What we heard report: Government of Canada consultations on the potential collection and publication of country of smelt and cast information for aluminum imports

On this page

• Introduction
• Background
• Highlights
• Participants
• Implementation of the measure to collect and publish CSC information
• Challenges and concerns for aluminum importers to comply with CSC information requirement
  • Administrative burden, supply chain disruptions and delays
  • Customs Self-Assessment and other customs release programs
• Reporting and recordkeeping requirements
• Collection of CSC information through the Single Window Integrated Import Declaration
• Access to documents and records
• Definition of CSC
• The publication of aggregate data on the Global Affairs Canada website for the 3 components of CSC
• Implementation timeline
• General comments and suggestions
• Next steps
• Annex A: Questionnaire

Introduction

This report provides a summary of feedback received in the public consultation on the potential collection and publication of country of smelt and cast (CSC) information for aluminum imports under Canada’s Aluminum Import Monitoring Program, which took place from May 21 to June 28, 2024.

Background

Global Affairs Canada administers the Aluminum Import Monitoring Program (Program) through General Import Permit (GIP) No. 83 – Aluminum Products, which facilitates the collection of aluminum import data. GIP No. 83 has reporting and record-keeping requirements which ensure the accuracy of data collected on aluminum imports and enable Global Affairs Canada to identify, and correct, potential discrepancies in import data. Information on the product category, country of origin, volume, and value of aluminum imports is collected, and reports are published online on the departmental website to enable government and external users to identify and track potential trends.

To inform the administration of the Program and to support Canada’s commitment to transparency in the collection and publication of aluminum import data, Global Affairs Canada sought feedback from stakeholders on a potential requirement for importers of aluminum to provide CSC information as an additional condition of using GIP No. 83. Specifically, importers would need to provide the country of largest smelt, the country of second largest smelt, and the country of most recent cast. If implemented, such data would be subsequently included in the public reports once a sufficient amount of data had been collected. The proposed policy aligns with Canada’s proposed approach to collecting and publishing country of melt and pour (COM) information for steel goods subject to the Steel Import Monitoring Program.

An online questionnaire containing 9 CSC-related questions was available for interested parties to complete and provide feedback on: the level of general support; potential compliance challenges; document retention requirements; method of data collection; the ability of importers to access CSC information; definition; publication of data; implementation timelines; as well as any other general comments/suggestions.

Highlights

Overall, respondents who expressed support for the collection and publication of CSC data are of the view that aluminum importers should not have difficulty obtaining and providing the required information. Of those who expressed support, most also supported the collection of CSC information through the Canada Border Services Agency’s (CBSA) Single Window Integrated Import Declaration (SW IID), as most aluminum importers already use this method to clear their goods at the border. Furthermore, many of these supportive respondents noted that the collection and publication of CSC data would enhance transparency and traceability in the aluminum supply chain, strengthen North American markets, and support the identification of unfair practices.

Respondents who opposed the proposed regulatory amendments voiced concerns regarding the potential difficulties faced in obtaining CSC information and the associated increase in administrative burden. Many of the opposing stakeholders also raised concerns about the potential impacts on costs, efficiency and competitiveness, as well as on their customs release privileges under the CBSA’s Customs Self-Assessment (CSA) Program.

Participants

16 submissions were received during the consultations: 13 via the online questionnaire and 3 via email.  Participating groups included small, medium and large enterprises, importers, producers, industry associations, customs brokerages, governments, and labour unions. These responses from a diverse variety of stakeholders provided greater insight into the potential benefits and challenges of collecting CSC information.

This report reflects the questionnaire responses, emails, and views expressed by participants, and not those of the Government of Canada.

Implementation of the measure to collect and publish CSC information

Many respondents supported the implementation of the proposed measure to collect CSC information through the CBSA customs declarations and to publish the aggregated data on Global Affairs Canada’s website. Some of the proponents indicated that the proposed regulation would align Canada’s Aluminum Import Monitoring Program with that of the Government of the United States.

Several respondents also mentioned that the collection of CSC information would strengthen North American trade by improving the transparency of the aluminum supply chain and by enabling interested parties to use CSC information to help identify potential unfair trade practices. Respondents noted that this requirement would also help Canadian aluminum producers acquire a better understanding of the dynamics of the domestic market. 

Moreover, while Canada is not obligated to collect or publish CSC information, respondents were of the view that adopting this new measure would strengthen Canada’s monitoring capabilities under the Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum. Others noted the importance of protecting Canada’s bilateral trade relations with the United States, specifically under the Canada-United States-Mexico Agreement (CUSMA), emphasizing that CUSMA plays a significant role in facilitating free and fair trade across North America and that further aligning Canada’s monitoring system with that of the United States would support the bilateral trade relationship.

