CUSMA: Chicken TRQ – Serial No. 988

Date: October 1, 2020

This Notice replaces Notice to Importers No. 1029 dated June 15, 2020, and sets out the policies and practices pertaining to the administration of Canada’s tariff rate quota (TRQ) for chicken under the 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.

Definitions
Allocation policy
Eligibility criteria
Calculation of allocations
Transfer, return and under-utilization of allocations
Information related to import permits of chicken and chicken products
Related Links

1. Definitions

Chicken means a product that is included in Items 96 to 104 on the Import Control List (ICL), namely chicken and chicken products falling under tariff items 01.05, 02.07, 02.09, 02.10, 16.01 and 16.02 in the list of tariff provisions set out in the Schedule to the Customs Tariff.

For the purposes of this Notice, all quantities of chicken are expressed in eviscerated equivalents pursuant to the List of EIPA commodity codes for chicken.

Further processing means the manufacturing of products that are on the ICL. Such products include, but are not limited to, patties, nuggets, fingers, rolls or roasts produced from chicken meat; it also means marinating, smoking or drying, coating or seasoning chicken meat.

Food service operator means a restaurant or food service company that is active in the Canadian food service sector in the chicken industry.

Non-ICL products means products that are not on the ICL and that are domestically manufactured using products that are on the ICL to compete with like imported products entering Canada duty-free or at a low rate of duty.

Processing means the slaughtering of chicken, cutting up of eviscerated chicken, de-boning of eviscerated or cut up chicken, or further processing of chicken meat.

2. Allocation policy

To be eligible, you must be active regularly in the Canadian food or agriculture industry at the time of application, and must remain active regularly throughout the upcoming quota year.
- Except for processors of non-ICL products, you must have been active regularly in the chicken industry throughout the reference period to be eligible to apply.
Except for processors of non-ICL products, individual applicants and related persons applicants are eligible for only one allocation.
- Note: All applicants must provide a list of related persons.
Processors of non-ICL products may also apply for an allocation as a processor or food service operator if you meet the relevant eligibility criteria.
The intent of the non-ICL allocation policy is to assist Canadian manufacturers to compete with like products that can enter Canada duty-free or at a low rate of duty.

3. Eligibility criteria

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

Processor of non-ICL products

that manufactures non-ICL products, in your owned and operated Canadian establishments that are in good standing and have received processing licenses from the Canadian Food Inspection Agency (CFIA), in the reference period; and
sells these products at the wholesale level.
You must exclude the following from your application:

ICL products
products that have not been processed in Canada in CFIA-approved plants owned and operated by you;
products for which you have not obtained a letter of opinion from the Canada Border Services Agency (CBSA);
products for which you are unable to provide the finished product recipe, processing method and composition of the meat;
products exported, or intended to be exported, from Canada;
products for which only packaging was performed;
products sold to related persons;
products sold at the retail level to consumers;
products containing meat from old roosters or spent fowl;
meat-on-meat products, meaning products that contain meat other than chicken and turkey, and less than 7% of non-meat ingredients (excluding spices and seasonings);
brochettes, meaning products composed of chicken and other ingredients on a skewer, pick or rod;
mechanically separated meat;
finely textured meat;
naturally occurring and added chicken skin; and
added fat.

Note: If you use marinated chicken in your non-ICL product, you must use the pre-marinated weight of the chicken in your application.
If you are related to a food service operator, you may be eligible to apply for an allocation provided that:

you provide a written guarantee that the non-ICL products are for retail sale only;
you undertake to pay for an independent auditor, approved by the Department, to evaluate and certify that the products are, and will be, produced and sold for retail sale only; and
you undertake to have such evaluations done, at your own cost, as often as quarterly if so requested by the Department.

Distributor

that bought (i.e., took ownership of and financial responsibility for) at least 220,000 kg and subsequently sold at least 220,000 kg of chicken in the reference period, using warehouses and trucks in carrying out this activity.
You may also qualify as a distributor if you are a retail company that:

has separate divisions that purchase and distribute chicken to non-affiliated companies; or
has central buying operations and sells to corporate or franchise stores (or co-op members), and that arranges delivery and charges the individual store for warehousing and for the chicken product.
Note: Companies that procure or sell chicken and chicken products on behalf of others without taking ownership of or financial responsibility for the products are not eligible to apply for an allocation.

You must exclude the following from your application:

products bought and sold for the export market;
non-ICL products;
products sold to related persons;
products sold at the retail level to consumers;
products containing meat from old roosters or spent fowl;
products bought from or sold to other distributors; and
live chickens.

Food Service Operator

that bought and subsequently sold at least 220,000 kg of chicken in the reference period.
You must exclude the following from your application:

non-ICL products;
products containing meat from old roosters or spent fowl; and
non-chicken purchases.

If you are a food service operator comprised of a parent company and various subsidiaries, the parent company must submit an application, accompanied by individual application forms for each individual affiliate or business brand.

Note: You must exclude any individual affiliate or business brand that did not buy and subsequently sell at least 220,000 kg of chicken in the reference period.

