respective definitions.  The 12-WT/TPR/M/112/Add.1
Page 63
month prior employment requirement is fair and reasonable and the standard for many GATS
Members.  In the current GATS negotiations, Canada has requested other Members commit to a more
liberal prior employment period of one-year in the past three.  Information technology workers should
seek work permits under Canada's existing GATS commitment on professionals or under the pilot
project Facilitated Processing for IT Workers.
For more information see <http:// www.cic.gc.ca/ english/work/itw.html>).
Miscellaneous
Question 20
Under the Canadian Constitution, provincial governm ents do enjoy legislative authority including on
matters affecting international trade. For e.g., a number of local-content requirements are in place at
the provincial level. Similarly in services, insurance companies are regulated at provincial level,
which complicates market access in this sector. How does Canada intend to meet its obligations
under the WTO within its constitutional structure?
Response
The Provincial Liquor Boards (PLBs) in Canada were established before the GATT was created, and
their existence and activity is consistent with the provisions of GATT Article XVII [“State Trading
Enterprises”].  In accordance with that Article, they are notified to the WTO as STEs.  The PLBs
operate as businesses whose decisions are based solely on commercial considerations and marketforces.  In Alberta, responsibility for the selection, retailing, warehousing, and distribution of liquor
rests with the private sector.  The alcoholic beverage-producing countries, which are major exporters
to Canada, have accepted the policies of Provincial liquor agencies through various bilateral
agreements.  Canada's commitments under these agreements are implemented on an MFN basis.
Imported products compete with domestic products in the PLB retail stores, and enjoy a large share of
the Canadian market.  By volume, imported spirits accounted for 31.2% of the market in 1999, rising
to 32.4% in 2001; imported wines held 65.4% of the market in 1999, rising to 67.0% in 2001.  Both
the value and market share of  wine and spirit imports continue to increase.
Where local content requirements exist, they actually have the effect of limiting the volume of wine
which can be sold in the private retail outlets, due to the limited potential of grape production inCanada.
EUROPEAN UNION
Report by the Government (WT/TPR/G/112)
II.  Trade Policy Developments
Focus on the Canada-US relationship
Question 1   (para 49)
Could Canada please explain the current cooperation on regulatory issues with the US and what
further steps does she intend to take to reduce the differences in approaches with the US through
harmonisation, regulatory cooperation and mut ual accommodation, while preserving Canadian
values?WT/TPR/M/112/Add.1
Page 64
Response
Due to our geographic proximity and our close economic ties, Canada and the US, have a long history
of regulatory cooperation in many sectors, including animal and plant health, food, chemicals,
transportation, environment, and construction. Canada and the US, together with Mexico, are also
parties to the NAFTA Committee on Standards-Related Measures whose functions include to
facilitate greater North American compatibility in standards-related measures [including technicalregulations] and to enhance cooperation on the development of standards-related measures.  Part of
the mandate of the NAFTA Committee on Sanitary and Phytosanitary Measures is to facilitate
cooperation between the Parties including cooperation in the development, application, and
enforcement of sanitary and phytosanitary measures.  We are always open to exploring all means of
enhancing regulatory cooperation with the United States, and with other trading partners as well.  At
the same time, we will ensure that we maintain th e capacity to protect Canadian values, such as the
health and safety of Canadians, while advancing both our economic and social interests.
Question 2
How will Canada prevent that closer regulatory cooperation with the US is translated into wider
regulatory differences vis-à-vis other trading partners? Should not Canada rather aim at increasing
international harmonisation of regulatory approaches?
Response
As the United States is Canada’s largest trading partner, we view increased regulatory cooperation
between our countries when appropriate as enhancing the potential to create substantial economic
benefits for both Canada and the US.   We do not see this objective operating so as to exclude other
mechanisms to ease regulatory barriers, such as promoting regulatory cooperation with the EU as part
of our bilateral Trade and Investment Enhancement Agreement.  The use of international standards,guidelines, and recommendations is an important element in Canada’s regulatory development
process, and their development and use internationally is something we continue to support and
promote.
Canada-US Smart Border Declaration
Part B:  Does the Smart Border Regime ap ply to all goods and persons crossing the US-Canada
border, including those originating in third countries ?
Response
The Smart Border Declaration signed by Deputy Prime Minister Manley and Homeland Security
Director Ridge in December 2001 recognizes that public security and economic security are mutually
reinforcing.  The Declaration is based on the long history of cooperative border management betweenCanada and the U.S.  The Smart Border Declaration is not a regime; rather it consists of a 30-point
Action Plan based on four pillars; the secure flow of people, the secure flow of goods, secure
infrastructure, and the sharing of information.
Those initiatives in the Action Plan which relate to the movement of goods or people apply in either
country and in some cases may be applicable to those originating in third countries (such as working
together to identify security threats before they ar rive in North America or the use of customs staff to
target marine intransit containers arriving in Canada or the U.S.).  Other initiatives such as NEXUSwhich expedites low risk travellers, or Free and Se cure Trade (FAST) for low risk commercial goods,
address Canadian and U.S. people and goods, respectively.WT/TPR/M/112/Add.1
Page 65
Part C:  Could Canada please explain what additional  measures are underway in the context of the
Smart Border Declaration?
Response
On September 9, 2002, Prime Minister Chrétien and President Bush issued a joint statement to
reaffirm both countries’ commitment to fully realize the smart border vision and on December 6,
2002, Deputy Prime Minister John Manley and Governor Tom Ridge released a status report to markone year of progress on the Smart Border Action Plan. While the status report highlights the
significant progress made to date, confirming that Canada and the United States are on track in the
implementation of the 30-point Action Plan items and in bringing steady improvement to the
efficiency and security of our shared border, it also identifies areas of future work where close
cooperation serves our mutual interests, such as biosecurity and science, and technology research and
development (see link for September 2002 status report http://www.dfait-maeci.gc.ca/can-am/menu-
en.asp?act=v&mid=1&cat=10&did=1671).
Regional and Bilateral Initiatives
Question 3   (para 69-72)
How does Canada see her numerous bilateral initia tives with Latin American countries (Central
America, CARICOM, Dominican Republic, Andean Communi ty) in light of the priority attached to the
successful conclusion of the ongoing WTO negotiations and FTAA negotiations respectively?
Response
In Canada's view, our bilateral and regional free trade initiatives complement and reinforce the
multilateral negotiations taking place through the WTO, which remains the cornerstone of Canada's
trade policy.  Likewise, Canada's negotiations with four Central American countries (El Salvador,
Guatemala, Honduras and Nicaragua) and our expl oratory discussions with CARICOM, the countries
of the Andean Community, and the Dominican Republic are building blocks to the Free Trade Area of
the Americas (FTAA) process, which is our top regional priority.  Bilateral and regional agreements
can support multilateral liberalization efforts by generating political momentum, developing and
refining elements of the trade regime, and preparing domestic industries for the further opening of
markets.  By ensuring that such arrangements ar e consistent with WTO rules, these initiatives also
help strengthen the multilateral system.
Regional and sub-regional agreements, moreover, can play a positive role in advancing global
negotiations either by flagging new issues and helping to place them on the global agenda, or by
providing innovative solutions to trade problems that can subsequently be elevated and adapted from
the bilateral or regional to the multilateral arena.  The bilateral and regional free trade agreements that
Canada has negotiated contain some innovative features through which we have tried to enhance
cooperation, strengthen institutional capacity, and promote long-term economic growth through
increased economic exchanges.  One example of this is the North American Free Trade Agreement
(NAFTA), in which certain provisions, such as services and intellectual property, were ahead of the
multilateral curve at the time the agreement was signed.  A more recent example is the Canada-Costa
Rica Free Trade Agreement (FTA), which is the first bilateral FTA containing innovative stand-alone
provisions on trade facilitation.
In addition, closer economic relations, as well as the closer governmental relations forged by the
negotiations process, contribute to progress on the broader social, political and environmental fronts.
As such, bilateral and regional initiatives can be an important element of a country’s development
efforts.  Engaging developing countries in FTAs also helps to build their capacity in trade
negotiations.WT/TPR/M/112/Add.1
Page 66
Consultations and Transparency
Question 4  (para 84)
The EU would be interested in learning more about the measures Canada will consider in order to
strengthen the role of parliamentarians during the negotiation an implementation of trade
agreements.
Response
The Government has the privilege of keeping Parliament fully informed and consulted through the
Standing Committee on Foreign Affairs and International Trade (SCFAIT). The committee has
already conducted two studies (1999 and May 2002) that addressed WTO issues and held extensive
public testimonies on various facets of these negotiations. The SCFAIT reports provide valuable
direction and guidance for our participation in WTO negotiations and ensure that the Government’s
positions and proposals reflect the views of Canadians.  The Government Response to the May 2002
SCFAIT Report entitled "Building an Effective New Round of WTO Negotiations: Key Issues forCanada" was tabled in the House of Commons in October 2002.
In light of the Inter-Parliamentary Union resoluti on on the creation of a parliamentary dimension to
the WTO in February 2003, Canada is presently reviewing its consultation strategy with elected
officials to ensure transparency, inclusiveness, and broad-based support for Canada's trade agenda.
Question 5   (para 85)
Could Canada please explain further provincial  and territorial involvement in trade policy?
Response
Although the exclusive responsibility of the federal government, trade agreements and dispute
settlement increasingly address areas of provincial jurisdiction and require provincial implementation.
The federal government maintains a close relationship with the provinces and territories in the area ofinternational trade policy by means of a variety of mechanisms. Provincial and territorial governments
are consulted all along on the identification and refining of issues, and the development of strategies
and positions. Federal, provincial, and territorial government officials participate in the Federal-
Provincial-Territorial Committee on Trade (C-Trade), which meets at least quarterly in order to
exchange information, share perspectives, and develop Canadian positions on a range of internationaltrade policy issues, including negotiations. In addition to these regular meetings, Canadian Ministers
responsible for trade as well as Deputy Ministers meet roughly once a year to develop further the
cooperative relationship that exists with provinces and territories in trade policy, to update them on
recent developments, and to discuss further coop eration on key issues. The Department of Foreign
Affairs and International Trade also maintains restricted federal-provincial-territorial websites, andschedules numerous conference calls almost on a weekly basis with provinces/territories to facilitate
the sharing of documents and current information on wide variety of trade policy matters.
Other initiatives
Question 6   (para 100)
The EU would be interested in learning more about the practical implementing steps of the Smart
Regulation initiative announced by the Canadian Government. What tools will be applied in the
application of this initiative and how do they link to Canada’s regulatory impact analysis practices?WT/TPR/M/112/Add.1
Page 67
Response
The 2002 Speech from the Throne, which introduced the Smart Regulation initiative, also called for
the creation of an External Advisory Committee that will "recommend areas where government needs
to redesign its regulatory approach to create and maintain a Canadian advantage".  The External
Advisory Committee on Smart Regulation (EACSR) is  being set up and will provide an external
perspective and expert advice to the Government of Canada on regulatory issues spanning economicand social policy objectives.  In February 2003, the Prime Minister appointed the Chair for the
EACSR, and members will soon be appointed fr om various sectors, including business, non-
governmental and academic communities.
Question 7
How does Canada plan to ensure that the implementa tion of the Smart Regulation initiative serves the
objective of international harmonisation of regulatory approaches? Does this initiative foresee
cooperation with third country regulators and consultation with third country stakeholders?
Response
As set out in the Speech from the Throne, " we need regulation to achieve the public good, and we
need to regulate in a way that enhances the clim ate for investment and trust in the markets". Toward
this objective, there is certainly room for international cooperation on regulatory issues.
The Canada-EU Joint Summit Statement in December 2002 identified regulatory cooperation as a
priority area toward enhancing our bilateral trade relationship.  Since then, we have engaged in
dialogue on regulatory cooperation with Europe, which would include exchanges of our respective
approaches in regulatory reform.
Report by the Secretariat (WT/TPR/S/112)
II.  Trade and Investment Policy FrameworkInstitutional and Policy Framework
Question 8:  Follow-up of written question for the TPR of 2001: (para 7)
Given the effects in terms of market access of divergent policies and practices at provincial level,
could Canada please provide further information on the progress made in terms of reduction of this
type of barriers in the context of the implem entation of the 1995 Agreement on Internal Trade,
particularly in relation to government procurement and standards?
Response
Since the Agreement on Internal Trade came into effect in 1995, governments have made
considerable progress.  Details are highlighted below.
In 1998, governments, with the exception of British Columbia and the Yukon, agreed to extend the
non-discrimination commitment to procurement undertaken by their municipalities, academic
institutions, social service agencies, and hospitals (the “MASH” sector).  The Secretariat estimates
this expansion covers an additional $30 billion of annual purchasing.
In 2002, British Columbia agreed to extend non-di scrimination provisions to its MASH sector.WT/TPR/M/112/Add.1
Page 68
The implementation of AIT requirements for transparency in procurement and corporate registration
and reporting through Internet-based systems has made it easier for firms to operate across provinces.
In 1997, an Internet-based electronic tendering system came into operation for procurement by
government departments;
In 2000, a portal was established for procurement by MASH entities;
In 2002, governments launched a web site to make it easier for corporations to do business anywhereacross provincial boundaries.
By July 2001, the requirements of the Labour Mobility Chapter had largely been met.
Of the 51 regulated professions under consideration, regulatory bodies for 42 of them had either met
or were well on their way to meeting the requirements  of the Agreement.  This represents 97% of the
workers in these regulated professions.
Progress is being made on the nine remaining occupations.
Unlike occupations that are usually regulated by non-government bodies, trades are regulated directlyby all provincial/territorial governments.  Each ju risdiction determines which trades it will regulate,
whether certification in the trade will be compulsory or voluntary, and what tr aining is required.  All
jurisdictions have taken steps or committed to offer further recognition of qualified trades persons.
Parties have signed a cooperative enforcement agreement on consumer related measures to facilitate
intergovernmental cooperation among consumer protection enforcement agencies.
Parties have made progress towards national sta ndards on truck safety, weight and dimensions and
some have eliminated extra-provincial truck operating authorities.
Participation in the WTO
Question 9 :  (para 19)
Does Canada plan to include in future notifications domestic support for agriculture, subsidies and
import licensing? What is the reason behind the lack of notifications by Canadian provinces to the
WTO since 1998?
Response
With respect to import licensing, Canada has included detailed information on each of these subjects
in previous WTO notifications, and will do so in the future.
Canada’s latest notification regarding domestic support is for 1999.  The notification for 2000 will be
submitted as soon as possible.  All domestic support to agriculture, including support by the federal
and provincial governments as well as support provided through joint federal and provincial
programs, is reported in Canada’s annual notification of domestic support to the Committee on
Agriculture of the World Trade Organization.Canada notifies changes to practices on import licensing (MA:1).  There have not been any changes to
practices on import licensing since our last no tification on August 2, 2001 (G/AG/N/CAN/45).
The Federal Government remains engaged in on-going consultations with Canadian provincial
governments regarding notification requirements under Article XVI:1 of the GATT 1994 and Article
25 of the Agreement on Subsidies and Countervailing Measures.  Thus far, the provinces have not
advised the Federal Government of any programs that meet the criteria for the purposes of
notification.WT/TPR/M/112/Add.1
Page 69
III.  Trade Policies and Practices by Measure
Measures directly affecting imports
(i) Customs procedures
Question 10   (para 11)
What is the scope of the Canadian Customs Action Plan? Is it intended to apply to other trade than
US trade carried by road? What are the requireme nts for importers to Canada to benefit from the
pre-approved carrier status? How will the security  measures applied in the aftermath of September
11 affect the implementation of this Plan?
Response
The Customs Action Plan (CAP) is an ambitious change regime, intended to provide Customs with a
more appropriate balance between facilitation and enforcement in Customs program delivery.  The
Plan is designed to achieve this balance by facilitating the flow of low-risk goods and people while
ensuring that there is improved program compliance and interdiction of inadmissible goods andpeople. This requires a broad-based approach to fundamentally change Customs processes.  The new
approach to program delivery is premised on the principles of self-assessment, advance information,
and pre-approval. While these principles exist in current program delivery, the CAP approach is
expanding their application well beyond what has existed previously.  Underpinning the application of
these program delivery principles are risk-based processing, and a fair and effective sanctions regime.
The initiatives outlined under the Customs Action Plan are not limited to trade with the United States.
Within the four commitments of the Customs Action Plan, the CCRA's fourth commitment is to
"promote certainty and consistency for exporters and for Canadians traveling abroad."  The
international focus of this commitment includes trav eler’s initiatives, such as Advanced Passenger
Information/Passenger Name Record (API/PNR),  and commercial initiatives such as Advance
Commercial Information (ACI).
As part of the Customs Action Plan, there are two programs which allow importers to benefit from
pre-approved carrier status.  These programs are the Customs Self Assessment program (CSA), a
progressive new trade option for clients who invest in compliance, and Free and Secure Trade
(FAST), a harmonized commercial process (between the US and Canada) that builds on the conceptsand principles of the CSA program.
Customs Self Assessment:
Importers eligible to apply to the CSA program include those who:
are resident in Canada;
have a history of actively importing for at least two years;are without contraband or major commercial infractions;
are prepared to make an investment in business systems;
are willing to provide senior management representation that commercial business processes, customs
interfaces, and the required trigger, audit trails, and linkages exist or will exist in the business's books
and records; and
are prepared to sign a Client Undertaking document with the CCRA
Carriers eligible to apply to the CSA program include those who are:
bonded or post-audit;
have a history of transporting goods to Canada for at least two years;WT/TPR/M/112/Add.1
Page 70
without contraband or major commercial infractions;
willing to be liable and maintain control of CSA shipments until delivered;
willing to provide senior management representati on that proper commercial business processes and
audit trails exist or will exist; and
prepared to sign a Client Undertaking document with the CCRA.WT/TPR/M/112/Add.1
Page 71
Free and Secure Trade:
In order to transport goods under the FAST program, commercial carriers and drivers must be
registered and able to demonstrate a high level of compliance with the laws and regulations
administered by the Canada Customs and Revenue Agency (CCRA).
The FAST driver program involves a rigorous pre-screening and approval process for their
registration, which is jointly administered by the CCRA, the United States Customs Service andCitizenship and Immigration Canada, and the United States Immigration and Naturalization Service.
Participants will be granted membership if the applicant has not had a serious customs infraction, has
not been convicted of any offence, and there is no other information that undermines the CCRA's
confidence of the applicant's compliance with program obligations.
Drivers applying to the FAST program will qualify if they are:
Citizens or permanent residents of the U.S. or Canada
Admissible to Canada or the U.S. under applicable immigration laws and have no criminal record forwhich they have not received a pardon, rehabilitation and/or waiver
Are of good character
Are 18 years of age; and
Have a valid driver's license
For Canada, the criterion is similar to what is used for the Commercial Driver Registration Program
(CDRP).   If drivers are planning on using FAST cl earance option into Canada or the United States,
they must be FAST approved.
Investing in the Future: The Customs Action Plan (CAP) 2000-2004, published in April 2000
provides CCRA with a new perspective and vision for border management and trade administration.
The two main features of the Customs Action Plan are risk-based processing, for travellers andtraders, which will streamline processing for low risk clients and intensify processing for those that
are higher and unknown risk, and a fair and effective sanctions regime.
The Customs Action Plan was in place prior to the events of September 11, 2001, and provides the
basis for initiatives we are currently pursuing.  The events of September 11th resulted in the
acceleration of some CAP initiatives, while other initiatives have been adjusted or remainedconsistent with their original implementation schedule.
(iii) Tariffs
Question 11
Follow-up of written question for the TPR of 2001: (para 27)
Canada has tariff peaks (exceeding 15%) on 657 lines, not taking into account the 183 tariff lines
covered by out-of-quota tariffs. Could Canada please  indicate whether and how she intends to reduce
or eliminate such tariff peaks in the on-going WTO negotiations?
Response
The Secretariat's report (WT/TRR/S/112, Chapter III, Table III.1) shows that in 2002, the average
applied MFN tariff in Canada was 21.7% for agricultural goods overall which includes the over-quota
tariffs which average 139 percent.   Imports of products subject to tariff quotas generally enter at very
low in-quota rates, averaging about 3% on a MFN basis which is comparable to the rates foragricultural products not subject to tariff quotas and non-agricultural goods.WT/TPR/M/112/Add.1
Page 72
The level of current Canadian MFN tariffs reflects the results of previous rounds of multilateral trade
negotiations in which Canada participated.  Overall, Canada has one of the world’s most liberal tariff
regimes.
In the WTO agriculture negotiations, Canada has called for an ambitious harmonizing reduction
formula to achieve maximum reductions from final bound tariffs and substantial reduction of tariff
disparity between competing products and tariff escalation from the raw to processed form of theproduct.  Such a formula should lower tariffs to a more uniform level, but for particularly sensitive
products, Members should have the option to achieve market access improvements in other ways –
such as providing a specified quantity of duty-free access to all Members through tariff quotas.
Where a Member chooses to provide access improvements through tariff quotas, a significant
improvement in market access can be achieved through commitments that expand access, eliminate
in-quota tariffs, and ensure clear rules so that tariff quota administration does not impede access.
(vi) Quantitative restrictions and controls
Question 12   (para 88)
Could Canada please explain on which basis US -manufactured products are excluded from the
prohibition of import of second-hand motor vehicles and aircraft?
Response
The following imports are prohibited under the Customs Tariff: second-hand motor vehicles less than
15 years old, except if manufactured in the United States; used or second-hand aircraft, except if
imported from the United States; and reprints of Canadian and British works copyrighted in Canada.
