Statement of Reasons—Initiation of investigations: Steel Racks (RACK 2026 IN)

Product definition^{Footnote 5}

[16] For the purpose of these investigations, subject goods are defined as:

Additional product information^{Footnote 6}

[17] The subject goods include all components and parts thereof meeting the product definition, regardless of: other dimensions, weight, or load rating; vertical components or frame type (including structural, roll-form, or other); horizontal support or beam/brace type (including but not limited to structural, roll-form, slotted, unslotted, Z-beam, C-beam, L-beam, step beam, and cantilever beam); surface coating, if any (including but not limited to paint, epoxy, powder coating, zinc, or other metallic coatings); rack shape (including but not limited to rectangular, square, corner, and cantilever); the method by which the vertical and horizontal supports connect (including but not limited to locking tabs, hooks, prongs or slots, bolting, riveting, clamping, and welding); and whether or not for use in a storage system of steel racks that has moving components (including but not limited to rails, wheels, rollers, tracks, channels, carts, and conveyors).

[18] For greater certainty, where subject goods are assembled into a storage system of steel racks that incorporates excluded components, machinery, technology or equipment, including where attached to subject goods, the product definition covers only the subject goods.

[19] The types of storage systems explicitly excluded from the product definition are defined further as follows: wire shelving units are units made from wire that incorporate both a wire deck and wire horizontal supports (taking the place of the horizontal beams and braces) into a single piece with tubular collars that slide over the posts and onto plastic sleeves snapped on the posts to create a finished unit; wall-mounted shelving and racks are defined as shelving and racks that suspend all of the load from the wall, and do not stand on, or transfer load to, the floor; ceiling-mounted shelving and racks are defined as shelving and racks that suspend all of the load from the ceiling and do not stand on, or transfer load to, the floor; wall/ceiling mounted shelving and racks are shelving and racks that suspend the load from the ceiling and the wall and do not stand on, or transfer load to, the floor; portable tier racks, which may also be referred to portable stacking racks, are typically: freestanding, portable assemblies with a fully welded base and four freely inserted and easily removable corner posts; assembled without the use of bolts, braces, anchors, brackets, clips, attachments, or connectors; one assembly may be stacked on top of another without applying any additional load to the product being stored on each assembly; and the assemblies typically have no mechanism (e.g., a welded foot plate with bolt holes) for anchoring the assembly to the ground.

[20] Rack protection products, which are excluded from the product definition in this case, are available for upright columns and end-of-aisle locations to lessen the chances of forklift damage in higher traffic areas. Such products include end of aisle protectors, post protectors, guardrails and bollards. Rack protection products may be purchased along with the steel racking or separately from a different supplier. Rack protection products are commonly made of steel but may also be made from plastic.

[21] Steel racks may or may not be forklift-loaded and are typically able to bear the weight of pallets, as opposed to exclusively hand-loaded storage systems, which may be referred to as “steel shelving.” Non-subject “steel shelving” is not strong enough to bear the weight of pallets and is not covered by the product definition in this case. Such products may be referred to as “heavy duty shelving”, “wide span shelving”, “light duty rack” or “baby rack” in the storage manufacturing industry.

[22] Whether a component is for use in a storage system can be forklift-loaded, or whether it is designed in whole or in part for hand loading, is not determinative of whether the product is included.

[23] In some cases, steel racks may be loaded or unloaded by hand. For example, this may be the case where the storage system incorporates a multi-level pick tower where forklifts do not access the upper level(s). In such cases elevators, conveyors, robotics or other automated systems may be used to bring items between levels.

[24] Products may also be stored in bins that rest on a pallet rack so that individual items can be unloaded or loaded by hand.

[25] If the components of the storage system otherwise meet the product definition, the use of accessories or automation of any kind do not exclude the product from the definition.

[26] Pallet racking may be of welded or bolted construction. The main difference between these two types of systems is that in the welded solution, the vertical and/or horizontal braces (which may also be referred to as struts) are welded to the posts/columns. For bolted racks, the frame is of bolted construction (i.e. the brace-to-post connections are bolted as opposed to welded).

[27] In a bolted solution, the vertical and horizontal braces are often formed from pre-galvanized steel. In a welded solution, the braces are most often formed from hot-rolled coil that has been pickled and oiled.

[28] Some applications or environments may have a preference for either bolted racks or welded racks, neither type can be considered superior in a general sense in terms of quality.

[29] Cantilever racking, which is often produced with structural steel, is produced with roll-formed steel as well. Cantilever racks are used to store lumber or other materials that are set out from the frame of the rack for accessibility in warehouses or storage facilities.

