Notices to Importers

Broiler Hatching Eggs and Chicks for Chicken Production Supplemental imports (Items 94 and 95 on the Import Control List)

Serial No. 852
Date:  November 1, 2013

Table of Contents

1. Coverage

1.1 This Notice cancels and replaces Notice to Importers No. 795 of October 21, 2011. It refers to items 94 and 95 of the Import Control List (ICL), namely live broilers for domestic production, being fowls of the species Gallus domesticus, weighing not more than 185 g, 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

2. Purpose

2.1 This Notice sets out the policies and procedures to be followed when requesting supplemental import permits for broiler hatching eggs and chicks

3. Duration

3.1 This Notice will remain in effect until further notice.

4. Authority

4.1 Each of the products covered by this Notice was added to the Import Control List (ICL) pursuant to paragraphs 5(1)(a), (b), (d) and (e) and sections 5.3 and 6 of the Export and Import Permits Act (EIPA) in order to implement a Canadian commitment under the World Trade Organization (WTO) Agreement on Agriculture.

4.2 Under TRQs, imports are subject to low "within access commitment" rates of duty up to a predetermined limit (i.e., until the import access quantity has been reached); imports over this limit are subject to higher "over access commitment" rates of duty. Under section 6.2 of the EIPA, the Minister may: a) determine an import access quantity allowed entry at the low rate of duty; b) establish a method of allocating the import access quantity; and c) issue an import allocation to any resident of Canada that applies for an allocation, subject to the regulations and any terms and conditions the Minister may specify in the allocation. Also pursuant to section 6.2 of the EIPA, the Minister may consent to the transfer of import allocations. Having established an import access quantity, the Minister shall, under subsection 8.3(1) of the EIPA, issue import permits to allocation holders that apply for permits, up to the limit of that quantity, subject to compliance and application of regulations made under section 12 of the EIPA. These permits shall entitle the goods to which they apply to be subject to the low "within access commitment" rates of duty. Subsection 8.3(3) allows the Minister to issue permits in excess of the access quantity.

4.3 Pursuant to subsection 6 (f) of the Import Allocation 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.

4.4 Pursuant to subsection 10.(1) of the EIPA, the Minister may amend, suspend, cancel or re-instate any permit or import allocation issued or granted under the Act.

5. National market shortage

5.1 Supplemental import permits may be issued to address the needs of industry during periods of national market shortages. National market shortages exist where the available supply of domestic product and unused import allocations offered through the sourcing system are insufficient to meet demand for a given week, as measured by requests from individual hatcheries that go unfilled at prices deemed reasonable (as outlined in paragraphs 9.3 and 9.7). The sourcing system is designed to correct for inter-hatchery, inter-provincial and inter-regional imbalances of supply and demand; in so doing, the system also serves as a discovery mechanism for determining whether true national market shortages exist.

6. Supplemental import permit administration

6.1 Separate supplemental import permits will be issued for broiler hatching eggs and for chicks.

7. Eligibility Criteria

7.1 For the purpose of this Notice, the terms "hatchery", "applicant" and "supplier" include any related corporations. Corporations are related if they meet the definition set out in Appendix 1.

7.2 An applicant will not be deemed eligible for supplemental import permits unless it and all its related corporations have satisfied the import allocation utilization requirement as specified in paragraph 11.1 of this Notice.

7.3 Supplemental import permits will normally be issued only to federally-registered hatcheries. These supplemental import permits may be issued when genuine market shortages exist (as defined in paragraph 5.1).

7.4 Supplemental import permits will not be issued for quantities greater than 100% of the requesting hatchery's normal weekly throughput as calculated by the Foreign Affairs, Trade and Development Canada (DFATD). A hatchery's normal weekly throughput will be calculated from the documents submitted each year by hatcheries requesting import allocations. Applicants requesting more than 50% of their normal weekly throughput may be required to provide additional documentation to substantiate their request.

8. Procedures

a) Sourcing requests:

8.1 All sourcing requests are to be made in writing, by facsimile or by email, to the Canadian Hatching Egg Producers (CHEP) and to DFATD, specifying total needs for the week required.

8.2 Sourcing requests will only be accepted at the CHEP and DFATD between the hours of Thursday 2 p.m.. and Friday 2 p.m., Ottawa time.