Prohibitions on the importation of used goods are common.  In the context of FTAA negotiations, for
example, a number of countries are proposing a blanket prohibition on all used goods. Canada is
prepared to consider eliminating its prohibition on used vehicles in the context of bilateral ormultilateral negotiations, if other countries are prepared to do the same.  Canada withdrew the
prohibition on the importation of used vehicles from the United States during the negotiation of the
Canada-U.S. FTA.  Canada and Mexico agreed to  phase-out the prohibition on originating vehicles
under the NAFTA.  Under the Canada-Chile FTA, however, Chile chose to maintain its prohibition on
used vehicles; therefore Canada maintained its measure.
It is important to note, however, that Canada’s Motor Vehicle Safety Act  and Regulations require that
all vehicles imported into Canada comply, at the time of importation, with the Canada Motor Vehicle
Safety Standards in effect on the date the vehicle was manufactured.  Vehicles manufactured for sale
in countries other than Canada and the United Stat es that do not comply with the requirements of the
Canada Motor Vehicle Safety Act, cannot  be altered to comply and cannot
 be imported into Canada.
The only exceptions to this rule are vehicles fifteen (15) years old or older  a s  d e t e r m i n e d  b y  t h e
month and year in which the vehicle was manufactured and buses manufactured before January 1,
1971.
Vehicles acquired in foreign countries other than the U.S. and designed, built, tested and certified to
meet either all applicable Canada Motor Vehicle Safety Standards  or all applicable United States
Federal Motor Vehicle Safety Standards  and bearing a statement of compliance label affixed by the
original manufacturer, as required by the Regula tions, may be eligible for importation into Canada
provided the vehicle has not been altered and the certification from the original manufacturer is
maintained.  Further information is available from: Transport Canada, Road Safety and Motor Vehicle
Regulation Directorate, at 1-613-998-8616 for further information.WT/TPR/M/112/Add.1
Page 73
(vii) Standards, technical regulations, and sanitary and phytosanitary measures
Question 13   (para 91)
In accordance to the Government of Canada Regulatory policy, a specific directive must be followed
when regulating. Could Canada indicate what are th e criteria laid down in such directive? Is
international regulatory policy one of those criteria? Does a similar directive exist for regulatory
policy at provincial level?
Response
The Regulatory Policy of the Government of Canada provides the primary policy framework for
making regulations.  It provides the guiding principles for the development of regulations and it
imposes certain requirements, including:
1. Canadians are consulted, and that they have an opportunity to participate in developing or
modifying regulations and regulatory programs.
2. They can demonstrate that a problem or risk exists, federal government intervention is
justified and regulation is the best alternative.
3. The benefits outweigh the costs to Canadians, their governments and businesses. In particular,
when managing risks on behalf of Canadians, regu latory authorities must ensure that the limited
resources available to government are used where they do the most good.
4. Adverse impacts on the capacity of the economy to generate wealth and employment are
minimized and no unnecessary regulatory burden is imposed. In particular, regulatory authorities must
ensure that:
information and administrative requirements are limited to what is absolutely necessary and that they
impose the least possible cost;
the special circumstances of small businesses are addressed; andparties proposing equivalent means to conform with regulatory requirements are given positive
consideration.
5. International and intergovernmental agreements are respected (see Appendix A of the
Government of Canada Regulatory Policy) and full advantage is taken of opportunities for
coordination with other governments and agencies.
6. Systems are in place to manage regulatory resources effectively.
7. Other directives from Cabinet concerning policy and law making are followed such as the
Cabinet Directive on Law-making and the Cabinet Directive on the Environmental Assessment of
Policy, Plan and Program Proposals and the Cost Recovery and Charging Policy.
When developing or changing regulations, federal re gulatory authorities must ensure that regulatory
officials are aware of and adhere to obligations set out in international and intergovernmental
agreements and accords.
In particular, for technical regulations that affect trade, federal regulatory authorities must:
With regard to notificationWT/TPR/M/112/Add.1
Page 74
prepublish proposals for new or changed technical regulations in Canada Gazette, Part I for a period
of at least 75 days, except in urgent circumstances, and take into account comments received;
With regard to performance-oriented requirements specify, where possible, technical regulatory
requirements in terms of performance rather than design or descriptive characteristics;
give positive consideration to accepting as equivalent other forms of technical regulatory
requirements, if satisfied that they adequately fulfil the objectives of the existing regulations;for TBT, ensure technical regulations treat products from one jurisdiction no less favourably than like
products from another;
for SPS, ensure measures do not arbitrarily or unjustifiably discriminate where identical or similar
conditions prevail;
ensure technical regulations are no more restrictive of entry into markets than is necessary;
With regard to international standards
use available international standards, guidelines and recommendations where those standards achieve
the regulatory objective;
With regard to enforcement
treat regulatees and products from one jurisdiction no less favourably than those from other
jurisdictions when assessing conformity to techni cal regulatory requirements, providing they are in
comparable situations;
With regard to complaint resolution
have in place a process to review complaints concerning conformity assessment procedures and must
take corrective action when justified.
(The Canadian Government Regulatory Policy documen t is available in full at the following Internet
link: http://www.pco-bcp.gc.ca/raoics-srdc/default.asp?Language =E&page= publications &sub=governmentofcanadaregula).
There is no similar directive for regulatory policy at the provincial level.  It should be noted that under
the Canadian constitution, the provinces have exclusive legislative jurisdiction in a number of areas.
Question 14   (para 97)
It is stated in the report that technical regulations and standards continue to differ among provinces.
Could Canada please inform about the steps that hav e been taken to ensure that provincial level
standards (for example for heaters, valves, pumps, as well as work safety and security standards) are
transparent and can be easily accessed by foreign producers?
Could Canada please explain further in what cons ists the on-going work of the Intergovernmental
Affairs and Trade (IGAT) Branch with the Agreement on International Trade Secretariat, aimed atreducing differences in technical regulations and standards, particularly on goods, among provinces?
Response
The Canadian Government continues to encourage the provinces to be more transparent and provide
notifications at an earlier stage.WT/TPR/M/112/Add.1
Page 75
The Intergovernmental Relations and Outreach Branch (IRO) within Industry Canada has overall
responsibility for recommending any changes to the Agreement on Internal Trade to the federal
Minister of Industry.  Within the Agreement, the sectoral chapters (e.g., Consumer-Related Measures
and Standards, Agricultural and Food Goods, Alcoho lic Beverages, etc.) deal with some aspect of
technical regulations and standards.  IRO Branch liaises with federal officials responsible for the
sectoral chapters to monitor progress towards meeting the targets and obligations in these chapters.
Question 15   (para 98)
According to this paragraph, Canada’s Standards Strategy is aimed at promoting the use of
(voluntary) adopted or adapted internationally accepted standards to the greatest extent possible.
Could Canada please elaborate further on how this ob jective is ensured in practical terms under the
above-mentioned Strategy?
Response
Under the Canadian Standards Strategy (CSS), SCC has developed a framework for developing
national positions with respect to international standardization.  This includes participation in
international forums, agreements, and events.
SCC policy is to continually improve the rate of adoption of international standards as the basis of
national standards of Canada (NSCs).  Of the 189 NSCs approved by SCC in 2001/02, 84% were
adopted from or based on international standards.SCC is a major player and continues to expand its role in the development of international standards.
In 2003, SCC had Participation status in 434 ISO and IEC technical committees, subcommittees, and
Observer status in 122 committees.  This represents an increase over the previous year.
SCC continues to promote the benefits of voluntar y standardization among Canadian stakeholders. In
2002 we launched "Regwatch" an electronic data base which enables Canadian regulators to trackstandards in Canadian regulations. In 2003 SCC will be launching "Standards Alert" a similar
electronic based system which will enable Canadians to learn about Canadian and international
standards. These initiatives represent a signific ant contribution to promoting transparency and
demonstrating the benefits of voluntary standardization to a wide range of users, including industry,
government, and consumers.
Part B:  Does this Strategy intend to cover also Canadian provinces? Could Canada please indicate
whether the harmonisation of standards within the regional context of the NAFTA conflicts with
international standards and, if so, to what extent?
Response
Canada's provinces and territories are key players in the development and implementation of the CSS.
The SCC's Provincial and Territorial Advisory Committee (PTAC) is made up of provincial and
territorial government representatives.  PTAC ha s special status in being recognized under the SCC
Act, with two seats on Council (board of directors) .  PTAC also has representatives on all the other
SCC advisory committees, to help ensure national policy coordination on standards related issues and
effective provincial and territorial engagement at all levels of the National Standards System.
In participation in regional trade initiatives, international standards remain the foundation for Canada
and its regional partners.  Wherever possible, regional standards are harmonized with relevantinternational standards.  However, NAFTA Article 905 permits derogation from use of international
standards where such standards are ineffective or inappropriate means to achieve a Party's legitimate
objectives, or to achieve a higher level of protection than can be achieved if the measure were based
on the relevant international standard.  The NAFTA Agreement is consistent with the WTO.
Currently, there are no NAFTA harmonized regional standards.WT/TPR/M/112/Add.1
Page 76
Question 16  (para 100)
This paragraph mentions the development by Canada of criteria for undertaking MRA negotiations
and enhancing existing agreements. Could Canada give an indication of those criteria?
Response
Several key criteria for Canada when we consider entering into MRA discussions are: clear
demonstration of tangible trade and regulatory benefits from the conclusion of an MRA; support fromjurisdictional partners and stakeholders; compatibil ity in the regulatory systems of the contracting
parties; and, sufficient resources to ensure effective MRA negotiation and implementation.
Question 17 :  (para 102)
It is stated in the report that, with regard to TBT provisions on labelling Canada considers them to be
balanced and adequate. The EC recalls, that in 1996 Canada submitted to the CTE and the TBTC a
communication (WT/CTE/W/21, G/TBT/ W/21) on elements of a possible understanding to the TBT
Agreement on eco-labelling.
The EC would like to inquire whether Canada intends to raise the elements outlined in its
communication in the context of the DDA mandate 32iii on labelling for environmental purposes?
Response
Canada would be pleased to respond to any questions or clarify information contained in our Trade
Policy Review.  We have noted the EC's comment on our 1996 Communication (WT/CTE/W/21;G/TBT/W/21) to the Committee on Trade and Environment and the Committee on Technical Barriers
and Regulations.  Canada would be pleased to di scuss with the European Commission our views on
labeling requirements for environmental purposes in the Committee on Trade and Environment.
Question 18 :  (para 109)
It is stated in the report that, where there are no health and/or safety concerns, Canada favours the
use of voluntary eco-labelling schemes to provid e consumers with information about a particular
product or services and that Canada’s main enviro nmental labelling programme is Environmental
Choice that uses criteria based on life-cycle approach.
The EC would like to inquire whether the Environm ental Choice programme uses as a basis the ISO
Standard 14024 on voluntary eco-labelling schemes based on a life-cycle approach?
Response
The Canadian Environmental Choice Program (ECP) was created in 1988, i.e., before the completion
of the ISO 14,024 standard. The ECP was very active in the development of the ISO 14,024 and the
latter very much follows the ECP.  ECP also has a life cycle focus and considers the broad range of
environmental aspects and impacts.
Part B
With regard to the 32,000 products and services carrying the Environmental Choice label, the EC
would like to inquire whether this figure contains any foreign products?WT/TPR/M/112/Add.1
Page 77
Response
This figure does indeed include foreign products, primarily from the US, but also from India and
China.
Part C
The EC would also like to request Canada to provide a list of any other voluntary eco-labelling
schemes, whether provincial/territorial or non-governmental, in use in Canada and explain whetherthese follow the ISO standard.
Response
The following is an indicative list of some of the eco-labelling programs in place (note that these
items are fully private sector activities, i.e. are not related to the government); the HAC Green
LeafTM Eco-Rating Program is a graduated rating system designed to identify hotels committed to
improving their bottom line fiscal and environmental performance; GreenLinksTM is a Canadian-
based company providing independent and verified eco-efficiency ratings for golf courses; andTerraChoice also offers the Clean Marine Green LeafTM Eco-Rating Program which offers marine
operators the opportunity to ensure that their marinas are following environmentally sound practices
and protecting waterways.  To provide a complete list, we would require more extensive consultations
with our provinces and territories.  To this end, it would be worthwhile if all Members undertook to
provide such information, including at the sub-national level.
Part D
The EC would furthermore like to request Canada to inform whether it has in place any certification
schemes for Sustainable Forest Management.
Response
In Canada, certification is pursued as a voluntary, market-based initiative.  Three major 'sustainable
forest management' certification schemes are in operation: that of the Canadian Standards Association
(CSA), the Forest Stewardship Council (FSC) and the Sustainable Forestry Initiative (SFI). We also
have 113.8 million ha. of forest lands certified under the generic ISO 14001 environmental
management system.
The area of forest certified to sustainable forest management systems is significant and is increasing
quickly. As of December 31, 2002, more than 28 million hectares had been certified under one of the
three available forest-specific certification systems (CSA: 14.4 million ha; SFI: 12.7 million ha; FSC:
1.0 million ha). This represents a 64% increase over one year ago. By 2006, the area certified under
these systems is expected to reach 136 million ha: CSA 71.7 million ha.; SFI 37.7 million ha.; and
FSC 26.8 Million ha.
Part E
Moreover, the EC would like to inquire whether Canada has in place any mandatory environmental
labelling requirements, whether federal and/or provincial/territorial.
Response
Two examples where there are mandatory labelling requirements under the Canadian Environmental
Protection Act 1999 (CEPA 1999) are:WT/TPR/M/112/Add.1
Page 78
Under the Storage of PCB Material Regulations (SOR/92-507), every owner or manager of a PCB
storage site shall affix a prescribed label to containers containing certain amounts of PCBs
Under the Export of Substances Under the Ro tterdam Convention (PIC) Regulations (SOR/2002-
317), exporters of a substance on the Export Control List must affix a label to the container containing
the substance that includes the following information:
the name of the substance as it appears on the Export Control List;
any hazard to human health or the environment; and
any precautionary measures to be followed when handling or being exposed to the substance
Canada's " Regulations Respecting Energy Using Products and Requirements Pertaining to their
Importation and Interprovincial Shipment", otherwise known as "Energy Efficiency Regulations"
applies to a number of energy-using products, such as dishwashers, clothes washers and dryers, gas
furnaces, oil-fired water heaters, and room air conditioners.  All the listed energy-using products must
meet federal energy efficiency standards in order to be imported into Canada or manufactured inCanada and shipped from one province to another.  The Regulations  continue to apply to these
products if they are incorporated into a larger unit or machine, even when that unit or machine is an
unregulated product.  A complete list of products and more details may be found at
http://oee.nrcan.gc.ca/regulations/html/EERGuide_Part1.cfm.
Measures affecting production and trade
(i) Competition Policy
Question 19:  (para 153)
According to this paragraph, the 2002 Competition Act has introduced “a new framework to facilitate
co-operation between foreign competition authorities in cases where the laws of the foreign State that
address the conduct are substantially similar to Canadian law”. Could Canada explain further whatthe novelties of the 2002 Act are in this respect? How do the international cooperation provisions of
the new Act relate to bilateral competition agreements/arrangements?
Response
The 2002 amendments to the Competition Act  introduced provisions that allow Canada to enter into
Mutual Legal Assistance Treaties with foreign jurisdictions in non-criminal matters. Parties to theseagreements will be able to formally request that th e other jurisdiction assist in obtaining or gathering
evidence pursuant to an evidence gathering order, a search and seizure order, an order for statement
by video link, or an order for the lending of exhibits.  The new provisions in the Competition Act  set
out the basic requirements to be incorporated in an y mutual legal assistance agreement negotiated for
this purpose:
• assistance provided to Canada will be comparable in scope to that provided by Canada;
• the circumstances in which Canada may refuse a request;
• confidentiality protections that will be afforded to any record or thing;
• undertakings by the foreign state that any record or thing provided by Canada will be used only
for the purpose for which it was requested;
• undertakings by the foreign state that any record or thing provided by Canada will be used subject
to any terms and conditions on which it was provided, including conditions respecting applicable
rights and privileges under Canadian law.
The new provisions of the Competition Act  allow Canada to enter into Mutual Legal Assistance
Treaties with foreign jurisdictions for the gatherin g of evidence related to civil competition matters.WT/TPR/M/112/Add.1
Page 79
Currently, Canada’s bilateral cooperation agreements provide for: notifications, cooperation and
coordination, positive comity, communications, avoidance of conflict, confidentiality.WT/TPR/M/112/Add.1
Page 80
(ii) Financial and other assistance to business
Question 20 :  (para 168)
Could Canada please explain the continuing lack of notifications of subsidies by Canadian provinces
under the WTO SCM Agreement?
Response
Canada's last subsidy notification was submitted in June 2002 and it covered 1998/99 and 1999/2000.
The document is G/SCM/N/60/CAN.
The Federal Government remains engaged in on-going consultations with Canadian provincial
governments regarding notification requirements under Article XVI:1 of the GATT 1994 and Article
25 of the Agreement on Subsidies and Countervailing Measures.  Thus far, the provinces have not
advised the Federal Government of any programs that meet the criteria for the purposes of
notification.
(iii) Local-content requirements
Question 21 :  (para 182)
Could Canada indicate what has been the percentage increase of outlets reserved to domestic wine in
the Canadian provinces which have such outlets? Coul d Canada please also refer to the ratio of those
“exclusive” outlets for domestic production vis-à-vis the outlets available to imported wine?
Response
Canada has bilateral agreements with major trading partners which limit the number of private wine
store licenses to the number in existence when the agreements were signed - notably the Canada/US
Free Trade Agreement which sets the date at October 4, 1987.  There has been no increase since that
time.  While there is no national data immediately available on the ratio of private outlets to those
available to imported products, in Ontario there are more than twice as many outlets where imported
products can be sold than there are outlets selling exclusively Canadian products.  Sales of wine
through stores selling exclusively Canadian wines is approximately 10% of total wine sales in Ontario
and British Columbia, which has not increased since 1995.
Question 22 :  (para 183)
Newfoundland and Labrador have reserved the right under the Agreement on Internal Trade to deny
out-of-province beer and beer products access to brewers’ agents. Could Canada explain the
reasoning behind this prohibition? What is the aim of the on-going review of this policy?
Response
This exception was negotiated under Canada’s Internal Trade Agreement and applies to all beer
except Newfoundland beer.  Its purpose is to facilitate the development of the provincial beer sector.It is reviewed on a regular basis with a view to potential changes should market conditions warrant.  It
is worthy to note that in the last five years the number of outlets available for distribution of out of
province beer has doubled from approximately 55 to 110 today.WT/TPR/M/112/Add.1
Page 81
(v) Government Procurement
Question 23 :  (para 201)
Is federal procurement, especially the opening and submission of tenders fully available online, and
are all kinds of goods and services included? Is information on municipal procurement opportunities
made available online also?
Response
Notices of Proposed Procurements for goods, services, and construction services are advertised on
MERX, an on-line advertising system used by the federal government of Canada.  A number of
provinces and municipalities also use MERX.  MERX provides links to other provincial and
municipal systems.  The federal government does not use MERX for the opening and submission of
tenders.
Part B
How often and by whom is Canadian procurement policy evaluated and updated? Is such a review
undertaken systematically or only in the case of complaints/reports of infringements?
Response
The determination of the contracting policy of the Government of Canada is the responsibility of the
Treasury Board (TB). The TB is a Committee of Cabine t, made up of Ministers. TB has approved and
enunciated a series of policy statements that must  be observed by all government departments. All
federal Cabinet ministers have statutory authority to enter into contracts in order to accomplish the
objectives of their respective departments. The TB, through its policy role, has an intrusive right to
require all ministers and government departments to observe the TB Contracting Policy and related
directives and guidelines issued by the TB. TB amends the TB Contracting Policy as and when
required.The Parliament of Canada has given a unique procurement authority to Public Works and
Government Services Canada (PWGSC). This depart ment has the exclusive right to acquire any good
that any other department of government may require. In  turn, authority to acquire low dollar value
items, up to $5,000 (($25,000 in some cases), has been delegated to departments. In addition to TB
contracting policies, PWGSC and most larger departments issue supplementary contracting directivesand guidelines. Usually, these are more concerned with process rather than policy. They outline the
various steps that must be taken within the departmental organization to satisfy the several internal
checkpoints related to the procurement process.
Question 24 :  (para 205)
In regard to challenge procedures could Canada please explain the following:As the Contract claims Resolution Board provides dispute resolution services for all procurement-
related disputes except bid challenges is it the Canadian International Trade Tribunals’ (CITT)
responsibility to deal with complaints regarding bids?
Response
Paragraph 205 outlines the role of the Contract Claims Resolution Board, which is to provide dispute
resolution services, with the exception of bid challenges.  The CITT has the responsibility to handle
complaints relating to procurements  at the federal level that are  by the AIT, NAFTA, CKTEA, and
WTO-GPA.WT/TPR/M/112/Add.1
Page 82
Question 25 :  (para 206)
According to the report, “for transactions covered by the GPA, national treatment conditions apply to
most federal procurement.” Could Canada please clarify whether there are exceptions to national
treatment other than those exceptions contained in the general notes and notes to Annexes in the
Appendix I of the GPA?
Response
Paragraph 206 states: ‘Canada grants national treatment to foreign suppliers in respect of procurement
covered by the GPA and other international agreements.  For transactions covered by the GPA,
national treatment conditions apply to most federal procurement, subject to agreed thresholds of SDR
130,000 for goods and services and SDR 5 million for construction contracts.’
Canada fully complies with its obligations under the GPA.  The national treatment obligation of the
GPA is applied to all procurement covered by the GPA.  The sentence in the Secretariat report would
be better stated if the word ‘most’ were to be omitted.
Question 26 :  (para 209)
Does the term “Canadian suppliers” include fore ign-owned companies established in Canada and
how does the AIT ensure equal market access cond itions to such companies in comparison with
domestically owned companies?
Response
Article 518 of the AIT defines “Canadian supplier” as a supplier that has a place of business in
Canada.  As long as foreign-owned companies meet this definition, they would have the same access
as Canadian-owned firms for any procurement opportunity restricted to “Canadian suppliers”.
