Notices to Importers

Items 94 and 95 - Broiler Hatching Eggs and Chicks for Chicken Production - Supplemental imports

Serial No. 795
Date:  October 21, 2011

Table of Contents

1. Coverage
2. Purpose
3. Duration
4. Authority
5. National market shortages
6. Supplemental import permit administration
7. Eligibility Criteria
8. Procedures
9. Sourcing of domestic product and/or unused import allocations
10. Supply shortage
11. Utilization of import allocations
12. Loss of eligibility for supplemental import permits
13. Imports for re-export
14. Permit issuance and validity
15. Permit fees
16. Further information 

• Appendix 1: Related Persons

1. Coverage

1.1 This Notice cancels and replaces Notice to Importers No. 767 of September 21, 2010. It refers to items 94 and 95 of the Import Control List (ICL), namely live broilers for domestic production, being fowls of the species Gallus domesticus, weighing not more than 185 g, that are classified under tariff item No. 0105.11.21 or 0105.11.22 in the List of Tariff Provisions set out in the schedule to the Customs Tariff and hatching eggs, for broilers, of fowls of the species Gallus domesticus, that are classified under tariff item No. 0407.11.11 or 0407.11.12 in the List of Tariff Provisions set out in the schedule to the Customs Tariff

2. Purpose

2.1 This Notice sets out the policies and procedures to be followed when requesting supplemental import permits for broiler hatching eggs and chicks

3. Duration

3.1 This Notice will remain in effect until further notice.

4. Authority

4.1 Each of the products covered by this Notice was added to the Import Control List (ICL) pursuant to paragraphs 5(1)(a), (b), (d) and (e) and sections 5.3 and 6 of the Export and Import Permits Act (EIPA) in order to implement a Canadian commitment under the World Trade Organization (WTO) Agreement on Agriculture.

4.2 Under TRQs, imports are subject to low "within access commitment" rates of duty up to a predetermined limit (i.e., until the import access quantity has been reached); imports over this limit are subject to higher "over access commitment" rates of duty. Under section 6.2 of the EIPA, the Minister may: a) determine an import access quantity allowed entry at the low rate of duty; b) establish a method of allocating the import access quantity; and c) issue an import allocation to any resident of Canada that applies for an allocation, subject to the regulations and any terms and conditions the Minister may specify in the allocation. Also pursuant to section 6.2 of the EIPA, the Minister may consent to the transfer of import allocations. Having established an import access quantity, the Minister shall, under subsection 8.3(1) of the EIPA, issue import permits to allocation holders that apply for permits, up to the limit of that quantity, subject to compliance and application of regulations made under section 12 of the EIPA. These permits shall entitle the goods to which they apply to be subject to the low "within access commitment" rates of duty. Subsection 8.3(3) allows the Minister to issue permits in excess of the access quantity.

4.3 Pursuant to subsection 6 (f) of the Import Allocation Regulations, when deciding whether to issue an import allocation or whether to consent to a transfer, the Minister shall take into account whether the import allocation holder has furnished false or misleading information in connection with any reports required by the Act or the regulations made under the Act or by any condition of an import allocation or import permit during the 12-month period preceding the period in respect of which the import allocation or transfer is to apply.

4.4 Pursuant to subsection 10.(1) of the EIPA, the Minister may amend, suspend, cancel or re-instate any permit or import allocation issued or granted under the Act.

5. National market shortage

5.1 Supplemental import permits may be issued to address the needs of industry during periods of national market shortages. National market shortages exist where the available supply of domestic product and unused import allocations offered through the sourcing system are insufficient to meet demand for a given week, as measured by requests from individual hatcheries that go unfilled at prices deemed reasonable (as outlined in paragraphs 9.3 and 9.7). The sourcing system is designed to correct for inter-hatchery, inter-provincial and inter-regional imbalances of supply and demand; in so doing, the system also serves as a discovery mechanism for determining whether true national market shortages exist.

6. Supplemental import permit administration

6.1 Separate supplemental import permits will be issued for broiler hatching eggs and for chicks.

7. Eligibility Criteria

7.1 For the purpose of this Notice, the terms "hatchery", "applicant" and "supplier" include any related corporations. Corporations are related if they meet the definition set out in Appendix 1.

7.2 An applicant will not be deemed eligible for supplemental import permits unless it and all its related corporations have satisfied the import allocation utilization requirement as specified in paragraph 11.1 of this Notice.

7.3 Supplemental import permits will normally be issued only to federally-registered hatcheries. These supplemental import permits may be issued when genuine market shortages exist (as defined in paragraph 5.1).

7.4 Supplemental import permits will not be issued for quantities greater than 100% of the requesting hatchery's normal weekly throughput as calculated by the Foreign Affairs and International Trade Canada (DFAIT). A hatchery's normal weekly throughput will be calculated from the documents submitted each year by hatcheries requesting import allocations. Applicants requesting more than 50% of their normal weekly throughput may be required to provide additional documentation to substantiate their request.

