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CETA: Cheese of All Types TRQ - Serial No. 957

Date: October 1, 2019

This Notice replaces Notice to Importers No. 909 dated October 1, 2018, and sets out the policies and practices pertaining to the administration of the cheese tariff rate quota (TRQ) under the Comprehensive Economic and Trade Agreement (CETA).

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
2. Allocation policy
3. Eligibility criteria
4. Calculation of allocations
5. Transfer, return, reallocation and under-utilization of allocations
6. Related links

1. Definitions

Cheese means a product that is included in Items 141 to 157 on the Import Control List, namely cheese falling under heading No. 04.06 in the list of tariff provisions set out in the Schedule to the Customs Tariff.

Milk means whole, partly skimmed, or skim milk, ultrafiltered whole, skim or partly skimmed milk, and cream, in liquid form, used in the production of cheese

New entrant means:

an eligible applicant who is not an allocation holder under Canada’s cheese TRQ under the World Trade Organization (WTO).
as of 2022, an eligible applicant who is not an allocation holder under Canada’s WTO cheese TRQ or did not receive an allocation of the TRQs established under CETA in the preceding year.

2. Allocation policy

To be eligible to apply, you must be active in the Canadian cheese sector at the time of application, and must remain active during the quota year.
- Note: You must, in addition, have been active in the Canadian cheese sector during the reference period.
Individual applicants and related persons applicants are normally 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.
If you received an allocation in the previous year and have submitted a complete application for an allocation in the new quota year, you may receive an advance of up to 30% of your initial allocation in the previous year, subject to any under-utilization or chronic return penalty that may apply.
At least 30 percent of the TRQ is available to new entrants every year.
- Note: Beginning in 2022, at least 10 percent of the TRQ quantity will be available for new entrants every year.
- Note: A New Entrant is treated as such for a period of three years.
Allocations are calculated on a market-share basis.
You must specify in your application the minimum quantity of quota that you will accept. If your calculated allocation is less than 1,000 kilograms, you are issued an allocation only if the quantity you have specified in your application is equal to or lower than your calculated allocation.
Individual allocations are capped at a maximum 20% of the TRQ.
In the event that the TRQ is not fully allocated, available quantities are offered immediately to eligible applicants in proportion to their allocation, or on demand if quantities still remain after the first offer.

3. Eligibility criteria

You are eligible to apply for an allocation if you are a:

Cheese manufacturer

that manufactures cheese in your own provincially-licensed or federally-registered facility.

Distributor

that buys cheese and resells it to other businesses.
You must exclude the following products from your application:
- products sold to other distributors;
- products sold to related persons; and
- products sold at the retail level to consumers.

Retailer

that is primarily engaged in retailing food, and which buys cheese and sells it directly to final consumers.
- Note: A Retailer does not include food service establishments primarily engaged in preparing meals, snacks and beverages, to customer orders, for immediate consumption on and off the premises, as defined in the North American Industry Classification System (NAICS).

4. Calculation of allocations

Cheese Manufacturers

20% is allocated to large cheese manufacturers that use more than 50,000,000 liters of milk annually for cheese production.
30% is allocated to small and medium-sized cheese manufacturers that use 50,000,000 liters of milk or less annually for cheese production.
Note: For cheese manufacturers, market share is calculated on the basis of the total amount of cheese manufactured by the cheese manufacturer in the reference period.

Distributors and retailers

20% is allocated to large distributors and retailers whose initial calculated allocation in proportion to total eligible distributor and retailer applicants equals or exceeds 20,000 kilograms.
30% is allocated to small and medium-sized distributors and retailers whose initial calculated allocation in proportion to total eligible distributor and retailer applicants is less than 20,000 kilograms.
Note: For distributors, market share is calculated on the basis of the total amount of cheese sold by the distributor in the reference period.
Note: For retailers, market share is calculated on the basis of the total amount of cheese purchased and subsequently sold by the retailer in the reference period.

5. Transfer, return and under-utilization of allocations

If you wish to transfer any portion of your allocation, you must submit a transfer request form.
- Note: If you transfer out any portion of your allocation to another allocation holder, you are not eligible to receive a transfer in for the remainder of the year. Conversely, if you receive a transfer in, you are not eligible to make a transfer out.
You may return any portion of your allocation by the prescribed return date.
If you return 20% or more of your allocation for two consecutive years, your allocation in the following year may be reduced by the amount of quota you returned averaged over those two years.
- Note: This provision does not normally apply to small and medium-sized allocation holders and new entrants.
Returned quantities are normally made available the day after the return date to distributors and retailers, who have not returned any portion of their allocation, in proportion to their initial allocation, or on demand if quantities still remain after the first offer.
If you use less than 95% of your allocation in one year, you may have your allocation adjusted downward by an under-utilization penaltyin the following year.
- Note: Any portion of your allocation that you transfer or return in accordance with the present policy is considered to have been used.

6. Related links

Date Modified:: 2019-10-11

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