Infant Formula Export Thresholds – Serial No. 1054

Date: May 1, 2021

This Notice replaces Notice to Exporters No. 994 and sets out the policies and practices pertaining to the administration of Canada’s export thresholds for infant formula under the Canada-United States-Mexico Agreement (CUSMA).

This Notice is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations, and remains in effect until further notice.

1. Definitions

“Dairy year” means August 1 to July 31.

“Distributor” means an establishment that buys infant formula and re-sells it to other businesses.

• For clarity, commission brokers do not meet the distributor definition. For purposes of this Notice, commission brokers procure or sell on behalf of others without taking ownership of or financial responsibility for the infant formula.
• Additionally, retailers do not meet the distributor definition. For purposes of this Notice, a retailer is an establishment that is primarily engaged in retailing food, and which buys infant formula and sells it directly to final consumers.

“Infant formula” means a product that is included in Item 5200 of the Export Control List (ECL), namely products that are classified under subheading 1901.10 containing more than 10% on a dry weight basis of cow milk solids.

“Market share” means an allocation method that apportions an allocation on the basis of an applicant’s level of planned production in proportion to the activity levels of other similar eligible applicants.

“On demand” means export permits are issued on a shipment-by-shipment basis until the specified below-threshold quantity is reached (there is no official application/allocation).

“Processor” means an establishment that carries on the manufacture of infant formula in its own facility and is licenced under the Safe Food for Canadians Act.

2. Allocation policy

• To be eligible, you must have planned production of infant formula in Canada at the time of application.
• Individual applicants and related persons applicants are eligible for only one allocation.
  • Note: All applicants must provide a list of related persons.
  • Note: In the case of separate applications from related persons involving a parent company and one or more subsidiaries, only the application nominated by the parent company is considered.
• You must be able to substantiate that you meet all of the criteria throughout the allocation year.
• In the event that there is some below-threshold quantity (BTQ) unallocated, you may apply for a share of this quantity once you have utilized 80% of your initial allocation and provided that you have not returned any quantities.
• An allocation is valid only for the dairy year for which it is issued.

3. Calculation of allocations

• The BTQ is allocated to processors on a market share basis based on the quantity of infant formula planned for production during the allocation year in proportion to the total of all planned production of all eligible applicants.

4. Transfer, return and under-utilization of allocations

• The transfer of allocations is normally prohibited. Transfers to distributors who act as the exporter of record for the transferred quantity may be considered.
  • If you are an allocation holder, you may submit a written request for a transfer to Global Affairs Canada for consideration.
• You may return any portion of your allocation by April 1.
  • Any portion returned by April 1 will be considered used for the purposes of administering the under-utilization policy.
  • Returned quantities will normally be made available seven days after the return deadline to eligible allocation holders who have used 80% or more of their allocation and not returned any unused quantity of their allocation
• If you use less than 95% of your allocation in one year, you may have your allocation adjusted downward by 100% of the unused quantity in the following year.
  • Any portion of your allocation that you transfer out will be considered as not having been utilized until it is exported and will be factored into the under-utilization penalty for the following year.
  • You will be advised of the applicable penalty before the allocation is finalized for the new dairy year.

5. Applying for an allocation

• Review the information in this Notice, including the policy concerning related persons, to see if you are eligible for an allocation.
• Familiarize yourself with the key dates and export threshold quantities for the export thresholds to ensure that you submit your application on time.
• Follow the instructions provided to complete the application form.
  • Note: If you do not have an EIPA file number, you can obtain one by submitting an Application for an EIPA File Number form (PDF version, 168KB).
  • Although you can submit an application without an EIPA file number, it is highly recommended that you obtain one in advance.
  • EIPA file numbers are also required to apply for shipment-specific permits.
• Submit your completed application.
  • Please submit your application to the export thresholds email address.
  • Note: It is important that you provide complete, accurate and truthful information in your application. This information will be considered to determine your eligibility for an allocation and the amount for which you may qualify.

6. Export permits

• An export permit is required for every shipment of infant formula covered by this Notice.
• Information about the permit application process, including information about fees, the monthly billing system, and information required from applicants, is available on the Global Affairs Canada website: Applying for an Export Permit.
• Exporters that wish to apply for an export permit are required to submit an Application for Export/Import Permit form.

7. Payment of the export charge

• Exporters of infant formula who wish to export product in excess of the threshold and/or their allocation or those who have not received an allocation must pay a charge of $4.25 per kg.
• The charge must be paid in full prior to the issuance on the requested export permit.
• For calculation and payment of the required charge, please fill out this form and send it to the Global Affairs Canada Cashier’s Office at 819-934-0227.

8. Related links

• Frequently asked questions
• Information concerning related persons
• How to apply for an allocation
  • Application form
  • List of EIPA commodity codes for milk products and infant formula exports
• Applying for an export permit
• Dairy export thresholds export charge payment form
• Contact us