Question 27 :  (para 213)
Can Canada please explain the large number of comp laints made to the CITT from foreign-owned
companies based in Canada and what were the main complaints raised?
Response
In fiscal year 2001/2002, 39 procurement complaints were accepted for inquiry by the CITT, a very
small number.  Canada does not have any statistics on complaints from foreign-owned companies.
Complaints relate to various aspects of the procurement process although there have been nocomplaints made on the basis of discrimination against a supplier because they are foreign owned.
Question 28:  (para 214)
The discriminatory practices currently exercised against foreign suppliers such as offering financial
incentives to small and medium sized domestic supplie rs to encourage them to make bids (for example
through the Atlantic Canada Opportunities Agency) lead to a significant decrease in the value formoney of the goods and services procured and a high additional cost to federal expenditure. Are there
any efforts being made to eradicate such harmful, distortionary practices?
Response
Where Canada is committed to open procurement under the trade agreements, suppliers from member
countries may bid as specified in those agreements.  Where commitments have not been made,WT/TPR/M/112/Add.1
Page 83
Canada retains the right to apply domestic preferences.  Information on any such requirements is
always contained in the bid documents.
Canada's Treasury Board Contracting Policy Manual identifies Canada's policy objective  as follows:
'The objective of government procurement contracting 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 appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.'Canada strives to contract in a manner that will ensure the pre-eminence of operation requirements,
while respecting its international obligations .
Question 29 :  (para 215)
Canada has stated that “it is prepared to table an offer at the sub-central level if Members are
prepared: (1) to include sectors of priority to  Canadian suppliers, for example, in the steel and
transportation areas; and (2) to agree to circumscribe the use of small business and other set asides
in a manner that, while not precluding their use, would provide an acceptable security of access tosuppliers from all Parties.“ The European Community has opened the transport sector to certain
GPA Parties and does not have any preferences fo r small and medium-sized enterprises. Could
Canada please explain the apparent inconsistency in its  position given that it has refused to enter into
negotiations with the European Community with respect to entities at the sub-central level?
If the reason for not offering entities at sub-federal level is the existence of restrictive and
discriminatory measures at sub-federal level in one GPA Party, why does Canada refuse to negotiate
reciprocal access with the remaining GPA Parties?
Response
Paragraph 215 fully reflects Canada's position, which has also been stated in the WTO Committee on
Government Procurement.  Canada will only consider sub-federal coverage if other parties areprepared to include sectors of priority interest to Canadian suppliers, such as steel and transportation,
to agree to circumscribe the use of small business and other set asides, and to agree to eliminate other
discriminatory measures.
Canada is an active member of the ongoing GPA Re view which has three goals: simplification of the
text, removal of discriminatory provisions, and improved coverage.  We remain committed to theprocess and seek a balance of concessions between Parties of the GPA as negotiations proceed.  We
believe it is in the best interests of all GPA Parties to work together in the GPA to achieve the goals of
the Review.
Question 30 :  (para 216)
Could Canada indicate what percentage of provinci al government procurement is still restricted to
local bidders? How has action under the Agreement of Internal Trade (AIT) helped reducing this
percentage?
Response
The Ontario government does not direct ministries and agencies covered under its directives to offer
preferences based on origin of supplier.  One exception is with regards to steel products, to mirror
preferences found in the US.
No data are available on the percentage of provincial government procurement restricted to local
bidders where “local” is defined as “within the province or territory”.  The Procurement Chapter of
the Agreement on Internal Trade calls for all provinces as well as the territories (except for Nunavut)
and the federal government to consider bids from suppliers across Canada on an equal basis.  As aWT/TPR/M/112/Add.1
Page 84
result, the provincial procurement market has become more competitive though no data are available
to gauge the extent of this change.
Part B
This paragraph also refers to the fact that the similar access conditions granted to other Canadian
suppliers for provincial procurement falling under the scope of the AIT “do not extend […]
automatically to procurement from foreign supp liers”. Could Canada indicate whether there are any
cases of provinces granting access to their gover nment procurement markets to foreign bidders?
Response
Since November 2001, the Province of Quebec has had a government procurement agreement with
New York State.  This agreement covers goods, services, and construction contracts.
Regarding the procurement of goods, the Alberta Government's Central Procurement Agency
maintains no differential treatment policy with respec t to the suppliers of goods from inside or outside
of Canada. Current Alberta practices allow for foreign suppliers of goods to bid on tenders issued byAlberta's Central Procurement Agency. Like Canadian suppliers, foreign suppliers must meet all the
terms and conditions of the tender to be deemed a qualified bidder. The Central Procurement Agency
receives bids from time to time from foreign suppliers of goods as well as some information
technology service providers and treats their bids as they would those received from Canadian
suppliers.The procurement of services is carried out in a decentralized environment whereby the Central
Procurement Agency encourages the same open, fair and competitive process with respect to Alberta
Government service contracts.  The Central Procurement Agency is not aware of any complaints from
foreign bidders with respect to market access issues involving Alberta government procurement.
(vi) Intellectual Property
Question 31 :  (para 236)
Could Canada please further elaborate on the ground s for amending Section 31 of the Copyright Act
on compulsory license applicable to retransmission of copyright protected works?
Response
The amendments to Section 31 were part of a bill to amend the Copyright Act , passed in Parliament
on December 2002 and expected to be proclaimed into force in the early months of 2003. Section 31
sets out the compulsory licence applicable to the retransmission of copyright protected works in
signals broadcast over the air by television and radio stations. The new bill aims to clarify that
distribution systems such as cable and satellite may continue to retransmit over-the-air radio and
television signals by paying royalties and respecting other provisions in the Copyright Act .  The bill
also excludes Internet-based retransmission of broadcast signals from compulsory licensing
regulations unless the Canadian Radio-te levision and Communications Commission (CRTC)
specifically adapts its regulatory framework to accommodate such transmissions.
Question 32 :  (para 237)
Could Canada please refer to the objectives and the IPRs protected in the envisaged second
Intellectual Property Law Improvement Bill?WT/TPR/M/112/Add.1
Page 85
Response
The IP Improvement Bill proposes non-controversial, administrative amendments to the Patent,
Trade-marks and Industrial Design Acts. These are largely housekeeping changes intended to
modernize these Acts. This bill does not affect substantive protection or the scope of IPRs.
Trade Policies in Selected Sectors
Telecommunication services
Question 33 :  (para 74)
The EU welcomes the review of foreign ownership rules in the Canadian telecommunications sector
announced by Minister Alan Rock in November 2002. The EU would be interested in an explanation
by the Canadian Government of this initiative.
Response
Canada 's Telecommunications Act requires that telecommunications common carriers be Canadian
controlled and limits direct investment to 20% of the voting shares.  The limit on the voting shares forholding companies is 33.3%.  The maximum investment by foreign entities in an operating company
is 46.7% i.e., 20% of the operating company and 26.7% of the holding company (33.3% of the
remaining 80%).
The Minister of Industry announced on November 19, 2002 that he is seeking the views of Canadians
on foreign investment restrictions in the telecommunications industry and that he had asked the Chairof the House of Commons Standing Committee on Industry, Science and Technology to undertake a
review. (Further details can be found onlin e at http://www.innovationstrategy.gc.ca/cmb
/innovation.nsf/MenuE/Invest00)
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participationin Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.
A report from the Committee to the Government is expected in the spring of 2003.  The Government
will then decide on what action, if any, it might wish to take.
Maritime Transport
Question 34
Could Canada please indicate whether she is ready  to expand the coverage of her GATS commitments
on maritime transport (i.e. coasting trade) in the on-going negotiations and under which conditions?
Response
With respect to the on-going GATS negotiations, Cana da intends to submit its initial offer of market
access commitments to its WTO trading partners within the prescribed timeline of March 31, 2003, asset out in paragraph 15 of the Doha Ministerial Declaration.  Any potential extension of Canada's
GATS commitments in the area of maritime transportation services will be addressed by the initial
market access offer.WT/TPR/M/112/Add.1
Page 86
Air Transport
Introduction
Question 35 :  (para 113)
Can Canada please confirm that the CAN$ 160 million compensation programme for Canadian air
carriers and the indemnities for third-party war-risk liability were a single, special event aid?
Considering the present political situation are there any further or new plans for compensations,indemnities or special financing facilities for airlines?
Response
The compensation programme and the indemnities for third-party war-risk were a single, special
event aid.  The current indemnity for third party war risk ends on May 1, 2003, but there is the
possibility of an extension.  At the current time, there are no plans for other compensation,
indemnities, or special financing for the airline industry.
Question 36
As acknowledged by the Canadian Competiti on Commissioner, liberalisation of the Canadian
domestic air transport is the best way to ensure a competitive market for the benefit of Canadian
consumers. The EU would be interested in knowi ng whether and how this reality will be reflected on
Canada’s position in GATS negotiations on air transport.
Response
At this time, Canada has no intention of opening its domestic air transport market to foreign
competition.  Canada believes that competition is emerging in the domestic market as new Canadian
entrants and low cost carriers enter the market and expand, and this trend is expected to continue.  In
this regard, there is no intention to change Canada’s position with respect to the inclusion of air
transport services at the GATS negotiations.
CHILE
Original question in Spanish
En Canadá la comercialización de bebidas alcohólicas está regulada por consejos provinciales
gubernamentales. Cada gobierno provincial controla la comprar, venta y distribución con normativas
propias que difieren en cada provincia. Esto suele resultar en discriminación contra los productosimportados. Por ejemplo, en la provincia de Ontario el vino importado solo puede ser vendito a
público (retail) en las tiendas del LCBO (Liquor Control Board of Ontario), en cambio el producto
local puede ser vendido además en los supermercados. Asimismo, los márgenes (mark ups) que
aplica el LCBO son mayores para los vinos importados que los locales, afectando el precio final de
los primeros y por lo tanto su atractivo en el mercado.
¿Cuál es el fundamento de las restricciones que aplica la Provincia de Ontario a la comercialización
de vinos importados? ¿Piensa Canadá revisar dichas re stricciones? Si es asi, ¿dentro de qué plazo
considera hacerlo? ¿Cual es la justificación para aplicar un margen (mark up) más alto a los vinos
importados?WT/TPR/M/112/Add.1
Page 87
English translation
Question 1
In Canada, the commercialization of alcoholic beverages is regulated by provincial government
councils. Each provincial government controls the purchase, sales, and distribution with its own
norms that are different in each province. This usually results in discrimination against imported
products. For example, in Ontario, imported wine c an only be sold to the public (retail) at LCBO
stores, while domestic products can be sold at supermarkets. Additionally, mark-ups applied by the
LCBO are higher for imported wines, increasing reta il price and reducing their attractiveness in the
market.
What is the basis for the restrictions applied by Ontario for the commercialization of imported wines?
Is Canada considering to review such restrictions? If  this is the case, in what time-frame would these
be reviewed? What is the justification for applying higher mark-ups to imported wines?
Response
The Provincial Liquor Boards (PLBs) in Canada, including the Liquor Control Board of Ontario, were
established before the GATT was created, and their existence and activity is consistent with the
provisions of GATT Article XVII [“State Trading Enterprises”].  In accordance with that Article, they
are notified to the WTO as STEs.  The PLBs operate as businesses whose decisions are based solely
on commercial considerations and market forces. In Alberta, responsibility for the selection, retailing,warehousing, and distribution of liquor rests with the private sector.  The alcoholic beverage-
producing countries that are major exporters to Canada, including Chile, have accepted the policies of
Provincial liquor agencies through various bilateral agreements.  Canada's commitments under these
agreements are implemented on an MFN basis.
In Ontario, supermarkets cannot sell wine.  There are no plans to review Ontario’s current practices at
this time.
Provincial liquor boards apply a mark-up to all products they handle, whether domestic or imported.
This mark-up varies by province but is typically in the range of 120%-160% of landed cost on spirits
products and 60% - 120% on table wines and 30% to 100% on beer, except in Alberta where a flat
mark-up per litre applies. (Landed cost = supplier cost, freight, insurance, federal customs and exciseduties and taxes).  This mark-up covers all provincial charges in the normal course of business
including storage, distribution and taxes, except for provincial retail sales taxes in most provinces.
There are usually additional fees associated with initial listing applications and may be additional
levies for specific purposes (e.g., environment).
Nominal cost of service differential charges are applied by most provinces on imported products to
cover the additional costs of service necessarily associated with imported products when compared to
domestic products. While Provinces do not apply higher base mark-ups to imported wines than they
do on domestic wines, in three Provinces (including Onta rio) this cost of service differential is built
into the mark-up and comprises the entire differen ce between provincial charges applied to imported
wines over domestic wines.  Please refer to Para graph 4 (a) of Annex C-10.2 of the Canada - Chile
FTA which deals with this issue.WT/TPR/M/112/Add.1
Page 88
REPUBLIC OF KOREA
II.  TRADE AND INVESTMENT POLICY FRAMEWORK
Question 1:  (para. 14)
To revise the penalty structure applied for infractio ns of the Customs Act or the Customs Tariff, the
Canadian Customs and Revenue Agency (CCRA) reportedly introduced a new Administrative
Monetary Penalty System (AMPS) in late 2001, which entered into force on 1 October 2002.
Has there been any specific effort to raise awareness amongst foreign exporters about the AMPS?
If there has been no such effort, does Canada have any intention to make one in the near
future?
Response
The Administrative Monetary Penalty System (AMPS), which was fully implemented on October 7,
2002, is a civil penalty regime that will secure compliance with Customs legislation through the
application of monetary penalties.  The use of monetary penalties will largely replace the use of
seizure and forfeiture provisions for technical infractions.  It is important to note that AMPS does not
add any new obligations to comply withCustoms requirements; all requirements remain the same under AMPS.
Regarding the issue of ensuring awareness of AMPS with our clients, the CCRA has been very
proactive in educating and informing Canadian importers, exporters, and their service providers about
AMPS.  Under the Customs legislation, the domestic importer and exporter are held responsible for
true, complete, and accurate Customs information.  Within this context, the CCRA has emphasizedthe need for our domestic clients to educate thei r foreign suppliers about all Customs requirements.
During 2002, the CCRA made presentations on AMPS to various exporter groups in the United
States, provided information to the Asia-Paci fic Economic Cooperation (APEC), and responded to
enquiries from individual exporters about AMPS.  At the present time, there are no plans to carry on
an organized outreach to educate and inform foreign exporters.
For foreign exporters who are interested in AMPS,  information is available through the CCRA's web
site at http://www.ccra-adrc.gc.ca/customs/general/amps/menu-e.html .
III. TRADE POLICIES AND PRACTICES BY MEASURE
Question 2  :   (para. 60-61)
It is reported that after the safeguard investigation the CITT made determinations of serious injury on
five of the nine imported steel products.  The CITT provided recommendations to the government
regarding measures to be taken for each product and the government is expected to respond to the
recommendations soon.  The lack of a codified timetable of the safeguard measures may lower the
predictability and transparency of the trade system of Canada.
Does the Canadian government have any intention to codify the timetable of the application of the
safeguard measures?
Response
Canada has no intention of codifying and/or legislating a timetable and/or deadline for a decision
regarding the possible application of safeguard measures following an investigation.WT/TPR/M/112/Add.1
Page 89
The protection of the steel industry in Canada can be achieved in a more positive manner through a
multilateral discussion forum rather than through  unilateral actions like the safeguard measures.
What is the view of Canada on this matter?
Canada continues to believe that efforts underway at  the OECD to address global overcapacity in steel
production and reduce subsidies and market access barriers is the best way to address the root cause of
steel trade problems.
We were very pleased with the results with the December meeting of the High Level Group, which
agreed to go forward with work on subsidy disciplines in the steel sector as a high priority.
Question 3 :  (para. 74)
The Report by the Secretariat indicated that the high rate of provisional duties imposed on steel
products during investigations provided protection to the domestic industry for a period of about four
months at the expense of the foreign supplier.  In particular, Korean suppliers of cold-rolled steel
sheets and hot-rolled steel sheets suffered from high provisional duties up to 68.6% and 34.2%respectively during the period of anti-dumping investigations, which ended in a no injury
determination.
We are concerned that frequent initiation of anti-dumping investigations and the excessively high rate
of provisional duties imposed by Canadian authorities may have served more often to restrict imports
than not.  What is the view of Canada on the matter?
Response
Since the conduct of trade remedy investigations in Canada is triggered by a properly documented
complaint from the domestic industry, the Government is in no way responsible for the frequent
initiation of investigations. However, conditions pr evailing in the international market for certain
products often explain the frequency of anti-dumping investigations on those products. In steel, for
example, which is the object of the majority of recent Canadian investigations, there has been a
growing global overcapacity, collapsing, or still recovering demand in some markets, and the
continuing emergence of new participants in international trade, all of which have led to a significant
surge in low priced steel imports into many countries, including Canada. These circumstances have
led inescapably to an increase in trade remedy actions. As has been noted on many occasions, Canadais not alone in experiencing a trend toward more trade investigations. According to a recent WTO
report, over 30 countries have anti-dumping duty orders in place against steel from 47 different
countries. That is why Canada, along with many other steel producing countries, including Korea,
support recent efforts within the OECD to discipline trade distorting subsidization to the steel sector.
As for the high rate of provisional duties, this is exclusively related to the circumstances of individual
respondents. Canada cannot comment further without knowing the specific circumstances to which
Korea refers.
Question 4 :  
(para. 215-216)
The Report by the Secretariat stated that Canada did not table an offer in the GPA at the sub-
federal level and that its provinces grant sim ilar access conditions to procurement from the
rest of Canada, but do not extend this automatic ally to procurement from foreign suppliers.
Has there been any progress in access to procurement from foreign suppliers since the last
TPR of Canada in 2000?WT/TPR/M/112/Add.1
Page 90
Does Canada have any plan to further improv e access to procurement from foreign
suppliers?
Response
Paragraph 215 fully reflects Canada's position, which has also been stated in the WTO Committee on
Government Procurement.  Canada will only consider sub-federal coverage if other parties are
prepared to include sectors of priority interest to Canadian suppliers, such as steel and transportation,
to agree to circumscribe the use of small business and other set asides, and to agree to eliminate other
discriminatory measures.
Canada is an active member of the ongoing GPA Review, which has three goals: simplification of the
text, removal of discriminatory provisions, and improved coverage.  We remain committed to the
process and seek a balance of concessions between Parties of the GPA as negotiations proceed.  We
believe it is in the best interests of all GPA Parties to work together in the GPA to achieve the goals of
the Review .
IV. TRADE POLICIES IN SELECTED SECTORS
Question 5 :  (para. 72-73)
According to the Report by the Secretariat, Canada has administered a steel import-monitoring
programme based on the provisions of the Export and Import Permits Act and has renewed it every
three years, most recently in August 2002.  Pursuan t to this programme, individual import permits are
required for each shipment of carbon and specialty steel products.  It is also stated that the issuance
of the permits is automatic.
What is the main purpose of the import-monitoring programme?
If the purpose of this programme is to gain stat istical data on trade in steel, then why is this
programme being implemented in the form  of “permits”, instead of “reports”?
It is stated that permits are not required when the importer is a vehicle manufacturer.  Please explain
the specific reason for this exemption.
Response
The import monitoring program for steel was established to provide an early indication of general
import trends in specific product categories as well as an early warning system regarding possibly
dumped and/or subsidized imports that may be injuring Canadian industry. However, it should be
emphasized that potential petitioners for trade remedy investigations must provide evidence ofdumped and/or subsidized imports as well as evidence of injury to domestic industry. Regarding
imports, actual imports as opposed import permit data, which reflects intentions to import as opposed
to actual imports, is used as evidence in considering whether to initiate an investigation.
As for the administrative provisions pertaining to automotive companies, individual permits are not
required on the condition that the importing companies provide a detailed report on the importationseach month. Imports by automotive companies were exempted because of their longstanding
administrative arrangements with Canada Customs, in which they reported entries each month, and
the significant volume of importations.
Question 6 :  (para. 78-79)
Under the Telecommunications Act, all telecommuni cations facility-based common carriers must be
Canadian-owned, controlled and incorporated under the laws of Canada or a Province.  The Act
specifically puts strict limitations on the foreign ownership of voting shares, but such provisions doWT/TPR/M/112/Add.1
Page 91
not apply to the ownership or operation of intern ational submarine cables, nor to satellite earth
stations, which can be foreign-owned.
Does that mean international submarine cables and satellite earth stations are not classified as
facility-based common carriers?
Response
An international submarine cable or a satellite earth station is considered to be a “transmission
facility” such that persons that own or operate these for the purpose of providing telecommunications
services to the public for compensation would be a “telecommunications common carrier” for
purposes of the Telecommunications Act.
Question 7 :  (para. 159-164)
The Secretariat reports that companies wishing to provide insurance services must be licensed by the
Province’s insurance authority, and cross-border supply of unlicensed companies is not permitted.  It
is also reported that a federal excise tax of 10% is applicable on premiums paid to unauthorizedforeign direct non-life insurers (except marine insurance) on risks within Canada, unless such
insurance is deemed not to be available in Canada.
What is the purpose of putting such restrictions on cross-border supply by foreign insurers given that
Canada has accepted the Understanding on Commitments in Financial Services?
What is the view of Canada on the opinion that the application of the federal excise tax to foreign
insurers is a discriminatory measure?
Response
Because the Canadian regulatory regime places a significant emphasis on consumer protection
(especially of unsophisticated consumers/investors), it is reasonable to have a licensing requirement
for the sale of most forms of insurance.
Most Canadian provincial governments impose a sales tax on insurance sales by licensed agents and
brokers.  As provincial sales tax is not applied to non-resident suppliers, the resulting price difference
for the consumer would put domestically licensed agents brokers at a disadvantage.  The 10% excise
tax is not discriminatory as it is meant to level the playing field for domestic and foreign firms
licensed in Canada.
