2023 FC, 2023 FC 1368

Date: 20231013 Docket: T-917-21 Citation: 2023 FC 1368 Ottawa, Ontario, October 13, 2023 PRESENT: The Honourable Mr. Justice Pamel BETWEEN: AKME POULTRY, BUTTER & EGGS DISTRIBUTORS INC Applicant and MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS Respondent JUDGMENT AND REASONS I. Overview [ 1 ] The Applicant, Akme Poultry, Butter & Eggs Distributors Inc [Akme or the company] is applying for judicial review of a decision dated May 11, 2021 [Decision] by a senior officer for trade compliance [Officer] with the Canada Border Services Agency [CBSA].

The Officer rejected Akme’s duty drawback claims under the Duty Drawback Program [DDP] governed by sections 89 and 113 of the Customs Tariff , SC 1997, c 36 , and by the Goods Imported and Exported Refund and Drawback Regulations , SOR/96-42 , on the grounds that Akme failed to provide the books and records requested by the CBSA in support of such claims. [ 2 ] The Minister of Public Safety and Emergency Preparedness [Minister] argues that this case is about the CBSA’s broad statutory power to compel production of documents and records from an importer of goods that the CBSA, in its discretion, may require in support of a drawback application under the Customs Act , RSC 1985, c 1 (2nd Supp ) [ Act ], as well as the CBSA’s capability of exercising such powers to inspect any records that may be relevant to the assessment and collection of duties, regardless of having any reasonable grounds to believe that there has been a breach of the Act .

However, in my view, that is not what this case is about; nor is the present application for judicial review about whether Akme met the conditions of the DDP so that its drawback application should have been granted.

Rather, this case is about the failure of the Officer to engage with central aspects raised by Akme in response to the further demand by the CBSA for the books and records of the company, contrary to what the Supreme Court has again, just recently, reminded us that administrative decision-makers must do if they are to avoid having their decisions set aside ( Mason v Canada (Citizenship and Immigration) , 2023 SCC 21 [ Mason ] at para 74 ). For the reasons that follow, I grant the present application for judicial review. II.

Background [ 3 ] Akme is a family-run food processing business headquartered in Saint-Eustache, Quebec which processes domestic poultry and poultry imported from the United States into a variety of processed poultry products, including individually quick frozen marinated chicken breasts. The DDP is a program administered by the CBSA meant to allow the Canadian food processing industry to be competitive, and whose purpose is to incentivize and facilitate trade for the Canadian businesses that participate in it.

Section 89 of the Customs Tariff is the basis for the DDP, in particular paragraph 89(1)(

d) in this case. There is both a discretionary and a compulsory aspect to the DDP, which represents a benefit or a privilege to those who qualify for the program.

Under the DDP, when goods are imported into Canada and re-exported, or where processed products made using substitute domestic or imported goods [Substitute Goods] that are of the same class as the imported Goods [Goods of the Same Class] are exported, the processor is eligible to obtain a refund of the duties paid on the imported Goods, provided that certain statutory requirements are met. [ 4 ] In the course of its business, Akme processed chicken imported from the United States as well as domestically sourced chicken into processed poultry products that were then exported to the United States.

Between December 2017 and February 2018, Akme made 11 duty drawback applications under the DDP representing approximately 45 different transactions, totalling approximately $5.37 million [First Set of drawback claims].

In addition, in June 2019, Akme submitted to the CBSA a further five drawback applications representing five additional transactions [Second Set of drawback claims]. [ 5 ] By letter dated August 23, 2019 [August 2019 decision], the CBSA agreed to refund only approximately $1.8 million of Akme’s First Set of drawback claims, finding that the Substitute Goods that were the subject of some of Akme’s claims did not meet the DDP requirements.

In particular, the CBSA determined that nine transactions did not meet the Goods of the Same Class requirement, i.e., Akme’s imported Goods and Akme’s Substitute Goods were different products given the differences in the respective descriptions used to identify them in the transaction documentation [Same Class Requirement issue]; in 20 transactions, the CBSA could not determine the origin of the Substitute Goods purchased domestically by Akme [Origin issue]; and in five transactions, the weight of the imported Goods was higher than the weight of the Substitute Goods [Weight issue]. [ 6 ] No judicial review was sought of the August 2019 decision.

Rather, Akme responded by sending lengthy submissions to the Minister by letter dated November 6, 2019 [November 2019 submissions], requesting that the August 2019 decision in relation to the First Set of drawback claims be overturned and that its drawback applications be accepted. In short, Akme argued, as regards the Same Class Requirement issue, that its Substitute Goods and imported Goods met the Goods of the Same Class requirement; as regards the Origin issue, that the origin of the Substitute Goods was irrelevant to its drawback claims because all of the substitute product was purchased

from Canadian slaughterhouses and was thus domestic; and as regards the Weight issue, that it was in fact a non-issue because it was merely the result of chicken being a natural animal product with possible water retention discrepancies. Along the way, the parties seem to have resolved the Weight issue regarding five of the transactions.

However, the Same Class Requirement issue and the Origin issue remained live issues with respect to the First Set of drawback claims; Akme argues that the CBSA never responded to its submissions with respect to those two live issues. [ 7 ] By letter dated February 28, 2020 [February 2020 decision], the Officer rejected Akme’s Second Set of drawback claims, indicating that the applications could not be processed because of certain " “omissions that prevent the [CBSA] from processing these requests any further” " and that they were thus found invalid.

The CBSA detailed the omissions in Akme’s claims and invited the company to resubmit its drawback claims once the specifically identified issues had been resolved and the requested documents had been provided— the additional specific information and documentation were purportedly needed to identify and trace the Imported Goods from importation through any processing, transfers or use of Goods of the Same Class, to the ultimate export or disposition of the goods [the concept of traceability].

Consequently, the Same Class Requirement issue continued to be a live issue in relation to the Second Set of drawback claims; again, no judicial review was sought with respect to the February 2020 decision. [ 8 ] Akme nonetheless continued to pressure the CBSA.

Following a series of exchanges between the parties which included further submissions by Akme, on May 22, 2020, the Officer sent Akme a letter [May 2020 decision] confirming the rejection of the Second Set of drawback claims; the Officer stated that after the company’s most recent submissions were reviewed, it was " “determined that not all of the information requested [by the CBSA] was submitted.” " The Officer underscored that it was incumbent upon Akme to demonstrate " “full traceability and compliance with the program requirements, including demonstrating that all program obligations relating to Goods of the Same Class are met.” " The Officer continued: This means that the participant must first clearly identify the goods (individual or by lot, raw material, part, or product, including quantities) under consideration.

In addition, the participant must document all necessary information to trace the exported goods back through any processing (including all inputs and outputs) or transfers, to the imported goods or Goods of the Same Class applied. Thus, traceability is the ability to identify and trace the quantity, use and movement of the goods throughout.

Without verifying the traceability of the goods, the Agency is unable to certify whether the claims submitted meet the conditions of the program requirements, and therefore is unable to complete the claim review. [ 9 ] The Officer nonetheless confirmed that " “[s]hould Akme wish to resubmit these claims, the following information should be included…” " [emphasis added], and went on to identify, amongst other things, copies of purchase orders, commercial invoices, product identification information, a description of various production processes, and a description of how the processes and goods met the Goods of the Same Class conditions for the applied equivalence use.

Finally, the Officer specifically requested access to Akme’s “books and records”: In addition to the above, please note that the CBSA will also require access to specific company books and records to conduct this verification such as : • the records/log used to track import and export shipments to and from Federally Registered Meat Establishments (required under the Meat Hygiene Manual of Procedures, Canadian Food Inspection Agency (CFIA)). • specific detailed ledgers (i.e. vendor, inventories (raw and finished goods), production, sales/transfers etc.); and • accounts which include production ‘leftovers’ (i.e. scrap or waste certificates, production loss factors, by- product produced); and/or Note: if by-products are created during the process and that by-product is not exported, a Value Outturn Statement is also required to substantiate the eligible amount of drawback. • any other documentation which would allow the CBSA to substantiate whether the goods and quantities claimed meet the conditions of the program.

