The Government of Canada is consulting with stakeholders concerning the allocation and administration of tariff rate quotas (TRQs) for dairy (e.g., cheese, milk, butter), eggs and poultry (e.g., chicken, turkey). Canada’s dairy, poultry and egg TRQs are implemented and administered by Global Affairs Canada in accordance with the Export and Import Permits Act and its associated regulations, and ministerial policies set out in Notices to Importers. Stakeholders have until 11:59 p.m. (Pacific Time) on August 31, 2019, to submit their responses, comments and suggestions.
Canada’s supply management regime covers dairy, eggs and poultry and Canada limited the volume of imports by administering a TRQ system. As a result of new import allocations in the Canada-European Union Comprehensive Economic and Trade Agreement (Canada-EU CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canada-United States-Mexico Agreement (“CUSMA” or “USMCA” or “NAFTA 2.0”), Canada is seeking input on how the TRQs should be allocated and administered on a going forward basis. The number of TRQ commitments for supply managed commodities has increased from the 20 TRQs established under the World Trade Organization in 1995 to 42 TRQs under administration today (including the Canada-EU CETA TRQs (2 new TRQs for cheese) and the CPTPP TRQs (20 new TRQs for dairy, poultry and eggs)). When CUSMA (16 new TRQs for dairy, poultry and eggs) is ratified, the number of TRQs for supply managed goods increases to 58 TRQs.
This consultation process is important as a new system for allocating and administering TRQs will be developed. If you wish to benefit from the TRQs, this is the time to speak up.
Who should participate?
The Government of Canada would like to hear from all sectors of Canadian society and from international stakeholders, including:
The stakeholders will include importers ,industry associations large retailers, specialty retailers, restaurants, manufacturers of food products, governments, dairy producers, foreign governments, etc.
How should stakeholders participate?
Stakeholders may complete an online questionnaire and submit that questionnaire electronically.
Stakeholders may also prepare written submissions and send the submissions to TRQConsultation.ConsultationCT@international.gc.ca.
Current Supply Management Regime
Importers of supply managed goods must obtain import allocation in order to be permitted to import dairy, poultry and eggs at the “within access” tariff rate. The “over access” tariff rates can exceed 300%. In addition, the importer must obtain an import permit for each and every shipment of supply managed goods prior to the importation of the goods. If the importer has an import permit for a shipment of “supply managed goods” issued by Global Affairs Canada, the “supply managed goods” may enter Canada under the “within access commitment” tariff code, which has a lower duty rate or is duty free. Only importers who have been allocated import quota or who have entered into an arrangement to use a quota holder’s quota may import “supply managed goods” under an import permit (they are the only ones who will receive an import permit from Global Affairs Canada). Import permits are issued on a shipment-by-shipment basis for a specific product and a specific quantity of that product (e.g., 1000 kgs of chicken wings). If the importer does not have an import permit for “supply managed goods”, the goods enter Canada under the “over access commitment” tariff code and are subject to significant duties (often over 300%).
Importance of Consultations
It is important to participate in the consultation process. If you do not participate, the Government of Canada will not have the input needed to amend TRQ regime in a way that will benefit your business.
One of the most important elements of the consultations is the allocation of TRQ. Prior to the implementation of the Canada-EU CETA, import allocations were not regularly opened to new entrants. The Canada-EU CETA required that new entrants be allocated a portion of the cheese TRQs over a period of years. This was the first time that new entrants could receive an allocation and then be granted import permits. Every year, Global Affairs Canada allocates EU cheese TRQ.
If Canadian companies wish to apply for and receive the new CPTPP TRQs and the new CUSMA TRQs, this is the time to outline a fair process for allocation and administration.
We would be pleased to discuss what should be contained in submissions.
For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at Cyndee @lexsage.com. For more information about Canada’s import restrictions and TRQs, please go to the LexSage website where we have posted many useful articles.