EL SALVADOR
I. DESARROLLO ECONOMICO RECIENTE
Original question
1) El comercio en ambas vías representó cerca del 80% del Producto Interno Bruto de Canadá en la
primera mitad del 2002. Las exportaciones de bienes y servicios han sido el componente principal delcrecimiento en  los últimos años…  (Párrafo 2) ¿Qué medidas adopta el gobierno canadiense para
mantener estos altos niveles de exportación?WT/TPR/M/112/Add.1
Page 92
English translation
Question 1
Two-way trade represented close to 80% of GDP in the first half of 2002. Exports of goods and
services have been the main component of growth in reent years. What measures has the Government
adopted to maintain such high levels of exports?
Response
Canada is an open economy that has pursued trade liberalization at the bilateral, regional, and global
levels.  We also share geographical proximity, an integrated production system, a competitive
exchange rate, and an enhanced free trade agreement with the United States.   These factors coupled
with strong US demand for Canadian exports have worked in favour of Canada selling relatively more
and more of its output abroad, particularly to the United States.
The trading relationship with the United States dominates Canada’s statistics on foreign trade.  In fact,
Canada-US bilateral trade flows are the greatest paired flows of any two countries in the world.  Wehave, thus, also made other steps aimed at fostering the flow of goods and services across its borders,
particularly for flows to the United States.   Chief amongst the steps taken has been efforts aimed at
improving the secure flow of goods and people across the Canada-US border, most notably the Smart
Border Action Plan and efforts to improve border infrastructure.
PRODUCCIÓN, EMPLEO Y PRECIOS
Original question
2) Según el Informe de la Secretaría, la tasa de ahorro se incrementó de un 3,7%  en el tercer cuarto
del año 2001 a un 4,7% en el tercer cuarto del 2002. (Párrafo 5) ¿A que factores adjudica Canadá
este incremento? ¿Existe en Canadá alguna medida  para incrementar el  ahorro?
English translation
Question 2
According to the Secretariat Report, savings rate gr ew from 3.7% in the third quarter of 2001 to 4.7%
in the third quarter of 2002 (paragraph 5). What are the factors behind this growth? Is there a
measure in place Canada to increase savings?
Response
In general, lower taxes and institutional measures that encourage savings lead to higher savings rates.
Canada has recently implemented a large tax cut package, which lowered tax rates, changed tax
brackets, and indexed exemptions and tax brackets to inflation.  In addition, Canada has a system of
registered savings plan, which allows individuals to save for retirement and shelter those savings, up
to a limit, from income tax until their retirement.WT/TPR/M/112/Add.1
Page 93
PATRONES DE INVERSIÓN Y COMERCIO
Inversión Extranjera
Original question
3) Canadá, además de ser un país que invierte en el extranjero,  es un país receptor de inversión
extranjera directa (FDI).  Canadá recibe una inversión significativa de portafolio y otros tipos de
inversión. Continuar atrayendo la inversión extranjera se ha convertido en uno de los objetivosprincipales de su política económica. (Párrafo 36)
¿Cuáles son los aspectos que Canadá considera relevantes al tomar su decisión de invertir en el
extranjero? ¿Cuáles otras medidas, además de incrementar las tasas de interés,  toman las
autoridades para atraer la inversión extranjera?
English translation
Question 3
In addition to investing abroad, Canada is a recipient of FDI. Canada receives significant amounts of
portfolio and other investments. Attracting FDI has turned into one of the main objectives of its
economic policy. What factors does Canada consider relevant when deciding to invest abroad? What
otehr measures, other than increasing interest rate s, does Canada take to attract foreign investment?
Response
Canadian companies invest abroad for a variety of commercial reasons.  Firms also take into
consideration the predictability and stability of the investment regime of the host country including
such factors as the promotion of the rule of law, and the principles of fairness, transparency, and non-
discrimination.
Investment Partnerships Canada (IPC), which is an agency  operated jointly by Industry Canada and
the Department of Foreign Affairs and International Trade, is mandated to attract foreign directinvestment.  An indicative list of measures and issues of key importance to Canada to attract
investment can be found on the IPC website at http://investincanada.gc.ca, including the need to
maintain a strong, open and competitive economy.
II. MARCO DE LA POLÍTICA DE INVERSIÓN Y COMERCIO
INTRODUCCIÓN
Original question
4) En la actualidad Canadá ha tomado iniciativas a nivel bilateral y regional, lo que le ha ayudado a
establecer una estrategia de comercio orientada hacia afuera, sin embargo, estos esfuerzos también
han  creado un sistema elaborado de tarifas preferenciales y reglas de origen. (Párrafo 3) ¿A que se
refiere Canadá con ‘un sistema elaborado’ de tarifas preferenciales y reglas de origen? ¿Quémedidas tomará Canadá para manejar este sistema elaborado de tarifas preferenciales y reglas de
origen, generado por las negociaciones bilaterales y regionales?WT/TPR/M/112/Add.1
Page 94
English translation
Question 4
Currently, Canada has taken intiatives, at the bilateral and regional levels, that have assisted it to
establsih a trade strategy oriented outwards. However, these efforts have as well created an
elaborated system of preferential tariffs and rules of origin. What does Canada mean by "elaborated
system" of preferential tariffs and rules of origin? What measure wil Canada take to manage theelaborated system, generated by regional and bilateral negotiations?
Response
Rules of origin are an essential element of preferential trade agreements.  For each FTA to which it is
a Party, Canada favours rules of origin that are transparent, simple to understand by the trading
community, and simple to administer in a consistent and predictable manner.  For goods that are not
wholly obtained, each FTA contains an annex of detailed product-specific rules of origin based
primarily on a change in tariff classification.  Furthermore, each FTA establishes procedures for theadministration of the rules of origin by the cu stoms authorities in each Party, including the
development of a uniform Certificate of Origin.
MARCO JURÍDICO E INSTITUCIONAL
Original question
5) Para mitigar el efecto de las diferentes políticas en el comercio interno, el  Acuerdo de Comercio
Interno (AIT), trata de reducir y eliminar, en la medida de lo posible,  las barreras para el libre
movimiento de personas, productos, servicios e inversión, dentro de Canadá. Además trata de
establecer un mercado doméstico estable y eficiente. (Párrafo 7) ¿Cuáles han sido los logros y
beneficios, obtenidos bajo el Acuerdo de Comercio Interno (AIT), en los temas de movimiento de
personas e  inversión?
English translation
Question 5
To reduce the effect of different policies on local trade, the AIT tries to reduce and eliminate as
possible barriers to the movement of people, goods, services, and investment within Canada. It also
tries to establish a stable and efficient (para 7) domestic market. What have been the achievementsand benefits of the agreement with respect to movement of people and investment?
Response
Labour Mobility
When the Agreement on Internal Trade (AIT) came into effect in July 1995, governments agreed that
workers qualified for an occupation in one part of Canada should have access to employmentopportunities within that occupation in any other province or territory.  To this end, the AIT:
ended the requirement to live in a province or territory as a condition of employment or eligibility to
practise an occupation;
called for the licensing or registration of workers to be based on their competence and established a
requirement to prevent undue delays in obtaining necessary certification; and
aimed to reconcile differences in occupational standards for dozens of regulated professions and
trades.WT/TPR/M/112/Add.1
Page 95
By July 2001, the requirements of the Labour Mobility Chapter had largely been met.  Of the 51
regulated professions under consideration, regulatory bodies for 42 of them had either met or were
well on their way to meeting the requirements of the Agreement.  This represents 97% of the workers
in these regulated professions.  Progress is also being made on the nine remaining occupations.
Unlike occupations that are usually regulated by non-government bodies, trades are regulated directly
by all provincial/territorial governments.  Each jurisdiction determines which trades it will regulate,
whether certification in the trade will be compulsory or voluntary, and what tr aining is required.  All
jurisdictions have taken steps or committed to offer further recognition of qualified trades persons.
Investment
With respect to investment, the AIT ensures that Canadian firms are able to make business decisions
based on market conditions rather than on discriminatory or investment-distorting government
measures.  Specifically, the investment provisions provide for non-discriminatory treatment of
Canadian businesses regardless of where the head office is located, where the firm is incorporated orwhere the owners live.  The AIT also prohibits the use of local content and purchasing requirements
except in limited cases for regional development programs.  Finally, governments have agreed not to
“poach”, i.e., give incentives to an enterprise lo cated in another province that would directly result in
the relocation of that operation to its own territory.
In June 2002, governments agreed to strengthen the disciplines on bidding wars by requiring parties to
refrain from engaging in bidding wars.  They also agreed to some technical amendments aimed at
clarifying the “Code of Conduct on Incentives”.  For ex ample, they agreed that Parties to the AIT may
not provide incentives through other governments (e.g., municipalities) in order to circumvent their
obligations.
Dispute Settlement
The AIT provides individuals, businesses, and governments with a dispute settlement process to
resolve complaints that a government’s practices are inconsistent with its obligations.
Original question
6) Como parte del Acuerdo de Comercio Interno (AIT), el gobierno provincial acordó enfocarse en
11 sectores o instrumentos de política  que ofrezcan el mayor potencial para la reducción debarreras.  Un capítulo de dicho Acuerdo del sector de energía, esta todavía por completarse con el
fin de facilitar la transmisión de electricidad dentro de las provincias. (Párrafo 8) ¿Ha definido el
Gobierno de Canadá un plazo específico para completar el  capítulo de energía en mención?
English translation
Question 6
As par of the AIT, provincial governments agreed to focus on 11 sectors or policy instruments that
offer the greatest potnential for reducing barriers. An AIT chapter on the energy sector is still to be
completed with the objective of facilitating electricity transmission between provindces (para 8). Has
the Government of Canada defined a specific timeframe to complete such chapter?
Response
Canada has not set a deadline for the completion of the Energy Chapter of the Agreement on Internal
Trade.WT/TPR/M/112/Add.1
Page 96
III. POLÍTICAS Y PRÁCTICAS  COMERCIALES POR MEDIDAS
MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES
Regulaciones y normas técnicas
Original question
7) Otra herramienta considerada útil por Canadá para armonizar los estándares y simplificar
requerimientos es la firma de los Acuerdos de Reconocimiento Mutuo (MRAs)… (Párrafo 100)Además de  que el Gobierno Federal suscribe Acuerdos de Reconocimiento Mutuo con otros países,
¿existe un Acuerdo interno entre el Gobierno Federa l y las Provincias, respecto a la reducción de
requisitos de desempeño en los sectores y productos en los cuales se mantienen requisitos de
contenido local? Cuando el gobierno central firma un Acuerdo de Mutuo Reconocimiento, ¿es este
reconocido por todas las provincias?
English translation
Question 7
Another tool considered useful by Canada to harm onize standards and simplify requirements is the
signing of MRAs (para 100). In addition to the Federal Government signing MRAs with other
countries, is there a domestic agreement between the Federal Govedrnemnt and the provinces
regarding the reduction of perofrmance requirements in theose sectors and products with local
content requirements? When the Federal Government signs an MRA, is it recognized by theprovinces?
Response
The federal government, the provinces, and the territories (except Nunavut*) signed the Agreement on
Internal Trade (AIT), which came into effect in 1995. The AIT includes provisions dealing with
performance requirements and local content.  In particular, the Investment Chapter (Six) of the AITprohibits the use of local content and purchasing requirements except in limited cases for regional
development programs.
* Nunavut was created after the AIT came into effect.  Nunavut is now considering whether to
become a signatory to the AIT.
Under the Canadian constitution, the provinces have exclusive legislative jurisdiction in a number of
areas.  As a matter of practice, when it negotiates international treaties touching on areas of provincial
jurisdiction, the federal government consults with  the provinces to ensure that their views and
interests are taken into account.
Original question
8) Entre el periodo comprendido entre el año 2000 y mediados de 2002, Canadá realizó 64
notificaciones de nuevas regulaciones técnicas a la OMC. (Párrafo 101) Además de las notificaciones
de estas regulaciones técnicas, ¿son notificados ante la secretaría de la OMC los reglamentos
técnicos emitidos por las provincias canadienses? ¿Existe un catalogo consolidado de todos los
reglamentos técnicos emitidos por las provincias canadienses? ¿Cuál es la dirección electrónica en
la cual se puede consultar?WT/TPR/M/112/Add.1
Page 97
English translation
Question 8
Between 2000 and mid-2002, Canada made 64 notifications of new technical regulations to the WTO
(paragraph 101). In addition to these nofitifications, are technical regulations issued by provinces
notified to the Secretariat of the WTO? Is there a catalogue of all technical regulations issued by the
provinces? On which website is is available?
Response
Technical regulations issued by the provinces are not notified as such to the Secretariat of the WTO.
No catalogue of all technical regulations issued by the provinces exists.  Some of the provinces,
however, do have some mechanisms in place for providing notification; i.e., the province of Quebec
publishes proposed legislation in the official Gazette of Quebec
(http://publicationsduquebec.gouv.qc.ca/home.php), a nd the Government of Ontario has a process of
consultation for proposed regulatory changes (environmental regulations) in its EnvironmentalRegistry (http://204.40.253.254/samples/search/ Ebrquery_REG.htm).
MEDIDAS QUE AFECTAN LA PRODUCCIÓN Y EL COMERCIO
Compras Gubernamentales
Original question
9) Con relación a las compras gubernamentales, se menciona que el 89.8% de los contratos
realizados  fueron adjudicados por métodos competitivos y el 10.2% fueron adjudicados por métodos
no competitivos. (Párrafo 199)
¿A que se refieren con  los términos métodos competitivos y métodos no competitivos? ¿Cuales
modalidades de contratación contemplada en las regulaciones canadienses se consideran
competitivas y cuales se consideran no competitivas?
English translation
Question 9
In relation to government procurement, it is ment ioned that contracts representing 89.8% of the total
value were allocated through competitive methods and 10.2% allocated in a non-competitive fashion.
(Paragraph 199) What do you  mean by competitive methods and noncompetitive methods? Whatmodalities of procurement in Canadian regulations are considered competitive and non-competitive?
Response
Competitive methods involve contracts where the process used for the solicitation of bids enhances
access, competition and fairness and assures that a reasonable and representative number of suppliers
are given an opportunity to bid by:
Either
(1) by giving public notice, using electronic bidding methodology, possibly supplemented by
traditional bidding procedures, of a call for bids for a proposed contract or of an intention to award a
contract to a pre-identified contractor in accordance with limited tendering reasons set out in the trade
agreements,WT/TPR/M/112/Add.1
Page 98
Or
(2) by giving public notice, using traditional bidding procedures (such as a suppliers' list, etc.) and in a
manner that is consistent with generally accepted trade practices, of a call for bids for a proposed
contract, and where,
In both situations:
a. in the case of a call for bids, the lowest bid or the bid that offered the best value, as set out in the
evaluation criteria in the bid solicitation and as determined by the contracting authority, was accepted;
b. in the case of a call for bids where only one bid, compliant with mandatory criteria set out in the bid
solicitation was received, fair value to the Crown, as determined by the contracting authority, was
obtained;
Non-competitive methods refer to any contract for which bids were not solicited or, if bids were
solicited, the conditions of a competitive contract were not met.
Original question10) Dentro de la sección de Compras Gubernamentales, se hace referencia al margen de preferencia
no mayor del 10% otorgado en las contrataciones realizadas bajo  AIT y para todas las
contrataciones no cubiertas en NAFTA y los Acuerdos de Compras de Gubernamentales. (Párrafo
210) Para las contrataciones en las cuales se otorga un margen de preferencia a los bienes y
servicios con valor agregado canadiense, ¿Como se de termina cual es el margen  de preferencia a
ser establecido en dicha contratación?
English translation
Question 10
Paragraph 210 cites that for procurement not covered by the GPA or NAFTA, entities covered by the
AIT may accord a preference for Canadian value-added, provided the preference margin is nogreater than 10%. How do you determine the margin of preference to be established?
Response
Article 504 (5) of the Agreement on Internal Trade permits federal, provincial, and territorial
governments to accord a preference for Canadian value-added of up to 10%.  Governments decide for
themselves whether to take advantage of this provision and, if so, the level of preference to be givenfor Canadian value-added.
Original question
11) En esta sección, se expresa que se permite limitar la contratación a productos y proveedores
canadienses cuando la entidad contratante considera que existe suficiente competencia dentro de los
proveedores canadienses. (Párrafo 210) ¿Existe algún mecanismo para permitirle determinar a la
entidad contratante la existencia de  competencia suficiente entre los proveedores canadienses? De
no existir un mecanismo a seguir por las entidades  contratantes, ¿Como determinan ellas que hay
suficiente competencia?
English translationWT/TPR/M/112/Add.1
Page 99
Question 11
In this section, it is also cited that there may also be a limit to tender to Canadian goods and
suppliers, provided the procuring  entity is satisfied that sufficient competition exists within the
Canadian suppliers. (Paragraph 210) Do mechanisms ex ist to help the procuring entity determine the
existence sufficient competition between Canadian suppliers? If no existing mechanism exist, how do
these procuring entities determine sufficient competition?
Response
Where Canada is committed to open procurement under international trade agreements, suppliers
from member countries may bid as specified in those agreements.  Where commitments have not been
made, Canada retains the right to apply domestic preferences.  Information on any such requirements
and how they will be applied is al ways contained in the bid documents.
IV. POLÍTICAS COMERCIALES POR SECTORES
TELECOMUNICACIONES Y SERVICIOS AUDIOVISUALESSERVICIOS DE TELECOMUNICACION
Original question
12) El monopolio Teleglobe en servicios de telecomunicaciones extranjeros fue abolido en 1998. La
competencia parece haber incrementado aun mas en el sector de telecomunicaciones y el costo de
ciertos servicios a disminuido. (Párrafo 6) ¿En cuáles otros servicios del sector telecomunicacionesha bajado el  costo para el consum idor, además del costo reducido en las llamadas  internacionales?
English translation
Question 12
The Teleglobe monopoly in telecommunications was abolished in 1998. The competition seems even
to have increased in the telecommunications sector and the cost of certain services diminished.(Paragraph 6) In which services of the telecommunications sector have costs been lowered for the
consumer, in addition to the reduced costs of international calls?
Response
Besides international services, competition has benefited consumers in many other areas.  A recent
OECD (Organisation for Economic Co-operation) publication , OECD Communications Outlook 2003,
indicated that Canada ranks 4th in the OECD in term s of wireline telephone charges and places 6th for
mobile prices.  The provision of Internet services is equally competitive, contributing to Canada's
ranking of 4th for dial-up Internet pricing and 1st for DSL (Digital Subscriber Loop) Internet prices.
In addition, 98% of Canadian households have a telephone while broadband Internet services are
available to 85% of Canadians.
SERVICIOS FINANCIEROS
Original question
13) La legislación financiera canadiense esta sujeto a revisión cada cinco años. Como un resultado
de la última revisión, en febrero de 2001,  el gobierno ha introducido una legislación para reformar
el marco legislativo para los servicios del sector financiero. Bill C-8, la ley que estableció laWT/TPR/M/112/Add.1
Page 100
‘Financial Consumer Agency of Canada’  entro en vigencia en octubre de 2001.  (Párrafo 133)
¿Cuales son las funciones y el rol de la “Financia l Consumer Agency of Canada”? ¿El  Bill C-8  está
disponible públicamente?, y de ser así, ¿Adonde se puede encontrar ésta información?
English translation
Question 13
The Canadian financial legislation is subject to review  every five years. As a result of the last review,
in February 2001, the government introduced legislati on to reform the legislative framework for the
financial services sector. Bill C-8, the Act to Establish the Financial Consumer Agency of Canada,
entered into force in October 2001. (Paragraph 133) What are the functions and the role of the
Financial Consumer Agency of Canada? Is the copy of Bill C-8 publicly available and if so, where
can this information be found?
Response
The Financial Consumer Agency of Canada (FCAC) is a federal agency working to protect and
educate financial services consumers.  It fulfils its mandate by:
providing consumers with information about their rights and responsibilities; and
enforcing federal consumer protection laws and regulations, including the monitoring of financial
institutions' business practices (known as voluntary codes of conduct) concerning small business
lending and the use of debit cards.
The FCAC monitors and supervises financial instituti ons that are regulated at the federal level. These
institutions include all banks and all federally incorporated or registered insurance, trust and loan
companies and co-operative credit associations.
Further information about the FCAC can be found on its website at:
http://www.fcac-acfc.gc.ca.
The contents of Bill C-8 can be found online at:
http://www.parl.gc.ca/37/1/parlbus/chambus/hous e/bills/government/C-8/C-8_3/C-8_cover-E.html
UNITED STATES
I. Economic environment
II. Trade policy regime:  framework and objectives(2) Institutional and Policy Framework
Question 1
Section II (2) of the secretariat's report states that the Office of Consumer Affairs at Industry Canada,
along with the Competition Bureau, analyzes "the impact of trade ... changes on consumers ... the
Bureau aims to prevent ... monopolistic pricing and anti-competitive conduct that could cause areduction in consumer welfare." If this is true, why do consumers pay higher prices as a result of The
Government of Canada, through the Canadian Dairy Commission, setting support prices for butter
and skim milk powder (SMP)?WT/TPR/M/112/Add.1
Page 101
Response
The operation of supply management in the Canadian dairy, poultry, and eggs sub-sectors is
implemented using government powers to limit production by issuing production or marketing quotas
to individual producers, which represent a share of the available domestic market. To achieve this,
government has created agencies which also assist producers to market their products.
These arrangements generally fall outside the scope of the Competition Bureau because they are
carried out by, or specifically authorised by, governments.