These newly completed or amended K32 Drawback Claim Forms may be resubmitted to the CBSA along with all of the above requested information within the legislative time limits and that claims submitted beyond the these time limits will be rejected . [Emphasis added.] [ 10 ] The Minister states that the specific list of items and information identified in the May 2020 decision clearly set out the case that Akme had to meet with the resubmissions of its claims, i.e., the information that the resubmissions needed to provide in order for the CBSA to reconsider the rejected claims.

In other words, argues the Minister, reconsideration of drawback claims already rejected was conditional upon Akme providing the requested information, and in particular its books and records.

That is not to say that Akme could not continue to resubmit its drawback claims for reconsideration, but only that there is no statutory duty to reconsider them and that the CBSA was not obliged to continuously reconsider submissions in respect of drawback claims that it already had rejected. [ 11 ] Akme draws a distinction between the Origin issue and the concept of traceability, and argues that concern over the Origin issue was not expressed by the Officer in either the February 2020 decision or the May 2020 decision and that consequently, from its perspective, the only live issues preventing the resolution of the Second Set of drawback claims up to that point were the Same Class Requirement issue and the general requirement to show traceability.

It should also be kept in mind, and as explained by counsel before me, that traceability is not, in itself, a legislative requirement for the DDP; rather, according to Akme, traceability is a concept that the

CBSA uses as a mechanism to confirm if the product has been imported and substituted with the new product, which was then exported —in essence, a map of the product’s processing chain from importation to Canada to re-exportation from Canada. [ 12 ] In any event, by a letter dated September 29, 2020 [September 2020 resubmission], Akme resubmitted its unpaid drawback requests from the First Set and Second Set of drawback claims, compiled as seven claims totalling approximately $4 million—a fresh start so to speak—accompanied by substantial submissions which it states clearly establish " “full traceability and compliance with the program requirements, including demonstrating that all program obligations relating to Goods of the Same Class are met.” " The submissions provided a purported roadmap in which Akme explained its business model and operations; provided a “walkthrough” of a sample transaction so as to show traceability, with reference to supporting documentation, including Excel spreadsheets; explained its products; reviewed how its imported and domestically purchased substitute chicken complied with the Goods of the Same Class requirement; explained how the CBSA could trace Akme’s products from import/purchase to export/sale; provided a chart of product descriptions for its imported, substitute and exported goods; and responded to the CBSA’s questions and request for information made in the May 2020 decision.

The September 2020 resubmission also provided a Q&A table whereby Akme seemingly sets out all of the questions asked and requests made previously by the CBSA in relation to its drawback requests, and provides specific responses.

In essence, Akme states that it was looking to fill the gaps of those certain " “omissions that prevent the [CBSA] from processing these requests any further” " and provided, in its view, a complete package of documents to establish that each of its drawback claims met all of the conditions of the DDP. [ 13 ] According to the CBSA, however, Akme did not provide any new documents; the documents included in the September 2020 resubmission may have been the same documents as those previously submitted, although according to Akme, there were fresh explanations and tools to show that the documents indeed respond to the CBSA’s questions and requests as part of the May 2020 decision.

Nor did Akme produce its books and records, although in fairness it may not have been clear to Akme whether, in “requiring access”, the CBSA was actually making a demand for production of the books and records in its May 2020 decision.

In any event, Akme argues that the Officer either already had the specific documents that he had requested—and thus his request for them again is an indication of his failure to engage with what Akme had already submitted—or had the relevant information already on hand but in a different format, filed as part of prior submissions, which would allow the Officer to assess any outstanding issues and come to a determination as to whether Akme’s drawback requests met all of the DDP requirements. [ 14 ] Akme also takes the position that its September 2020 resubmission seemingly resolved the Same Class Requirement issue, and points to internal correspondence in the record between CBSA personnel dated February 1, 2021 [February 2021 internal communication] which states that " “[w]e maintain our earlier position that from a goods of the same class perspective only, it is our opinion based on the available information that the goods in question have met all of the legislative Drawback Program requirements to qualify for the goods of the same class provision.

Therefore, the verification can proceed to determine if all of the other program conditions were met” " [emphasis added]. Before me, Akme also noted that the February 2021 internal communication was before the Officer when he rendered the Decision, yet there is no indication that the Officer considered it before rejecting its claims. The Minister takes the position that the February 2021 internal communication was simply an off-the-cuff statement from an individual who was not involved in the file.

However, I must agree with Akme that it is nonetheless the only area in the record where the CBSA is seen to somehow engage with the issue of determining whether Akme’s drawback claims meet the Goods of the Same Class requirement. [ 15 ] In any event, on March 11, 2021, the Officer wrote to Akme [March 2021 request], this time specifically requesting the books and records that had been mentioned in the May 2020 decision so as to conduct the verification of the drawback claims.

The Officer again noted that Akme had not provided any new documents " “in regards to the traceability of the goods in order to determine the origin of the chickens purchased in Canada ” " [emphasis added], including from two of Akme’s domestic suppliers; this, according to the Minister, went to the Origin issue as regards the substitute chicken purchased in Canada.

From what I understood from counsel, it was not enough for Akme to confirm that the substitute chicken was domestically purchased (i.e., purchased by Akme in Canada); rather, the CBSA was looking to determine whether that product was initially Canadian—or foreign—sourced.

The letter also indicated that Akme needed to provide the CBSA with " “sufficient satisfactory documentation upon request that demonstrates full traceability and compliance with the program requirements, including demonstrating that all program obligations relating to Goods of the Same Class are met.” " [ 16 ] Before me, the Minister argued that traceability is not simply about the origin of the domestic chicken, but also about the need for the CBSA to follow and track the movement of the product from, in this case, the purchase of equivalent goods through processing and thereafter out to export; the Minister argues that there are several conditions that Akme had to meet to establish eligibility for the DDP and that evidence of traceability allows the CBSA to follow the product along the processing chain and substantiate Akme’s assertions on having met DDP requirements.

In the Minister’s view, and contrary to the position taken by Akme, the March 2021 request did not link traceability solely to the Origin issue, but to all the conditions of the DDP.

However, from my perspective, I certainly understand how Akme could have read the March 2021 request as linking the traceability requirement to the Origin issue, with the Officer simply asserting that without verifying the traceability of the goods (i.e., so as to address the Origin issue), the CBSA is " “unable to certify whether the claims submitted meet the conditions of the program requirements” " . [ 17 ] In any event, the Minister argues that the March 2021 request was Akme’s last chance—last amongst many previous chances—to provide the “books and records” of the company to substantiate Akme’s previously made submissions regarding its compliance with DDP requirements.

What is clear, however, is that the March 2021 request does not address Akme’s assertion that all the documents required to determine whether the company had complied with the DDP requirements were in fact received by the CBSA.

In particular, the March 2021 request does not address the previous submissions of Akme with respect to either the Same Class Requirement issue (including the February 2021 internal communication) or the Origin issue, nor does it identify any other requirement of the program that was still a live issue needing to be verified by way of traceability, nor does it reference where in previous exchanges one may find its engagement with Akme’s submissions on those issues.

According to the Minister, the CBSA did not have to address these aspects, as engagement with Akme’s submissions was fulfilled with the May 2020 decision when the case that Akme had to meet was laid out. [ 18 ] By letter dated March 26, 2021 [March 2021 submissions], Akme replied to the March 2021 request by referring to its September 2020 resubmission and stating that the CBSA " “has already received all documentation required to substantiate that the conditions of the [DDP] as to importation, interchangeability of substitute goods, processing and export have been met” " [emphasis added]; the September 2020 resubmission seemingly explained in detail how Akme met the Goods of the Same Class requirement.

Admittedly, Akme did not

provide the CBSA with any new documents along with the March 2021 submissions.