[30] Roll-formed components generally include less steel (i.e. they are lighter). Structural steel racking tends to be heavier and offers greater durability. In particular, customers may prefer structural steel components due to the thicker corners on the posts, which are more amenable to wear and tear in environments with frequent impacts from powered lift truck equipment. Structural steel racks are also often preferred for applications with harsh environmental elements, including outdoor and freezer or cold storage applications. Food storage applications may prefer structural racks as the open channel column design makes it difficult for food entrapment, and easier for the racks to be washed down.

[31] Steel racking components and accessories that are covered by the product definition may be used to build single or multi-level work platforms integrated into the storage system and used to move products more efficiently through a storage facility. These platforms or structures may be described as rack-supported mezzanines, catwalk systems, pick modules or pick towers. While such work platforms may be described as “mezzanines”, that is a term that is also commonly used to describe free-standing steel structures within a facility that are not integrated into a steel racking system. Components for use in freestanding mezzanines are non-subject goods.

[32] The Canada Standards Association (“CSA”) Group published its “User guide for steel storage racks” in 2022 which provides additional details and information in line with the product definition and information provided above.

Standards and registration

[33] Pallet Racking is produced to CSA S16-2014 Annex N (design and construction of pallet racking)

[34] Note that there is a development of a new standalone standard CSA S345-2023 that will replace Annex N and is intended for reference in the 2025 National Building Code of Canada. However, CSA S16-2014 Annex N requires the fabricator of the pallet racking to meet the requirement of CSA W47.1 or CSA W55.3. The Canadian Welding Bureau (“CWB”) certifies companies to meet this requirement in Canada and abroad. The CWB certified directory is publicly available online. To be certified, companies must be audited twice a year and all welders must take tests every 2 years to renew their CWB cards. Further, the fabricator must use only CWB certified welding wire and gases. An office employee must be a “Welding supervisor” and must take classes and pass tests to act in this role.

[35] The Ontario Building Code (“OBC”), references the CSA S16-24 standard, updated in 2024, incorporating the latest research and safety requirements for steel structures. Additionally, a standalone standard CSA S345:2023 has been published to specifically address the design and construction of steel storage racks, replacing Annex N to CSA S16, effective January 1, 2025.

[36] The complainants indicate that the product definition does not reference any specific standards in order for the goods to be covered under the product definition.

Product uses^{Footnote 7}

[37] The key technical attributes of steel racks are their stability, strength, and load-bearing capacity. These features allow them to bear heavy loads in rack formations. They are often used for the storage of heavy pallets of materials and products in warehouses, order fulfillment facilities, distribution centres, big-box retail stores, and manufacturing facilities.

Manufacturing process^{Footnote 8}

[38] Steel rack components may be produced from either hot-rolled channel and angle sections or hot-rolled or cold-rolled steel coils.

[39] Steel rack components produced from hot-rolled or cold-rolled coils are manufactured by slitting the steel coil into narrower widths suitable for producing the profiles of the beams, braces and columns. The slit blanks are punched with holes which will be later used to construct the racks and then cut to length according to the project requirements. The blanks are then fed through a series of roll-forming dies which progressively bend the steel into the desired final shapes, which are typically closed tubes for the beams, and open “C” shapes for the uprights.

[40] Rack components produced from hot rolled channel and angle sections are cut to length and punched before being assembled by welding the sections together where necessary.

[41] Finally, the components are painted, galvanized or otherwise coated, according to the customer’s requirements, and packaged for delivery.

Classification of imports

[42] The allegedly dumped and subsidized goods are normally imported under the following tariff classification number):

1. 7326.90.90.90
2. 9403.20.00.70
3. 7308.90.00.60
4. 7308.90.00.99

[43] However, this tariff classification number also includes non-subject goods, and subject goods may also fall under additional tariff classification numbers.

[44] It should be noted that the complainants indicate that imports of steel racks primarily enter under the following three tariff classification numbers: 7326.90.90.90, 9403.20.00.70, and 7308.90.00.60. Upon analyzing import data for the specific importers identified in the complaint, the CBSA found that tariff classification number 7308.90.00.99 is also likely used for steel rack imports. Accordingly, this additional tariff classification number has been included alongside the three tariff classification numbers originally identified by the complainants.

Like goods and class of goods

[45] Subsection 2(1) of SIMA defines “like goods” in relation to any other goods as “... (a) goods that are identical in all respects to the other goods, or (b) in the absence of any such goods, goods the uses and other characteristics of which closely resemble those of the other goods.” In considering the issue of like goods, the Canadian International Trade Tribunal (CITT) typically looks at a number of factors, including the physical characteristics of the goods, their market characteristics, and whether the domestic goods fulfill the same customer needs as the subject goods.