8. Procedures

a) Sourcing requests:

8.1 All sourcing requests are to be made in writing, by facsimile or by email, to the Canadian Hatching Egg Producers (CHEP) and to DFAIT, specifying total needs for the week required.

8.2 Sourcing requests will only be accepted at the CHEP and DFAIT between the hours of Thursday 2 p.m.. and Friday 2 p.m., Ottawa time.

8.3 The CHEP will send the Sourcing Survey Form in writing, by facsimile or by email, to all Broiler Hatching Eggs & Chicks Quota holder hatcheries before Friday 5:00 p.m., Ottawa time.

b) Offers of domestic product and of portions of unused import allocations:

8.4 Suppliers who offer domestic product and/or unused import allocations through the sourcing system must inform the CHEP, in writing, by facsimile or by email, of the total amount(s) available for the week in question.

8.5 Offers of domestic product or unused import allocations will only be accepted at the CHEP between Monday 9 a.m. and Tuesday 12 p.m. (noon), Ottawa time. All Sourcing Forms submitted to the CHEP that offer unused import allocation will be forwarded to DFAIT 

Note: Once product is offered/requested through the sourcing system, sellers and buyers are committed to offering or buying those amounts; failure to comply will result in a penalty, as outlined in section 12.0 of this Notice

9. Sourcing of domestic product and/or unused import allocations

9.1 The CHEP will respond to the applicant in writing, by facsimile or by email, copied to DFAIT, by Tuesday 5:00 p.m., Ottawa time, providing a list of suppliers with total quantities of available broiler hatching eggs or chicks and/or unused import allocations, as the case may be, to meet the specific needs.

9.2 Domestic product offers will be given preferential treatment. An applicant must contact all potential domestic product suppliers in writing, by facsimile or by email, with copies to the CHEP and DFAIT, by Wednesday 5:00p.m., Ottawa time. Suppliers must complete a contract and respond to the purchaser in writing, by facsimile or by email, with copies to the CHEP and DFAIT, by Thursday 12:00 p.m., Ottawa time. If a buyer commences a sourcing action specifying eggs, the domestic supplier may, conditional upon consent of the buyer, fill all or part of the request with chicks using a conversion factor of 1.27 broiler hatching eggs per chick.

9.3 When supply of broiler hatching eggs is sourced and the "delivered price" (includes all transportation and handling cost for delivery to the buyer's premises) does not exceed the published Ontario Broiler Hatching Egg and Chick Commission (OBHECC) price in effect at the time of the request (on a per saleable chick basis), a purchasing contract must be entered into with confirmation, by facsimile or by email, copied to the CHEP and DFAIT.

9.4 When chicks are supplied, the published OBHECC price in effect at the time of the sourcing request, less 4 cents per chick, will apply.

9.5 The request will not normally be considered further once domestic supply has been sourced.

9.6 In the event that a hatchery's request could not be filled, or could be filled only partially with domestic product, or could be sourced but was refused on the basis it did not meet the OBHECC price in effect at the time of the request, any outstanding requirement may be sourced through unused import allocations.

9.7 The applicant must contact all potential suppliers of unused import allocations by Thursday 5:00 p.m., Ottawa time. If, in response to a request, an unused import allocation is sourced and the "delivered price" (includes all transportation and handling cost for delivery to the buyer's premises) does not exceed the OBHECC price per dozen (OBHECC price per saleable chick x 12 divided by 1.27 = price per dozen) in effect at the time of sourcing, a purchasing contract must be entered into with confirmation, by facsimile or by email, copied to DFAIT, before Friday 5 p.m., Ottawa time, of that week.

9.8 A hatchery which is offering an unused import allocation must offer the unused allocation for a price which does not exceed the price differential between U.S. product (i.e. "delivered price in Canadian dollars") and the OBHECC price in effect at the time of the request. This differential will be determined by DFAIT on a quarterly basis or more frequently as the market conditions merit.

9.9 Delivery of broiler hatching eggs will be made Sunday through Saturday of the week commencing 21 days after the sourcing request has been placed with the CHEP.

9.10 Delivery of chicks will be made Sunday through Saturday of the week commencing 35 days after the sourcing request has been placed with the CHEP.

10. Supply shortage

10.1  A supplemental import permit may be issued to a requesting hatchery if neither domestic product nor unused import allocations could be sourced to meet its needs or the product is offered at a delivered price that exceeds the OBHECC price in effect at the time of the request. However, if an offer of either domestic product or unused import allocations is made and if it meets the OBHECC price in effect at the time of the request, an application may be refused or reduced by an amount equal to the quantity offered through the sourcing system.

11. Utilization of import allocations

11.1 Supplemental import permit requests from applicants will only be considered if they and their related hatcheries have utilized their annual import allocations of both broiler hatching eggs and chicks within a given quarter of the year on a cumulative basis, according to the following schedule:

• By March 31 - 30% of annual import allocation;
• By June 30 - 60% of annual import allocation;
• By Sept. 30 - 80% of annual import allocation;
• After September 30 - 100% of annual import allocation

The applicable utilisation rate is determined by the date of delivery, not the date of the request.