Rather, Akme stated that the CBSA’s request for the books and records of the company is predicated on determining the origin of the Substitute Goods, but that the origin of any substitute product purchased in Canada is irrelevant to the company’s drawback claims because Akme has not requested duty drawbacks in relation to the chicken purchased in Canada, but rather only in relation to product imported into Canada from the United States; according to Akme, the Minister may just as well have requested books and records to establish that the chickens were hatched on a Monday rather than a Wednesday. [ 19 ] In any event, Akme explained that regardless of the relevance of the documentary request, it had attempted to secure the requested origin documents from its Canadian domestic suppliers from whom it had purchased the product, but to no avail.

However, from the Minister’s perspective, the Origin issue is not only tied to imported chicken but also to chicken purchased domestically, as it is imperative that the CBSA be able to determine whether the domestically purchased chicken, itself, was sourced elsewhere and had possibly already benefited from the DDP after having been imported from, say, the United States. [ 20 ] From the Minister’s perspective, Akme could have, and should have, simply provided the books and records that the Officer requested; rather, with the September 2020 resubmission and the March 2021 submissions, the company embarked on an arduous attempt to explain to the CBSA that it already had all the documents that it needed to address the claims.

In fact, Akme states that its submissions went further than that, in that the company’s submissions actually pointed to where in their application package the Officer would have found many of the documents and much of the information now being requested, but that the request for the “books and records” to ascertain the origin of the Substitute Goods was simply improper under the circumstances as it was irrelevant to their claim. [ 21 ] In the Decision dated May 11, 2021, the Officer rejected Akme’s resubmitted drawback claims solely on the grounds of Akme’s failure to provide the requested “books and records”, without any mention of Akme’s assertion that some of the documents were already in hand and that the CBSA nonetheless already had sufficient documents and information to assess and accept the claims.

The Officer indicated that under subsection 40(1) of the Act and paragraph 113(3)(

a) of the Customs Tariff , Akme was obliged to " “provide the CBSA with the required documentation in order to determine eligibility” " and that, in essence, the failure to do so—in this case, the failure to provide the specific books and records requested—justified the rejection of its claims. In other words, Akme’s drawback claims were not rejected because of an expressed failure to meet the identified conditions or requirements of the DDP, but because the company had failed to provide the specific “books and records” requested by the Officer. III. Analysis A.

Preliminary issues [ 22 ] As a preliminary matter, the Minister argues that exhibits A, B, C, and E of the affidavit of Spyros Plessas dated January 14, 2022, should be struck as inadmissible because those documents were not before the Officer as part of the drawback claims and were not part of the certified tribunal record under rule 318 of the Federal Courts Rules , SOR/98-106 ; the corresponding paragraphs 6, 10 to 13, and 15 of the affidavit should be struck on the same basis. I am dismissing the Minister’s request.

There is no doubt that, generally, only evidence that is actually before the decision-maker is admissible on judicial review.

However, and putting aside that Exhibit E was seemingly before the Officer at the time that he rendered the Decision, the impugned paragraphs and exhibits fall under the “general background” exception—one of the few exceptions to the general rule—as information that might assist the Court in understanding the history and nature of the case before the administrative decision-maker and the issues relevant to judicial review ( Delios v Canada (Attorney General) , 2015 FCA 117 at paras 41–46 ; Association of Universities and Colleges of Canada v Canadian Copyright Licensing Agency (Access Copyright) , 2012 FCA 22 at para 20 ).

Therefore, I only consider those paragraphs and exhibits as non-argumentative orienting statements; I would say, however, that although the words " “[o]nce again, Akme had to resort to legal recourse and sought judicial review of the 2018 Denial” " found at paragraph 13 of Mr.

Plessas’s affidavit may push this exception to its limit, nothing turns on what may likely be, rightly or wrongly, only an expression of frustration on the part of the affiant. [ 23 ] In addition, although Akme seeks in its notice of application that, inter alia , the Court set aside the notices of penalty assessments made against it, the parties confirmed before me that no such notices have been issued against the company. B.

Standard of review [ 24 ] As to the Decision itself, the parties agree that the standard of review applicable to the merits of the Decision is that of reasonableness; the determinative issue is whether the Officer provided reasons that are responsive to the central issues raised by Akme in its submissions and that are transparent, intelligible and justified ( Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 [ Vavilov ] at paras 15 , 81, 94, 127 and 128). C. The reasonableness of the Decision [ 25 ] I have set out the relevant statutory and regulatory provisions in the Annex to my decision.

I should also mention that Akme raises a number of issues, any one of which the company argues renders the Decision unreasonable.

However, given my decision regarding the paucity of the Officer’s engagement with, and the Officer’s lack of responsiveness to, the central issues raised by the company in its submissions, I do not see it necessary to deal with those other issues. [ 26 ] The thrust of the Minister’s argument relates to his broad powers under the Act to require access to and to examine an importer’s records, and the obligation on the part of the importer to retain records for that purpose; the powers are broad because, argues the Minister, the regime established by the Act , the Customs Tariff and the trade incentive programs they provide for is based on a voluntary, self-reporting customs system, and the effectiveness of such a system depends on the importer’s legal obligation to maintain adequate books and records and on the Minister’s power to verify compliance with legislation through inspection, audit or examination of these

records (Martineau v Minister of Revenue et al, 2004 SCC 81 , [2004] 3 SCR 737 at paras 25 and 26).

The Minister comparesand contrasts sections 230, 231.1 and 231.2 of the Income Tax Act, RSC 1985, c 1 (5th Supp) [ITA], with sections 40, 42 and 43 of theAct, and argues that similar obligations exist with respect to taxpayers maintaining records—in the context of tax audits, argues theMinister, the Supreme Court of Canada has found that the Minister of National Revenue has broad powers for the administration andenforcement of the ITA, and must be capable of exercising those broad powers to inspect any records by auditing and examining thoserecords that may be relevant to the assessment and collection of taxes, regardless of having any reasonable grounds to believe that therehas been a breach of the ITA (R v McKinlay Transport Ltd, (SCC), [1990] 1 SCR 627 at 648–650; R v Jarvis, 2002SCC 73 at paras 47–53). [27] In administering the DDP, argues the Minister, the CBSA relies on importers’ financial records to ensure compliance withsubsection 89(1) of the Customs Tariff, and the maintenance of books and records would not assist in monitoring compliance with theAct if the Minister was not able to consult those books and records; in fact, adds the Minister, an importer who seeks to take advantageof a trade incentive program under the Act loses the right to exclude an inquiry by the Minister for the purpose of verifying compliancewith the program (Canada (Minister of National Revenue) v Redeemer Foundation, 2006 FCA 325 at paras 31 and 39 (aff’d in RedeemerFoundation v Canada (National Revenue), 2008 SCC 46)).

Accordingly, Akme necessarily had to provide the books and records thatwould allow the CBSA to trace each import transaction through any processing, transfer or use of Goods of the Same Class, andultimately to the exportation of the same quantity of goods as the quantity of goods that was originally imported.

Such records had to bepresented in a manner that would allow the CBSA to perform a detailed audit and determine the amount of duties to be refunded(Imported Goods Records Regulations, SOR/86-1011, s 4 [Regulations]). [28] The Minister argues that the CBSA can request any document that it, and not Akme, believes is necessary in order to assess adrawback claim, as long as such a request relates to the “administration and enforcement” of the Act; the Minister points to paragraph113(3)(

a) of the Customs Tariff, which provides that, for the purposes of granting a drawback claim pursuant to subsection 113(1), adrawback application "“must be supported by such evidence as the [Minister] may require”" [emphasis added]. According to theMinister, this ties in to subsection 40(1) of the Act, which requires that every person "“who imports goods or causes goods to beimported…shall keep…any records in respect of those goods…and shall, where an officer so requests, make them available to theofficer…”" [emphasis added].

