Broiler Hatching Eggs and Chicks for Chicken Production – CPTPP Tariff Rate Quota (TRQ) (Items 94, 95 and 135 on the Import Control List)

Serial No. 914

Date: November 26, 2018

This Notice to Importers is provided pursuant to Section 6.2 of the Export and Import Permits Act (EIPA) and will remain in effect until further notice.

In brief

Imports of broiler hatching eggs and chicks for chicken production into Canada are subject to import controls under Canada’s EIPA.  Accordingly, an import permit is required for shipments of hatching eggs and chicks to enter Canada. 

Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, Canada agreed to establish a tariff rate quota (TRQ) of 1,138,093 dozen eggs equivalent or hatching eggs and chicks.

The allocation period for the hatching eggs and chicks CPTPP TRQ extends from January 1 to December 31, inclusive.  Import permits for shipments of hatching eggs and chicks destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for hatching eggs and chicks, which is administered by Global Affairs Canada.

This Notice to Importers sets out the policies and practices pertaining to the administration of the CPTPP TRQ, including the allocation, underutilization, return and transfer policies.  This Notice also explains how to apply for import permits.

Summary of key dates and access quantity for the 2019 allocation year

• TRQ Year: January 1 to December 31
• Access Quantity: 333,333 dozen eggs equivalent
• Start of Application Period: November 26, 2018
• Application Deadline: December 12, 2018
• Reference Period for assessing applicant’s eligibility for an allocation: 52 complete, consecutive weeks starting on the first Sunday of October two years before the allocation year
• Opening of the TRQ for imports: January 1, 2019
• Date for Returning Unutilized Quota: September 1, 2019 (no later than 12:00h, Eastern Time)

1. Purpose

1.1 The purpose of this Notice is to:

a. set out the policies and practices pertaining to the administration of CPTPP TRQ for broiler hatching eggs and chicks for chicken production.

b. invite applications for allocations under the TRQ for the next quota year; and

c. explain how to apply for permits for imports of broiler hatching eggs and chicks for chicken production.

2. Definitions

“Broiler hatching eggs and chicks” means a product that is included under Items 94, 95 and 135 of the Import Control List.

“Market share” means an applicant’s level of broiler egg hatching activity in relation to the total broiler hatching activities of the other eligible applicants within the group of the TRQ.

“Reference period” means the period of time used to measure an applicant’s activity in the Canadian broiler hatching egg sector. For the purpose of this Notice, the reference period the period of 52 complete, consecutive weeks starting on the first Sunday of October two years before the allocation year.

3. General information

3.1.1. In accordance with its commitments under the CPTPP, Canada has established a TRQ for imports of broiler hatching eggs and chicks for chicken production.

3.1.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA can enter Canada at a lower rate of duty, while imports over this quantity are subject to higher rates of duty. The TRQs therefore have three components: an import access quantity negotiated with Canada’s international trade partners; a within access commitment rate of duty that applies to imports up to the access level; and a higher, over access commitment rate of duty for imports over the access level.

3.1.3. The within and over access rates of duty that apply to imports of broiler hatching eggs and chicks for chicken production can be found in Canada’s Customs Tariff.

3.1.4. Pursuant to the EIPA and its corresponding 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. Furthermore, the Minister may attach conditions to import allocations and/or to import permits, and may amend, suspend, cancel or re-instate import permits and allocations.

3.1.5. Failure by an applicant to provide any information requested by Global Affairs Canada under the EIPA or failure to comply with any condition of an authorization or permit issued pursuant to the EIPA may result in the rejection of the application for an allocation under the broiler hatching eggs and chicks for chicken production TRQ, the reduction or cancellation of an authorization issued pursuant to the EIPA, or the cancellation of associated permits.

3.2. Access quantity

3.2.1. The access quantity for the CPTPP broiler hatching eggs and chicks for chicken production TRQ will be phased in over nineteen years.  The phase-in table can found in the text of the CPTPP under section 25 of 2-D, entitled Canada Appendix A Tariff Rate Quotas.

