Notice to Importers

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

Serial No. 876
Date: September 30, 2016

This Notice replaces Notice to Importers No. 873 dated November 13, 2015, and will remain in effect until further notice.

This Notice is provided pursuant to the authority of the Export and Import Permits Act (EIPA) and its corresponding regulations.

In Brief

Imports of broiler hatching eggs and chicks for chicken production (chicks) into Canada are subject to import controls under Canada’s EIPA. Accordingly, an import permit is required for shipments of broiler hatching eggs and chicks to enter Canada. Import permits for shipments of broiler hatching eggs and chicks destined to the Canadian market are issued to allocation holders under Canada’s tariff rate quota (TRQ) for broiler hatching eggs and chicks for chicken production, which is administered by Global Affairs Canada.

The combined annual access level for imports of broiler hatching eggs and chicks shall be 21.1% of estimated domestic production of broiler hatching eggs for the allocation year. The allocation period for the hatching eggs and chicks for chicken production TRQ extends from January 1 to December 31, inclusive.

This Notice to Importers sets out the policies and practices pertaining to the administration of the TRQ, including the allocation, underutilization and transfer policies. This Notice also explains how to apply for import permits.

Table of Contents


1.0 Purpose

1.1 The purpose of this Notice is:

a. to set out the policies and practices pertaining to the administration of Canada’s TRQ for broiler hatching eggs and chicks for chicken production.

b. to invite applications for allocations under the TRQ for the next quota year; and

c. to explain how to apply for permits for imports of broiler hatching eggs and chicks for chicken production.

2. General Information

2.1 Background

2.1.1. 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 EIPA in order to implement a Canadian commitment under the World Trade Organization (WTO) Agreement on Agriculture.

2.1.2. Under Canadian TRQs, in any given year, a predetermined quantity of imports of a good controlled under the EIPA can enter Canada at a lower rate of duty, while imports over this quantity are subject to higher rates of duty. The TRQs therefore have three components: an import access quantity negotiated with Canada’s international trade partners; a within access commitment rate of duty that applies to imports up to the access level; and a higher, over access commitment rate of duty for imports over the access level.

2.1.3. The within and over access rates of duty that apply to imports of broiler hatching eggs and chicks can be found in Canada’s Customs Tariff.

2.1.4. Pursuant to the EIPA and its corresponding 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. Furthermore, the Minister may attach conditions to import allocations and/or to import permits, and may amend, suspend, cancel or re-instate import permits and allocations.

2.1.5. Failure by an applicant to provide any information requested by Global Affairs Canada, or failure to comply with any condition of an allocation or permit issued pursuant to the EIPA may result in the rejection of the application for an allocation under the broiler hatching and chicks for chicken production TRQ, the reduction or cancellation of an allocation issued pursuant to the EIPA, or the cancellation of associated permits.

2.2. Access Quantity

2.2.1. The combined annual access level for imports of broiler hatching eggs and chicks shall be 21.1% of estimated domestic production of broiler hatching eggs for the year. This estimate will be adjusted and finalized during the month of August of the quota year, when final production figures are available. The calculation of domestic production includes exports, but excludes imports.

2.2.2. The combined annual access level is subdivided into two separate and distinct access levels for broiler hatching eggs and for chicks. Separate import allocations will be issued to all eligible applicants. A company which receives an allocation for broiler hatching eggs may convert any portion of this allocation into an egg-equivalent (EE) allocation for chick imports at a conversion rate of 1.27 broiler hatching eggs for one chick. Chick import allocations may not, however, be converted into hatching egg import allocations.

2.2.3. The annual access level for broiler hatching eggs shall be 17.4% of the estimated domestic broiler hatching egg production for the year. The annual access level for EE chicks shall be 3.7% of the estimated domestic broiler hatching egg production for the year.

2.3. Allocation Period

2.3.1. The quota allocation year for the broiler hatching eggs and chicks for chicken production TRQ extends from January 1 to December 31, inclusive.

3. Products Covered

3.1. This Notice pertains to items 94 and 95 of the ICL, namely live broilers for domestic production, being fowls of the species Gallus domesticus, weighing not more than 185 grams, 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.

