FCA Upholds Decision to Quash CBSA Decisions in Judicial Review

  • June 05, 2021
  • John G. Bassindale and Stuart G. Clark


One of the most frustrating experiences for commercial importers dealing with the CBSA is having it deviate suddenly from longstanding past administrative practices that importers have come to rely on to facilitate their businesses.  Pleas of “but the last CBSA Officer said” or “but you’ve always let us do it this way before” fall on deaf ears.  However, in rare circumstances, the courts have been willing to hold the CBSA accountable for unexplained deviations from past practices.  Such was the case in the recent Federal Court of Appeal (the “FCA”) decision Canada (Attorney General) v. Honey Fashions Ltd., 2020 FCA 64 (CanLII).  There, the FCA upheld, in part, the decision of the Federal Court with respect to certain remission claims submitted by Honey Fashions Ltd. (“Honey Fashions”) which were denied by the CBSA in a reversal of a longstanding administrative practice which caught Honey Fashions by surprise.


Honey Fashions is a Canadian clothing manufacturer based in Montreal.  For a number of years Honey Fashions claimed benefits under various Canadian Textile and Apparel Remission Orders (“TARO”).  While the exact details of the TARO varied over time, generally, named Canadian textile manufacturers (“Eligible Manufacturers”) were entitled to receive a drawback or refund of customs duties paid on the importation of foreign textiles/apparel, up to a certain maximum. 

TARO was introduced in 1988 to assist Canadian textile and apparel manufacturers competing with low-priced imports.  From its inception, however, there were issues with some Eligible Manufacturers not obtaining the full benefit of TARO because they were not importers, and did not want to become involved in importing.  Discussions occurred between the industry and the Department of Finance on possible work-around for these Eligible Manufacturers. 

Eventually the Department of Finance concluded that an Eligible Manufacturer could benefit from TARO so long as they were listed as “importer of record” on the customs paperwork, and regardless whether they owned the goods at the time of import. 

An Eligible Manufacturer could therefore enter into a “partnering agreement” with a Canadian importer and, provided the customs paperwork declared the Eligible Manufacturer as “importer of record”, the Eligible Manufacturer could claim the TARO benefits.