3.2.2. The 2019 access level for the CPTPP broiler hatching eggs and chicks for chicken production TRQ is 333,333 (dozen eggs equivalent).

3.3. Allocation period

3.3.1. The quota allocation year for the broiler hatching eggs and chicks for chicken production TRQ extends from January 1 to December 31, inclusive.

3.3.2. Eligibility for an allocation will be assessed on the basis of each applicant’s broiler hatching activities during the reference period of  52 complete, consecutive weeks starting on the first Sunday of October two years before the allocation year. An applicant must be a resident of Canada and active regularly in the Canadian broiler hatching sector during the reference period and the allocation year.

3.3.3 Being active regularly during the reference period and the allocation year is normally understood to mean monthly activity.

4. Products covered

4.1. This Notice pertains to items 94 and 95 of the ICL, namely live broilers for domestic production, being fowls of the species Gallus domesticus, weighing not more than 185 grams, 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.

4.2. This Notice also covers hatching eggs of the species Gallus domesticus (chicken) other than for broilers captured under Item 135 of the ICL. They are classified under tariff item No. 0407.11.91 or 0407.11.92 in the List of Tariff Provisions set out in the schedule to the Customs Tariff. There are no import access quantities for hatching eggs other than for broilers into Canada. Applications for specific import permits for hatching eggs other than for broilers will be issued on request.

4.3. Importers who require a determination as to whether the product they intend to import is eligible under this TRQ are encouraged to obtain an advanced tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).

5. Allocation policy

5.1. The CPTPP broiler hatching egg and chicks for chicken production TRQ is allocated to federally-registered hatcheries on the basis of market share.

5.2. An eligible broiler hatchery applicants’ market share is calculated on the basis of the number of eggs hatched by the applicant during the reference period in relation to the total hatched calculated within the group of eligible applicants.

5.3. Each chick hatched in Canada may be counted towards the total number of chicks hatched for chicken meat production of only one applicant. In cases where hatching is subcontracted, each chick hatched may be counted by either the hatchery that owns the egg or the hatchery that did the hatching, not both.

5.4. In order to ensure that allocations are issued in economically viable quantities, applicants whose market share calculation does not result in a minimum 25,000 dozen allocation will normally not be issued an allocation.  Applicants are to specify the minimum volume they are willing to accept. Should an applicant’s market share calculation result in a volume lower than the specified volume, no allocation will be issued.

5.5. Applicants for an allocation are required to provide a list of related persons. Applicants should consult Appendix 3 for the definition of related persons as it applies for the purpose of this Notice.

5.6. All import allocations expire at the end of each allocation year and all applicants interested in receiving an import allocation must reapply each year.

6. How to apply for an allocation

6.1. Applicants who wish to apply for an allocation under the CPTPP broiler hatching eggs and chicks TRQ are invited to submit their application form (see Appendix 2) and any other relevant documents, no later than December 12 immediately preceding the opening of the quota year.

6.2. All applicants for an allocation are required to include as part of their application:

• a completed application form;
• a sworn affidavit;

6.3. All appendices to the application should be in the exact format of the models attached to this Notice. Any changes to the wording of the appendices will normally not be permitted. Any change to the appendices should be discussed and submitted in advance to be validated by Global Affairs Canada.

6.4. The information that the applicant provides will be considered when allocating the TRQ. Global Affairs Canada retains the right to request additional information. Applicants may be required to provide evidence of their activities, including supporting information on the total number of chicks hatched for chicken meat production, such as copies of their weekly Report of Chicken Hatchery Operations prepared for Agriculture and Agri-Food Canada and/or Provincial Boards or Commissions.  Accountants may be asked to explain the procedures used in greater detail and may be asked to provide Global Affairs Canada with copies of all working documents. Any costs associated with a request for additional information will be borne by the applicant. Failure to provide information requested may result in the application being deemed incomplete.