8.3 The CHEP will send the Sourcing Survey Form in writing, by facsimile or by email, to all Broiler Hatching Eggs & Chicks Quota holder hatcheries before Friday 5:00 p.m., Ottawa time.

b) Offers of domestic product and of portions of unused import allocations:

8.4 Suppliers who offer domestic product and/or unused import allocations through the sourcing system must inform the CHEP, in writing, by facsimile or by email, of the total amount(s) available for the week in question.

8.5 Offers of domestic product or unused import allocations will only be accepted at the CHEP between Monday 9 a.m. and Tuesday 12 p.m. (noon), Ottawa time. All Sourcing Forms submitted to the CHEP that offer unused import allocation will be forwarded to DFATD 

Note: Once product is offered/requested through the sourcing system, sellers and buyers are committed to offering or buying those amounts; failure to comply will result in a penalty, as outlined in section 12.0 of this Notice

9. Sourcing of domestic product and/or unused import allocations

9.1 The CHEP will respond to the applicant in writing, by facsimile or by email, copied to DFATD, by Tuesday 5:00 p.m., Ottawa time, providing a list of suppliers with total quantities of available broiler hatching eggs or chicks and/or unused import allocations, as the case may be, to meet the specific needs.

9.2 Domestic product offers will be given preferential treatment. An applicant must contact all potential domestic product suppliers in writing, by facsimile or by email, with copies to the CHEP and DFATD, by Wednesday 5:00p.m., Ottawa time. Suppliers must complete a contract and respond to the purchaser in writing, by facsimile or by email, with copies to the CHEP and DFATD, by Thursday 12:00 p.m., Ottawa time. If a buyer commences a sourcing action specifying eggs, the domestic supplier may, conditional upon consent of the buyer, fill all or part of the request with chicks using a conversion factor of 1.27 broiler hatching eggs per chick.

9.3 When supply of broiler hatching eggs is sourced and the "delivered price" (includes all transportation and handling cost for delivery to the buyer's premises) does not exceed the published Ontario Broiler Hatching Egg and Chick Commission (OBHECC) price in effect at the time of the request (on a per saleable chick basis), a purchasing contract must be entered into with confirmation, by facsimile or by email, copied to the CHEP and DFATD.

9.4 When chicks are supplied, the published OBHECC price in effect at the time of the sourcing request, less 4 cents per chick, will apply.

9.5 The request will not normally be considered further once domestic supply has been sourced.

9.6 In the event that a hatchery's request could not be filled, or could be filled only partially with domestic product, or could be sourced but was refused on the basis it did not meet the OBHECC price in effect at the time of the request, any outstanding requirement may be sourced through unused import allocations.

9.7 The applicant must contact all potential suppliers of unused import allocations by Thursday 5:00 p.m., Ottawa time. If, in response to a request, an unused import allocation is sourced and the "delivered price" (includes all transportation and handling cost for delivery to the buyer's premises) does not exceed the OBHECC price per dozen (OBHECC price per saleable chick x 12 divided by 1.27 = price per dozen) in effect at the time of sourcing, a purchasing contract must be entered into with confirmation, by facsimile or by email, copied to DFATD, before Friday 5 p.m., Ottawa time, of that week.

9.8 A hatchery which is offering an unused import allocation must offer the unused allocation for a price which does not exceed the price differential between U.S. product (i.e. "delivered price in Canadian dollars") and the OBHECC price in effect at the time of the request. This differential will be determined by DFATD on a quarterly basis or more frequently as the market conditions merit.

9.9 Delivery of broiler hatching eggs will be made Sunday through Saturday of the week commencing 21 days after the sourcing request has been placed with the CHEP.

9.10 Delivery of chicks will be made Sunday through Saturday of the week commencing 35 days after the sourcing request has been placed with the CHEP.

10. Supply shortage

10.1  A supplemental import permit may be issued to a requesting hatchery if neither domestic product nor unused import allocations could be sourced to meet its needs or the product is offered at a delivered price that exceeds the OBHECC price in effect at the time of the request. However, if an offer of either domestic product or unused import allocations is made and if it meets the OBHECC price in effect at the time of the request, an application may be refused or reduced by an amount equal to the quantity offered through the sourcing system.