Challenges and concerns for aluminum importers to comply with a CSC information requirement

Many respondents identified challenges that aluminum importers might have in complying with a new CSC information requirement. They explained that obtaining and providing the necessary information would require additional time and resources, leading to increased costs and diminished competitiveness for Canadian enterprises.

Administrative burden, supply chain disruptions and delays

Some participants expressed concerns about the potential increase in administrative burden that the proposed policy would impose on aluminum importers. They also commented that the complexity of the aluminum supply chain makes it difficult to acquire CSC information from suppliers. As a result, they asserted that the collection of CSC information would be costly and time-intensive for both suppliers and importers and would impact their ability to remain competitive. Some raised concern that foreign suppliers would pass the costs of retrieving or providing CSC information onto importers in Canada or be otherwise discouraged from selling goods into Canada.

They also stated that an increase in administrative burden during the import process would result in production delays and would be particularly challenging in the context of existing delays and shortages related to supply chain disruptions.

Furthermore, some participants noted that sufficient traceability of imported goods is already provided through the existing terms and conditions of GIP No. 83 as importers are required to retain, for a period of six years, documents and records containing information on the country of origin of the goods and the country from which the goods are imported.  

Some participants stated that their potential support of the measure would require the global aluminum industry to put traceability measures in place. Others conditioned their support of this new regulation’s ability to provide better access to a competitive supply chain for Canadian manufacturers.

Customs Self-Assessment and other customs release programs

Some enterprises expressed concerns that the collection of CSC for aluminum imports would invalidate the exemptions created by the CBSA for participants of certain customs release programs, particularly the CSA program as these importers benefit from a streamlined process for clearing low-risk goods, removal of the need to transmit trade data to the CBSA prior to the goods arriving in Canada and extended accounting timelines.

Reporting and recordkeeping requirements

Most respondents did not express any concerns with the requirement to retain documents and records containing CSC information, and provide to Global Affairs Canada upon request, for a period of 6 years after the year in which the import is made. Presently, importers are already required to keep import documents and records for a period of 6 years, under the Customs Act, for GIP No. 83. Some stakeholders in specific fields noted that most of the documentation related to imports, including material certification thereof, are usually retained for a minimum period of 10 years in certain industries.

Collection of CSC information through the Single Window Integrated Import Declaration

Most respondents support the collection of CSC through the CBSA’s SW IID. Stakeholders also noted that the use of the IID would not on its own create additional administrative burden as most importers already use the SW IID to clear their goods. Some participants raised questions around the necessity of collecting CSC through SW IID for every aluminum import and suggested reporting through monthly or annual blanket declarations.

Access to documents and records

Many participants noted that documentation on CSC information would be complicated to acquire from suppliers, especially for finished products that have been bought and sold many times. They conveyed that similar issues have been encountered in the United States in the implementation of their CSC requirement under the Aluminum Import Monitoring and Analysis (AIM) System. Some respondents also noted that most suppliers are not currently contractually obligated to provide CSC information. Others advised that the required information is not easily found on commercial documentation. Furthermore, they noted that many companies may be involved in a single transaction, which would further increase the difficulty of obtaining CSC information. There were also concerns that the importation process may be delayed if an importer is not able to provide CSC information to the CBSA prior to the arrival of the goods at the border.

Definition of CSC

Overall, respondents supported the proposed definition of CSC, which is similar to the definition that is used by the Government of the United States. Some participants agreed with the proposed definition, even if they expressed opposition to the implementation of new measures to collect and publish CSC information.

Some participants noted that a definition consistent with that of the United States would help to increase the transparency of the North American supply chain. Others specified that while the definition is accurate for smelting, it neglects to address the complications introduced by the melting and casting of scrap, which is generally non-traceable.

The publication of aggregate data on the Global Affairs Canada website for the 3 components of CSC

Most respondents support the publication of aggregated data on the Global Affairs Canada website for the three components of CSC. Certain participants voiced concerns about the potential exposure of confidential or proprietary information, resulting in a loss of competitiveness. Other comments noted that aggregate data should be accessible at the “product category” (6-digit Harmonized System (HS) Code level), or at the 10-digit level.

Implementation timeline

Participants supported a transition period to provide importers with sufficient time to begin gathering the required information from their suppliers. However, there were varying responses regarding the time required to effectively prepare for such requirements. Some participants stated that between 12 and 18 months would be needed to allow importers to adjust. Other participants suggested that 6 months would be sufficient. In contrast, one respondent indicated a minimum period of 2 years was necessary due to challenges such as supply chain disruption and the impacts on the customs release process.