6.5. The declaration in the application form allows Global Affairs Canada and its representative access to any information pertaining to the applicant in relation to the application for an import allocation or to subsequent applications for, or concerning the use of, import permits that is in the files of Agriculture and Agri-Food Canada or the Canadian Food Inspection Agency. Normally, applicants are informed of any such requests for information.

6.6. Section 18 of the EIPA forbids any person to knowingly induce, aid or abet any other person to contravene any of the provisions of the EIPA. Such contraventions by an applicant or its accountant may lead to prosecution for offenses under the EIPA.

6.7. Applicants are invited to send their applications by E-MAIL to HatchingEggs-OeufsIncubation.TIC@international.gc.ca Applicants sending their application by e-mail should be prepared to present the original version of their application upon Global Affairs Canada’s request. Failure to do so may lead to the cancellation of any allocation issued pursuant to the application and/or the cancellation of associated permits.

6.8. Applications sent by MAIL or COURIER should be addressed to the broiler hatching eggs and chicks quota manager at Global Affairs Canada. The mailing address of the Trade Controls Policy Division can be obtained on the appropriate controlled product page on Global Affairs Canada’s website, under Contact Us.

6.9. Applications sent by facsimile will not be accepted. Only original applications will be accepted.

6.10. Applications postmarked after the deadline immediately preceding the opening of the quota year, or in a format other than that required, will not be considered. Lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).

7. Under-utilization, return and reallocation policies

7.1. Under-utilization policy

7.1.1. An allocation holder with a utilization rate less than 90% for CPTPP broiler hatching egg and chicks for chicken production TRQ in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year.^{Footnote 1}

7.1.2. For allocation holders that under-utilized in the previous quota year, allocations in the new quota year will be reduced by the percentage of the allocation not utilized (in egg equivalents) in the previous quota year.^{Footnote 2}

7.1.3. Allocation holders that under-utilized during the previous quota year will be advised of the applicable under-utilization penalty before the allocations are finalized for the new quota year.

7.2. Return Policy

7.2.1. Allocation holders of CPTPP broiler hatching eggs and chicks for chicken production TRQ may return any portion of the balance of their allocation no later than September 1 of the quota year. Any portion of an allocation that is returned by this date will be considered as having been used for purposes of administering the under-utilization policy in 7.1.1.

7.3. Reallocation policy

7.3.1. Returned quantities will normally be made available seven days after the return deadline to eligible allocation holders who have not returned any unused quantity of their allocation. The reallocated quantity will be in proportion of the applicant’s allocation, or on demand if quantities still remain after the first offer.

8. Transfer policy

8.1. The Minister may allow the transfer of allocations between allocation holders. All requests for transfer of allocations must be referred to Global Affairs Canada for consideration. Requests must be made by way of the CPTPP Poultry and Eggs – Import Allocation Transfer Request Form.

9. Import permits

9.1. Types of permits

9.1.1. An import permit issued by Global Affairs Canada is required for every shipment of goods covered by this Notice to enter Canada. For a given shipment, importers may either present a shipment-specific import permit or invoke the appropriate General Import Permit (GIP).

9.2. Shipment-specific import permits

9.2.1. Shipment-specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under CPTPP broiler hatching eggs and chicks TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty.

9.2.2. To claim the within access rate of duty for a shipment, the importer must present the shipment-specific import permit to CBSA at the time of final accounting.

9.2.3. For a shipment-specific import permit to be considered valid, the name on the permit must match exactly the name of the importer on CBSA’s B3-3 Canada Customs Coding Form and related documents at time of final accounting. Furthermore, the quantity on the permit must be the same as the net quantity on the Customs invoice. It is incumbent on the recipient of the permit to ensure that a permit application is made in the name of the importer of record and includes the correct quantity. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

9.2.4. Individual allocations may be credited for shipments which are returned to the exporting country because of rejection by the CFIA. Importers wishing to avail themselves of this provision must submit to Global Affairs Canada, within two weeks from the date of the rejection, the inspection certificate and related export documents showing that the shipment has been exported from Canada. These documents must bear the applicable import permit number. No credit will be made after the end of the quota year.