11. Utilization of import allocations

11.1 Supplemental import permit requests from applicants will only be considered if they and their related hatcheries have utilized their annual import allocations of both broiler hatching eggs and chicks within a given quarter of the year on a cumulative basis, according to the following schedule:

  • By March 31 - 30% of annual import allocation;
  • By June 30 - 60% of annual import allocation;
  • By Sept. 30 - 80% of annual import allocation;
  • After September 30 - 100% of annual import allocation

The applicable utilisation rate is determined by the date of delivery, not the date of the request.

12. Loss of eligibility for supplemental import permits

12.1 Any hatchery applying for a supplemental import permit may not register as having broiler hatching eggs or chicks TRQ to offer during the period 21 days before and 21 days after the date of its application for a supplemental import permit. Any violation of this condition will result in the loss of eligibility for supplemental import permits for the week in question.

12.2 Eggs obtained through supplemental import permits must be set in the hatchery's own facilities. A hatchery which has been issued supplemental import permits may be required to provide proof of sets upon the request of DFATD. A violation of this condition will result in loss of eligibility for supplemental import permits by the offending hatchery and all related hatcheries for a period of 60 days.

12.3 Any applicant which commenced a sourcing action with the CHEP and the DFATD and who has:

  • a) withdrawn all or any part of his request after the request had been sent to the CHEP and the DFATD; or

  • b) failed to contact all suppliers in writing, by facsimile, copy to the CHEP and the DFATD; or

  • c) failed to enter into a purchasing contract after the request has been sourced by the CHEP and the DFATD, and the price quoted falls within the applicable price set out in paragraphs 9.3 and 9.4;

will normally be refused a supplemental import permit for a period of 60 calendar days commencing from the date of placing the sourcing request with the CHEP and the DFATD.

12.4 Any supplier which has informed the CHEP and DFATD that a certain amount of broiler hatching eggs or chicks are available will be considered to have offered that amount into the sourcing system and is therefore committed to supply product up to the level stated.

12.5 Any supplier which fails to:

  • a) supply product up to the level stated; or
  • b) respond to an applicant's request for supply; or
  • c) to complete a contract;

will be suspended from the supplier's list and will normally be refused a supplemental import permit for a period of 60 calendar days, commencing from the date of his offer to the CHEP and the DFATD.

13. Authorization to Import Broiler Hatching Eggs under the Import for Re-Export Program (IREP)

13.1. This program is limited to Canadian hatcheries.

13.1.1 Applicants approved for participation in the program for a given year must comply with program terms and conditions, permit conditions, as well as reporting requirements. Normally, failure to comply with program terms and conditions, permit conditions as well as reporting requirements, or failure to provide updated and accurate information, could result in the application of sanctions as set out in Section 13.8. 

13.2. An IREP participant:

  • a. must be the importer of record of those broiler hatching eggs;
  • b. must be the sole hatchery for those broiler hatching eggs; and
  • c. must subsequently re-export chicks as the exporter of record.

13.2.1. As the importer of record, the name of the IREP participant should correspond to the importer name on customs release documentation (e.g. B3, section 1), and the IREP participant owns the imported broiler hatching eggs. As the exporter of record, the name of the IREP participant should correspond to the importer name on foreign customs release documentation (e.g. US Entry Summary, box 26).

13.2.2. Diversion of product imported under the IREP to the Canadian market is prohibited. Specifically, the transfer or sale of broiler hatching eggs imported under the IREP, or of chicks hatched from broiler hatching eggs imported under the IREP, within Canada or to a Canadian resident or company is prohibited.

13.3. The IREP Authorization Year

13.3.1. The IREP authorization year extends from June 1 to May 31 inclusive.

13.4. Application Process

13.4.1. To participate in the IREP, a Canadian hatchery must apply for an authorization for supplemental imports each authorization year. An applicant may submit an application at any point during the authorization year.

13.4.2. IREP participants seeking an authorization for continued participation in the program may be eligible for the streamlined renewal process detailed in Section 13.4.6.

13.4.3. An application is composed of the following documents:

  • Application form
  • Export Product(s) List (Section) 13 form
  • Detailed explanation of the loss factor declared in Export Product(s) List Section 13 (signed)
  • Contract or purchase order documentation from foreign client (for new applications only)

13.4.4. The application form and related documents are included in Appendix 2. They must be submitted electronically to the DFATD IREP mailbox (irep@international.gc.ca). Incomplete applications will not be processed until all information has been received.