[46] In addressing the issue of classes of goods, the CITT typically examines whether goods potentially included in separate classes of goods constitute "like goods" in relation to each other. If those goods are "like goods" in relation to each other, they will be regarded as comprising a single class of goods.

[47] The complainants claim that domestically produced goods meeting the product definition are not identical to the subject goods in all respects give the variations that can exist in terms of types of steel inputs, configurations, accessories, thickness of steel, and more.^{Footnote 9}

[48] The complainants argued that subject goods and the “like goods” produced by the complainants in Canada form a single class of goods. Further, subject goods and Canadian-made like goods produced by the complainants are virtually identical in their physical characteristics, dimensions, specifications, metallurgy and uses. Subject goods are sold to the same Canadian customers who purchase like goods from the complainants.

[49] After considering questions of use, physical characteristics and all other relevant factors, the CBSA is of the opinion that subject goods and like goods constitute only one class of goods.

Domestic producers

[50] In addition to the complainants, there are five other known producers of steel racks in Canada that were identified by the complainants and the CBSA.

Estimates of domestic production

[51] The complaint includes the annual production of like goods for the complainants and supporting producers from January 1, 2022 to September 30, 2025. Based on these estimates and supplementary research by the CBSA, the complainants and the supporting producers account for a majority of the production of steel racks in Canada in 2025.

Standing

[52] Pursuant to subsection 31(2) of SIMA, the following conditions must be met in order for an investigation to be initiated:

1. the complaint is supported by domestic producers whose production represents more than 50% of the total production of like goods by those domestic producers who express either support for or opposition to the complaint, and
2. the production of the domestic producers who support the complaint represents 25% or more of the total production of like goods by the domestic industry

[53] Based on an analysis of information provided in the complaint, as well as the information gathered by the CBSA, the CBSA is satisfied that the standing requirements of subsection 31(2) of SIMA have been met.

The Canadian market

[54] In order to estimate the import values, the complainants first estimated that the Canadian market for steel racks as roughly 10% of the size of the United States (US) and Canadian markets combined, in reference to an article published by a prominent dealer of steel racks in Canada. The complainants had this estimate corroborated through an independent market research firm, Data Intelo, which is claimed to arrive at the estimate of import volumes to Canada based on market contacts with manufacturers/exporters, distributors and service providers, logistics and trade intermediaries and end users. To determine the size of the US domestic production for steel racks, the complainants relied on state-by-state shipment statistics of steel racks. To estimate the total size of the US market, the complainants relied on import data from United States International Trade Commission under the Harmonized Tariff Schedule code of 9403.20.00.82. The complainants estimated the Canadian market values based on the percentage of the US market and then derived the Canadian imports by deducting the domestic production from the total Canadian market. The complainants estimated 37.5% as the percentage of subject imports from China based on their total imports from all sources to Canada estimate.

[55] The CBSA reviewed import data from the CBSA’s Enhanced Facility Information Retrieval Management (E-FIRM) database and the CBSA Assessment and Revenue Management (CARM) system, as well as its Accelerated Commercial Release Operations Support System (ACROSS) and other data to correct any errors or inconsistent unit of measures, and to remove non-subject imports.

[56] The CBSA believes that the dollar values reported in E-FIRM are accurate for all goods imported under the tariff codes rather than volume. The tariff classification numbers involve a huge variety of goods and therefore the units of measurement across the four tariff codes vary, encompassing litres, metres, pieces, sets and in some cases no specified unit, in addition to the standard measurement kilogram. Given the nature of steel racks, with each component of steel racks may report its measurement based on its own unique dimensions, there is no reasonable methodology to convert that data available from E-FIRM to represent a meaningful amount in metric tonnes. The CBSA considers quantity-based volume to be an inappropriate assessment for steel rack imports. Accordingly, the CBSA has based its import analysis on value rather than volume. Accordingly, the CBSA has based its import analysis on value rather than volume and will rely on that data for purposes of negligibility as well as for purposes of considering import trends.

[57] Detailed information regarding the sales from domestic production by the complainants as well as the volume of imports of subject goods cannot be divulged for confidentiality reasons. The CBSA, however, has prepared the following table to show the estimated import share of subject goods in Canada.

[58] The table below summarizes the CBSA’s estimate of the apparent Canadian market for steel racks, in terms of market share, using data submitted by the complainants along with its own further refined import data:

[59] The CBSA will continue to gather and analyze information on the volume and value of imports during the Period of Investigation (POI) of January 1, 2025 to December 31, 2025 as part of the preliminary phase of the dumping and subsidy investigations and will refine these estimates.