In the case of food service chains, only the application submitted by the system-wide brand owner of the chain is considered for an allocation. Individual entities within that chain (e.g., franchisees) are not eligible to apply for an allocation.

Processor

that bought at least 250,000 kg of chicken and subsequently sold at least 250,000 kg of chicken and chicken products processed or further processed in the reference period in federally or provincially registered Canadian plants owned and operated by you.
You must exclude the following from your application:

products that were not processed in federally or provincially registered Canadian plants owned and operated by you;
products bought and sold for the export market;
non-ICL products;
products that you did not process (e.g., distribution sales);
products sold at the retail level to consumers;
products containing meat from old roosters or spent fowl; and
intra-company transfers and transactions.

If you are a parent company submitting joint applications by affiliated firms, you must exclude the purchases and sales of any company, whether it’s the parent company or an affiliated company, that does not meet the 250,000 kg purchase, production and sales criteria as set out above.

4. Calculation of allocations

Processors of non-ICL products

A maximum of 17,097,442 kg of quota is allocated to processors of non-ICL products on the basis of one kilogram of import quota for each kilogram of chicken inputs used in the production of non-ICL products in the reference period.

If the total amount of chicken requested for the production of non-ICL products exceeds the quantity available to processors of non-ICL products, the allocation is done on a pro-rata basis.
Any dark meat you require for the production of your non-ICL chicken products is supplied by the Chicken Farmers of Canada (CFC) Market Development Program (MDP). To obtain dark meat through the MDP, you should:

include the dark meat requirements in your quota application; and
contact us at Chicken-Poulet@international.gc.ca to obtain a numbered and dated letter for each purchase order.
Note: If you are unable to access your specific dark meat needs through the MDP at prices competitive with U.S. product landed in Canada, you may apply for supplemental imports for these products. (See Notice to Importers Chicken and Chicken Products - Supplemental Imports)

If the amount of quota you are allocated for the production of non-ICL products is insufficient to meet your manufacturing needs, you may apply for supplemental imports through the Import-to-Compete program. Supplemental import requests are authorized only for the specific inputs you require for the manufacturing of your non-ICL products. (See Notice to Importers Chicken and Chicken Products - Supplemental Imports)

Note: As a component of the evaluation of supplemental import requests under the Import-to-Compete program, the Department will review whether you have any remaining allocation under any TRQ for non-ICL chicken products and whether you can reasonably source the requested product from the eligible destinations under the TRQ in question. If you have not submitted an application for one of the available chicken TRQs, you may be asked to submit a written explanation as to why you did not apply for any TRQ allocation.

Traditional processors, distributors and food service operators under the World Trade Organization (WTO)

Traditional processors, distributors and food service operators are allocated a total of 10,523,717 kg at the same percentage they were allocated individually in the previous year, as adjusted since (e.g. for under-utilization).

Non-Traditional Distributors

5,055,710 kg is allocated to distributors on an equal share basis

Non-Traditional Food service operators

2,006,443 kg is allocated to food service operators on a market share basis based on the total amount of chicken purchased by the food service operator:

70% is allocated to food service operators whose quantity (non-eviscerated equivalent) of chicken purchases is equal to at least 50% of their total quantity of meat purchases;
30% is allocated to food service operators whose quantity (non-eviscerated equivalent) of chicken purchases is less than 50% of their total quantity of meat purchases.
the minimum amount allocated to a food service operator is 10,007 kg;

Note: In the case of a parent company with subsidiaries, the parent company’s allocation is the sum total of its eligible subsidiaries’ calculated allocations.

Non-Traditional Processors

are allocated any remaining quota on a market share basis based on the dollar difference between purchases and sales of processed product:

the minimum amount allocated to a processor is 42,094 kg.

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.
You may return any portion of your allocation to the Department in writing by the prescribed return date.

Note: Any remaining quantity will be made available after the return date to eligible allocation holders 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 90% of your allocation in one year, you may have your allocation adjusted downward by an under-utilization penalty in 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. Information related to import permits of chicken and chicken products

For import control purposes, partially deboned products are considered to be boneless, therefore you must use the appropriate EIPA boneless chicken codes when requesting a permit. Examples of such products include:

fresh chicken breasts that have been partially deboned so that only the keel bone or cartilage remains;
boneless chicken breast, with or without skin, with part or all of the wing bone attached (generally referred to as Chicken Supreme).

Processed chicken - Adjustment for non-chicken ingredients:

If you are requesting a permit to import a processed chicken product that is on the ICL (i.e., products beginning with tariff codes 1601 or 1602), you may request that any breading, battering, salt and spices be deducted from the weight of the product. All other inputs, including water used in marination, are considered part of the chicken.
To be eligible to make use of this provision you must:

submit the product recipe and production procedures prior to applying for an import permit;
indicate the product number in the comment field on the import permit application form; and
list both the actual gross weight (in the QUANTITY field) and the actual net weight in the (DOCUMENT QUANTITY field) in the import permit application.

7. Related links

Date modified:: 2022-09-27

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