13.4.5. To be eligible to continue to participate in the IREP, IREP participants must submit their application to DFATD no later than the 31st of March immediately preceding the start of the authorization year for their continued participation to be approved by June 1st.

13.4.6. Streamlined renewal process:  To be eligible for the streamlined renewal process, applicants must satisfy the following three criteria:

  • The IREP participant was approved for broiler hatching eggs under the current authorization year;
  • The IREP participant has not changed its loss factors (i.e., the data in latest approved Export Product(s) List Section 13 are still valid); and
  • The IREP participant was not suspended for non-compliance with the terms, conditions or reporting requirements of the program during the twelve months preceding the application.

13.4.7. IREP participants who do not meet all three eligibility criteria for the streamlined renewal process must submit complete applications as per section 13.4.3.

13.4.8. As with the regular application process, the streamlined renewal process requires an application form.  Under the streamlined renewal process, however, eligible applicants may select the renewal check-box that appears on the application form.  Other forms and supporting documents listed in section 13.4.3 are not required to be submitted at the time of application under the streamlined renewal process; however, they must be supplied on demand if requested.

13.4.9. Applicants and/or IREP participants will be apprised in writing of the result of their application. The letter of authorization will provide additional information concerning the terms, conditions and reporting requirements of the program.

13.4.10. Each authorization to participate in the IREP is conditional upon receipt of the CEO acceptance letter (see template in Appendix 2). Failure to provide this letter within 30 days of receipt of the letter of authorization will result in the IREP participant being deemed to not have accepted all the terms and conditions found herein and in its letter of authorization, and its participation in the program will be ended.

13.4.11. Should an IREP participant wish to modify any information in its original application, an amendment request must be submitted for approval by DFATD prior to implementation of the change by the IREP participant.

13.5. Permit Conditions

13.5.1. IREP participants will be eligible to receive import permits subject to certain conditions, including:

13.5.2. IREP participants must export all chicks under the IREP within 180 calendar days of the date of entry indicated on the associated supplemental import permit.

13.5.3. IREP permits issued in a given authorization year will be valid only for that authorization year.

13.6. Reporting requirements

13.6.1. Monthly export reports: IREP participants must submit, electronically, monthly export reports for all IREP chick exports in a given month (including a nil report if applicable) to DFATD (irep@international.gc.ca) by the end of the following month. These reports must be prepared in the prescribed format using the template in Appendix 2. Units, headers or structure cannot be modified. All fields in the template must be filled for each export shipment. DFATD may at any time request supporting export documentation for any reported shipment (see section 13.7.1.).

13.6.2. Bi-monthly inventory reports: IREP participants must submit, electronically, bi-monthly inventory reports. These reports must be prepared in one of the prescribed format using the template in Appendix 2. Units, headers or structure cannot be modified. The inventory report must be an account, on the first day of the month (starting August 1 of the authorization year), of broiler hatching eggs imported under the IREP and chicks under the IREP, that have not yet been exported. It must include quantities at the hatchery and, if applicable, quantities stored offsite within Canada.

13.6.3. Only broiler hatching eggs imported under the IREP and chicks under the IREP are eligible to be reported under the IREP. Chicks hatched from broiler hatching eggs imported under the TRQ or obtained from other sources are not eligible to be reported under the IREP, and chicks exported prior to the import of a corresponding quantity of broiler hatching eggs under the IREP are not eligible to be reported as exports under the IREP. An IREP participant who submits erroneous reports may be subject to sanctions (see section 13.8.).

13.6.4. IREP participants must provide a declaration, using the template in Appendix 2, from their CEO, stating that all broiler hatching eggs imported under the IREP during the authorization year have resulted in the export of chicks in accordance with all program terms and conditions, permit conditions, and that reporting requirements were met. This letter should only be submitted once it has been determined that all of these criteria have been fulfilled. This letter may not be submitted prior to May 31 of the relevant authorization year, but must be provided no later than December 31 of the following authorization year.