Section 20 allegations

[65] Section 20 is a provision of SIMA that may be applied to determine the normal value of goods in a dumping investigation where certain conditions prevail in the domestic market of the exporting country. In the case of a prescribed country under paragraph 20(1)(a) of SIMA, it is applied where, in the opinion of the CBSA, the government of that country substantially determines domestic prices and there is sufficient reason to believe that the domestic prices are not substantially the same as they would be in a competitive market.^{Footnote 10}

[66] The CBSA initiates dumping investigations on the presumption that section 20 is not applicable to the sector under investigation unless there is information that suggests otherwise.

[67] A section 20 inquiry refers to the process whereby the CBSA collects information from various sources in order to form an opinion as to whether the conditions described under subsection 20(1) of SIMA exist with respect to the sector under investigation. Before initiating an inquiry under section 20, the CBSA must first analyze the information submitted in the complaint and the evidence it has gathered independently to determine if it is sufficient to warrant the initiation of an inquiry.

[68] The complainants allege that the prices of steel storage systems are substantially determined by the Government of China indirectly, due to the fact that steel counts for a significant portion of the direct material cost to produce steel racks and the Government of China substantial controls over the steel industry.^{Footnote 11} The complainants state the Government of China’s plans, policies and directives support and direct the expansion of China’s warehousing and logistics infrastructure and the build-out of physical supply chains.^{Footnote 12} The complainants also point out that in multiple previous investigations involving Chinese steel products, the CBSA has made findings that there is sufficient evidence that the conditions listed in section 20 of SIMA exist to justify the initiation of the section 20 inquiry.^{Footnote 13}

[69] The CBSA has reviewed the information provided in the complaint and conducted its own research and believes that there is a reasonable indication to support an inquiry into the allegations that the measures taken by the Government of China may substantially influence prices of steel racks in China.

[70] Consequently, on April 20, 2026, the CBSA included in its investigation, a section 20 inquiry in order to determine whether the conditions set forth in paragraph 20(1)(a) of SIMA prevail in the steel storage systems sector in China.

[71] As part of this section 20 inquiry, the CBSA sent section 20 RFIs to all potential producers and exporters of steel racks in China, as well as to the Government of China, requesting detailed information related to the steel storage systems sector in China.

[72] In cases where conditions of section 20 exist, pursuant to paragraph 20(1)(c), the normal value can be determined based on profitable selling prices or full costs of production and an amount for profit on goods sold domestically in a surrogate country, to which the conditions described in section 20 of SIMA are not applicable.

[73] For the purposes of obtaining information necessary to calculate normal values pursuant to subparagraph 20(1)(c) of SIMA, the CBSA requested information from producers in India and Mexico, which has large domestic production of steel racks. Both countries are believed to operate under fair market conditions and is at a comparable level of economic development to China.

[74] In the event that the CBSA does not receive sufficient information from producers and exporters of subject goods in the selected surrogate countries for the purposes of determining normal values pursuant to section 20, the CBSA may identify other surrogate countries at a later date.

[75] Importers were also requested to provide information on sales of like goods produced in surrogate countries, in the event that normal values must be determined under paragraph 20(1)(d) of SIMA.

[76] In the event that the CBSA forms the opinion that domestic price of steel racks are substantially determined by the government, and there is sufficient reason to believe that the domestic prices are not substantially the same as they would be if they were determined in a competitive market, the normal values of the goods under investigation will be determined, pursuant to paragraph 20(1)(c) of SIMA, where such information is available, on the basis of the domestic selling prices or the aggregate of the cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits of like goods sold by producers in any country designated by the CBSA and adjusted for price comparability; or, pursuant to paragraph 20(1)(d) of SIMA, where such information is available, on the basis of the selling price in Canada of like goods produced and imported from any country designated by the CBSA and adjusted for price comparability.

Normal value

Complainant’s estimates of normal value

[77] The complainant’s allegations of dumping are based on a comparison of their estimated quarterly normal values for the allegedly dumped goods to their estimated quarterly weighted average export prices. The complainant’s estimated margins of dumping are for the proposed POI of October 1, 2024 to September 30, 2025.

[78] The complainants state that they were unable to locate exporter specific home market pricing for steel racks. They indicate that there is no published third-party pricing of steel racks and that section 15 normal values cannot be estimated.^{Footnote 14}

[79] Although the complainants argue that the conditions of section 20 prevails in the Chinese steel storage systems sector, and that normal values should thus be determined pursuant to section 20 of SIMA, the complainants nevertheless estimated normal values using the methodology of paragraph 19(b) of SIMA (i.e. based on the estimated costs in China) in addition to providing an estimate using the methodology of paragraph 20(1)(c) of SIMA (i.e. based on the estimated costs in India as surrogate country).