Subsection 40(2) of the Act reads: "“If, in the opinion of the Minister, a person has not kept records inaccordance with subsection (1), the Minister may request that person to comply with that subsection in respect of the records.”" [29] The Minister also points to subsection 2(1) of the Regulations in support of his position that every person who is required bysubsection 40(1) of the Act to keep records of commercial goods must keep all records that relate to a specific list of items enumerated inthat subsection of the Regulations.

In any event, states the Minister, sections 42 and 43 of the Act—which admittedly relate to theMinister’s audit powers—empower the Minister to require any person to provide any record for any purpose related to the administrationor enforcement of the Act.

Consequently, it is for the Officer, and not Akme, to decide what information and documents must beproduced in order for a drawback claim to be accepted, and the failure to produce such documents alone is justification for the rejectionof such claims. [30] Akme concedes that the CBSA enjoys a broad power to request production of documents for the further administration of the Act.However, it states that the breadth of the Minister’s statutory power is nonetheless subject to the parameters set out by the SupremeCourt in Vavilov; the argument that Akme is making in its submissions to the Officer and before me is that subsection 40(1) of the Actonly requires an importer to maintain records of imported goods, and not of domestically sourced goods, which make up the SubstituteGoods in this case, that are relevant to the company’s duty drawback applications.

The Minister reads subsection 40(1) of the Act morebroadly, as referring to records for all goods of an importer: not just with respect to imported products, but also with respect todomestically sourced goods. That is of course a debatable issue, one which the Officer seems to have conveniently avoided with therendering of his Decision.

In fact, argues Akme, the Officer never addressed any of the issues raised by Akme in relation to thedocuments requested, to wit, that the request for the “books and records” in relation to the origin of the Substitute Goods was irrelevantto the company’s drawback claims and thus untethered to any statutory purpose; that the Officer was already in possession of some of thedocuments that he was requesting or at least had the information being requested, although in a different format; or that Akme hadalready provided all the documentation required to substantiate the outstanding issue of the Goods of the Same Class requirement. [31] Akme states that subsection 2(1) of the Regulations is of little assistance to the Minister in the present context, as the requirementset forth therein is nonetheless tied to subsection 40(1) of the Act, and thus is limited to records relating to imported goods and does notcover those related to domestically sourced goods.

In addition, Akme argues that sections 42 and 43—provisions which the Ministeraccepts relate to his audit powers—are also of little assistance, as we are not dealing here with a situation where the Minister is auditingAkme and compelling production of documents and records in support thereof. [32] Akme argues that the Officer is under a statutory duty to assess the company’s application for duty drawbacks, and where there hasalready been evidence of substantial documentary disclosure (here, over 3,000 pages of documentation addressing each of the legislativerequirements under the DDP and over 40 pages of explanatory submissions), there has to be a connection between the further andcontinual request for documentation and the purpose of that request.

Akme argues that the Officer had a duty to justify his decision toreject the company’s claims, and in doing so, was required to address the central aspects of Akme’s arguments as to the appropriatenessof his request for the books and records; any discretion to request documents in the context of reviewing an application under the DDPpursuant to paragraph 113(3)(

a) of the Customs Tariff cannot be arbitrarily exercised. [33] According to Akme, it has met all of the legislative requirements so as to benefit from the DDP; however, the CBSA is refusing toengage with its submissions and assess its documents, or to identify the gaps so that they can be rectified, yet relentlessly continues to askfor more documents.

According to Akme, what we are witnessing, in essence, is a petulant CBSA not following its past practice ofidentifying which conditions of the DDP have been met and which remain outstanding and thus giving the claimant an idea of the casethat it needs to meet; refusing to exercise the statutory authority delegated to it by the Act; and abdicating the role assigned to it byParliament by refusing to properly assess the company’s submissions and to analyze the documents provided by Akme in support of itsdrawback claims.

In short, from the company’s perspective, the CBSA has failed to grapple with the information and documents alreadyprovided by Akme in support of its drawback claims, or to engage in the central aspects of Akme’s response to the CBSA’s request forfurther documentation; rather, it simply continues to stick its head in the sand and plough forward with a request for more and more

documents. From the company’s perspective, the Officer appears to have been searching for spurious grounds to avoid having to review the company’s substantial submissions, with the single-minded view of disqualifying Akme’s drawback claims; the CBSA’s continual requests for documents are simply not based on a rational chain of analysis ( Vavilov at paras 85 and 103 ), inter alia , because such requests relate to an issue—the Origin issue—which is not germane to Akme’s drawback claims.

We must keep in mind that in its March 2021 submissions, Akme argues that the origin of the substitute chicken is irrelevant and that the request for documents to verify the origin of the substitute chicken is thus unreasonable, and that issue—which is central to Akme’s position—was never addressed by the Officer.

As the Decision fails to address, and engage in any way with, the key issues that the company raised in its response to the CBSA’s request for additional documentation, it is neither transparent, nor intelligible, nor justified, according to Akme. [ 34 ] The company also argues that nothing in the text of subsections 89(1) and 113(3) of the Customs Tariff or subsection 40(1) of the Act grants the CBSA discretion to refuse claims based solely on a failure to provide records of domestically sourced goods upon request.

In the end, Akme argues that it no longer knows what case it has to meet; from the company’s perspective, it is on an endless merry-go- round with the CBSA in seeking reimbursement of about $4 million of duties that it has already paid and that it has a right to receive under the prevailing statutory provision, yet the CBSA keeps moving the goalposts on them by continually seeking more and more documents without reviewing what has already been submitted by the company. [ 35 ] From the Minister’s perspective, the issues raised by Akme were somehow addressed in the March 2021 request when the Officer stated that " “[a] review of the documentation and explanation provided with the re-submission…we have notice [ sic ] that no new documents were presented….

Without verifying the traceability of the goods, the CBSA is unable to certify whether the claims submitted meet” " the DDP requirements.

In any event, argues the Minister, he has the right to seek substantiation or corroboration of the information already provided by Akme, and while not necessarily disputing the information submitted by Akme, the Minister argues that he has the authority to corroborate the information submitted by a claimant via the books and records of the company, in particular the accounting records, especially where, as is the case here, discrepancies have been raised within the documents that were submitted.

Here, argues the Minister, the CBSA required the additional documents because the documents that Akme had previously submitted did not allow the CBSA to make such a determination; the Minister cites Gugliotti v Canada (Citizenship and Immigration) , 2017 FC 71 [ Gugliotti ] at paragraphs 36 to 37 for the proposition that a party can expect the reconsideration of its application to be denied if it fails to provide information requested by a decision-maker to assess the reliability of previously filed evidence. [ 36 ] First of all, I do not read the March 2021 request as the Minister is suggesting.

There is no explanation, in response to Akme’s submissions, as to why the Origin issue is relevant when Akme has not requested duty drawbacks in relation to chicken purchased in Canada. Also, whether or not Akme was correct in its argument regarding the Origin issue, it seems to me that the company was entitled to a response on the issue from the CBSA as it was directly tied to the Officer’s request for the books and records of the company, the non-delivery of which was the sole reason for the rejection of the company’s applications and the issuance of the Decision.

The reasoning behind the simple request for documents without further substantiation, notwithstanding the submissions of Akme, cannot be found to be internally coherent. The Officer’s reasoning is simply that the CBSA requested documents, that Akme did not provide them, and that thus, the dismissal of the claim was justified. I find this approach untenable.

As Vavilov makes clear, " “[r]easons that ‘simply repeat statutory language, summarize arguments made, and then state a peremptory conclusion’ will rarely assist a reviewing court in understanding the rationale underlying a decision and ‘are no substitute for statements of fact, analysis, inference and judgment’” " ( Vavilov at para 102 ; see also Osun v Canada (Citizenship and Immigration) , 2020 FC 295 at para 26 ); here, we do not even have a

summary of the arguments made by Akme.