9.3. General import permit

9.3.1. The GIP that applies for broiler hatching eggs and chicks is General Import Permit (GIP) No. 100 – Eligible Agricultural Goods. There is no limit to the quantities of broiler hatching eggs and chicks that can enter Canada under the GIP; however, such imports will be subject to the higher over access rate of duty.

9.3.2. Shipment-specific import permits will not be issued for shipments already imported into Canada under the authority of the GIP, regardless of the importer's allocation.

9.4. How to apply for a permit

9.4.1. 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 Import Permit.

9.5. EIPA commodity codes

9.5.1 In completing import permit applications, the following codes should be used to describe the product to be imported:

• Broiler Hatching Eggs (hatching eggs import allocation): 0407.11.11.00.6300 (Dozen).
• Chicks (converted from hatching eggs import allocation): 0105.11.21.00.6300 (number). (Note: Chicks imported under this code will be charged to an applicant's hatching egg import allocation).
• Broiler Hatching Eggs other than for broilers: 0407.11.91.00.6300

10. Contact us

10.1. Names and direct phone numbers for quota manager(s), permit officer(s), and the Help Desk are available on the Global Affairs Canada website: Contact Us.

10.2. For directory assistance, you may call 343-203-6820.

Appendices

Appendix 1 – Application form

Application form | PDF 162 KB

Appendix 2 – Affidavit for applications for a market share of the broiler hatching eggs and chicks products TRQ

I, [NAME OF PERSON], a resident of the county or municipality of , in the province of , make oath and say as follows :

1. I am employed by [applicant name] as a [job title].
2. The information contained in this affidavit pertains to [applicant name] application form for an import allocation for the CPTPP broiler hatching eggs and chicks tariff rate quota (TRQ) for the next quota year (“the application”).
3. [Applicant name] does and will continue to do business through the next quota year as a hatchery as outlined in Notice to Importers Broiler Hatching Eggs and Chicks – CPTPP TRQ (Items 94, 95 and 135 on the Import Control List).
4. I examined [applicant name] sales invoices covering the reference period of 52 complete, consecutive weeks starting on the first Sunday of October two years before the allocation year having a total of (quantity) [dozens] and a total of [amount] dollars of chicks.
5. I compared the total dollar amount of each of the sales invoices to banking records (or other financial documents indicating that full payment had been received) and found them to be in agreement.
6. I confirm that all related applicants and all related persons as defined in Appendix 3 to the Notice were described in the application.
7. I am listing the name, address and percentage of share ownership of all shareholders owning 5% or more of the total voting shares as described in [applicant name] register of share ownership and confirm that the register of share ownership matches the list in the application.
8. I agree that any information provided by me or my firm to Global Affairs Canada in support of my firm’s application for a share of the broiler hatching eggs and chicks TRQ is subject to review by an independent public accountant (or an accountant named by Global Affairs Canada), if and as required by Global Affairs Canada, and that all costs related to work by the accountant shall be borne by [applicant name].
9. I understand that the information provided by me in this affidavit will be used to assess [applicant name] application for a share of the broiler hatching eggs and chicks TRQ. I realize that section 17 of the Export and Import Permits Act (EIPA) forbids any person from furnishing false or misleading information and forbids knowingly making any misrepresentation in any application pursuant to the EIPA. I am aware that section 18 of the EIPA forbids any person from knowingly inducing, aiding or abetting any other person in contravening any of the provisions of the EIPA.
10. I confirm that all information provided in the application is accurate and complete.

