1. Canada-United States-Mexico Agreement (CUSMA) entry-into-force and implementation of CUSMA tariff rate quotas (TRQs)
How will the entry-into-force date of July 1, 2020, affect the phase-in of the CUSMA TRQs?
As of July 1, 2020, CUSMA TRQ volumes will be prorated to the number of months that remain in the ‘quota year’ as defined in the specific provisions of each TRQ.
For example, some TRQs are administered based on the calendar year (January 1 – December 31), while others are based on the dairy year (August 1 – July 31).
TRQs administered on a calendar year basis:
The quota volumes will be prorated to volumes equal to six months of the quota volume commitment for quota year one, for the period of July 1, 2020 to December 31, 2020.
The full TRQ volume for quota year two will then be made available as of January 1, 2021 until December 31, 2021.
TRQs administered on a dairy year basis:
The quota volumes will be prorated to volumes equal to one month of the quota volume commitment for year one, lasting for the period from July 1, 2020 to July 31, 2020.
The full TRQ volumes for quota year two will then be made available as of August 1, 2020, to July 31, 2021.
What are the annual access quantities for the CUSMA TRQs?
The CUSMA TRQs will be phased in over 10 to 19 years, depending on the TRQ. However, the majority of the new access will have been phased in by year 6 of the Agreement (i.e., 2026), followed by limited growth until the final phase-in year of the CUSMA TRQs. The CUSMA TRQ quantities will not grow after the final phase-in year.
For information about the annual access quantity for each TRQ, as well as the TRQ application period opening and closing dates and reference periods, see the key dates and access quantities web page.
2. Application process
How can I apply for an allocation under the CUSMA TRQs?
Applications must be provided to Global Affairs Canada (the Department) by the application deadline that is identified in the key dates and access quantities web page.
To be eligible for an allocation, an applicant must be:
Active in the Canadian food or agriculture sector; and
Able to demonstrate activity regularly in the applicable sector during the relevant reference period (normally, this is understood to mean monthly activity).
Applicants who wish to apply for an allocation under the new CUSMA TRQs should review the relevant Notice to Importers, found below, and the application process set out under Applying for an allocation:
The Notices include links to the application form that must be completed and submitted to the Department by the application deadline.
Applicants must include their EIPA number in the application for an allocation.
Note: Given that access to certain Government of Canada facilities has been severely restricted due to COVID-19 measures, all applications for the CUSMA TRQs opening on June 15, 2020, are to be submitted electronically. The email address to which you must submit your application is included in the application form for each respective TRQ.
What is the application period for the CUSMA TRQs?
CUSMA enters into force on July 1, 2020.
The application period for all CUSMA TRQs begins on June 15 and closes on June 22.
Some CUSMA TRQs are administered on the basis of the calendar year (January 1 to December 31), while others use the dairy year (August 1 to July 31).
Due to the different periods of time over which some CUSMA TRQs are administered, the application deadlines for quota year two and future years will not be the same for every CUSMA TRQ.
Do I have to apply twice for year one and year two for the dairy-year TRQs? What about for calendar-year TRQs?
No, for the dairy year TRQs only one application will be required. One application for both quota year one (2019/2020) and quota year two (2020/2021) must be submitted by June 22, 2020.
For the calendar year TRQs, two applications will be required. Applications for quota year one must be submitted by June 22, 2020. Quota year two will be a separate process with an application period that will open ninety days in advance of the beginning of quota year two (i.e., October 1, 2020 for the quota year beginning January 1, 2021).
I do not have an EIPA number. Can I still submit an application?
Yes. If an applicant does not have an EIPA number, the Department will assign one based on the information provided in the application for an allocation.
Please note that it may take longer to process an application without an EIPA number.
If I don’t apply for an allocation in year one, can I still apply for an allocation in subsequent years?
Yes. The CUSMA TRQs are allocated on an annual basis based on an applicant’s activity during the 12-month reference period.
Do I have to submit a new application each year?
Yes. Applicants must submit an application on an annual basis and demonstrate that they were active during the reference period.
3. Allocation process
The Notice to Importers states that an applicant must be active regularly in the Canadian food or agriculture sector during the reference period and the allocation year. What does this mean?
As defined in the General Information page, this means that you are able to demonstrate activity in the relevant Canadian sector on a consistent basis (in most cases it is monthly).
This is why the application form requests applicants to complete a monthly breakdown of their activities in the applicable sector.
Do I have to be able to demonstrate a history of importing these products to apply for an allocation under the applicable CUSMA TRQ?
No. Applicants’ eligibility for an allocation will be assessed against the eligibility criteria for the applicable CUSMA TRQ and their activity in the Canadian sector in the 12-month reference period preceding the allocation year.
How can I determine the pool under which I should apply?
Applicants must determine which of the quota pools most corresponds to the nature of their business. The Department will review the application and determine whether an applicant qualifies for the quota pool to which they have applied.
I believe I qualify for an allocation under more than one group in a CUSMA TRQ. Can I apply for an allocation under both groups?
Applicants are normally eligible to apply under only one group.
Do I have to provide an accountant’s letter or affidavit with my application?
Recognizing the impacts COVID-19 is having on stakeholders’ ability to conduct normal operations, the Department has decided, on an exceptional basis, to waive the requirement to provide an accountant's letter for the upcoming CUSMA TRQs.
The Department has removed the requirement to provide an individual affidavit with a TRQ application.
The Notice to Importers says that only one applicant from a group of related parties will receive an allocation under each CUSMA TRQ. How can I determine if I am related to another company?
The criteria for determining whether individuals or companies applying for quota are related are set out in the Information Concerning Related Persons. Applicants who are uncertain whether they are related should err on the side of caution and list the individuals or companies to whom they may be related and seek an assessment from the Department.