Further, while decision-makers are not required to respond to every argument raised, the failure to meaningfully grapple with and provide reasons that are responsive to the central issues raised by the parties may call into question whether the decision-maker was alert and sensitive to the matter before it ( Vavilov at paras 127–128 ). [ 37 ] Akme’s position is that we are not in a situation where the company is under audit and where the CBSA is seeking to compel the disclosure of records for the purpose of determining whether the company has paid appropriate customs duties (as would be the case in a tax audit under the ITA ); thus, sections 42 and 43 of the Act do not apply.

Rather, having already paid nearly $4 million in customs duties, Akme is seeking to benefit from a statutory incentive program and is applying for the refund of those duties; either the company has met the conditions of the program or it has not, with the burden being upon Akme to establish that it has ( 9058-3956 Quebec Inc et al v Canada (Public Safety and Emergency Preparedness) , 2006 FCA 363 [ 9058-3956 Quebec Inc ] and Sebag et al v Canada (Minister of Public Safety and Emergency Preparedness) , 2011 FC 310 [ Sebag ]). [ 38 ] From my perspective, the Minister is hardly at the mercy of the voluntary, self-reporting system—as would be the case with an audit under the ITA—and now trying to see if, say, deductions were properly claimed.

It is for the Minister to assess, with the information that he requests, whether the application for a refund of the duties is warranted. In any event, from my perspective, whether sections 42 and 43 of the Act apply in this context is less important. I read paragraph 113(3)(

a) of the Customs Tariff as being wide enough to cover the documents and information which the Officer reasonably believes, in his discretion, to require in the assessment of Akme’s drawback claims. However, Akme is not challenging the Officer’s authority to request such supporting documentation as may be required pursuant to paragraph 113(3)(

a) of the Customs Tariff , but rather the reasonableness of this request in view of its submissions, in particular as regards the books and records for the purposes of assessing the Origin issue, and the fact that Akme’s failure to submit these documents led to the rejection of its drawback claims. [ 39 ] In any event, I must agree with Akme: how can the Officer’s request for the documents be reasonable when he has not engaged with the submissions that purportedly establish that some of the documents have already been produced, that the necessary information is in the record but just not in the format requested by the Officer, or that the request itself in relation to the “books and records” is unsupportable at law?

There is no engagement with the issue as to whether or not Akme’s books and records were relevant in order to satisfy the Goods of the Same Class requirement (mentioned in the May 2020 decision and the March 2021 request) or to address the Origin issue (mentioned in the March 2021 request). The Minister’s broad powers of inspection and his power to compel production are not a hall pass for the CBSA to avoid having to comply with the principles set out by the Supreme Court in Vavilov when it comes time to render a final decision on whether Akme has met the conditions of the DDP.

It seems to me that where the CBSA is requiring evidence in support of an importer’s applications for duty drawback, such a request must be in line with the nature of the claim itself and be reasonably linked to compliance with the statutory requirements of the program for which the applications were made; otherwise, as Akme put it, the Officer may as well have been asking for documents showing on what day the chickens were hatched.

[ 40 ] This is particularly so where a negative decision means that the claimant is now out of time to seek reconsideration, as is the case for Akme here. As stated by the Supreme Court in Vavilov , the importance of the decision to the individual affected is a key component in the assessment of the reasonableness of the decision ( Vavilov at para 77 ).

To accept the Minister’s argument that it was enough that the Officer’s request for the books and records was not complied with, and that it was not incumbent upon the Officer to fully address Akme’s assertions before rejecting Akme’s drawback claims, would be tantamount to giving the Officer unbridled discretion to ask for whatever documents that he wishes to obtain, regardless of the relevance or probative value of such documents in respect of the conditions of the program, thus rendering mere compliance with the Officer’s request for documentation a condition of the program itself.

As stated earlier, the Decision to reject Akme’s claims is based not on the merits of the company’s application, but rather solely on its failure to provide the books and records requested by the Officer.

It seems to me that if such a request by the Officer for the books and records of Akme was indeed proper under these circumstances, leading to the desultory rejection of Akme’s drawback claims, it would be simply too easy for federal agencies to circumvent their statutory duties under the guise of documentary sufficiency. [ 41 ] This is not a situation, as the Minster argues, of Akme simply resubmitting claims which have already been rejected, without anything further ( Gugliotti at paras 36–37 ); here there is a great deal further, maybe not in terms of new documents, but certainly in terms of establishing the roadmap for the appreciation (at least in Akme’s view) of the documents already submitted so as to fill the gaps identified by the Officer in the first go-around of the submission of the claims.

How can a demand for documents be considered reasonable—even at the lower end of the reasonableness scale—if the Officer did not review the documents through the prism which Akme has provided, including addressing the legal arguments going to the propriety of the demand itself in relation to purportedly outstanding issues? It was certainly open to the Officer to reject the distortions of the prism as being misleading and to not buy in to the conclusions that lay at the end of the road down which Akme wished to take him via the explanations, justifications and “roadmap” provided.

It was also open for the Officer to push back on Akme’s claim with respect to the need for further documents regarding the Origin issue being improper or with respect to the application of paragraph 1 of

Article 303 of the North American Free Trade Agreement (the “lesser of” rule). I also accept that paragraph 113(3)(

a) of the Customs Tariff requires a claimant applying for a drawback to support its application with such evidence as the Minister may require.

But without assessing what has been provided through the lens of the arguments that have been made, I do not see how it can be said that the further request for documentation can be reasonable, regardless of how broad the right to inspection may be. [ 42 ] It seems to me that the power of the Minister to inspect and examine, or to compel the production of, documents from an importer upon demand so as to allow the Minister to exercise his powers of supervision over the regulatory scheme—whether or not the Minister has reasonable grounds for believing that a particular importer has breached the Act—should not be conflated with the obligation of the CBSA to engage with the submissions of the claimant and to reasonably assess whether the importer has met the conditions of a statutory program prior to rejecting the claim.

In addition, even if the above provision did allow the CBSA to request records of Akme’s non- imported goods or did grant the CBSA the discretionary power to refuse drawback claims based on a failure to provide those records— the Minister only goes as far as conceding that a request for documents must be linked to a purpose relating to the administration and enforcement of the Act—such discretionary power would still need to be exercised in accordance with the principles enunciated in Vavilov . [ 43 ] There is no issue of Akme providing new documents; it clearly did not.

What it did was provide a fresh take on the documents submitted as an attempt to clear up any possible confusion as to how the documents allowed the CBSA to find that they were sufficient. It is important that I see that any documentation which led to the Decision was reasonably requested in line with the requirements of the Act following the Officer’s review of Akme’s submissions.

On the basis of Akme’s lengthy September 2020 resubmission and the efforts that Akme subsequently made to focus the Officer’s mind on that submission, the adequacy of certain answers and the responsiveness of others may quite possibly be debatable, but again, it is not enough for counsel to try to justify the Decision after the fact. [ 44 ] The Minister argues that with the March 2021 submissions, Akme was providing the Officer simply with what Akme thought that the Officer needed and not with what the Officer requested, and that in any event, even if secondary information allowed for the determination that Akme’s drawback claims met all the conditions of the DDP, the Minister nonetheless has the authority to ask for the primary records of the company to substantiate or corroborate such information.

Putting aside for the moment whether what Akme had submitted was in fact only secondary information, I am not convinced that the Officer, without having engaged in Akme’s submissions, was in a position to know whether any of the conditions of the DDP needed to be validated or corroborated. In essence, the Officer does not know what he does not know until he engages with Akme’s substantive submissions once the refresh button has been pushed; it seems to me that in order to seek validation of submitted information, one must first understand the nature of the information and the explanations already submitted.

It is quite possible that with the benefit of the prism of the fresh submissions and the direction provided by Akme in the September 2020 resubmission as to where to find the necessary information, the Officer would have been satisfied with Akme’s documentation.