Section 19(b)

[80] As the complainants claimed that information on domestic prices of steel racks in China was lacking, the complainants estimated normal values using the methodology of paragraph 19(b) of SIMA, based on the aggregate of the estimated costs of production in China, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. Normal values were estimated for each quarter of the POI.^{Footnote 15}

[81] For the purposes of estimating the cost of raw materials, the complainants relied on published pricing for hot-rolled coil in China, as published by CRU Group. The complainants claim that although the imported subject goods to Canada are roll-formed from hot-rolled coil, bracing of pre-galvanized steel is more expensive than hot-rolled coil because it is further processed. As such, the complainants claim that the use of hot-rolled coil cost only is conservative in their estimate. The complainants converted CRU hot-rolled coil pricing USD to CAD using Bank of Canada exchange rates. The complainants made an adjustment to the direct material cost as they relied on pickled and oiling costs published by a producer of roll-formed steel racks and claim that roll-formed steel racks typically use pickled and oiled hot-rolled steel as it performs best in the roll-forming machines. Additional adjustments were made to reflect the yield loss and cost from the coil slitting process derived from Canadian producer processing and yield ratios. Other direct material costs in the production of steel racks were estimated as a percentage of steel costs based on producer financial data. The complainants’ estimate of other direct material costs is represented as a weighted average ratio of steel costs.^{Footnote 16}

[82] With respect to labour costs, the complainants adjusted their own labour costs by using a wage ratio derived from average manufacturing sector wages for the workforce in China, published by Trading Economics and the National Bureau of Statistic China.^{Footnote 17}

[83] In estimating factory overhead costs the complainants used their own cost for domestic sales on a per metric tonne (MT) of output basis.^{Footnote 18} For financial expenses and general, selling and administrative expenses, the complainants derived ratios from 2024 and 9M 2025 financial statement data from Guangdong Haili, a Chinese producer of roll-formed steel racks.^{Footnote 19} The complainants have provided supporting financial statements from Japanese and Malaysian producer of steel racks as supplementary information should the Chinese producer information not be considered.^{Footnote 20}

[84] The complainants estimated a reasonable amount for profit on the basis of the 2024 financial statement of the aforementioned Chinese producer of roll-formed steel racks.

[85] On the basis of the above methodology, the complainants estimated normal values for each quarter of the POI, from the last quarter of 2024 to the third quarter of 2025, inclusively.

Section 20

[86] In light of the section 20 allegations, the complainants also provided normal value calculations for subject goods based on a surrogate methodology. The complainants submitted that India would be an appropriate surrogate country. To support this assertion, the complainants suggested that China and India are the first and third largest economies in Asia, respectively and are top five economies by size in the world. Both are middle income countries on OECD’s list of countries eligible to receive official development assistance, with India listed as a lower-middle income country and China as upper-middle income. India is also the second largest steel producer in the world, being second only to China.

[87] As such, the complainants estimated section 20 normal values, using the methodology of subparagraph 20(1)(c)(ii), on the basis of the aggregate of the estimated costs of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits, in India.

[88] For the purposes of estimating the cost of raw materials, the complainants relied on published pricing for hot-rolled coil pricing published by CRU for the Indian market, adjusted to reflect the yield loss experienced by the complainants and the costs of the slitting process.

[89] The complainants made an adjustment to the direct material cost as they relied on pickled and oiling costs published by a producer of roll-formed steel racks and claim that roll-formed steel racks typically use pickled and oiled hot-rolled steel as it performs best in the roll-forming machines. Additional adjustments were made to reflect the yield loss and cost from the coil slitting process derived from Canadian producer processing and yield ratios. Other direct material costs in the production of steel racks were estimated as a percentage of steel costs based on producer financial data. The complainant’s estimate is represented as a weighted average ratio of other direct material costs to steel costs.

[90] With respect to labour costs, the complainants consolidated direct labour costs for the production of steel racks, adjusted using the latest available 2024 wage data for India's manufacturing sector, sourced from the Ministry of Statistics and Programme Implementation (MOSPI) and Trading Economics. A wage ratio of 7.4% was derived by comparing average annual salaries in India to those in Canada, and this ratio was applied to scale Canadian labour inputs.

[91] In estimating factory overhead costs the complainants used its own cost for domestic sales on a per MT of output basis. The complainants were not able to furnish and have no reason to believe that overhead costs for the production of steel racks in India would differ materially from those incurred by steel racks manufacturers in Canada.

[92] The complainants estimated a reasonable amount for general, selling and administrative expenses using Skipper Limited as a proxy, which is a publicly listed Indian manufacturer specializing in fabricated steel structures such as transmission towers and tubular products. Skipper Limited’s 2024 audited financial statement was used for deriving financial ratios and applied as a percentage of costs.^{Footnote 21}

[93] The complainants estimated a reasonable amount for profit on the basis of the 2024 financial statement of the aforementioned Indian producer of fabricated steel structures.