III. Trade policies and practices by measure
(2) Measures Directly Affecting Imports
vii. Standards, technical regulations and SPS
Question 2
Many US breakfast cereals and orange juice are fortified with vitamins and minerals. Health Canada
has restricted these products on the premise that they are meal replacements and treated as drugs.Although the US company can request a temporar y marketing authorization letter from Health
Canada for 2-3 years to show the benefits of the product, U.S. Companies are still having problems
with the process, as breakfast cereals are still prohibited. What steps are being taken to make this
process more transparent and the outcome more predictable?
Response
Canada’s restrictions on the import and sale of foods with added vitamins and minerals result from
differences between the Canadian regulations on fortification of foods, which have been promulgated
over the course of the last 40 years, and those of other countries, including the United States.
Canada’s regulations on fortification of foods are consistent with the Codex Alimentarius
Commission’s General Principles for the Addition of Essential Nutrients to Foods CAC/GL 09-1987(amended 1989, 1991) and the U.S. Food and Drug Administration Fortification Policy
(21CFR§104.20).
The sale in Canada of U.S. fortified breakfast cereals has not been restricted on the premise that they
are meal replacements.  Canada permits the fortification of breakfast cereals but has more controls on
the extent and level of fortification than does the United States.  There is no requirement in theCanadian Food and Drug Regulations for fortified breakfast cereals to be considered as meal
replacements.
In addition, there is no requirement in the Canadian Food and Drug Regulations for orange juice
fortified with vitamins and minerals to be treated as a drug.  However, one U.S. company chose to sell
calcium-fortified orange juice as a calcium supplement.  All vitamin and mineral supplements arecurrently regulated as drugs in Canada.
In the late 1990s, recognizing industry concerns that the current regulations were too restrictive and
limited consumer choice, Canada initiated a review of its policies on addition of vitamins and
minerals to foods, following an established, step-wise process.  Proposed policy recommendations
were issued for public comment in October 1999 and an update on the status of the project with
options for implementation was published for discussion in October 2002.  The new Dietary
Reference Intakes (DRIs) established by the Institute of Medicine of the National Academies of theUnited States were used as a tool in developing the options for implementation.  The work to establishWT/TPR/M/112/Add.1
Page 102
the DRIs was funded for the most part by the governments of the U.S. and Canada between 1997 and
2003.
Canada’s review of its policies on the addition of vitamins and minerals to foods and the subsequent
development of options for implementation have been completely transparent and have incorporated
ongoing consultations with stakeholders, includi ng industry associations and individual food
industries.  The policy review and implementation process is intended to address industry concernsthat the current regulations were too restrictive and limited consumer choice.  The process is fully
justified in that it has been guided by current scie ntific information, including that provided by the
Institute of Medicine of the National Academies of the United States.
The comment period on the October 2002 discussion  paper closed on January 31, 2003.  Comments
received from stakeholders are currently being analysed by Health Canada.  The comments are
available to the general public.  Regulatory amendments which will allow more flexibility in the
addition of vitamins and minerals to foods, while at the same time meeting public health needs andprotecting the population from the harmful effects of excessive or imbalanced intakes, are anticipated
in 2004.
Question 3
Canada has an application system for granting waive rs for the importation of bulk produce.  What
measures will the Canadian government take to ensure consistency and transparency in the awardingof such waivers?
Response
The Fresh Fruit and Vegetable Regulations, under the Canada Agricultural Products Act, are designed
to ensure that all fresh fruits and vegetables entering into Canada or domestic supplies comply with
Federal health and safety, quality, packaging and labeling regulations.
Processors or packers are free to source their supplies from the area or supplier of their own choice,
including imports, provided those supplies comply with all the requirements of the Act and the
Regulations.
In circumstances when adequate quality and quantity of compliant products are not available,
processors or packers may apply to the Minister  for an exemption to obtain non-complying products
from another province or another country.  Health and safety requirements will not be waived under
any circumstance.
In order to ensure consistency and transparency in the application of Ministerial Exemptions, the
CFIA recently reviewed its guidelines with the aim of enhancing consistency and transparency. These
are available to the public on CFIA's website:http://www.inspection.gc.ca/english/plaveg/fresh/meguide.shtml.
Question 4
Section III(2)(vii) of the Secretariat's report  mentions standards and conformity assessment as
solutions to inter-provincial trade and regulatory obstacles. Yet, as mentioned in that section,
“Technical regulations and standards continue to differ among provinces.  For example, Quebec has
refused to allow the process to continue by not supplying an intermediary for the dispute initiated by
the provinces of Ontario, Alberta, Saskatchewan and Manitoba. What efforts are being made to align
inter-provincial discrepancies regarding establishment of standards for trade in margarine?WT/TPR/M/112/Add.1
Page 103
Response
A wide range of issues that affect the internal trade of agriculture and food goods, including
standards, regulations, and technical issues, are being addressed on a regular basis by various forums
– two of which are the Federal-Provincial Agriculture Trade Policy Committee (FPATPC), and the
Federal-Provincial-Territorial Agri-food Inspection Committee (FPTAFIC). The FPATPC, for
example, has identified margarine colouring standard s as a technical barrier to internal trade, and
continues to keep the matter under review with the objective of resolving the issue.
(3) Measures Directly Affecting Exports
(ii) Export Financing and other Assistance
Question 5
In section III (3)(ii) of the Secretariat's report, there is no mention of the Government of Canada
(Agriculture and Agri-Food Canada, Department of Foreign Affairs and International Trade, Western
Economic Diversification Canada, Canada Development for Quebec and the Atlantic CanadaOpportunities Agency) Agri-Food Industry Market Strategy (AIMS) funding to foster exports.
According to Agriculture and Agri-Food Canada's Departmental Performance Report for 2001/02,
AIMS funding paid industry associations "C$9 .8 million in financial assistance towards numerous
market development activities throughout the world." Can Canada provide an explanation for why
this data was not included in the Secretariat’s report?
Response
We would not want to speculate on why the Secretariat might choose to include or not to include
specific issues.  With respect to Agri-Food Industry Market Strategies (AIMS), Canada operates the
program to encourage Canadian agri-food industries to increase exports.
(d) Export restrictions for commercial purposes (paragraph 124)
Question 6
Regarding the Softwood Lumber dispute mentioned in paragraph 124 of this report, has Canada
notified any of its subsidy programs providing benefits to the Canadian lumber industry to the WTO
Subsidies Committee, as required under Article 25 of the Agreement on Subsidies and Countervailing
Measures (the Subsidies Agreement)?  If not, for ea ch of the following programs please identify the
form of the subsidy, subsidy per unit, policy objectiv e, duration of the program and statistical data on
the trade effects of the program:
a) Non-Payable Grants and Conditionally Repayabl e Contributions from the Department of Western
Economic Diversification ;
b)  Federal Economic Development Initiative in Northern Ontario (FedNor);c)  Forest Renewal B.C. ;
d)  Job Protection Commission of British Colombia;
e)  Private Forest Development Program of Quebec;WT/TPR/M/112/Add.1
Page 104
f) Provincial Stumpage Programs administered by  the Provinces of British Columbia, Quebec,
Ontario, Alberta, Manitoba, and Saskatchewan.
Response
The programmes listed by the U.S. are not subsidies and are not specific within the meaning of Article
1 and Article 2 of the SCM Agreement, respectively. Consequently, the obligation to notify does not
arise.
(ii) Export financing and other assistance
(b) Export Development Canada
Question 7
This report states that the EDC’s Canada Account “has been used to support transactions that the
Federal Government deems to be in the ‘national in terest’ but that the EDC cannot support under the
Corporate Account for reasons of exceptional risk.”  Please explain how this provision conforms with
regulations set out in the SCM Agreement regarding export subsidies (Article 3.1(a)).
Response
EDC's Canada Account was extensively examined, from both a programme and transaction
perspective, by two WTO panels, most recently in Canada-Export Credits and Loan Guarantees for
Regional Aircraft (WT/DS222).  The Panel found th at EDC's Canada Account was not inconsistent,
"as such", with Article 3.1(a) of the SCM Agreement.
(4) Measures Affecting Production and Trade
(ii) Financial and other assistance to business
(c) Selected federal measures and programs, regional assistance (paragraph 175)
Question 8
In evaluating companies that are eligible to r eceive loans from FedNor and the Credit Unions of
Northern Ontario, is the competitiveness or commercial viability of these companies taken into
consideration?
Response
Yes. Given that assistance provided is in the form of a repayable contribution, an assessment of the
ability of the enterprise to repay the contribution is undertaken, as are competitive factors.
Question 9
Please explain whether financial assistance provided by the Province of British Colombia to the pulp
mill of Skeena Cellulose at Prince Rupert has been notified under Article 25 of the SCM Agreement,
and if not, whether the GOC plans to do so in the future.  In addition, could you please also explain
whether other firms or industries are (or were) eligible for similar assistance?WT/TPR/M/112/Add.1
Page 105
Response
The provincial government's financial assistance to Skeena Cellulose was not notified under Article
25 of the SCM agreement since it is considered not to fall under these notification requirements
The government's involvement in Skeena formed part of Skeena's restructuring plan under the
Companies' Creditor Arrangement Act restructuring plans, which was approved by creditors and the
B.C. Supreme Court in February 1998. The restructur ing plan was, intended to restructure Skeena to
enhance the long-term viability of the company's operations.
In 2001, the government made a priority of returning Skeena to private sector ownership. The sale of
Skeena was subsequently concluded in April 30, 2002 and ownership of Skeena now rests solely in
the hands of the private sector. The government has no further financial interest in Skeena (no
financing, loans, loan guarantees, or ownership/investment interest).
Question 10
Please provide further explanation as to the requirements for commercial fishers to qualify for
assistance under the New Brunswick Fisheries Devel opment Board.  Could you please also explain to
what extent support through this program contributes to the creation or maintenance of capacity in
the fisheries sector?  More specifically, how are factors such as oversupply and overcapacity taken
into account when determining the amount of support given to commercial fishers through this
program?
Response
The requirements for commercial fishers to qualify for assistance under the Fisheries Development
Board are given below:
ELIGIBILITY CRITERIA 2:
Applicants must not have any loans in arrears with the Department.
Applicant must be a certified commercial fisherman and must provide a copy of any relevant fishing
licenses.
Applicants must provide a copy of their income tax returns including the statement of income and
expenses of fishing for the past three years.
Applicants must pledge their licences in support of any loan provided.An applicant who has been convicted of an offence related to illegal fishing activity within the last 5
years may not be eligible for financial assistance.
Applicant must have attempted to obtain the re quired financing from conventional sources such as
banks or financial institutions.
In February 2002 the Department of Business Ne w Brunswick implemented a “need criteria”, as
outlined in the 6
th bullet above, whereby the Applicant must demonstrate that funding is not available
elsewhere from conventional lenders on reasonable terms and conditions.
In addition, in order to qualify for support the Applicant must demonstrate the viability of the
proposal.
The vessels considered for funding are matched to the licenses and quotas held by the fishermen, and
these licences and quotas are controlled and allocated by the Government of Canada .  Issues of supply
and capacity therefore are not directly considered under this program as they fall under the purview of
                                                     
2 Fisheries Development Program  guidelines (loans for commercial fishing), Department of Business
New BrunswickWT/TPR/M/112/Add.1
Page 106
the federal government, which is responsible for resource management, and quota and license
allocation.
It was noted that, as per the Department of Fish eries and Oceans Canada, “the Licensing Policy is an
integral part of a number of federal government in itiatives to restructure the commercial fisheries and
lay the foundation for a fishery that is environmentally sustainable and economically viable. The
objectives of the policy are to reduce capacity, improve the economic viability of participants incommercial fishing operations and prevent future growth of capacity in the commercial fishery.
3”
Question 11
Based on our review of public information regarding fisheries programs, we have identified the
following additional programs:
a)  Fisheries Diversification Program
b)  Government Restrictions on Licences for Processing Plants
c)  Subsidized loans to the Fisheries Industryd)  Local Processing Requirement for Shrimp
e)  Federal and Provincial Tax Breaks for Diesel Fuel
Please provide information regarding the following programs and explain whether they will be
notified to the Subsidies Committee under Article 25 of the Subsidies Agreement.
Response
The above programs or initiatives have not been notified because it is considered that they do not fall
within the provisions of Article 25 of the ASCM.
Question 12
Could you please provide more information regardi ng requirements for companies to receive interest-
free loans and other assistance under the Investissement Quebec program?  For example, are Smalland Medium Size Business Guarantees contingent on  exportation? Also, how is it determined whether
contributions provided to companies under the FAIR programme are refundable or non-refundable?
Response
L'obligation de notification des mesures spécifiques prévue à l'article 25 de l'Accord sur les
subventions et les mesures compensatoires ne s'applique  pas aux deux  mesures mentionnées et cesmesures ne sont pas subordonnées aux résultats à l’exportation.
Le programme FAIRE vise à faciliter la réalisation de projets d'investissement et, dans les cas où une
contribution gouvernementale est accordée, la contribution est généralement remboursable.
Investissement-Québec peut cependant, sans excéder 10% de son portefeuille d'engagements, rendre
la contribution non remboursable lorsque les retombées économiques découlant du projetd'investissement le justifient.
Le programme Garantie-PME ne s'adresse qu'aux entreprises ayant moins de 100 employés sur une
base consolidée ou moins de 10 M $CA de chiffre d'affaires. Pour l'essentiel, il s'agit d'une garantie de
remboursement d'au plus 80% de la perte éventuelle que pourrait subir une institution financière après
                                                     
3 From the Fisheries and Oceans Canada website: http://www.glf.dfo-mpo.gc.ca/fm-gp/rm-gr/lic-
dp/index-e.htmlWT/TPR/M/112/Add.1
Page 107
réalisation de ses garanties en cas de non remboursement d'un prêt par l'entreprise.  Des honoraires de
garantie variant de 1% à 2,25% du solde du prêt, selon le risque, et une commission d'engagement de
1% sont imposés à l'entreprise bénéficiaire de la garantie d'emprunt. Ces taux sont comparables à ceux
pratiqués sur le marché commercial.
Question 13
In Newfoundland and Labrador, projects in the petroleum and gas industries are “approved only if
they result in sufficient local employment and purchases of goods and services produced.” Please
explain how these local content requirements conform with Canada’s obligations under Article 3.1(b)
of the Subsidies Agreement.   Please also provide the level of local purchases of goods and services
that is prescribed for these projects.
Response
The statements made by the U.S. are inaccurate.  As per the Canada-Newfoundland Atlantic Accord,
projects in the petroleum and gas industry are approved based on the economic viability of the project.The Atlantic Accord states that: "1st consideration shall be given to services provided from within the
province and to goods manufactured in the province, where those services and goods are competitive
in terms of fair market price, quality and delivery".
There is no prescribed level of local purchases of goods and services for these projects.
This requirement does not conflict with Canada's obligations under Article 3.1b of the WTO
Agreement on Subsidies and Countervailing Measures.
(iv) Intellectual Property Rights
Patents
Question 14
Regarding the recent decision of the Canadian Su preme Court that “higher life forms” are not
patentable, can you please explain the scope of this decision.  For example, could microorganisms
within the meaning of TRIPS Article 27(3)(b) be f ound to be “higher life forms” within the meaning of
that decision?
Response
In Canada, an innovation is patentable only if it comes within the term "invention" as defined in the
Patent Act , and fulfills the patentability criteria: novelty, non-obviousness and utility. The Canadian
Patent Act does not distinguish between the patentability of various life-forms. Jurisprudentially, in
the recent Supreme Court of Canada decision on the Harvard Onco-mouse  case, it was held that a
higher life form, such as a genetically-modified mouse, was not an invention within the meaning of
the current Patent Act .
In the recent Supreme Court of Canada decision on the Harvard Onco-mouse  case, it was held that a
higher life form, such as a genetically-modified mouse, was not an invention within the meaning of
the current Patent Act . 
With regard to lower the life forms, the majority of the Supreme Court stated:
“The patentability of lower life forms was not at issue before this Court, and was in fact was
never litigated in Canada. In Abitibi, supra, the Patent Appeal Board, the Commissioner concurring,WT/TPR/M/112/Add.1
Page 108
rejected the prior practice of the Patent Office and issued a patent on microbial culture that was used
to digest, and thereby purify, a certain waste prod uct that emanates from pulp mills. [...The Board
determined that]:
...this decision will extend to all micro-organisms,  yeasts, moulds, fungi, bacteria, actinomycetes,
unicellular algae, cell lines, viruses or protozoa; in fact all new life forms which are produced en
masse  as chemical compounds are prepared, and are  formed in such large numbers that any
measurable quantity will possess uniform properties and characteristics.”
It is accepted in Canada that lower life forms are patentable.
The Supreme Court’s decision regarding patenting of  higher life forms is relatively narrow -
restricting itself to higher life forms. Other biotechnological inventions such as those relating to
genetic inventions were not considered by the court.
Question 15
We are concerned about the protection biotechnology-related inventions in Canada because of this
decision.  Does Canada have any current plans to address these matters in the legislature?
Response
In the recent Speech from the Throne, the Government of Canada committed itself to adapting its
intellectual property framework to enable Canada to be a world leader on emerging issues such as
multicellular inventions.
The Government of Canada will be acting soon in response to the Supreme Court of Canada’s
Harvard Onco-mouse  decision. It will be consulting Canadians and the Canadian Biotechnology
Advisory Committee. In addressing the challenge raised by the Harvard Onco-mouse  decision, the
Government of Canada will continue to seek the right balance between fostering innovation,
encouraging the diffusion of knowledge and protecting the values of Canadians.
It is worth repeating that the Supreme Court’s decision regarding patenting of higher life forms is
relatively narrow - restricting itself to higher li fe forms. Other biotechnological inventions such as
those relating to genetic inventions were not consider ed by the court at all.  The Canadian Intellectual
Property Office’s practices regarding what subject matter is patentable has not changed as a
consequence of this decision.
Copyright and Related Rights
Question 16
What is the status of ratification to the WIPO  Copyright Treaty and the WIPO Performances and
Phonograms Treaty?  As you are aware, these two Tr eaties entered into force nearly a year ago, and
have 40 and 39 members, respectively.  It is of utmost importance for the United States to be able towelcome Canada to these Treaties in the near future.
Response
The Government is committed to bringing the Copyright Act into conformity with the WIPO
Copyright Treaty and the WIPO Performances and Phonograms Treaty once the issues involved are
thoroughly analyzed, subject to appropriate consultations. That process is part of the short-term
agenda for Canada's copyright reform.WT/TPR/M/112/Add.1
Page 109
Question 17
While Canada continues to make progress on resolving the outstanding issue of national treatment of
U.S. artists in the distribution of proceeds from  Canada's private copying levy and its "neighboring
rights" regime, what is the status of this issue currently?
Response
Canada's private copying levy and our neighbouring rights regime are in conformity with our national
treatment obligations .
Trademarks
Question 18
We understand that Canada and the European Union are close to agreement on the phasing out of the
use of certain generic terms in connection with wines and spirits in Canada.  Section 11.18(3) of the
Trade-marks Act of Canada lists certain generic terms for wine which can be used on labels and in
trademark registrations.  Section 11.18(4) of th e Trade-marks Act of Canada lists certain generic
terms for spirits which can be used on labels and in trademark registrations.  How will this
development affect the rights of trademark holders whose marks incorporate these generic terms?
Question 19
Related to the question above, how will this devel opment affect the rights of trademark holders to
maintain, protect, assert, and enforce their rights in these trademarks?
Response to Questions 18 and 19
Canada and the European Union are currently negotiating a bilateral agreement on wines and spirits,
which includes provisions related to the protection of geographical indications in Canada. Canada has
held a consultation, open to both foreign and domestic stakeholders, which considered the question of
whether or not certain wine names currently deemed as generic in Canada could be removed from thislist in the context of a mutually beneficial bilateral wine and spirits agreement between Canada and
the European Community. Canada has received a number of comments from both domestic and
foreign parties; it would not be appropriate to comment on the outcome of these consultations at this
point in time as the bilateral negotiation is ongoing.
IV. Trade policies by sector
(2) Agriculture
(ii) Main forms of Support
Question 20
Section IV (2)(ii) of the Secretariat's report states that total payments under marketing and trade
programs amounted to C$81 million in 2001/02.  Since C$9.8 million is purely under the AIMS
program, the remaining C$71.2 million must repres ent interest payments to the Canadian Wheat
Board (CWB) on behalf of the Government of Ca nada on defaulted Credit Grain Sales debt from
sovereign countries.  However, according to the public accounts of Canada for 1997/98, defaulted
liabilities totaled C$6.7 billion, generating interest payments of C$74 million to the CWB.  The public
accounts for Canada in 2001/02 indicate that outstanding debt in the form of defaulted grain sales
was C$7.3 billion. While interest earnings from the GOC to the CWB were not reported in theWT/TPR/M/112/Add.1
Page 110
2001/02 public accounts of Canada, it is likely more than the remaining C$71.2 million.  We request
that Canada substantiated this amount, which we wo uld have expected to be in the range of C$80-85
million range. Can Canada explain in detail why th is discrepancy occurred and what they are doing
to alleviate the problem?
Response
The $81 million for marketing and trade in 2001/02 cited by the Secretariat does not include any
amount for reduction of foreign debt owed to th e Canadian Wheat Board (CWB) and renegotiated at
the Paris Club.
Debt relief granted has no relation to the calculations outlined in the question.
(iv) Export support
Question 21
Could you please explain how Canada plans to im plement the Appellate Body decision of December
2002 regarding Canada’s CEM scheme and continued operation of Special Milk Class 5(d)?
Response
On December 20, 2002, the WTO Appellate Body ruled that Canada was found to be breach of its
WTO obligations for providing export subsidies through its dairy export practices (a combination of
the supply of commercial export milk and the ope ration of Special Milk Class 5d) above its WTO
quantity commitment levels.  On January 17, 2003 the WTO Dispute Settlement Body adopted the"WTO Dairy" Appellate Body and Compliance Panel reports.