13.7. Additional information

13.7.1. IREP participants must retain, for a period of seven years, and provide to DFATD on demand, copies of the following documents:

  • a. Purchase documents for the broiler hatching eggs:
    • Purchase orders and commercial invoices
    • Proof of payment (e.g., banking records)
  • b. Import documents:
    Copies of complete release and accounting packages submitted to the CBSA. Packages include:
    • Cargo control documents (e.g., Bill of Lading)
    • CBSA Form B3
    • Commercial invoice
    • Any required permits, licenses, or certificates (e.g., Canadian Food Inspection Agency [CFIA] inspection certificate)
  • c. Export documents:
    • Transportation documents related to the exportation of chicks (e.g., Bill of Lading, freight invoices)
    • Accounting documents related to the sale of chicks (e.g., Letter of intent from foreign customer, Purchase Order, sales contracts, commercial invoices, proof of payment)
    • Any required permits, licenses, or certificates (e.g., CFIA inspection certificate)
    • Copies of the importing country’s Customs documentation, completed and certified by a Customs officer of the country to which the chicks were exported, (e.g. US Entry Summary for exports to the United States)
    • For export destinations other than the United States, a copy of CBSA’s B13A export declaration
  • d. Documents concerning hatching of broiler hatching eggs:
    • Production records to allow tracking of broiler hatching eggs and chicks, including inventory levels, quantities of broiler hatching eggs and quantities of chicks
    • Descriptive literature related to hatching and associated loss factors

13.7.2.  DFATD may request additional information, and may also request that an independent public accountant (or an accountant named by DFATD) certify information provided to it by the IREP participant.

13.7.3. IREP participants may be subject to unannounced onsite verification by DFATD. In accordance with section 10.2 of the EIPA, DFATD inspectors may, at all reasonable times, have access to facilities, warehouses and any other location where IREP products may be hatched or stored. Accordingly, IREP participants are required to cooperate fully in the event of an inspection, audit or examination.

13.8. Sanctions

13.8.1. Failure to comply with any term or condition of the IREP or any of its reporting requirements will normally result in suspension from participation in the IREP, cancellation of import permits, reduction of an IREP participant's TRQ allocation(s) and/or prosecution for offences against the EIPA. An IREP participant that is suspended from participation in the IREP is not eligible to receive IREP import permits.

13.8.2. If an IREP participant fails to comply with any term or condition of the IREP or any of its reporting requirements on multiple occasions, that IREP participant may be suspended from participation in the IREP for the remainder of the authorization year.

13.8.3. Should DFATD's reconciliation of an IREP participant’s imports and exports under the IREP indicate that broiler hatching eggs imported by that IREP participant under the IREP has been in Canada for more than 180 calendar days, the IREP participant will normally be suspended from the program until DFATD determines that the situation has been rectified and that the IREP participant is in compliance with program terms and conditions.

13.8.4. Should there be unresolved discrepancies in the information provided by an IREP participant, that IREP participant may be suspended from the program until DFATD determines that the situation has been rectified and that the IREP participant is in compliance with program terms and conditions.

Note: For the purpose of this section, the conversion factor of 1.27 broiler hatching eggs equal one chick will apply.

14. Permit issuance and validity

14.1 Individual import permits are required for each shipment.

14.2 Import permits are issued through an on-line automated system either (a) in the offices of certain customs brokers in major centres across Canada, or (b) at DFATD in Ottawa.

14.3 A list of customs brokers having access to the on-line computer system may be obtained from DFATD on request.

14.4 In completing supplemental import permit applications, the following codes must be used to describe the product to be imported:

  • Broiler Hatching Eggs (Supplemental for shortage):
    0407. 11. 11. 00. 0300 (Dzn)
  • Chicks (Supplemental for shortage):
    0105. 11. 21. 00. 0300 (Nbr)
  • Broiler Hatching Eggs (Import for re-export):
    0407. 11. 11. 00. 0500 (Dzn)

15. Permit fees

15.1 A fee will be levied for each supplemental import permit issued in accordance with the Changes to Export and Import Permits and Certificates Fees Order (Notice to Importers No. 508 dated May 16, 1995).

16. Further information

16.1 Questions concerning the sourcing of domestic product should be addressed to:

Canadian Hatching Egg Producers (CHEP)
21 Florence Street
Ottawa, Ontario
K2P 0W6
Telephone: (613) 232-3023
Facsimile: (613) 232-5241
Email: info@chep-poic.ca

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

16.3 For directory assistance, you may call 613-944-0773.