Sworn before me at the City of ________________________________________in the province

of______________________, on this ____________ day of ________[Month]of ______ [Year]

Notary Public, Justice of the Peace or Commissioner of Oaths

______________________________________

Signature and printed or typed name of swearer

Appendix 3 – Information Concerning Related Persons

1. For the purposes of this Notice to Importers, persons are related to each other and are related persons if they are:

• relatives of one another;
• corporation and
  • a person who controls the corporation,
  • any person who is a member of a related group that controls the corporation,
  • any person who is a relative of any person who controls the corporation, or
  • any person who is a relative of any person who is a member of a related group that controls the corporation; or
• two corporations
  • controlled by the same person, related group, or unrelated group,
  • one of which is controlled by one person and that person is a relative of a person who controls the other corporation,
  • one of which is controlled by one person and that person is a member of a related group that controls the other corporation,
  • one of which is controlled by one person and that person is a relative of any member of a related group that controls the other corporation,
  • one of which is controlled by one person and that person is a relative of each member of an unrelated group that controls the other corporation,
  • one of which is controlled by a related group, a member of which is also a member of another related group that controls the other corporation,
  • one of which is controlled by a related group, a member of which is a relative of any member of another related group that controls the other corporation, or
  • one of which is controlled by a related group, each member of which is a relative of at least one member of another related group that controls the other corporation.

2. Notwithstanding section 1, for the purposes of this Notice to Importers, persons shall normally be deemed related to each other and to be related persons if they are not dealing with each other at arm's length in respect of the import, purchase and/or sale of the products covered by this Notice.

3. (1) For the purposes of this Notice to Importers:

• “arm’s length” means the relationship that exists between parties that are self-interested, who are seeking to maximize their respective positions, and who act severally and independently from each other - it is a question of fact whether persons not related to one another within the meaning of section 1 of this appendix were at a particular time dealing with each other at arm's length;
• “common connection” may be evidenced by, for example:
  • a provision in a formal agreement,
  • conduct, or
  • a business or family relationship;
• “economically dependent” means a state when the ongoing operations of a corporation depends upon the majority of its business volume coming from one source;
• “person” means an individual or a corporation;
• “related group” means two or more persons that have a common connection;
• “relative(s)” are persons connected by blood, marriage, common-law partnership, adoption or affinity regardless of age or relationship;
• “unrelated group” means two or more persons that have no common connection.

3. (2) For the purposes of this Notice to Importers:

• “control” means ownership of such a number of shares as carries with it the right to a majority of the votes in the election of the board of directors.
  • In addition to this definition, the following also applies
    • (i) ownership of more than one-third of the shares and less than a majority of the shares of a corporation may be presumed to constitute control of that corporation unless it can be established that the corporation is not controlled in fact by the owner of those shares
    • (ii) a person who has an option or a right under a contract, in equity or otherwise, in any capacity, to shares in a corporation, or to acquire shares in a corporation, or to control the voting rights of shares in a corporation may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person who has this option or right;
    • (iii) where any person, related group, or unrelated group owns a large debt of a corporation which may become payable on demand or a substantial investment in retractable preferred shares that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the owner(s) of that debt or retractable preferred shares
    • (iv) where a corporation has commercial activities, contractual agreements, or arrangements with any person, related group, or unrelated group that could make this corporation economically dependent on this person, related group, or unrelated group, then that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person, related group, or unrelated group that has commercial activities, contractual agreements or arrangements with that corporation
    • (v) where any person, related group, or unrelated group possesses unique expertise or experience that is critical for the ongoing operations of a corporation that person, related group, or unrelated group may be presumed to control that corporation unless it can be established that the corporation is not controlled in fact by the person, related group, or unrelated group that possesses the unique expertise or experience
• “control in fact” means an ability to change or determine the composition of the board of directors or an ability to direct the business and affairs of the corporation.

4. For the purposes of this Notice to Importers:

• (a) where two corporations are related to the same third corporation within the meaning of this Notice to Importers, they are related to each other;
• (b) a corporation can be controlled or controlled in fact by a person, related group, or unrelated group notwithstanding that the corporation is also controlled by another person, related group, or unrelated group;
• (c) a person can be considered to be related to himself, herself, or itself for the purpose of establishing that persons are related to each other and are “related persons”.