Detailed trilateral consultations with New Zealand and the United States are being conducted on
compliance issues.  The various provincial commercial export milk mechanisms were shut down as of
December 31, 2002.  Canada is also removing, through re-regulation at the provincial (and ultimately
federal) level, the various steps taken to establish the various commercial export milk mechanisms.This process varies province-by-province.  It is dependent upon the regulatory framework in each
province and the associated need for public consultation with industry stakeholders.  As of February
11, 2003, five provinces have re-regulated commercial export milk (Saskatchewan, Manitoba, New
Brunswick, Nova Scotia and Ontario).  It is expected that the re-regulation process in the remaining
provinces can be completed by March 31, 2003.
(3) Textiles and Clothing
(ii) Trade policy developments
Question 22
Please provide additional details regarding the C$3 million in provincial assistance provided to a
knit and dye plant located in Drummondville, Quebec under Investissement Quebec.  Please indicatewhether Canada has notified this program to the Subsidies Committee and whether the assistance
provided by  Investissement Quebec, Economic Development Canada, or the local Drummondville
government is contingent upon export performance.
ResponseWT/TPR/M/112/Add.1
Page 111
Une aide de 3 M $CA  a été versé à l'entreprise dans le cadre du programme FAIRE (voir plus haut) .
l'investissement totalisait 50  M  $CA. Ce programme n’était pas assujetti à l'obligation de notification
en vertu de l'article 25 de l'Accord sur les subventions et les mesures compensatoires .
L’assistance donnée à cette entreprise à Drummondville n’était pas subordonnée aux résultats à
l’exportation.
(4) Steel
Question 23
Please explain how financial assistance provided by federal, provincial and municipal governments to
Algoma Steel in Ontario under the Companies’ Cr editors Arrangement Act (CCAA) complies with
Canada’s commitments as laid out in the Subsidies  Agreement. Please also explain whether this
program has been notified under Article 25 of the SCM Agreement and if not, whether the GOC plans
to do so in the future.
Response
Algoma Steel Inc restructured its operations under the protection of the Companies' Creditors
Arrangements Act (CCAA), bankrupt cy legislation which is similar to the Chapter 11 process in the
United States, from April 2001 to January 2002.  During this restructuring period, federal, provincial
and municipal governments were each asked to make a contribution to this restructuring effort. Each
government ultimately decided to provide some measure of assistance.
The federal government provided Algoma with a $50 million loan guarantee for a period of two years,
based on commercial terms with Algoma paying a guarantee fee.  The Province of Ontario, through
the Ontario Pension Guarantee Fund, agreed to the firm's restructuring of its pension obligations that
largely removed from the firm's books the pension obligation for its current retirees. The City of Sault
Ste Marie agreed to forego certain taxes owed to it.
Canada is currently working on updating its subsidy notification made in June 2002 to the Committee
on Subsidies and Countervailing Measures.  The programs benefiting Algoma would be taken into
consideration in the preparation of that notification.  For the sake of transparency and in response to
the question from the U.S., Canada is making available here to the Members a copy of a paper which
Canada has submitted to the OECD and which outlines the circumstances of the Algoma assistancepackage.
The paper is contained in OECD web site (SG/Steel(2002)20/3).
(5) Telecommunication and Audiovisual Services
(iii) Audiovisual services
Question 24
What are Canada’s plans with regard to the reduction of foreign equity limits in telecom and cable
TV?
Response
Canada 's Telecommunications Act requires that telecommunications common carriers be Canadian
controlled and limits direct investment to 20% of the voting shares.  The limit on the voting shares for
holding companies is 33.3%.  The maximum investment by foreign entities in an operating companyWT/TPR/M/112/Add.1
Page 112
is 46.7%, i.e. 20% of the operating company and 26.7% of the holding company (33.3% of the
remaining 80%).
The Minister of Industry announced on November 19, 2002 that he is seeking the views of Canadians
on foreign investment restrictions in the telecommunications industry and that he had asked the Chair
of the House of Commons Standing Committee on Industry, Science and Technology to undertake a
review. (Further details can be found onlin e at http://www.innovationstrategy.gc.ca/cmb/
innovation.nsf/MenuE/Invest00)
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participation
in Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.
A report from the Committee to the Government is expected in the spring of 2003. The Government
will then decide on what action, if any, it might wish to take.
In a separate process, the Standing Committee on Canadian Heritage is examining foreign ownership
of broadcasting undertakings as part of its comprehensive review of broadcasting in Canada.
Question 25
What is Canada doing to ensure non-discriminatory a ccess to cable TV networks by Internet service
providers?
Response
The Canadian regulatory regime established by the Canadian Radio-Television and
Telecommunication Commission is non-discriminatory a nd fair for all industry participants.  There is
no "discriminatory access" to cable networks in Canada.
Question 26
Apart from television programming, Canada also has several regulations in the audiovisual sector
that pertain to the support of the Canadian film indu stry.  Could you please explain if any of these
programs or regulations have been notified to the Subsidies Committee?  If not, for each of the
following programs, please identify the form of the subsidy, subsidy per unit, policy objective,
duration of the program and statistical data on the trade effects of the program:
a) The Canadian Film or Video Production Tax Credit
b) Ontario Film and Television Tax Credit
c) Ontario Production Services Tax Credit
d) Ontario Computer Animation and Special Effects Tax Credit
e) Ontario Interactive Digital Media Tax Credit
Response
The Canadian Film or Video Production Tax Credit has not been notified to the Subsidies Committee,
as film and video production are services, identifiable by the MTN.GNS/W/120.
Question 27
The GOC explained earlier in this report in paragraph 167 that the no Canadian provinces have
reported to the federal government that they hav e subsidy programs that meet the notification
requirements set out in the Subsidies Agreement.   It appears as though several of the programs
administered by provincial governments meet the defini tion of a subsidy as laid out in Article 1 of theWT/TPR/M/112/Add.1
Page 113
Subsidies Agreement.  Could the GOC please explain whether the provincial programs listed above,
as well as provincial programs benefiting other industries, will be notified to the Subsidies Committee
under Article 25?
Response
These programs or initiatives have not been notified to the Subsidies Committee, as these programs
relate to services, identifiable by the MTN.GNS/W/120.
MALAYSIA
Question 1
The Secretariat’s report in para 31 noted that most of Canada’s trade is with the United States, with
export share rising from 79% to 87% in 2001.  In comparison, trade share with other countries was
not maintained but has fallen quite significantly.  Could Canada elaborate on the factors for this
decline?
Response
Canada’s export share to the US has risen over the past decade along the manner suggested in the
question.  A corollary of this observation is that the export shares of the rest of Canada’s trading
partners have fallen by an amount equal to the US gains. This does not, however, imply that the level
of trade with non-US partners has fallen.  Indeed, exports to both the US and non-US may increase at
the same time.  It is only if exports to the US rise  at a faster rate than exports to non-US destinations
will the US share increase.  This is, in fact, what has happened as Canada’s merchandise exports to
the US increased 130% over 1993-2002 while Canadian exports to all other sources increased by over
35%.  Canada shares geographical proximity, an integrated production system, a competitive
exchange rate, and a free trade agreement with the United States.   These factors coupled with strong
US demand for Canadian exports have worked in favour of Canada selling relatively more and moreof its output to the United States.
Question 2
In para 1 of the Executive Summary, it is noted that Canada is diversifying its economic relationships
through preferential trade arrangements.  Is Canada adopting other measures to diversify other than
through the FTA route?
Response
Canada is a strong supporter of the multilateral trading system and an active participant in the WTO
negotiations.
Question 3
Canada’s current account balance has improved from  negative territory to positive balance since
1999, due mainly to larger trade surpluses and more stable outflows of investment outcome.   Could
Canada provide reasons for this and if they anticipate that this situation could be maintained in the
near future?WT/TPR/M/112/Add.1
Page 114
Response
Canada shares geographical proximity, an integrated production system, a competitive exchange rate,
and a free trade agreement with the United States.   These factors coupled with strong US demand for
Canadian exports have worked in favour of Canada selling relatively more and more of its output to
the United States.  As goods exports have expanded faster than imports, Canada’s current account
surplus for goods and services has grown (Canada runs  a small but stable services deficit).  Expansion
of the goods and services surplus has, in turn, pulled the overall current account balance into positive
territory, offsetting the investment income deficit noted in the question.  With a strong US appetite for
imported goods it is likely that the situation will be maintained over the near future.
Question 4
In para 234 of the Secretariat report, it is noted that higher  life-forms such as mice and chimpanzees
cannot be patented.  Is there a distinction in Canadian Patent law on the different life-forms?
Response
The Canadian Patent Act does not distinguish between the patentability of various life forms.  It only
speaks to what is considered to be a patentable invention within Canada’s patent regime.
In the recent Supreme Court of Canada decision on the Harvard Onco-mouse case, it was held that a
higher life form, such as a genetically-modified mouse, was not an invention within the meaning of
the current Patent Act .
With regard to lower life forms, the majority of the Supreme Court stated:
“The patentability of lower life forms was not at issue before this Court, and was in fact was never
litigated in Canada.  In Abitibi, supra, the Patent Appeal Board, the Commissioner concurring,
rejected the prior practice of the Patent Office and issued a patent on microbial culture that was used
to digest, and thereby purify, a certain waste product that emanates from pulp mills. [The Boarddetermined that]:
...this decision will extend to all micro-organisms,  yeasts, moulds, fungi, bacteria, actinomycetes,
unicellular algae, cell lines, viruses or protozoa; in fact all new life forms which are produced en
masse  as chemical compounds are prepared, and are formed in such large numbers that any
measurable quantity will possess uniform properties and characteristics.”
It is accepted in Canada that lower life forms are patentable.
The practice of the Canadian Intellectual Property Office has not changed as a consequence of the
recent Supreme Court of Canada decision.  Based on the current definition of invention within the
Patent Act , CIPO did not and does not allow patent claims for higher life forms .
HUNGARY
Question 1
Hungary notes that in most provinces of Canada introduction of alcoholic beverages is a state
monopoly which limits the access of producers to the market.
Could Canada explain how the principle of "comme rcial consideration" and national treatment for
imported products is implemented under the existing regulations?WT/TPR/M/112/Add.1
Page 115
Response
The detailed substance relating to the ‘commercial consideration’ question was given in Canada’s last
notification under GATT Article XVII, State Trading Enterprises, as set out below:
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
In Canada, the importation of and inter-provincial trade in alcoholic beverages is governed by the
federal Importation of Intoxicating Liquors Act  (IILA). The objective of the IILA relates to the control
of the consumption of alcoholic beverages in Canada for the purpose of protecting public health and
morals.
B. Summary of legal basis for gaining the relevant exclusive or special rights or privileges, including
legal provisions and summary of statutory or constitutional powers.
The IILA provides the provinces, within their respective jurisdiction, with control over the sale of
intoxicating liquor, and over the importation, sending, taking or transportation of such liquor into the
provinces. The provinces (except for Alberta) have delegated this activity to the provincial liquorcontrol authorities. In Alberta, responsibility for the selection, retailing, warehousing and distribution
of liquor rests with the private sector. The statute expressly provides that nothing in the IILA forbids
the importation, sending, taking or transportation of intoxicating liquor for sacramental or medicinal
purposes, or for manufacturing or commercial purposes not related to the use of liquor as a beverage.
As well, under the IILA, an exception exists for persons licensed by the Government of Canada under
the Excise Act  to carry on the business or trade of a distiller or brewer where the intoxicating liquor is
imported solely for the purpose of being used for blending with or flavouring the products of the
business or trade of that person.
Description of the functioning of the state trading enterprises
A.  Summary statement providing overview of operations of the state trading enterprise.
The provincial liquor control authorities deal with the importation and sale of alcoholic beverages
within their respective jurisdictions. Exportation of alcoholic beverages is a private matter of beverage
manufacturers.
B.  Specification of exclusive or special rights or privileges enjoyed by the state trading enterprise.
The IILA provides the provincial liquor control authorities with the delegated authority to import
alcoholic beverages in Canada.
C.  Types of entities other than state trading enterprises that are allowed to engage in
importation/exportation and conditions for participation.
Private traders are allowed to import if they are licensed by the Government of Canada under the
Excise Act  to carry on the business or trade of a distiller or brewer where  the intoxicating liquor is
imported for the purpose of being used for blending with or flavouring the products of the business or
trade of that person.  Alcoholic beverages may be sold through stores operated by the provincial
liquor control authority or through provincially authorized private retailers or a combination of both.
The private trade determines its own criteria pertaining to exports.
D.  How import/export levels are established by the state trading enterprise.WT/TPR/M/112/Add.1
Page 116
Provincial liquor control authorities purchase or permit the purchase of alcoholic beverages in line
with market needs as related to such commercial considerations as price, quality, availability,
marketability, transportation and other conditions of purchase or sale.
With reference to ‘national treatment’, wineries in the Provinces of Ontario, British Columbia and
Nova Scotia are permitted to sell their wines directly to consumers at the winery where they are made
and through a limited number of off site locations within the province.  Distillers may also sell theirdistilled products at the distillery where they are made.  In addition, wine sold through corner grocery
stores in Quebec must be bottled in Quebec.  The alcoholic beverage-producing countries that are
major exporters to Canada have accepted the policies of Provincial liquor agencies through various
bilateral agreements.  Canada's commitments under these agreements are implemented on an MFN
basis.
Imported products compete with domestic products in the PLB retail stores, and enjoy a large share of
the Canadian market.  By volume, imported spirits accounted for 31.2% of the market in 1999, risingto 32.4% in 2001; imported wines held 65.4% of the market in 1999, rising to 67.0% in 2001.  Both
the value and market share of  wine and spirit imports continue to increase.WT/TPR/M/112/Add.1
Page 117
Question 2
Members have the right to protect human, animal or plant life or health. SPS measures however may
not constitute a disguised trade restriction and should be used in a way that minimizes their effect on
trade.
In view of this how would Canada explain that according to the experience of Hungary some risk
assessment procedures have not been completed after 3-5 years?
Response
Canada is very surprised that Hungary has raised this question, as we believe that Canada has been
both accommodating and responsive to Hungary's requests to export certain meat products to Canada.
Canada uses a standard questionnaire and where applicable, on-site visits, as the basis to approve third
country meat inspection systems or a country's animal health status for serious diseases.  This is not
an unreasonable approach and is aimed at receiving information upon which to base an approval.
Regrettably, many of the delays that Hungary speaks of were due to Hungary's failure to respond toCanadian requests for information and follow-up.
For example, Hungary has requested the Canada recognize it as free of Classical Swine Fever.  In
order to complete its review, in February 2002, Canada requested, in writing, that Hungary provide
results of its 2001 survey of the commercial swine population.  As of 11 March 2003, Canada had not
received this material.
Similarly, in November 2002, Hungary strongly raised concerns that Canada had not responded to a
February 2002 letter relating to the export of goose livers from Hungary to Canada.  Upon further
investigation by Hungarian officials, it was reveal ed that Hungary had not, in fact, forwarded the
letter to Canada.  Hungary sent the letter in question to Canada on November 14, 2002 and Canada
provided a comprehensive response on December 12, 2002.
Canada would also note that import conditions were established in August 2001 for Hungarian salami
exported to Canada.
We are not aware of any risk assessments relative to Hungary that have taken 3-5 years due to a lack
of action or response from Canada.
In closing, Canada values its relationship in this area with Hungary.  We will continue to be
responsive and work co-operatively w ith Hungarian officials on these matters.
Question 3
Geographical indications are increasingly recognized as representing significant commercial value
and are to be protected under Section 3 of the TRIP S Agreement. According to our information last
October consultations were initiated with Canadian stake-holders about the timed phasing-out ofsome terms for wines and spirits that are deemed to  be generic according to the sections 11.18(3) and
(4) of the Trade-marks Act.
How would Canada describe its relevant policy with  a view to reports that suggest that Canada
intends to deregister some wine brands? Please provide detailed information on what measures
Canada will take to strengthen the protection of geographical indications?WT/TPR/M/112/Add.1
Page 118
Response
The consultation referred to in question 3 is dire ctly linked to our bilateral negotiation with the
European Community on wines and spirits and was open to all interested stakeholders.  The
consultation considered the question of whether or not certain wine names currently deemed as
generic in Canada could be removed from this list in the context of a mutually beneficial bilateral
wine and spirits agreement between Canada and the European Community. Canada has received anumber of comments from both domestic and foreign part ies; it would not be appropriate to comment
on the outcome of these consultations at this point in time as the bilateral negotiation is ongoing.
Canada complies with its TRIPS obligations on the protection of geographical indications under the
current provisions of the Trade-marks Act of Canada.
INDONESIA
Question 1
Canada has successfully reduced tariff rates and liberalized almost all sectors and the average MFN
tariff has declined from 7.2% to 6.8%. However, for some sectors high tariffs are still in place
especially those related to the interest of developing countries such as clothing. At the same time
many clothing products are still restricted by imposing quotas. We are impressed that Canada
imposes double protection. Could Canada give clarification on this matter?
Response
With respect to Canadian tariffs, 51% of Canada’s tariffs are applied at MFN free.  Another 13% are
applied at rates between free and 5%.  Another 24% of Canada’s tariffs are applied at between 5 and
10%.  Based on 2001 imports, Canada’s trade-weighted applied MFN rate is 3.5%.  With respect to
textiles and apparel, Canada committed to major trade liberalization for these sectors in the Uruguay
Round.  The MFN tariffs on these products are being significantly reduced (textile tariffs are beingreduced from 16-22% in 1994 to 12-14% by January 1, 2004; for apparel from 25% to 18% by
January 1, 2004).
Canada is also fully committed to the full integration of the textile and clothing sector into GATT
1994 disciplines by 1 January 2005 under the Agreement on Textiles and Clothing (ATC) and the
elimination of all remaining quotas by that date. The ATC also provided a negotiated 10-yeartransition process to allow domestic industry to adjust - this represents a fundamental commitment
Canada made to its industry.
In addition, Canada has just implemented a major market access liberalization package for LDCs
(except Myanmar (Burma)) to full quota-free and duty-free treatment for almost all products of LDC
origin (i.e., other than supply-managed agricultural goods), including all textile and apparel products(and apparel alone accounts for more than half of the LDC’s exports to Canada). For this initiative,
the rules of origin for apparel are designed to develop trade; they reflect the production capacity of
LDCs, and allow LDCs to use imports of fabric and yarn originating in other LDC and developing
countries (and Canada).
Canada’s commitments under the Uruguay Round continue to provide improved access into the
Canadian market for textile and apparel exports from developing countries.WT/TPR/M/112/Add.1
Page 119
Question 2
On page 27 of the Secretariat Report we note that Canadian producers have continued to seek
protection from imports considered to be dumped  and of all antidumping allegations the most are
directed on steel products. Within two years (2000 and 2001) 32 new final antidumping measures
were imposed. Since Canada has taken a great numbe r of antidumping actions in a relative short
time, Indonesia has a strong impression that Canada  uses the Agreement on Antidumping to protect
domestic industries from import competition rather t han to provide remedy to offset injury from unfair
competition. Please explain.
Response
The Anti-dumping Agreement is not meant to protect industries from import competition but to
protect industries from unfair trade which causes material injury.  Canada does not aim to conduct
more trade remedy investigations in one sector in particular and does not target steel products
specifically. Frequent use of the anti-dumping law is something requested by Canadian steel firms,not the Government.  When its domestic industry makes a properly substantiated request, Canada will
continue to conduct anti-dumping investigations on steel, as it would on any other product, in full
accordance with its international trade obligations and its own domestic law.
It is important to note that in the steel sector a nnual import volumes for the entire year in 2002 (6.3
million tonnes) were the third highest level on record – below only the level achieved in 2000 (7.9million tonnes) and in 1998 (6.7 million tonnes). In 2002, domestic steel consumption in Canada rose
4.2% above the levels in 2001 but imports increased by 13.5% over the same period.
Question 3
In the Report, it is very obvious that Canada will apply its Antidumping Legislation on MFN basis to
all countries. Nevertheless, Canada will exclude Chile from the imposition of antidumping duty on
dumped imports from Chile due to Free  Trade Agreement. The questions are:
Assuming that of all sources of dumped import products, 60% are imported from Chile and the main
cause of injury are products from Chile. In th is context, will Canada ignore the dumped imports from
Chile and the scope of investigation will be limited to other sources?
From the legal point of view, we seek to clarify whether free trade agreement can be used to justify
unfair trade practices such as dumping and subsidies. And we would also like to have further
clarification whether NAFTA as a free trade agreement has the same rules and disciplines, which also
excludes its member from dumped imports and countervailing action.
Response
The Canada-Chile Free Trade Agreement came into effect on July 5, 1997.  The Agreement precludes
Parties from initiating anti-dumping proceedings against each other on a particular product as of the
earlier of the date on which the product becomes tariff free in both countries or, as of January 2003.
Currently, therefore, Canada cannot initiate anti-dumping proceedings with respect to goods from
Chile.  The North American Free Trade Agreement with Mexico and the United States does not
contain this type of exemption from anti-dumping or countervail action.
Question 4
While most antidumping actions are taken against steel products (vide Table AIII.3) from almost all
sources, at the same token, Canada first safeguard investigation (March 2002) was also taken to
protect domestic steel industries. Most importantly, the petition of safeguard was not filed by domesticWT/TPR/M/112/Add.1
Page 120
producers and/or group of producers or association of steel producers but the Government of
Canada. Since most antidumping and safeguards actions which both are different in nature are taken
to protect domestic steel industries, we have a strong impression that imported steel products are
target of Canada. Please explain.
Response
The Anti-dumping Agreement is not meant to protect industries from import competition but to
protect industries from unfair trade which causes material injury.  Canada does not aim to conduct
more trade remedy investigations in one sector in particular and does not target steel products
specifically. Frequent use of the anti-dumping law is something requested by Canadian steel firms,
not the Government.  When its domestic industry makes a properly substantiated request, Canada will
continue to conduct anti-dumping investigations on steel, as it would on any other product, in full
accordance with its international trade obligations and its own domestic law.