[94] On the basis of the above methodology, the complainants estimated normal values for each quarter of the POI, from the last quarter of 2024 to the third quarter of 2025, inclusively.

CBSA’s estimate of normal value

[95] For the purposes of initiation, the CBSA estimated normal values using a constructed cost approach based on the methodology in paragraph 19(b) of SIMA, calculated based on the aggregate of estimates of the cost of production of the subject goods, a reasonable amount for administrative selling and other costs and a reasonable amount for profits.

[96] The CBSA reviewed the complainant’s methodology to determine how normal values were estimated and found that approach reasonable, but made the following estimates and adjustments:

• The CBSA estimated Q4 2025 using the best available information from the complaint and its own sources, including raw material steel costs based on Fastmarkets data for hot-rolled coil in China, converted into Canadian dollars using updated quarterly average Bank of Canada exchange rates
• Adjustments were made for the period of Q1 2025 to Q4 2025 using updated quarterly average exchange rates from Bank of Canada
• For Q4 2025, the CBSA estimated weighted averages for direct labour, factory overhead, and yield loss from raw material processing using historical cost information from the complainants
• Using information presented in the complaint, adjusted as described, the CBSA has estimated normal values on a quarterly basis for comparison to quarterly export prices

[97] Although the complainants have provided an estimate for section 20 margin of dumping, for purposes of the initiation, the CBSA is not estimating normal values using a section 20 methodology. The CBSA will endeavor to gather additional information from exporters, government, and other relevant sources in order to enable the CBSA to form an opinion as to whether the conditions of section 20 exist in the domestic market for steel storage systems sector in China.

Export price

Complainant’s estimates of export price

[98] The export price of goods sold to importers in Canada is generally determined in accordance with section 24 of SIMA, based on the lesser of the adjusted exporter’s sale price for the goods or the adjusted importer’s purchase price. These prices are adjusted where necessary by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.

[99] The complainants claim that export prices could not be calculated based on Statistics Canada import data and that the most reliable basis to estimate export prices should be based on the commercial evidence of marketed or sold subject goods in the Canadian market during the period of investigation.

[100] For Q4 2024, the complainants estimated export prices based on the average of two quotes, dated September 2024, that were offered to a Canadian customer from Chinese producers of roll-formed steel racks.^{Footnote 22} For Q1 2025, the complainants calculated a percentage margin for price undercutting and applied this margin to their own quarterly average selling prices to determine a range of projects across the domestic industry given the fluctuations in per unit pricing per project.

[101] On the basis of this methodology, the complainants determined average quarterly export prices for the POI, from the last quarter of 2024 to the third quarter of 2025, inclusively.

CBSA’s estimates of export price

[102] In order to estimate export prices, volume and value of imports of subject goods into Canada from China, the CBSA relied on information available through E-FIRM and ACROSS.

[103] The CBSA used the adjusted import data to estimate export prices on a quarterly basis for subject goods shipped from China between January 1, 2025, and December 31, 2025.

Estimated margins of dumping

[104] For the purposes of the initiation of the dumping investigation, the CBSA has estimated a weighted average margin of dumping using normal values based on the methodology of section 19 of SIMA.

[105] Based on the normal values estimated under section 19, the CBSA estimated the margin of dumping for subject goods from China by comparing the estimated weighted average normal value with the estimated weighted average export price for the period of January 1, 2025, to December 31, 2025. The CBSA estimates the margin of dumping to be 6.4%, expressed as a percentage of the export price.

Subsidy programs in China

[112] In alleging that actionable subsidies were applicable to the subject goods imported from China, the complainants relied on previous CBSA subsidy investigation findings and other investigative authorities’ investigations, particularly with respect to steel products. The complainants also relied on publications issued by the World Trade Organization (WTO) and other publications.

[113] In particular, the complainants alleged that the Government of China provides substantial subsidies to its steel industry, such as cash grants, land-use rights, discounted inputs, preferential loans and directed credit, special tax rebates, and VAT and tariff exemptions.^{Footnote 23}

[114] The complainants argued that the CBSA’s numerous recent findings that Chinese steel products were subsidized provided strong evidence that steel producers also benefited from such subsidies. The complainants listed nine final determinations of subsidizing regarding steel products.^{Footnote 24}

