OTTAWA – The Canadian government has launched an investigation into allegations by Canadian pasta manufacturers that they are being undermined by dumped Italian product.
A preliminary decision from Revenue Canada officials is due within three to five months.
A ruling in favor of the Canadian companies would mean a duty could be slapped on imported Italian pasta until the Canadian International Trade Tribunal makes a decision on whether to confirm the finding and to make the penalty permanent.
Canada’s four pasta makers, with plants in Quebec, Ontario and Lethbridge, Alta., say profits and maybe jobs are at stake unless they get protection from what they consider unfair competition.
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The industry “contends that if the dumping and subsidizing of dry pasta from Italy is allowed to persist, the Canadian producers will continue to encounter decreasing profits, perhaps to the point where some Canadian production operations will eventually be forced to close,” said a background document on the case prepared by Revenue Canada officials.
One of the plants that could be affected is operated in Lethbridge by Borden-Catelli Canada.
The industry employs 600 people across Canada.
The Canadian companies complain that the European Union provides export subsidies to Italian pasta exporters.
This, they say, has allowed a 124 percent increase in volume of imported Italian product in three years, to 17.6 million kilograms, and an increase in market share to 14.3 percent while the share held by domestic producers fell to 68.7 percent from 79.4 percent.
The European Union has disputed the claims of damage, suggesting increased product from the United States could be the cause of Canadian industry woes.
The Canadian manufacturers contend that increased future shipments from Italy are likely because the domestic Italian market is stable, production is increasing and exports are being encouraged.
It is the second time the Canadian industry has tried to win a judgment against pasta imports from Europe.
In 1986-87, the government rejected a complaint of damage, concluding that the European share of the Canadian market was too small to be such a major price factor.
Since then, market share has more than doubled from 7.1 percent in 1992 to over 14 percent last year.