I am not saying that the Officer was obliged to accept Akme’s submissions, but only that it was not reasonable for him not to have engaged with them prior to rejecting the drawback claims for non-production of the books and records. [ 45 ] In addition, I cannot agree with the Minister that there is a distinction to be made between the reasonableness of the Decision and the reasonableness of the request by the Officer for the books and records of Akme. The decision to reject Akme’s claims was based solely on the fact that the books and records were not provided.

Finally, the Minister argues that in the context of a reconsideration decision, as is the case here, I should not be looking to the decisions sought to be reconsidered ( Canadian Airport Workers Union v Garda Security Screening Inc , 2013 FCA 106 at para 3 ; Sofina Foods Inc v Canada (Attorney General) , 2015 FC 47 at para 50 ; Complexe Enviro Progressive Ltée v Canada (Minister of Transport) , 2018 FC 1299 at paras 31–33 ), in particular as Akme has not sought judicial review of those previous decisions.

I agree, and that is why I have limited myself to the Decision and the reasons upon which it was based. [ 46 ] I should also mention that the present case differs from the situations in 9058-3956 Quebec Inc and Sebag . There is no suggestion here that Akme has not provided a document which is specifically identified as a required condition for the DDP. Here, the CBSA is asking for more documents supposedly, as argued by the Minister before me, to corroborate the information already received from Akme and to address a lacuna that it suggests exists in such submissions.

However, it does not seem as though the Officer dealt with any of those submissions; rather, it seems as though it simply rejected the drawback claims for failure by Akme to provide the “books and records” that were requested, a request which Akme directly challenged without receiving a response from the Officer.

[ 47 ] Nor, as I stated earlier, is this case similar to the situation in Gugliotti , cited by the Minister for the proposition that a reasonable request for additional information to weigh or assess the evidence filed should be complied with, on pain of dismissal of the application ( Gugliotti at para 36 ); here, no concerns were expressed by the Officer with the reliability of the documents submitted by Akme, and even if there were any unstated concerns, any request for additional documents must be reasonable—I would think that before one can reasonably request corroborative documents, one must first grapple with the issues raised by the claimant.

Here, the failure to consistently address those issues notwithstanding the continued underscoring of those issues by Akme suggests that the Officer simply did not. D. The discrepancies in Akme’s documentation and the importance of traceability [ 48 ] The Minister argues that the documents initially provided by Akme included discrepancies that were identified to the company but never corrected.

In particular, the March 2021 request makes reference to the need for documents " “in regards to traceability of the goods in order to determine the origin of the chickens purchased in Canada.” " The parties made considerable submissions regarding the concept of traceability.

As stated earlier, traceability is not, in itself, a legislative requirement for the DDP, but rather a concept used by the CBSA to follow products from importation into Canada (assuming foreign origin) to the substitution with similar goods, and then to exportation of the similar goods —in essence, a map of the chain of the goods from sourcing in or importation to Canada, until final exportation from Canada. [ 49 ] To be eligible for a drawback of duties pursuant to paragraph 89(1)(

d) of the Customs Tariff , argues the Minister, on account of Akme using equivalent goods (Goods of the Same Class), there are a number of conditions that must be met before a drawback of duties is permitted; Akme has the onus of demonstrating, for each import transaction, that a number of factors have been met, including, amongst other things, that the goods for which a drawback is claimed were imported with duties paid, that the imported goods were processed in the same plant in Canada in which the Goods of the Same Class were processed, and that the same quantity of Goods of the Same Class as the quantity of goods originally imported was subsequently exported.

Hence, argues the Minister, showing traceability is important in that it allows for the tracking of the goods from importation through any processing, including the tracing of the use of products that properly meet the Goods of the Same Class conditions, and thereafter to the subsequent export of the goods. Once the Minister exercises his discretion in favour of the granting of relief under paragraph 89(1)(d), the claimant is to be (i.e., shall be) granted a refund or drawback of all or a portion of duties if the conditions set out in

section 113 of the Customs Tariff are met. [ 50 ] I accept that the Officer determined, rightly or wrongly, that there existed outstanding issues with respect to Akme’s drawback claims, hence the August 2019 and February 2020 decisions.

But then came the September 2020 resubmission, and then the March 2021 submissions which, in particular, looked to address the Officer’s concern expressed in the March 2021 request, including the need for documents in relation to not only the traceability of the goods " “in order to determine the origin of the chickens purchased in Canada” " , but also the traceability of the goods in order to determine compliance with the remaining conditions of the program.

Rather than addressing the submissions of Akme in relation to the Origin issue and the other issues which Akme thought were still outstanding, the Officer issued the Decision. I can certainly understand Akme when it states that it simply no longer understood the case it had to meet, given its continued attempts to specifically express its position on what it thought were the outstanding issues, in particular the Origin issue.

Putting aside a possible procedural fairness issue which, as I indicated to the parties, was not raised by Akme, the impression, rightly or wrongly, is that the Officer was not interested in addressing the issues as submitted by Akme, but rather was simply determined to find an expeditious way to dismiss the claims, especially since Akme would then be out of time to resubmit them. [ 51 ] I do not doubt that the DDP has requirements as set out by the Minister, but the trouble that I have with his position is that the Officer cannot know whether any of those discrepancies were corrected or explained by Akme because there is nothing to suggest that the Officer engaged with the submissions of the company that were meant specifically to address those discrepancies.

Akme states that the March 2021 submissions, in conjunction with the September 2020 resubmission, are a complete answer to those discrepancies, in particular in relation to the Origin issue, to which the need for traceability seems mostly to relate, yet rather than addressing what Akme submitted, the Decision simply dismissed Akme’s drawback claims because, in essence, no new documents were provided.

The Officer has completely missed the mark, and in my view, the Decision falls well short of the transparency, intelligibility and justification requirements of Vavilov , even taking into consideration the context and the history of the exchanges between the parties in respect of the drawback claims found in the record. [ 52 ] It seems to me that before the Officer is able to reject a claim for what is in essence a sufficiency issue, he must first engage with the submissions of the claimant.

This does not in any way limit the broad powers of forcing disclosure that the Minister has, nor, as stated, does it mean that a claimant can simply continue to submit for reconsideration claims that were previously rejected, without any further material (see Gugliotti at paras 36–37 ). What it does mean is that, even in a case of reconsideration, where a claimant has provided new arguments to substantiate its claim, even where no new documents are submitted, the CBSA must reasonably engage with those arguments prior to rejecting the claim.

In the end, the CBSA may well be fully justified in determining that Akme has not met the conditions of the DDP, but without addressing the issues raised and the attempts made by Akme to fill the gaps, the Decision to dismiss the claims solely on the basis of Akme not providing new documents is unreasonable. E.

Was Akme barred from raising issues that were the subject matter of previous decisions for which no judicial review was sought? [ 53 ] The Minister argues that if Akme was not satisfied with the Minister’s position on, say, the Origin issue, a position purportedly expressed by the Minister in the August 2019 decision, it should have taken that decision to judicial review. I do not accept that argument. Clearly, the CBSA invited Akme to resubmit its previously rejected claims; thus, an administrative option continued to exist.

Such resubmissions would necessarily include a fresh take on what the CBSA found previously to be non-compliant as regards Akme’s claims. The Minister conceded before me that reconsideration is meant as a fresh start, but argues that even under reconsideration, we cannot separate the Decision from the record and that therefore, Akme knew what case it had to meet, and the CBSA was not obligated to simply repeatedly express the same position taken previously in relation to the claims.

[ 54 ] I cannot agree with the Minister. I appreciate that there is no statutory requirement for reconsideration of claims; however, to allow the resubmission of claims for reconsideration, and then to deny them on the grounds that any fresh—and possibly otherwise persuasive —arguments should have been previously made on judicial review, seems to me inconsistent; I can see where a claimant may feel sandbagged.