[115] The complainants identified numerous potential subsidy programs that producers and exporters of steel racks in China may have benefitted from. The complainants listed several export assistance programs, research and development assistance programs, technology and industrial advancement assistance programs, brand and trademark awards, sustainability and environmental assistance programs, preferential loan and guarantee programs, preferential tax programs, relief from duties and taxes, grants related to preferential economic development zones and other types of programs.^{Footnote 25} The most common support provided by the complainants consists of information from past CBSA findings. The complainants also relied on the United States Department of Commerce’s (USDOC) final results of their steel racks expedited sunset review, China’s most recent notification of active subsidy programs to the WTO in 2023, and the United States Trade Representative’s January 2025 Report to Congress on China’s WTO Compliance.^{Footnote 26}

[116] The complainants alleged that these subsidy programs are actionable and/or countervailable and that the subsidies are neither negligible nor insignificant. The complainants also claimed that the programs are either used by or are available for use by producers and exporters of steel racks in China. The complainants also alleged, with support, that there are various Chinese producers and exporters of steel racks that operate in special economic zones, giving them access to numerous subsidy programs and preferential treatment.^{Footnote 27}

[117] As a result, based on the information available, the CBSA identified 37 potentially actionable subsidy programs that may have benefited Chinese producers/exporters of steel racks. Many of these are programs the CBSA has already countervailed in respect of previous subsidy investigations concerning goods from China. These programs have been grouped into the following five categories:

1. Grants and grant equivalents
2. Preferential tax programs
3. Relief from duties and taxes
4. Good/services provided by the government and
5. Preferential loans and loan guarantees

[118] The CBSA’s analysis revealed that the alleged subsidy programs constitute potential financial contributions by the Government of China that may have conferred benefits to producers/exporters of steel racks. In addition, the programs were further examined and were considered to be potentially specific either in law or in fact within the meaning of subsections 2(7.2) and 2(7.3) of SIMA.

[119] The descriptions of the identified programs to be investigated are found in the subsidy RFI.

[120] If more information becomes available during the investigation process that indicates that some exporters/producers of subject goods may have benefited from any other programs during the POI, the CBSA will request complete information from the Government of China and exporters/producers of subject goods to pursue the investigation of these programs.

CBSA's conclusion

[121] Sufficient evidence is available to support the allegations that steel racks originating in or exported from China have been subsidized. In investigating these programs, the CBSA has requested information from the Government of China, exporters and producers to determine whether exporters/producers of subject goods received benefits under these programs and whether these programs, or any other programs, are actionable subsidies and, therefore, countervailable under SIMA.

Estimated amount of subsidy

[122] The complainants were unable to estimate the amounts of subsidy on a program basis for the subject goods imported from China. Instead, the complainants estimated the amount of subsidy as being equal to the difference between the estimated total cost of production plus a reasonable amount for profit and the export price for steel racks sold into Canada from October 1, 2024 to September 30, 2025. The total cost of production and export price were estimated using the same methodology presented in the dumping section.^{Footnote 28}

[123] It is the CBSA’s understanding that subsidies have the effect of lowering the full cost of the goods, including the cost of production and the amount for selling, administrative and all other costs, which allows exporters to pass-through the subsidy benefits in reducing the selling price of those goods to Canada. Therefore, the CBSA is satisfied that the exporter’s ability to sell subject goods to Canada at prices substantially below their estimated full costs supports the complainants’ allegations that subsidies are being conferred on the imported goods.

[124] The CBSA’s analysis of the available information indicates that subject goods imported into Canada during the period from January 1, 2025 to December 31, 2025 were subsidized and that the estimated amount of subsidy is 7.0% of the export price.

Increased subject imports, loss of market share, lost sales

[129] The complainants alleged that imports of subject goods from China have increased significantly over the recent years and that this growth has directly caused lost sales and lost market share for the domestic industry. To support these allegations, the complainants provided estimates of import values from 2022 through the POI, drawn from the Data Intelo import analysis and statements of evidence filed by representatives of the complainants.^{Footnote 29} The complainants also provided domestic sales data and a Canadian market table setting out total market size, domestic industry sales and import shares by country of origin for each year from 2022 to 2025.^{Footnote 39}

[130] The CBSA conducted its own analysis of import data, focusing on import value as the primary indicator of subject import presence and trend given the product characteristics of the subject goods.

[131] With respect to lost sales, the complainants provided account specific evidence of sales lost to Chinese subject goods across the complainants, spanning the period from June 2023 through April 2025.^{Footnote 31} The complainants submit that the instances documented represent a sample of cases where information was available regarding direct competition with subject goods and that actual lost volumes and revenues attributable to dumped imports are substantially higher. The CBSA finds that the account specific lost sales evidence, taken together with the import value data, is sufficient to establish a reasonable indication that the domestic industry lost sales as a result of the presence of subject goods in the Canadian market. The CBSA finds that the injury factors of increased value of subject goods imported, lost sales and lost market share are sufficiently supported and linked to the allegedly dumped and subsidized goods from China.