To see if there any restrictions on related persons for the TRQ under which you wish to apply, please review the relevant Notice to Importers.
I am related to an allocation holder under another TRQ program for these products. Can I apply for an allocation under the CUSMA TRQs?
Yes. However, related parties may not normally receive more than one allocation under the same CUSMA TRQ.
I am a distributor. Why can’t I include sales of products to other distributors in my application?
Sales to other distributors are not allowed to be included in a distributor applicant’s total sales in order to ensure that the sale of that same quantity of products is not used by multiple distributors to qualify for an allocation.
For more information on distributor-to-distributor sales, please review the guiding principles for applying for an allocation.
Once I have submitted an application, how will I know if I have qualified for an allocation?
Applicants will be informed in writing whether they have qualified for an allocation and the amount of quota they have been allocated.
Applicants will be informed whether they have received an allocation by June 30, 2020.
Will my allocation be the same each year, or will it change from year to year?
The amount allocated to each individual quota holder will vary from year to year.
For TRQs that are allocated on a market share basis, the amount of quota that an applicant will receive in any given year will depend on the level of that applicant’s activity in the domestic sector in relation to the activity of all the other eligible applicants in his or her pool.
For TRQs that are allocated on an equal share basis, the amount of quota that an applicant will receive in any given year will depend on the number of eligible applicants to the quota available to allocate.
Note the CUSMA TRQ access quantities will also be phased in over 10 to 19 years, depending on the TRQ.
Why are the CUSMA TRQ policies considered ‘interim’?
As part of the Comprehensive Review of the Allocation and Administration of TRQs for Dairy, Poultry and Egg Products, the Department had indicated that it would publish interim allocation policies for the CUSMA TRQs should the Agreement come into force prior to the completion of the Review.
The CUSMA Notices to Importers set out the interim allocation policies for each respective TRQ.
Due to the COVID-19 situation, the Comprehensive Review has been temporarily suspended.
Following the stabilization of the COVID-19 situation, the Department will resume the Review, including stakeholder consultations on long-term CUSMA TRQ policies.
4. Allocation caps and minimum allocations
Is there any cap on the maximum amount of quota that an individual applicant can receive?
No, there is no policy to cap the amount of quota that an applicant can be allocated.
However, the maximum amount of quota that an applicant can be allocated will be limited in practice by the allocation methodology that applies to the CUSMA TRQ.
For CUSMA TRQs that are allocated on a market share basis, the size of the largest allocation will be a function of the market activity of the eligible applicants; the applicant with the largest market activity (whether in terms of sales, production, or distribution) will receive an allocation that is proportionate to the market activity of all eligible applicants in the CUSMA TRQ.
For CUSMA TRQs that are allocated on an equal share basis, the size of the allocation received by all eligible applicants will be equal to the volume of available quota divided by the number of eligible applicants.
Is there a minimum amount of quota that an applicant can receive? Will applicants receive allocations in commercially viable quantities? What happens if the calculation of market share produces an allocation size that is less than the minimum threshold?
Yes, there is a minimum allocation that an applicant may receive; however, the exact quantity varies depending on the TRQ.
20,000 kg is the minimum allocation under the CUSMA TRQs for dairy. Applicants whose market share calculation does not result in an allocation at or above the 20,000 kg minimum threshold will normally not be issued an allocation, unless the applicant identifies the minimum volume they are willing to accept. Should an applicant’s market share calculation result in a volume lower than the identified volume, no allocation will be issued.
25,000 dozen is the minimum allocation under the CUSMA TRQ for Eggs and Egg products. Applicants whose market share calculation does not result in an allocation at or above 25,000 dozen will normally not be issued an allocation, unless the applicant identifies the minimum volume they are willing to accept. Should an applicant’s market share calculation result in a volume lower than the identified volume, no allocation will be issued.
5. Transfer, return, and under-utilization policies
Is it possible to transfer quota? If so, to whom and how?
Yes. The Minister may allow the transfer of allocations between allocation holders.
All quota transfers must be referred to the Department for consideration.
Requests must be made by way of the Transfer Request Form for the applicable specific CUSMA TRQ.
For all CUSMA dairy TRQs, once an allocation holder has transferred all or part of their allocation to another allocation holder, they will not be able to receive a quota transfer for the remainder of the allocation year. Conversely, once an allocation holder has received a transfer, they may not transfer any of their allocation to another allocation holder for the remainder of the quota year.
How can I access quota that has been returned by other allocation holders?
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 first issuance of returned quota will be in proportion to the applicant’s initial allocation; afterwards, quota will be available on demand if any remains after the first issuance.
What happens if I cannot use my entire allocation? Can I return some? How do I do that?
An under-utilization penalty will normally apply to allocation holders that do not utilize 90 or 95% of their allocation in a quota year, depending on the utilization threshold that is indicated in the applicable Notice to Importers.
Allocation holders that do not meet the minimum utilization threshold in the quota year may have their allocations adjusted downward by an under-utilization penalty for the new quota year.
If an allocation holder anticipates that they may not be able to utilize all or a portion of their quota allocation, they may return any portion of their unused allocation by no later than the relevant return date indicated in key dates and access quantities web page. Any portion of an allocation that is returned by the return date will be considered as having been used for the purposes of administering the under-utilization policy.
Allocation holders who wish to return quota may do so by notifying the Department in writing of the volume of allocation they wish to return by no later than the applicable return date. This notification should be sent to the organizational mailbox associated with the specific commodity listed on our Contact us page.
6. Further information
How do I get more information about the allocation process?
If these FAQs, the relevant Notice to Importers, or the General Information page do not address a question, inquiries may also be directed to the organizational mailbox associated with the specific commodity listed on the Application Forms and our Contact Us page.