The whole point of reconsideration is to afford the claimant the chance for a fresh review based upon the case that it makes on resubmission; in fact, the Minister himself concedes in his written submissions that the Officer engaged in “a fresh exercise of discretion” in rendering the Decision ( Bell Canada v Canada (Attorney General) , 2011 FC 1120 at paras 98 and 99 ; Dumbrava v Canada (Minister of Citizenship and Immigration) , [1995] FCJ No 1238 , (1995) 101 FTR 230 at para 15 ).

To now take the position, as the Minister is taking before me, that the CBSA had already set out its position on the Origin issue, the Same Class Requirement issue or the traceability issue, and thus no longer needed to repeat itself notwithstanding the fresh arguments made by Akme, is not persuasive. [ 55 ] I accept that the May 2020 decision may have suggested that resubmission of the drawback claims was conditional upon Akme providing, inter alia , the books and records.

However, it seems to me that in setting hard and fast conditions for resubmission, the Officer may well have been fettering his own discretion as regards any fresh review of the claims. In any event, Akme states that the September 2020 resubmission substantially complied with the Officer’s request for information, indicating that in essence, the information was already in the file, but not necessarily in the format of the books and records as specifically identified by the Officer.

For my part, I cannot determine, from the record before me, whether the documents requested as part of the May 2020 decision or the March 2021 request were relevant to the DDP conditions as they relate to the Origin issue, nor am I able to address whether Akme’s legal submissions regarding the reasonableness of those requests are correct without the Minister’s position on the issues that Akme raised in it March 2021 submissions.

As I mentioned to the parties, it is not for the Court to go over the March 2021 submissions and track through the thousands of pages of supporting documents to determine whether Akme is correct and that the Officer already had the information that he was seeking but did not know it because he did not engage with those submissions, in particular with respect to the legal issue relating to the Origin issue and the propriety of the CBSA requesting the books and records of the company so as to assess the origin of domestically sourced product.

Suffice it to say that that exercise was seemingly not done by the Officer, an exercise I believe was incumbent upon him to do before dismissing the drawback claims for the simple reason that Akme did not provide new documents. [ 56 ] This is not a case, as the Minister argues, of Akme asking the Officer to undertake his entire analysis from scratch when he did not receive the documents that he requested.

Rather, it is a case of the Officer needing to review Akme’s submissions to ascertain whether the purpose of his document request was, in essence, already complied with, or whether it was indeed, as Akme argues, improper as it related to the Origin issue. The Minister argues that Akme does not specifically state that the books and records are already in the file, but simply that the information needed to determine compliance with the conditions of the DDP is already in the record; in other words, the CBSA has the information, but just not in the format of the books and records.

That may be so, but if indeed the record contained all the information allowing the CBSA to find that Akme had complied with all the conditions required for its drawback claims, I cannot accept that the CBSA was able to nonetheless deny the claims simply because the information was not in the format requested even though Akme seemingly has gone to great lengths to provide the CBSA with a roadmap on how to trace that information.

Moreover, as regards the Origin issue, Akme is telling the CBSA that its request for books and records to substantiate this issue is improper; the CBSA does not address the propriety of its request for the “books and records”—a legal issue I would think—but proceeds to simply dismiss the claims for non-production of those documents. Again, I must agree with Akme that there is a complete failure on the part of the CBSA to engage with the proposition put forward by Akme, which thus renders the Decision not reasonable.

Nor has counsel’s attempt to take me through the history of the correspondence allowed me to connect the dots to find justification for the CBSA’s failure to specifically address the Origin issue in its Decision. [ 57 ] I should also mention that this is not a case of a claimant looking to avoid paying customs duties or to find more time to do so. Akme has paid approximately $4 million in import duties out of pocket and now seeks reimbursement through corresponding drawbacks. The consequences to a small, family-run business of a decision of the Minister refusing Akme’s claims are serious.

Vavilov makes it clear that the greater the consequences of a decision, the greater the requirement that the decision-maker grapple with those consequences and ensure that they are justified in light of the facts and law ( Vavilov at paras 133–135 ). [ 58 ] In the end, the Decision is not reasonable not because the Officer did not have the authority to request additional books and records —there is no issue that he did—but because the Decision did not meaningfully account for the central issues and concerns raised by Akme in relation to such a request.

As the Supreme Court again recently reminded us, a decision maker must " “meaningfully account for the central issues raised by the parties” " ( Mason at para 74 ; Vavilov at para 127 ), and that " “[t]he failure of a decision maker to “meaningfully grapple with key issues or central arguments raised by the parties may call into question whether the decision maker was actually alert and sensitive to the matter before it” " ( Vavilov at para 128 ).

As a result, " “where reasons are provided but they fail to provide a transparent and intelligible justification … the decision will be unreasonable” ( " Vavilov at para 136 ). In the present case, it is as if the parties were speaking at cross-purposes: the CBSA was raising issues and requesting documents, and Akme was desperately trying to point the Officer to specific documents already in the file which addressed those concerns. Rather than engaging with those submissions, the Officer simply took the view that because no new documents were submitted, the claim should be dismissed.

From my perspective, that is an untenable position to take. Otherwise, it would be too easy for any federal agency to punt its obligation to review an admittedly voluminous and complex file down the field and assert that a claimant should have complied with a document request so as to avoid addressing issues going to the appropriateness of such a request, despite the company’s insistence that the necessary documents were already in hand.

This position is untenable in particular given the consequences to Akme of a refusal of its claims—including a four-year bar on resubmission for being outside the statutory time frame for DDP claims. IV. Remedy [ 59 ] As regards the appropriate remedy, Akme states that it identified several issues with the Decision, issues that have been plaguing Akme for years in its quest to receive reimbursement of duties that it rightly claims. It suggests that the Court can order the refund of the drawbacks in issue.

However, as I made clear during the hearing, it is generally not for the Court to put itself in the place of the Officer who has been tasked by Parliament to assess and determine whether the legislative conditions for the DDP have been met. [ 60 ] This is a situation where, as stated by the Supreme Court, " “the legislature has entrusted the matter to the administrative decision

maker, and not to the court, to decide” " ( Vavilov at para 140 ). Nor do I think it appropriate in this case for me to remit the matter back to the CBSA, ordering that it pay Akme’s drawback claims with a directed order or that it reach a specific result on redetermination.

Generally, a Court should not substitute its own decision for that made by the administrative decision-maker by compelling the decision- maker to reach a specific conclusion ( Catalyst Pharmaceuticals, Inc v Canada (Attorney General) , 2022 FC 292 at para 194 ), I would think especially where the assessment to be made is highly technical and fact-specific, and ought to be performed by the statutorily delegated decision-maker with the benefit of a full record.

Under the circumstances, I will send the matter back for redetermination, to a wholly new verification team of the CBSA that will benefit from my reasons for judgment and that should no doubt render a decision in line with the principles enunciated herein while properly engaging with the submissions of Akme in relation to the legislated DDP conditions, all within a reasonable time frame given the circumstances. [ 61 ] The parties have agreed that in the event that Akme is successful, the Minister will pay costs in the amount of $4,500; I will so order. JUDGMENT in T-917-21 THIS COURT’S JUDGMENT is that : 1 .