Price undercutting

[132] The complainants alleged that subject imports have undercut the pricing of the domestic producers by a significant margin. In support of this allegation, the complainants provided account specific examples of price undercutting at individual customers, supported by the statements of evidence filed by representatives of the complainants.^{Footnote 32} The domestic producers estimated unit pricing of imports based on evidence of price undercutting at specific accounts in the market, as available import statistics do not allow visibility to import volume.^{Footnote 33}

[133] The CBSA has examined the complainants’ allegations of price undercutting by reviewing the account specific evidence provided in the complaint alongside the CBSA’s own analysis of import data. The CBSA finds the claim of price undercutting to be well supported and sufficiently linked to the allegedly dumped and subsidized goods from China.

Price depression and price suppression

[134] Price depression or erosion occurs when selling prices of the local product are reduced to meet or compete with dumped import prices. Price suppression refers to the prevention of price increases which would have otherwise occurred, if not for the dumped imports. The complainants submit that the price undercutting discussed above has resulted in both price depression and price suppression in the Canadian market.

[135] With respect to price depression, the complainants alleged that their average selling prices declined from 2023 to the first nine months of 2025.^{Footnote 34} The complainants attribute this decline to the competitive pressure exerted by the allegedly dumped subject goods and provided account specific examples of circumstances in which they reduced their quoted prices in response to competition from Chinese imports.

[136] With respect to price suppression, the complainants referred to the relationship between their selling prices and their costs over the period of analysis, submitting that the competitive pressure from low priced subject imports has constrained their ability to raise prices to levels sufficient to recover costs. NASECO specifically referred to the suppression of prices across the entire market as a result of Chinese import competition.^{Footnote 35} The complainants’ financial performance data submitted in the complaint provides additional support for this claim.

[137] The CBSA notes that the evidence specific to price depression and price suppression is less extensive than the evidence of price undercutting. However, the complainants’ allegations are consistent with the evidence of price undercutting discussed above and the account specific examples demonstrate that the domestic producers have been required to reduce their quoted prices in response to competition from subject imports. The evidence is adequate to meet the reasonable indication threshold at this stage.

[138] Based on the information contained in the complaint, the CBSA finds that the claims of price depression and price suppression to be adequately supported and reasonably linked to the allegedly dumped and subsidized goods.

Adverse impact on financial performance

[139] The complainants provided consolidated financial data covering 2022 through 9M 2025. The CBSA has reviewed this information and finds that it generally establishes a trend of worsening financial performance, consistent with the price effects as discussed above.

[140] The record shows that domestic selling prices have been on a downward trajectory since 2023, a trend that corresponds with the increasing volume of subject goods entering the Canadian market at prices that consistently undercut those of the complainants.

[141] The CBSA is satisfied that the information contained in the complaint generally established a trend of worsening financial performance and that this injury factor is sufficiently supported and reasonably linked to the allegedly dumped and subsidized goods.

Adverse impact on production and capacity utilization

[142] The complaint includes production volume and capacity utilization data covering 2022 through 9M 2025.

[143] The complainants submit that the decline in production and capacity utilization is attributable to the loss of sales to subject goods. The production decline coincides with the period in which subject goods expanded their share of the Canadian market, and the evidence of account specific lost sales indicates that the displacement is occurring at the customer level. The growth in excess capacity over the injury analysis period is consistent with the displacement of domestic production by subject imports which is supported by the market share and lost sales evidence in this analysis. The CBSA is of the opinion that this injury factor is sufficiently supported and reasonably linked to the allegedly dumped and subsidized goods.

Adverse impact on employment

[144] The complainants submit that the loss of sales and production volume to subject imports has had a direct adverse effect on domestic employment. In support of this allegation, the complainants provided data on number of employees and total hours worked from 2022 through 9M 2025.^{Footnote 36}

[145] The CBSA finds that there is evidence that the reduction in the complainants’ production volume is tied to the increasing volume of imports from China and that as such, the reduction in the employment level is reasonably attributable to the allegedly dumped and subsidized imports.

CBSA's conclusion: Injury

[146] Overall, based on the evidence provided in the complaint, and supplementary data available to the CBSA through its own research and customs documentation, the CBSA finds that the evidence discloses a reasonable indication that the dumping and subsidizing of the subject goods from China, have caused injury to the steel racks industry in Canada in the form of:

• Increased volume of imports of subject goods
• Lost sales and lost of market share
• Price undercutting
• Price depression and price suppression
• Adverse impact on financial performance
• Adverse impact on production and capacity utilization and
• Adverse impact on employment