It is important to note that in the steel sector a nnual import volumes for the entire year in 2002 (6.3
million tonnes) were the third highest level on record – below only the level achieved in 2000 (7.9
million tonnes) and in 1998 (6.7 million tonnes). In 2002, domestic steel consumption in Canada rose
4.2% above the levels in 2001 but imports increased by 13.5% over the same period.WT/TPR/M/112/Add.1
Page 121
Questions raised by the Discussant (H.E. Mr. Stefán Hauker Jóhannesson)
Macroeconomic Environment
Question 1
How does one put one's house in order while maintaining economic growth? Canada's experience
with its economic reform process would provide useful insights to other WTO Members.
Response
During the 1980s, a consensus developed among OECD  nations on the combination of policies most
likely to deliver sound economic performance.  It was built around four key principles: trade
liberalization, structural reform, fiscal prudence, and low and stable inflation. Canada has followed a
policy framework based on these four key principles over the past decade and our recent economic
performance shows that they do lead to better  economic performance. Growth in the Canadian
economy averaged 3.8% per year over the 1997-2002 period, up from only 1.5% over the 1990-1996
period.  Moreover, our economy has consistently exceeded the average growth rates of the world'smost industrialized countries since 1997, including over the past two years during which the world
economy struggled.  Both the IMF and the OECD predict that Canada's economy will outperform
those of other G-7 countries again this year.
Canada made a number of accomplishments as well as sacrifices in order to make progress on all four
principles.  To promote free trade, Canada signed the Canada-U.S. Free Trade Agreement in 1989 andthe North American Free Trade Agreement in 1994.  Governments have taken steps to reduce
distortions in the personal income tax system, implemented a goods and services tax to replace the
outdated tax on manufacturers, introduced a $100-million tax cut package in 2000, strengthened the
incentive to work through changes to the unemployment insurance program, and made important
changes to the public pension system.  Fiscal policy was guided by the principle of putting the ratio ofpublic debt to GDP on a sustainable, downward track, which implied reducing public spending and
restoring fiscal health.  Since 1991, monetary policy has operated with a system of inflation-control
targets, creating a climate of low, stable, and predictable inflation to help smooth out fluctuations in
the economy and create the best possible environmen t for longer-term economic growth.  The success
on the fiscal front, together with low and stable inflation, allowed the Bank of Canada to lowerinterests rates when it was necessary, and provided the government with sufficient financial  resources
to  reduce the tax burden and invest in key areas. Only by remaining focused on the medium-term
goals of macroeconomic policy can a country put its house in order and maintain economic growth in
the face of global uncertainties and challenges.
Question 2
It would be desirable for Canada to diversify the geographic composition of its trade, which I
presume is currently being sought in part through an expanding number of preferential trade
agreements and arrangements. To what extent would Canadian authorities consider it desirable to
extend this to other WTO Members, for example through tariff reductions on an MFN basis in the
context of the Doha Development Agenda.
Response
The Doha Declaration states that negotiations with respect to non-agricultural market access shall aim
to "reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks,
high tariffs, and tariff escalation".  It also states that "product coverage shall be comprehensive and
without a priori exclusions", aiming to reduce barriers "in particular on products of export interest to
developing countries."   It is our goal to arrive at a result in the Doha negotiations that fully meets thatWT/TPR/M/112/Add.1
Page 122
mandate.  Just as certain Members wish to obtain better access to Canada for their exporters,
Canadian industries have their own export interests.  With good will and hard work on everyone's
part, we believe we can arrive at a result that is mutually beneficial.
In the WTO agriculture negotiations, Canada is seeking real and substantial improvements in market
access for all agriculture and food products through a variety of techniques.
Question 3
Canada welcomes foreign direct investment and about 50% of manufacturing production is carried
out by foreign companies. Canada also actively participates in the WTO Working Group on the
Relationship between Trade and Investment. In this context, would it not be time for a review of the
Investment Canada Act of 1985 and of the existing restrictions on foreign direct investment?
Response
The purpose of the Investment Canada Act is to encour age investment in Canada so as to contribute to
economic growth.  Under the Act, significant investments such as foreign acquisitions of Canadian
companies worth over $223 million are subject to review  in order to ensure 'net benefit' to Canadians.
During the review process, the likely impact of the investment is assessed (e.g., the effect of the
investment on economic activity, productivity, competition etc).  In practice, most transactions
reviewed under the Investment Canada Act proceed.  The review process is relatively quick and theInvestment Canada Act sets out strict time limits within which the reviewing authority must respond.
This is to ensure that the legislation does not unduly delay any investment in Canada.  Further
information on the Investment Canada Act is available at http://investcan.ic.gc.ca/.
Trade Policy Regime
Question 4
The Secretariat Report highlights the reforms intr oduced to streamline and facilitate the import
process, based on risk management, advance information, pre-approval, and self assessment in
border management. For the time being, however, thes e reforms seem to have facilitated trade mostly
with the United States, since all carriers pre-approved by late 2002 were involved in Canada-US
trade transported by road. In the interest of preventing any discrimination, it would be helpful toknow whether the new trade facilitation provisions apply to trade with non-US partner and, if not,
when the provisions may be generalised.
Response
Many of the new initiatives being introduced by the CCRA do apply to non-US partners. The
G7/Electronic One Step Import and G7 Electronic Export projects, for example, are designed tostreamline and facilitate the import and export processes, and were built upon the work started by the
G7 Initiative to Harmonize and Simplify Customs Procedures.  These projects, slated for
implementation in the summer of 2003, will coincide with a similar UK pilot, and will not be
restricted to Canada/US trade.
With respect to programs with pre-approved carrier status, there are currently two such programs at
the CCRA: the Customs Self Assessment (CSA) program and Free and Secure Trade (FAST).  The
Customs Self Assessment program is a progressive new trade option for clients who invest incompliance, and Free and Secure Trade is a harmoni zed commercial process, between Canada and the
United States, that builds on the concepts and principles of the CSA program.WT/TPR/M/112/Add.1
Page 123
The Customs Self-Assessment program was expanded in 2002 to include goods shipped directly from
Mexico to an importer who is a vehicle manufacturer within the automotive industry.  In addition,
given that CSA clearance processes are available to other modes, two rail companies and an air
courier are now authorized under the program.  Further expansion of the program is subject to
evaluation; however, there are no plans for further expansion at the present time.
Question 5
Does Canada intend to reduce its high tariff peaks in such products as dairy and poultry products,
textiles and clothing, and boats and ships? If so, what timeframe is envisaged?
Response
With respect to textiles and apparel, Canada committed to major trade liberalization for these sectors
in the Uruguay Round.  The MFN tariffs on these products are being significantly reduced (textile
tariffs are being reduced from 16-22% in 1994 to 12-14% by January 1, 2004; for apparel from 25%
to 18% by January 1, 2004).  All quotas on clothing and textiles products are being abolished.Canada’s commitments under the Uruguay Round continue to provide improved access into the
Canadian market for textile and apparel exports from developing countries. In addition, since January
of this year, Least Developed Countries have duty-free, quota-free access to Canada for almost all
goods, the only exceptions being over-quota dairy products, eggs and poultry.  This is irrespective of
the outcome of the Doha negotiations, which we believe can yield additional benefits for all Members,particularly if all Members are willing to work hard and make appropriate contributions.
With respect to boats and ships, Canada continues to  have concerns with subsidies that some foreign
governments provide to their shipbuilding sectors.   We would hope that these will be addressed
during the Doha Round as well.
The level of current Canadian MFN tariffs and Canada’s tariff quota regime, which includes dairy and
poultry products, reflects the results of previous rounds of multilateral trade negotiations in which
Canada participated.  Overall, Canada has one of the world’s most liberal tariff regimes. In the WTO
agriculture negotiations, Canada is seeking real and substantial improvements in market access
through a variety of techniques for all agriculture and food products.
Question 6
The exclusion of some members with which Canada has bilateral agreements, such as Chile, from
antidumping investigations is an interesting devel opment of Canadian trade policy. It seems to me
that the application of this exclusion might, in pr inciple, discriminate in favour of Chilean firms,
which could not be investigated even if there were reasons to believe that such firms may be engaged
in dumping. It would be interesting to have furthe r details on this mechanisms, and to know if Canada
is considering including this type of exclusion in future free trade agreements.
Response
The Canada -Chile Free Trade Agreement came into effect on July 5, 1997.  The Agreement
precludes Parties from initiating anti-dumping proceedings against each other on a particular product
as of the earlier of the date on which the product becomes tariff free in both countries or, as of January
2003.  Chile is the only country with which Canada has a mutual exemption from anti-dumping
investigations.  Respecting on-going or future regional trade negotiations, Canada is not prepared todiscuss its possible negotiating positions in the context of the TPR exercise.WT/TPR/M/112/Add.1
Page 124
Question 7
New legislation adopted in Canada since its last Review includes provisions to facilitate international
cooperation on competition issues. Canada has also sought to further international cooperation on
competition policy through its participation in a growing number of bilateral agreements. How does
Canada see the interaction between th ose agreements and ongoing multilateral efforts in this area?
Response
Canada views multilateral cooperation efforts and bilateral cooperation agreements as
complementary.
In Canada’s view, a multilateral agreement on comp etition policy would provide a flexible framework
for cooperation. This recognizes that cooperation at the WTO is a long term and incremental process.
It also means that cooperation could include a variety of activities, relating to developing institutional
capacity, sharing information among competition authorities, or administrating the agreement.
Any WTO provisions on cooperation, however, would not take the place of ongoing, case specific
cooperation that occurs under bilateral cooperation arrangements. Multilateral cooperation would
supplement, but not replace, bilateral cooperation.
Question 8
The Secretariat Report notes that local content requirements, performance or purchasing
requirements continued to be maintained on a number of products, including unprocessed fish androe herring, logs and pulpwood, and wine products to encourage local production and employment.
In this respect, is Canada considering phasing out  these requirements, which could constitute a
source of market distortion?
Response
With reference to wine products, relevant Canadian provinces are not considering phasing out any of
the province-specific local content requirements currently in place.
Where local content requirements exist, they actually have the effect of limiting the volume of wine
that can be sold in the private retail outlets, due to the limited potential of grape production in Canada.
Performance and purchasing requirements are established by the Provincial Liquor Boards (PLBs) in
Canada (except in Alberta).  These PLBs were established before the GATT was created, and theirexistence and activity is consistent with the provisions of GATT Article XVII [“State Trading
Enterprises”].  In accordance with that Article, they are notified to the WTO as STEs.  The PLBs
operate as businesses whose decisions are based solely on commercial considerations and market
forces. In Alberta, responsibility for the selection, retailing, warehousing and distribution of liquor
rests with the private sector. The alcoholic beverage-producing countries that are major exporters toCanada have accepted the policies of Provincial liquor agencies through various bilateral agreements.
Canada's commitments under these agreements are implemented on an MFN basis.
Imported products compete with domestic products in the PLB retail stores, and enjoy a large share of
the Canadian market.  By volume, imported spirits accounted for 31.2% of the market in 1999, rising
to 32.4% in 2001; imported wines held 65.4% of the market in 1999, rising to 67.0% in 2001.  Both
the value and market share of wine and spirit imports continue to increase.WT/TPR/M/112/Add.1
Page 125
Question 9
On federal and provincial financial assistance to businesses, what are Canada's views as to the
circumstances that warrant the granting of gover nment assistance and whether this may not impair
efficiency in an economy otherwise largely free of policy-induced distortions?
Response  To follow from the Canadian authorities.
Question 10
Will provincial procurement be included in the GPA. If so, when? Are there plans to extend the
procurement disciplines in the Agreement on Inte rnal Trade to provincial crown corporations?
Response
Discussions are underway to include the coverage of federal, provincial, and territorial Crown
corporations under the Agreement on Internal Trade.
Canada is an active member of the ongoing GPA Review, which has three goals: simplification of the
text, removal of discriminatory provisions, and improved coverage. We remain committed to theprocess and seek a balance of concessions between Parties of the GPA as negotiations proceed. We
believe it is in the best interests of all GPA Parties to work together in the GPA to achieve the goals of
the Review.
Question 11
With respect to intellectual property rights, an important step taken by Canada during the period
under review is the amendment of Canadian patent la w in 2001 to bring its legislation into conformity
with a WTO Appellate Body decision concerning pa tent terms. Canada also signed the Patent Law
Treaty, which will facilitate the harmonisation of administrative practices for processing fees. As the
Secretariat Report notes that the Treaty had not yet been ratified by Canada in late 2002, what
progress has been made towards ratification of the Treaty?
Response
Canada signed the Patent Law Treaty (PLT) in 2001. Canada has reviewed its patent legislation to
identify what changes are required in order to be compliant with the Patent Law Treaty. Canada
intends to ratify the PLT once these required changes are implemented.
Question 12
Part A:  Two other issues in the area of IP prot ection have captured my interest. The first relates to
the implementation of the WTO Panel ruling with respect to stockpiling by generic manufacturers of
patented medicines, which resulted in the passing of new regulations. What is Canada's  view on the
effects of these new regulations after they were adopted?
Response
Former section 55.2(2) of Canada's "Patent Act" created an exception to patent infringement for third
parties who wished to use a patented invention for the purposes of stockpiling articles intended for
sale after patent expiry. However, s.55.2(2) was only rendered operative through the passage of
subordinate regulations.WT/TPR/M/112/Add.1
Page 126
The only subordinate regulations ever passed in that respect were "The Manufacturing and
Stockpiling of Patented Medicines Regulations" which allowed generic drug manufacturers to
stockpile generic versions of patented drugs within 6 months prior to patent expiry.
In 2000, Canada repealed those regulations by passing "The Regulations Repealing the Manufacturing
and Storage of Patented Medicines Regulations". Repeal of the regulations rendered s.55.2(2)
inoperative and brought Canada into compliance with the WTO ruling on stockpiling.
As a house-cleaning measure, Canada later repealed s.55.2(2) itself with the passage of Bill S-17, "an
Act to Amend the Patent Act" in 2001.
Part B:  The second issue concerns the decision by the Supreme Court, in December 2002, to rule that
higher life forms cannot be patented. What is Cana da's assessment of the implications of this ruling?
Response
In Canada, an innovation is patentable only if it comes within the term "invention" as defined in the
Patent Act , and fulfills the patentability criteria: novelty, non-obviousness and utility. The Canadian
Patent Act does not distinguish between the patentability of various life-forms. Jurisprudentially, in
the recent Supreme Court of Canada decision on the Harvard Onco-mouse  case, it was held that a
higher life form, such as a genetically-modified mouse, was not an invention within the meaning of
the current Patent Act .
The practice of the Canadian Intellectual Property Office has not changed as a consequence of this
decision.  Based on the current definition of invention within the Patent Act , CIPO did not and does
not allow patent claims for higher life forms .
With regard to lower the life forms, the majority of the Supreme Court of Canada stated in the
Harvard onco-mouse case that:
“The patentability of lower life forms was not at issue before this Court, and was in fact was never
litigated in Canada.  In Abitibi, supra, the Patent Appeal Board, the Commissioner concurring,
rejected the prior practice of the Patent Office and issued a patent on microbial culture that was used
to digest, and thereby purify, a certain waste produc t that emanates from pulp mills.  [...The Board
determined that]:
...this decision will extend to all micro-organisms,  yeasts, moulds, fungi, bacteria, actinomycetes,
unicellular algae, cell lines, viruses or protozoa; in fact all new life forms which are produced en
masse  as chemical compounds are prepared, and are formed in such large numbers that any
measurable quantity will possess uniform properties and characteristics.
It is accepted in Canada that lower life forms are patentable.
The Supreme Court’s decision regarding patenting of  higher life forms is relatively narrow -
restricting itself to higher life forms. Other biotechnological inventions such as those relating to
genetic inventions were not considered by the court.
Sectoral Policies
Question 13
I was very interested by Canada's new Agricu ltural Policy Framework and I would welcome more
information on the subject. I would be particularly keen in learning how the framework will be
implemented as to achieve its goals of improving the responsiveness of the agricultural sector toWT/TPR/M/112/Add.1
Page 127
market signals and global competition. On the same topic, the Government Report mentions that
within the APF, Canada seeks the integration of a ll international agricultural activities, including
enhancing cooperation with developing countries. Could Canada elaborate on this point.
Response
The Agricultural Policy Framework (APF) is an action plan agreed to by governments, the goal of
which is to achieve a stronger, sustainable agricultur al sector.  The APF is composed of five elements:
food safety and food quality; environment; science and innovation; renewal; and business risk
management.  One of the key commitments of the APF is making Canada a world leader in supplying
high-quality and safe food produced in an environmentally responsible manner; and, to be positioned
to meet the changing demands of a highly segmented world market.
Achieving this commitment will require effective collaboration within industry and between industry
and government. The key vehicle that has been implemented for achieving this collaborative approach
is the Value Chain Roundtable.  These Roundtables bring together all components of a sector’s supplychain as well as governments in order to fo ster dialogue and collaborate on shared goals.
In regards to the integration of international agricultural activities, and as part of fulfilling the
commitments that it undertook as a signatory to the Doha Agreement, Canada is in the process of
identifying and prioritizing appropriate international development projects in technical trade
cooperation and trade-capacity building.  Such cooperation will assist developing countries to benefitfrom increased trade as well as to be able to fully participate in the global trading system.  Canada
believes that assisting developing countries in th ese areas will not only strengthen the trading system
itself but also support the goals of establishing an equitable trading system and appropriate
international technical standards and policies.
Question 14
I would like to raise one issue not addressed in the reports -- the groundfish resource collapse in the
early 1990s. I am referring in particular to the coll apse of the cod stock, mainly adjacent to the coast
of Newfoundland. The collapse of this important fishery sounded a warning bell to governments
around the world. It would be interesting for me if Canada could shed some light on the status of the
regeneration of the concerned fish stocks, what th e outlook is, and what lessons could be learned from
the near depletion of these fish stocks and the crisis the fishery industry faced in the affected regions.
Response
The status of the cod stocks in question is currently under review. The scientific advice used in the
assessment is based on an open and transparent peer review process. This peer review is currently
taking place and involves DFO scientists, international fisheries scientists and provincialrepresentatives, as well technical experts from the industry and other organizations.
The indications to date on the status of the stocks are not promising. The Minister of Fisheries will
make a decision on possible actions following recommendations made by the Fisheries Resource
Council of Canada in late March. Any comment on the status of the stocks at this time would not be
appropriate.
Question 15
What types of measures is Canada taking to facilitate the adjustment of the Canadian textiles and
clothing industry as the deadline approaches for the elimination of all import quotas.WT/TPR/M/112/Add.1
Page 128
Response
The Government of Canada recently introduced the Canadian Apparel and Textile Industries Program
(CATIP).  This program will focus on projects that help our textile and apparel companies and their
industry associations by strengthening marketing st rategies, identifying high-potential niche markets,
developing e-business capabilities, diversifying  products, and by applying new technologies to
improve productivity.  Further information on the program can be found at www.strategis.gc.ca/catip.
In addition, the government has established a joint government-industry Working Group on Textiles
and Apparel, in order to assist in identifying high -risk issues affecting the long-term competitiveness
of the textile and apparel industries, and to recommend, on an ongoing basis, measures that the
government might take to assist these industries in addressing these issues.
Question 16
Regarding both air and maritime transport, gradual reforms appear to focus on improving
competition and reducing costs for users. It would be  interesting to know if these reforms are likely to
result in new proposals by Canada for liberalization in the WTO.
Response
With regard to air transport, Canadian government policy over the last decade has been moving in the
direction of improving domestic competition and reducing costs for users. Domestically, the airline
industry is deregulated and Canada has commercialized its airports and air navigation system. It hasalso largely reduced its subsidies.  Internationally, Canada has been pursuing gradual liberalization
through the bilateral process.  At this time Canada is not planning any new proposals for liberalization
in the WTO framework.
With respect to maritime transport, any proposals in the maritime sector that might be made by
Canada will be tabled during the negotiations.
Question 17
In financial services, market access has been further improved in banking services, with the extension
of operations permitted for foreign bank branches. Ownership restrictions in banks have also been
liberalized. In this context, I wonder how these changes are likely to affect the market structure of the
banking sector.
Response
Recent reforms introduced in Bill C-8 were designed to provide as much structural flexibility as
possible for the industry while preserving safety and soundness and consumer protection principles.
As such, it introduced a new size-based owne rship regime, a new holding company option and
expanded the range of permitted investments, among other measures.
The new framework is intended to facilitate joint ventures, strategic alliances and a variety of other
strategic options for all federally regulated financial institutions, domestic and foreign.  It is enabling,
and ultimately it is up to individual institutions to determine how they will make use of that
flexibility.  Canada has a very competitive banking sector, with generally narrow profit margins and
few untapped market niches.  Nonetheless, firms view the Canadian financial system as attractive; it is
stable, yet dynamic, with good opportunities for growth.WT/TPR/M/112/Add.1
Page 129
Question 18
With respect to telecommunications, where competition appears to have increased and the cost of
certain services dropped, it would be interesting to know whether Canada intends to relax the
remaining market access restrictions, such as Canadian domestic ownership requirements for
facilities-based carriers.
Response
Canada has bound its current open and competitive regime in its current GATS schedule of
commitments.
With respect to Canadian domestic ownership requirements, the Minister of Industry announced on
November 19, 2002 that he is seeking the views of Canadians on foreign investment restrictions in the
telecommunications industry and that he had aske d the Chair of the House of Commons Standing
Committee on Industry, Science and Technology to undertake a review.
In this regard, the House of Commons Standing Committee on Industry, Science and Technology
announced on December 11, 2002 that it would 'review federal laws that restrict foreign participation
in Canada's telecommunications sector'.  The Committee concluded hearings on February 27, 2003.