12. Loss of eligibility for supplemental import permits

12.1 Any hatchery applying for a supplemental import permit may not register as having broiler hatching eggs or chicks TRQ to offer during the period 21 days before and 21 days after the date of its application for a supplemental import permit. Any violation of this condition will result in the loss of eligibility for supplemental import permits for the week in question.

12.2 Eggs obtained through supplemental import permits must be set in the hatchery's own facilities. A hatchery which has been issued supplemental import permits may be required to provide proof of sets upon the request of DFAIT. A violation of this condition will result in loss of eligibility for supplemental import permits by the offending hatchery and all related hatcheries for a period of 60 days.

12.3 Any applicant which commenced a sourcing action with the CHEP and the DFAIT and who has:

• a) withdrawn all or any part of his request after the request had been sent to the CHEP and the DFAIT; or

• b) failed to contact all suppliers in writing, by facsimile, copy to the CHEP and the DFAIT; or

• c) failed to enter into a purchasing contract after the request has been sourced by the CHEP and the DFAIT, and the price quoted falls within the applicable price set out in paragraphs 9.3 and 9.4;

will normally be refused a supplemental import permit for a period of 60 calendar days commencing from the date of placing the sourcing request with the CHEP and the DFAIT.

12.4 Any supplier which has informed the CHEP and DFAIT that a certain amount of broiler hatching eggs or chicks are available will be considered to have offered that amount into the sourcing system and is therefore committed to supply product up to the level stated.

12.5 Any supplier which fails to:

• a) supply product up to the level stated; or
• b) respond to an applicant's request for supply; or
• c) to complete a contract;

will be suspended from the supplier's list and will normally be refused a supplemental import permit for a period of 60 calendar days, commencing from the date of his offer to the CHEP and the DFAIT.

13. Imports for re-export

13.1 Supplemental import permits may also be issued for the import of broiler hatching eggs, for re-export as chicks, subject to the applicant providing DFAIT, prior to the issuance of the permit, with a copy of a confirmed export contract, which must state the chicks are for re-export.

13.2 Upon submission of the above documents to DFAIT, individual import permits for each planned shipment can be requested. After each re-export, applicants must submit to DFAIT a copy of the customs export documents within 30 days.

13.3 Failure to comply with program conditions may result in suspension from participation in IREP, cancellation of associated import permits, reduction of a company’s TRQ allocation(s) or prosecution for offences against the Export and Import Permits Act. A company that is suspended from participation in IREP is not eligible to receive IREP import permits.

13.4 Should DFAIT not receive the customs export documentation within the above-mentioned time frame, the company may be suspended from the program and could be refused further supplemental import permits under the IREP. A company may be reinstated under the program if DFAIT determines that the situation has been rectified and that the company is in compliance with program requirements. However, failing to provide customs export documents on multiple occasions, may result in a suspension from participation in the IREP program for the remainder of the year, reduction or cancellation of an authorization issued pursuant to the EIPA or cancellation of associated permits.

Note: For the purpose of this section, the conversion factor of 1.27 broiler hatching eggs equal one chick will apply.

14. Permit issuance and validity

14.1 Individual import permits are required for each shipment.

14.2 Import permits are issued through an on-line automated system either (a) in the offices of certain customs brokers in major centres across Canada, or (b) at DFAIT in Ottawa.

14.3 A list of customs brokers having access to the on-line computer system may be obtained from DFAIT on request.

14.4 In completing supplemental import permit applications, the following codes must be used to describe the product to be imported:

• Broiler Hatching Eggs (Supplemental for shortage):
  0407. 11. 11. 00. 0300 (Dzn)
• Chicks (Supplemental for shortage):
  0105. 11. 21. 00. 0300 (Nbr)
• Broiler Hatching Eggs (Import for re-export):
  0407. 11. 11. 00. 0500 (Dzn)

15. Permit fees

15.1 A fee will be levied for each supplemental import permit issued in accordance with the Changes to Export and Import Permits and Certificates Fees Order (Notice to Importers No. 508 dated May 16, 1995).

16. Further information

16.1 Concerning the sourcing of domestic product or unused import allocation:

Canadian Hatching Egg Producers (CHEP)
21 Florence Street
Ottawa, Ontario
K2P 0W6
Telephone: (613) 232-3023
Facsimile: (613) 232-5241
Email: info@chep-poic.ca

16.2 Concerning supplementary imports:

a) Market Shortages

Mr. Guy Giroux
Trade Controls Policy Division
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

Telephone: 613-995-8108
Facsimile: 613-996-0612
Email: guy.giroux@international.gc.ca

b) Import For Re-Export Program (IREP)

Questions with respect to IREP may be addressed by email to irep@international.gc.ca or by mail at:

Mrs. Ann Marie Broadbent
Trade Controls Policy Division
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

Telephone: 613-996-2385
Facsimile: 613-996-0612
Email: annmarie.broadbent@international.gc.ca

16.3 Enquiries about permit issuance and utilization of import allocations may be addressed to:

Mrs. Adèle Brisson
Telephone: 613-995-8104
Facsimile: 613-996-0612
Email: adele.brisson@international.gc.ca