The application for judicial review is allowed. 2 . The decision dated May 11, 2021, is set aside and this matter is remitted for redetermination within a reasonable time frame by a differently constituted verification team of the CBSA in line with the reasons set out in the present decision. 3 . Costs are to be paid to Akme in the amount of $4,500, all inclusive. "Peter G. Pamel" Judge ANNEX Customs Tariff , SC 1997, c 36 " Duty Deferral " " Report des droits " " Relief " " Exonération " " 89

(1) Subject to subsection (2), sections 95, 98.1 and 98.2 and any regulations made under

section 99, if an application for relief is made within the prescribed time, in accordance with subsection (4), by a person of a prescribed class, relief may be granted from the payment of duties that would but for this

section be payable in respect of imported goods that are " " 89

(1) Sous réserve du paragraphe (2), des articles 95, 98.1 et 98.2 et des règlements visés à l’article 99 et sur demande présentée dans le délai réglementaire en conformité avec le paragraphe (4) par une personne appartenant à une catégorie réglementaire, des marchandises importées peuvent, dans les cas suivants, être exonérées, une fois dédouanées, des droits qui, sans le présent article, seraient exigibles : " " (

a) released and subsequently exported in the same condition in which they were imported; " "

a) elles sont ultérieurement exportées dans le même état qu’au moment de leur importation; " " (

b) released, processed in Canada and subsequently exported; " "

b) elles sont transformées au Canada et ultérieurement exportées; " " (

c) released and directly consumed or expended in the processing in Canada of goods that are subsequently exported; " "

c) elles sont directement consommées ou absorbées lors de la transformation au Canada de marchandises ultérieurement exportées; " " (

d) released, if the same quantity of domestic or imported goods of the same class is processed in Canada and subsequently exported; or " "

d) la même quantité de marchandises nationales ou importées de la même catégorie est transformée au Canada et ultérieurement exportée; " " (

e) released, if the same quantity of domestic or imported goods of the same class is directly consumed or expended in the processing in Canada of goods that are subsequently exported. " "

e) la même quantité de marchandises nationales ou importées de la même catégorie est directement consommée ou absorbée lors de la transformation au Canada de marchandises ultérieurement exportées. " " Exception " " Exception "

"

(2) Relief of the duties or taxes levied or imposed under sections 21.1 to 21.3, the Excise Act, 2001 or the Excise Tax Act may not be granted under subsection (1) on tobacco products, vaping products or designated goods. " "

(2) L’exonération ne s’applique pas dans le cas de droits ou taxes perçus ou imposés, en application des articles 21.1 à 21.3, de la Loi de 2001 sur l’accise ou de la

Loi sur la taxe d’accise , sur les produits du tabac, les produits de vapotage et les marchandises désignées. " " Deemed exportation " " Présomption d’exportation " "

(3) For the purposes of subsection (1), goods are deemed to have been exported if they are " "

(3) Pour l’application du paragraphe (1), sont réputées avoir été exportées les marchandises : " " (

a) designated as ships’ stores by regulations made under paragraph 99(

g) and supplied for use on board a conveyance of a class prescribed under that paragraph; " "

a) désignées comme provisions de bord au

titre de l’alinéa 99

g) et fournies en vue de leur usage à bord d’un moyen de transport d’une catégorie réglementaire prévue par cet alinéa; " " (

b) used for the equipment, repair or reconstruction of ships or aircraft of a class prescribed under paragraph 99(d); " "

b) ayant servi pour l’équipement, la réparation ou la reconstruction de navires ou d’aéronefs d’une catégorie réglementaire prévue par l’alinéa 99 d); " " (

c) delivered to a telegraph cable ship of a class prescribed under paragraph 99(d); " "

c) livrées à des navires poseurs de câbles télégraphiques d’une catégorie réglementaire prévue par l’alinéa 99 d); " " (

d) supplied for exportation to a department or agency of, or a corporation owned, controlled or operated by, the Government of Canada or the government of a province, that is designated by the Minister of Public Safety and Emergency Preparedness; " "

d) fournies en vue de leur exportation aux ministères ou organismes fédéraux ou provinciaux, ou aux sociétés d’appartenance, d’exploitation ou de contrôle fédérales ou provinciales, désignés par le ministre de la Sécurité publique et de la Protection civile; " " (

e) placed in a bonded warehouse or duty free shop for exportation, or placed in a bonded warehouse for use in accordance with paragraph (

a) or (c); " "

e) placées en entrepôt de stockage ou en boutique hors taxes en vue de leur exportation ou placées en entrepôt de stockage en vue d’un usage conforme aux alinéas

a) ou c); " " (

f) transferred from a person who has been issued a certificate under

section 90 to another person who has been issued such a certificate; or " "

f) cédées par le titulaire d’un certificat délivré en application de l’article 90 à un autre titulaire d’un tel certificat; " " (

g) used or destined for use in any other prescribed manner. " "

g) utilisées ou destinées à être utilisées de toute autre manière réglementaire. " " Application " " Demandes " "

(4) An application for relief under subsection (1) must be in a form and contain information satisfactory to the Minister of Public Safety and Emergency Preparedness. " "

(4) Les demandes d’exonération sont présentées en la forme et comportent les renseignements que le ministre de la Sécurité publique et de la Protection civile juge indiqués. " " … " " […] " " Additional Relief " " Autres formes d’exonération " " Refund or drawback " " Remboursement ou drawback " " 113

(1) Subject to subsection (2), sections 96, 98.1 and 98.2 and any regulations made under subsection (4), a refund or drawback shall be granted of all or a portion of duties if " " 113

(1) Sous réserve du paragraphe (2), des articles 96, 98.1 et 98.2 et des règlements d’application du paragraphe (4), est accordé un remboursement ou un drawback de tout ou

partie des droits si, à la fois : " " (

a) relief or a refund of all or a portion of the duties could have been, but was not, granted under

section 89 or 101; " "

a) l’exonération ou le remboursement de tout ou

partie des droits aurait pu être accordé en application des articles 89 ou 101, mais ne l’a pas été; " " (

b) all or a portion of the duties was paid; and " "

b) les droits ont été payés en tout ou en partie; " " (

c) an application is made in accordance with subsection (3) and

section 119. " "

c) une demande est présentée en conformité avec le paragraphe (3) et l’article 119. " " No refund " " Aucun remboursement " "

(2) No refund or drawback of the duties imposed on tobacco products or vaping products under the Excise Act, 2001 shall be granted under subsection (1), except if a refund of the whole or the portion of the duties is required to be granted under Division 3. " "

(2) Il n’est accordé aucun remboursement ou drawback des droits imposés sur les produits du tabac ou les produits de vapotage en vertu de la Loi de 2001 sur l’accise , sauf si le remboursement d’une fraction ou de la totalité des droits est prévu par la

section 3. " " Application " " Demandes "

"

(3) For the purposes of subsection (1), an application must " " … " "

(3) Pour l’application du paragraphe (1), les demandes : " " […] " " (

b) be made by a prescribed person or by a person belonging to a prescribed class of persons; " "

b) sont présentées par les personnes visées par règlement ou les personnes d’une catégorie réglementaire; " " (

c) be made in the prescribed form and manner, with the prescribed information, within four years, or within such other time as may be prescribed, after the goods in respect of which it is made are released; and " "

c) sont présentées, en la forme prescrite par le ministre de la Sécurité publique et de la Protection civile et comportent les renseignements prescrits par lui, dans les quatre ans — ou, le cas échéant, dans le délai réglementaire — suivant le dédouanement des marchandises; " " (

d) if the goods have not been exported or deemed exported for the purposes of relief under

section 89, disclose the number of the certificate issued under

section 90. " "

d) portent, pour l’application de l’article 89 dans les cas où les marchandises n’ont pas été exportées ou ne sont pas réputées exportées, le numéro indiqué sur le certificat délivré au

titre de l’article 90. " " Regulations " " Règlements " "

(4) For the purposes of this section, the Governor in Council may, on the recommendation of the Minister of Public Safety and Emergency Preparedness, make regulations prescribing " "

(4) Pour l’application du présent article, le gouverneur en conseil peut, sur recommandation du ministre de la Sécurité publique et de la Protection civile, préciser par règlement : " " (

a) the circumstances in which, and the classes of goods in respect of which, a refund or drawback of duties levied under sections 21.1 to 21.3 or under the Special Import Measures Act , a surtax or temporary duty imposed under Division 4 of

Part 2, a tax levied under the Excise Tax Act or a duty levied under the Excise Act, 2001 may not be granted under subsection (1); " "

a) les catégories de marchandises inadmissibles au remboursement ou au drawback des droits perçus au

titre des articles 21.1 à 21.3 ou de la

Loi sur les mesures spéciales d’importation , des surtaxes ou droits temporaires imposés en application de la

section 4 de la p

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