A report from the Committee to the Government is expected in the spring of 2003.  The Government
will then decide on what action, if any, it might wish to take.
Question 19
What is the proportion of agri-food exports that consists of fish and fisheries products?
Response
Canada's agri-food exports in 2002 were at $25.7 billion, which excludes seafood products which
were an additional $4.7 billion.  Thus, the total agri-food and fish exports for 2002 were $30.4 billion,
of which fish and sea products comprised 15.5%.
Question 20
What, if any, are the limits on indirect ownership of fish processing operations?
Response
Foreign ownership limitations in the fisheries sector are minimal. Concerning eligibility requirements
related to the issuing of Canadian commercial fishing licences, a corporation must be at least 51%Canadian-owned to hold a licence.   Canada has maintained a reservation relating to this requirement
in all trade/investment agreements to which Canada is a party.
Question 21
How effective have Canada's measures been in reducing fisheries capacity in Canada?
Response
Targeted early retirement and license retirement programs in the 1990s reduced the number of license
holders in the Atlantic fisheries by over 20% and also reduced the number of license holders in the
Pacific salmon fishery by over 50%.  The adoption of stricter licensing rules reduced the numbers
even further and will limit new entry in the future. In addition to these past adjustment measures,WT/TPR/M/112/Add.1
Page 130
through the ongoing Integrated Fisheries Management Plans process, comprehensive input and output
control and self-adjustment measures are in place to ensure sustainable use of fisheries resources and
to help maintain a balance between fishing capacity and available resources.
Question 22
What are your views on the internal consistency of measures, especially provincial assistance to the
fisheries sector versus federal capacity measures?
Response
In Canada, federal jurisdiction over the marine fisheries sector and the measures in place through
Integrated Fisheries Management Plans help ensure that harvesting capacity remains in balance with
available resources, regardless of any provincial programs.  With regard to the processing sector,
which is an area of provincial jurisdiction, both provincial and federal policies and programs now tend
toward rationalization of processing capacity across different fish species.
Question 23
Given Canada’s demographic trends, is Canada having problems with its pension system? What
reforms have been undertaken?
Response
In addition to the general remarks made at the review by Mr. Randle Wilson, Canadian Delegation
Head, here are additional information:
The following paragraph summarizes the changes to the system of pension and RRSP limits over the
years, including the recent budget changes.
The system of limits for registered pension plans (RPPs) and registered retirement savings plans
(RRSPs) underwent a major reform in 1990, which made them fairer and more flexible.  A
comprehensive limit of 18 per cent of earnings was established for all registered savings, whether inRPPs, RRSPs or both, and the carry-forward of unused RRSP room was introduced.  A number of
other improvements to the system were made in the mid-1990s.  Most recently, the 2003 budget
proposed to increase the RPP and RRSP contribution limits to $18,000 by 2005 and 2006
respectively, with corresponding increases to the maximum pension limit for defined benefit RPPs.  In
addition, the budget indicated that the government  would review representations to improve the
savings system and, in particular, examine whether tax pre-paid savings plans could be a useful and
appropriate mechanism to improve the tax treatment of savings and to provide additional savings
opportunities for Canadians.
Also, page 139 of the budget provides a brief summary on securing the strength and long-term
stability of the retirement income system.
Encouraging Savings by Canadians: Increasing the RPP/RRSP Limits
Private domestic savings are a critical source of capital in the economy as well as a fundamental
instrument for individual Canadians to finance their retirement and meet other needs such as buying a
home or supporting the education of their children. The tax treatment of savings is an important factor
for the formation of private savings because it affects the after-tax return on savings and therefore the
incentive to save.
In Canada registered pension plans (RPPs) and regi stered retirement savings plans (RRSPs) are the
principal tax-assisted savings vehicles. The deferral of tax on savings in these plans reduces the taxWT/TPR/M/112/Add.1
Page 131
burden on savings and therefore increases the incentive to save. Savings in RPPs and RRSPs total
over $1 trillion and are a key source of funds for investment in the economy.
RPPs and RRSPs together form the third pillar of Canada’s retirement income system, along with Old
Age Security and the Guaranteed Income Supplement, and the Canada and Quebec Pension Plans.
RPPs and RRSPs play a major role in assisting Canadians in planning and funding their retirement.
They also reduce the costs to employers of providing compensation packages, including retirementplans, that are competitive; RPP and RRSP limits can thus be a factor in the decision of mobile,
skilled workers to accept employment in Canada, and in the ability of employers to attract and retain
such workers.
The ability of taxpayers to save in RPPs and RRSPs is governed by limits on the pension benefits that
may be provided under "defined benefit" RPPs and on the contributions that may be made to RRSPs
and "money purchase" RPPs. Setting appropriate limits on savings in RPPs and RRSPs is an
important objective of public policy. However, over the years there have been successive delays inimplementing planned increases in the RPP and RRSP contribution limits to $15,500 that were first
proposed in 1984. The result is that the existing RRSP contribution limit is $13,500, and the real value
of the limits in 2003 is well below their levels in 1976.
As part of the strategy to improve the tax system to encourage economic growth and job creation, and
building on success in securing the first two pillars of Canada’s retirement income system, this budgetproposes to increase the RPP and RRSP limits. First, the currently scheduled increases in the RPP and
RRSP annual contribution limits to $15,500 will be accelerated by one year. As a result, the 2003
contribution limits for RRSPs and money purchase RPPs will increase to $14,500 and $15,500,
respectively. These RPP and RRSP limits will then be increased in steps to $18,000 by 2005 and
2006, respectively. Corresponding increases will be made to the maximum pension limit for definedbenefit RPPs, bringing it to $2,000 per year of service by 2005. The limits will be indexed to average
wage growth for subsequent years. 
The Three Pillars of Canada’s Retirement Income System
Canada’s retirement income system is based on three pillars:
OAS/GIS: The Old Age Security (OAS) and Guaranteed Income Supplement (GIS)
programs provide a basic, minimum income guarantee for seniors.
CPP/QPP: The Canada and Quebec Pension Plans (CPP/QPP) ensure a basic level o f
earnings replacement in retirement for all working Canadians.
Tax-Assisted Retirement Savings: The system of private tax-assisted savings in RPPs
and RRSPs encourages and assists Canadians to save for retirement to supplement
their public pensions.
Through sound economic and fiscal management, the Government has succeeded in securing the
strength and long-term stability of the first two pillars.
By balancing the budget, putting the debt-to-GDP ratio on a firm downward track and
exercising continued prudent fiscal management, the Government has ensured that the
OAS/GIS programs can be financed on a sustainable basis.
By implementing with the provinces the 1997 CPP reforms, it has put the CPP on a
secure financial footing. According to the chief actuary of the CPP in his most recent
actuarial report, the 9.9-per-cent contribution rate that took effect on January 1, 2003—
the final step in fully implementing the 1997 reforms—should be sufficient to sustain the
plan for more than the next 50 years.
Having secured the first two pillars of the retirement income system, the Government is now
moving to strengthen the third pillar by increasing the RPP and RRSP limits. This budget
increases the RRSP annual contribution limit to $18,000 by 2006 and indexes it to average wage
growth in subsequent years. It makes corresponding increases to limits for both money purchase
and defined benefit RPPs.WT/TPR/M/112/Add.1
Page 132
The increases in RPP and RRSP limits will support savings and investment. Higher limits will also
better meet the retirement savings needs of Canadians, including skilled workers and small business
owners constrained by the current limits. They will also improve the ability of employers in Canada to
attract and retain highly qualified personnel.
Table 5.5  Existing and Proposed RPP/RRSP Limits
  2003 2004 2005 2006 2007
(dollars)
Money purchase RPPs: annual contribution limit
 Existing 14,500 15,500 Indexed   
 Proposed 15,500 16,500 18,000 Indexed  
Defined benefit RPPs: maximum pension benefit (per year of service)
 Existing 1,722 1,722 Indexed   
 Proposed 1,722 1,833 2,000 Indexed  
RRSPs: annual contribution limit
 Existing 13,500 14,500 15,500 Indexed  
 Proposed 14,500 15,500 16,500 18,000 Indexed
Moving forward, it is important that the tax syst em continue to provide effective mechanisms to
support saving. The Government has received numerous representations from individuals, researchersand businesses that Canada’s tax system should be more conducive to saving. The Government
intends to carefully review these representations and to conduct analysis in order to identify possible
approaches for future improvements. In particular, the Government will examine whether tax pre-paid
savings plans could be a useful and appropriate mechanism to improve the tax treatment of savings
and to provide additional savings opportunities for Canadians.
For further information on the 2003 budget, please refer to: http://www.fin.gc.ca/budtoce/2003/
budliste.htm
With respect to EI rates in Budget 2003, the Government had indicated that it was reviewing the issue
of premium rate-setting. The budget set out the principles that the government will take into account
in designing a permanent premium rate-setting regime.Briefly, they are as follows:
* Premium rates should be set transparently;
* Premium rates should be set on the basis of independent advice;
* Expected premium revenues should correspond to expected program costs;
* Premium rate-setting should mitigate the impact on the business cycle; and* Premium rates should be relatively stable over time.
The government has begun consulting on how a permanent regime can best incorporate these
principles. Officials will be meeting soon with ke y stakeholders. Interested parties can provide
submissions to the government until June 30, 2003 by mail or through the web sites of the
Departments of Finance and Human Resources Development.
To provide employers and employees with certainty about contribution rates until the new regime is in
place, the Government is proposing to set the employee premium rate for 2004 at $1.98, bylegislation.  Based on the private sector economic forecasts used in the budget, it is estimated that this
rate would generate premium revenues equal to projected program costs for 2004.WT/TPR/M/112/Add.1
Page 133
Response to questions raised during the Trade Policy Review of Canada
Question 1
Members asked for more information on the Agricultural Policy Framework.
Response
See related response to Discussant Question 13 (reproduced as follows):
The Agricultural Policy Framework (APF) is an action plan agreed to by governments, the goal of
which is to achieve a stronger, sustainable agricultur al sector.  The APF is composed of five elements:
food safety and food quality; environment; science and innovation; renewal; and business risk
management.  One of the key commitments of the APF is making Canada a world leader in supplying
high-quality and safe food produced in an environmentally responsible manner; and to be positioned
to meet the changing demands of a highly segmented world market.
Achieving this commitment will require effective collaboration within industry and between industry
and government.  The key vehicle that has been implemented for achieving this collaborativeapproach is the Value Chain Roundtable.  These Roundtables bring together all components of a
sector’s supply chain as well as governments in order to foster dialogue and collaborate on shared
goals.
In regards to the integration of international agricultural activities, and as part of fulfilling the
commitments that it undertook as a signatory to the Doha Agreement, Canada is in the process ofidentifying and prioritizing appropriate international development projects in technical trade
cooperation and trade-capacity building.  Such cooperation will assist developing countries to benefit
from increased trade as well as to be able to fully participate in the global trading system.  Canada
believes that assisting developing countries in th ese areas will not only strengthen the trading system
itself but also support the goals of establishing an equitable trading system and appropriateinternational technical standards and policies.
Question 2
Hong Kong, China asked about Intellectual Property Rights as they relate to music.  In particular,
they asked if IPRs in Canada were different/weaker for products that are not in English or French.
Response
Copyright protection is identical regardless of the language of the work.  This applies to all works,
including music.
Question 3
Is the anti-dumping exemption in the Canada-Ch ile FTA being considered for future FTAs, in
particular the FTAA? (Brazil)
Response
Respecting ongoing or future regional trade negotiations, Canada is not prepared to discuss its
possible negotiating positions in the context of the TPR exercise.WT/TPR/M/112/Add.1
Page 134
Question 4
Japan's written question number 6: Japan would like to point out that measures taken by some
provinces for limiting the exports of logs is designed “to encourage the further processing of certain
natural resources in Canada”, and thus that, this is highly likely to violate Article XI of the GATT.
Japan considers that the Canadian Government should “take such reasonable measures as may be
available to it to ensure observance of the provisions”, in accordance with Article XXIV:12 of theGATT.  In this regard, has the Canadian Government already taken such measures, and if not, does
the Government have any intention to do so in the future?
Response
Already provided in Remaining Response_Japan.doc (reproduced below):
We believe that the relevant provisions of provincial legislations are consistent with Canada's WTO
obligations.  Notwithstanding, the Government of Canada is prepared to take such measures as may
be available to it to ensure that the WTO/GATT provisions continue to be observed.
Question 5
What influence will 3rd parties have with regard to smart regulation?  Will Canada ensure that new
regulation is WTO consistent? (EC)
Response
The current regulatory system provides an avenue for third party consultation on proposed regulations
and amendments through a notice and comment period.  The Government of Canada Regulatory
Policy requires that any proposed regulations having an impact on trade be pre-published in the
Canada Gazette for a period of 75 days.  All proposed regulations and amendments are then notified
to the WTO.
The Regulatory Policy also requires that departments or agencies adhere to obligations set out in
international agreements, including obligations as  laid out in the WTO TBT and SPS Agreements.
Question 6
How far does Canada intend to go with Air Transport liberalization? (Norway)
Response
Provided that aviation safety and security are not compromised and sufficient consumer protection
exists, Canada is prepared, through the bilateral process, to incrementally and progressively liberalize
the economic rules governing air services.  It will do so where there is a prospect of increased air
services and benefits for Canadian entities, especially Canada’s air carrier industry.
Question 7
Does Canada plan to revise the restriction that an employee be employed by a company for one full
year before being eligible for an intra-company transfer to Canada.  (Raised by India)
Response
The 1-year prior employment requirement for an intra-company transferee is fair and reasonable.  An
executive, manager or specialist needs time to acquire experience and knowledge of a transferringWT/TPR/M/112/Add.1
Page 135
company's management and operations to be eligible as an intra-company transferee.  The 1-year prior
employment requirement is used by many GATS Members, notably India. In the current GATS
negotiations, Canada has requested other Members commit to a more liberal prior employment period
of one-year in the past three.  Is I ndia willing to make such a commitment?
Question 8
Canadian commercial fisheries subsidies and their consistency with the Subsidies and Countervailing
Measures Agreement, Article 25.  (USA)
Response
See responses to related written questions from the US.
Question 9
Chile suggested it would like a future open-skies agreement between Canada and Chile.  Any
reaction?
Response
Canada already has an open skies agreement with Chile.  In August 2001, it was agreed that cities in
both countries may be served by any number of airlines from each country.  Service could be
provided via any intermediate cities in third coun tries with transit rights, and beyond to any cities in
third countries with transit rights.  There are no limitations on the frequency of flights between
Canada and Chile, and fares between the two countries are accepted unless the authorities of bothcountries are dissatisfied.  These arrangements are already in force.
Question 10
On SPS, Hungary complained that the Canadian mar ket is closed to it for bovine and swine fresh,
chilled and frozen meat.
Response
Also see written response to written Question 2 from Hungary:
With respect to fresh/chilled/frozen bovine meat, Canada does not consider Hungary to be a country
free of BSE.  Under Canada's BSE policy, imports are permitted only from countries recognized by
the Canadian Food Inspection Agency to be free of BSE.  Hungary is free to formally request Canada
to consider Hungary's BSE-free status, provided Hungary is prepared to provide, in a timely manner,the risk assessment information that would be required.  This fundamental step would be a practical
prerequisite to any further consideration of other animal health and sanitary aspects of Hungary's
regulatory system for fresh or frozen bovine meat.
On fresh/chilled/frozen pork, we would invite Hungary to formally request, in writing, an approval for
products it wishes to export to Canada.  However, in a practical vein, Hungary has yet to provide the
Classical Swine Fever data requested over a year ago.  This would be an important step to any further
consideration of other aspects of Hungary's pork meat system.
Question 11
What protection may Canada offer for the GI for Tokai wine? (Hungary)WT/TPR/M/112/Add.1
Page 136
Response
Canada and the European Union are currently negotiating a bilateral agreement on wines and spirits,
which includes provisions related to the protection of geographical indications in Canada.  Canada has
held a consultation, open to both foreign and domestic stakeholders, which considered the question of
whether or not certain wine names currently deemed as generic in Canada, including Tokay, could be
removed from this list in the context of a mutually beneficial bilateral wine and spirits agreementbetween Canada and the European Community.  Canada has received a number of comments from
both domestic and foreign parties, it would not be appropriate to comment on the outcome of these
consultations at this point in time as the bilateral negotiation is ongoing.
Question 12
The Secretariat, in paragraph 19 of its Report, mentions:
[…] The Government is a central participant in nearly all WTO activities, and has met most of its
notification obligations over the period since December 2000.  Exceptions include notifications ondomestic support to agriculture, on subsidies, and on import licensing (Table II.2).  Provinces have
not notified any measures to the WTO since 1998.
The Community notes that Canada, in the previous Review, responded to a question on this issue by
stating that:
“No province has indicated to the federal governmen t that it has subsidies that are subject to the
notification requirements of the SCM Agreement.   Federal officials have questioned whether the
provinces have fully reviewed their programmes, and are actively consulting with them in this
regard.” Doc. G/SCM/N/48/CAN
Could Canada explain why Provinces still do not notify their support programmes to fisheries?
Response
The Federal Government has been engaged in on-going consultations with the Canadian provincial
governments regarding subsidy notification requirements as set out in Article 25 of the Agreement on
Subsidies and Countervailing Measures (ASCM). Thus far, the provinces have not advised the Federal
Government of any fisheries programmes that meet the criteria for the purposes of notification.
Question 13
According to publicly available information, the province of Quebec is maintaining a whole range of
support programmes for fisheries, in particular in the area of investment i.e. construction of new
vessels, modernisation of vessels. Examples of th ese programmes are: “Programme d'appui financier
à la flotte de pêche côtière”, “Programme de financement de la pêche commerciale” and
“Programme de modernisation de la flotte de pêche au poisson de fond”Overcapacity in the fisheries sector is increasingly becoming a matter of concern.
Could Canada indicate whether these programmes will continue in the future or whether they will be
phased out?  Has Canada quantified the total amount of subsidies, for all provinces and for all
programmes, that has been granted to the fisheries sector?
Response
Il est à noter que les permis de pêche et les allocations de prises sont fonction de l'état des ressources
halieutiques et que les programmes québécois n'ont pas d'influence sur le niveau de la récolte.WT/TPR/M/112/Add.1
Page 137
Il n'est pas prévu, pour le moment, de terminer ni le programme d'appui financier à la pêche côtière  ni
le programme de financement de la pêche commerciale, un programme de garantie bancaire pour
acheter, réparer et construire des bateaux et de garantie  pour les achats de contingents et de permis de
pêche.  Cependant, le programme de modernisation de la flotte de pêche au poisson de fond, qui
s'applique depuis l'année financière 2001-2002, se termine en 2003-2004.
As indicated in the above answer, the provincial governments have not identified any fisheries
programs, which meet the notification requirements under the ASCM.WT/TPR/M/112/Add.1
Page 138
Website listings on Canadian Government policies
Foreign investment in telecommunications industry
Review of foreign investment restrictions in the telecommunications industry:
http://www.innovationstrategy.gc.ca/cmb/innovation.nsf/MenuE/Invest00
Customs procedures
Investing in the Future: The Customs Action Plan (CAP) 2000-2004, published in April 2000:
http://www.ccra-adrc.gc.ca/customs/general/blue_print/menu-e.html
Administrative Monetary Penalty System (AMPS):
http://www.ccra-adrc.gc.ca/customs/general/amps/menu-e.html
Canada's implementation of the ATC
http://www.dfait-maeci.gc.ca/eicb/textile/wto_atc-en.aspContingency measures
Canadian International Trade Tribunal (CITT)
http://www.citt.gc.ca/
TBTs
Official Gazette of Quebec (http://publicationsduquebec.gouv.qc.ca/home.php)
Government of Ontario Environmental Registry
(http://204.40.253.254/samples/search/Ebrquery_REG.htm).
Government Procurement
http://canada.justice.gc.ca/ [use "Search"]
Information on the Federal government's procurement policy, procedures, notices and circulars is
available at:http://www.tbs-sct.gc.ca/cmp/home-accueil.asp?Language=EN\
Intellectual Property, including copyright
A Framework for Copyright Reform
http://strategis.ic.gc.ca/epic/internet/incr p-prda.nsf/vwGenerate dInterE/rp01101e.html
Consultation Paper on Digital Copyright Issues
http://strategis.ic.gc.ca/epic/internet/incr p-prda.nsf/vwapj/digital.pdf/$FILE/digital.pdf
Consultation Paper on Application of Copyright Ac t's Compulsory Retransmission Licence to the
Internet
http://strategis.ic.gc.ca/epic/internet/incrp-
prda.nsf/vwapj/retransmissione.pdf/$FILE/retransmissione.pdf
Agreement on Internal Trade (AIT)
http://www.intrasec.mb.ca/WT/TPR/M/112/Add.1
Page 139
Agricultural Policy Framework (AAFC):
http://www.agr.gc.ca/puttingcanadafirst/index_e.php
http://www.agr.gc.ca/puttingcanadafirst/index_f.php
Trade Negotiations and Agreements (DFAIT):
http://www.dfait-maeci.gc.ca/tna-nac/menu-en.asp
http://www.dfait-maeci.gc.ca/tna-nac/menu-fr.asp
Trade and Economic Analysis (DFAIT):
http://www.dfait-maeci.gc.ca/eet/menu-en.asp
http://www.dfait-maeci.gc.ca/eet/menu-fr.asp
Investment Canada Act (IC):
http://investcan.ic.gc.ca/Initial environmental assessment of the DDA negotiations:
http://www.dfait-maeci.gc.ca/tna-nac/consult1-en.asp#wto
http://www.dfait-maeci.gc.ca/tna-nac/consult1-fr.asp#wto
Canadian Apparel and Textile Industries Program (CATIP):
www.strategis.gc.ca/catip
__________