General comments and suggestions

In terms of general comments and suggestions, respondents suggested certain other options be considered, as outlined below.

Exemptions and exclusions:

• Exemptions for certain HS codes to reduce administrative burden.
• Exclusion of low value imports. It was noted that the U.S. does not require CSC for imports with a value of less than $5,000 USD.
• Exemptions for participants of the CSA, and other customs release programs, to ensure that existing facilitated customs release processes continue.

Reporting requirements and procedures:

• Include an additional requirement to provide the countries of further processing and require importers to identify in each permit application all countries where subsequent processing has taken place. Respondents were of the view that the identification of the origin of the goods would help prevent the evasion of trade remedy measures and act as a deterrent to import unfairly traded aluminum into Canada.
• Allow importers a grace period to respond with 'unknown' when asked for CSC information for a period of one year after the implementation. It was noted that this is similar to what the U.S. did when they implemented their aluminum import monitoring system. This proposition was supported by other participants.
• Collect “countries of further processing” and publish a separate report with this information.

Use of information:

• Use CSC information collected to support the implementation of a potential border-carbon adjustment mechanism or similar environmental measures.

Other comments:

• Provide an option to submit CSC information at the time of CSA accounting to provide data without significantly impacting import processes.

Next steps

The feedback received during the public consultations will inform the administration of the Aluminum Import Monitoring Program and any potential regulatory changes regarding the collection and publication of CSC information. Any amendments proposed will also be informed by Global Affairs Canada’s experience in the forthcoming implementation of the similar country of melt and pour requirement for steel imports. 

Thank you to all who participated in the consultation process.

Annex A - Questionnaire: Public consultations on the potential collection and publication of the country of smelt and cast information for aluminum imports under Canada’s Aluminum Import Monitoring Program

The original questionnaire included a section on respondent information, consent for disclosure of information, and the following options for responses for most of the questions: “Yes”, “No”, “Don’t Know” and “Please explain why”. Prior to completing the questionnaire, respondents were encouraged to consult a background section.

Country of smelt and cast – general

1. In general, would you or your organization/business support the implementation of new measures to collect and publish information on the country of largest smelt, country of second largest smelt, and country of most recent cast?

2. Do you anticipate any challenges or have any concerns for aluminum importers to comply with a potential requirement to provide information on the country of largest smelt, country of second largest smelt, and country of most recent cast?

3. Canadian customs law requires importers to retain certain documents and records pertaining to an import for a period of 6 years after the year in which the import is made. Do you have any concerns with the requirement to retain and provide to Global Affairs Canada upon request, for a period of 6 years after the year in which the import is made, documents and records containing information on the country of largest smelt, country of second largest smelt, and country of most recent cast?

Country of smelt and cast – method of data collection

4. If measures to collect and publish country of smelt and cast are implemented, would you support a requirement for importers of aluminum goods to provide country of largest smelt, country of second largest smelt, and country of most recent cast information when completing their customs declaration by using the Single Window Integrated Import Declaration? (Please consult the background section for further information).

Country of smelt and cast – access to information

5. Do you have any concerns about obtaining documents and records containing information on the country of largest smelt, country of second largest smelt, and country of most recent cast?

Country of smelt and cast – definition

6. Would you support the following definition of country of smelt and cast for the purposes of the Aluminum Import Monitoring Program?
   
   Please note that this definition is aligned with the definition used by the Government of the United States for its own Aluminum Import Monitoring System: Country of smelt can be distinguished into two categories: country of largest smelt and country of second largest smelt. Both refer to the primary aluminum produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. The country of largest smelt applies to the country where the largest volume of primary aluminum is produced for manufacturing, whereas the country of second largest smelt applies to the country where the second-largest volume of primary aluminum is produced for manufacturing. Lastly, the country of most recent cast refers to the country where the aluminum product (with or without alloying elements) was most recently cast and was last liquified by heat and cast into a solid state. The final solid state can take the form of either a semi-finished product or a finished aluminum product.
   
   If you have an alternative definition of the country of smelt and cast, please provide details.

Country of smelt and cast – publication of the data

7. If measures to collect country of largest smelt, country of second largest smelt, and country of most recent cast are implemented, would you support publishing aggregate data on the Global Affairs Canada website for all 3 points? Please note that the publication of the aggregate data will consider the protection of business proprietary information.

Country of smelt and cast – implementation timeline

8. If measures to collect country of largest smelt, country of second largest smelt, and country of most recent cast are administered, how long of an implementation period would you require?

Country of smelt and cast – general comments/suggestions

9. Please provide any additional comments or recommendations regarding the collection and publication of country of largest smelt, country of second largest smelt, and country of most recent cast for aluminum imports or the Aluminum Import Monitoring Program in general.