3.2. This Notice also covers hatching eggs of the species Gallus domesticus (chicken) other than for broilers captured under Item 135 of the ICL. They are classified under tariff item No. 0407.11.91 or 0407.11.92 in the List of Tariff Provisions set out in the schedule to the Customs Tariff. There are no import access quantities for hatching eggs other than for broilers into Canada. Applications for specific import permits for hatching eggs other than for broilers will be issued on request.

3.3. Importers who require a determination as to whether the product they intend to import is eligible under the broiler hatching eggs and chicks for chicken production TRQ are encouraged to obtain an advanced tariff classification ruling from the appropriate regional client service office of the Canada Border Services Agency (CBSA).

4. Allocation Policy

4.1. The broiler hatching egg and chicks for chicken production TRQ is allocated to federally-registered hatcheries on the basis of market share.

4.2. The term market share, as used in this Notice, means an applicant's share of the total number of chicks hatched by all successful applicants during the reference period (i.e. the period of 52 complete, consecutive weeks starting on the first Sunday of October two years before the allocation year) as reported to Global Affairs Canada for the purpose of obtaining an import allocation.

4.3. Federally-registered hatcheries that receive an import allocation will be permitted to import up to 95% of this allocation prior to August 1 of the quota year. Allocation holders will be informed by letter regarding the remaining 5%, with adjustments, if any, after the overall import access quantity for the quota year is finalized in August.

4.4. All import allocations expire at the end of each allocation year and all applicants interested in receiving an import allocation must reapply each year.

4.5. To ensure an orderly transition between quota years, eligible applicants may receive, upon Global Affairs Canada's receipt of a complete application, advances of up to 30% of their final allocation in the previous year for the first quarter of the new quota year. Advances to applicants likely to be subject to an under-utilization penalty (pursuant to section 6.1) will be evaluated on a case-by-case basis.

5. How to apply for an Allocation

5.1. Federally-registered hatcheries applying for an import allocation on the basis of market share must provide information on the total number of chicks hatched for chicken meat production during the reference period by completing and submitting the form provided in Appendix 1.

5.2. Additional supporting information on the total number of chicks hatched for chicken meat production, such as copies of their weekly Report of Chicken Hatchery Operations prepared for Agriculture and Agri-Food Canada and/or Provincial Boards or Commissions, is not required to be submitted at the time of application; however, it must be supplied on demand if requested. Market share, determined on the basis pursuant to paragraph 4.2, is subject to verification by Global Affairs Canada.

5.3. Each chick hatched in Canada may be counted towards the total number of chicks hatched for chicken meat production of only one applicant. In cases where hatching is subcontracted, each chick hatched may be counted by either the hatchery that owns the egg or the hatchery that did the hatching, not both.

5.4. Applicants for an allocation are required to provide a list of related persons. Applicants should consult Appendix 2 for the definition of related persons as it applies for the purpose of this Notice.

5.5. Applicants who wish to apply for an allocation under the broiler hatching egg and chick TRQ are invited to submit their application form no later than the 15th of November immediately preceding the opening of the quota year.

5.6. Section 18 of the EIPA forbids any person to knowingly induce, aid or abet any other person to contravene any of the provisions of the EIPA. Such contraventions by an applicant or its accountant may lead to prosecution for offenses under the EIPA.

5.7. Applications sent by MAIL or COURIER should be addressed to the broiler hatching eggs and chicks quota manager at Global Affairs Canada. The name and mailing address of the broiler hatching eggs and chicks quota manager can be obtained on the Global Affairs Canada website, under Contact Us.

5.8. Applications sent by EMAIL should be sent to HatchingEggs-OeufsIncubation@international.gc.ca. Applicants submitting their application by email should be prepared to present the original version of their application to Global Affairs Canada upon request. Failure to do so may lead to the cancellation of any allocation issued pursuant to the application and/or the cancellation of associated permits.

5.9. For legibility reason, applications sent by facsimile will not be accepted.

5.10. Applications postmarked after the 15th of November immediately preceding the opening of the quota year, or in a format other than that required, will not be considered. Lost applications will not normally be considered without acceptable proof that they were sent before the deadline (e.g., courier receipt).

5.11. The declaration in the application form allows Global Affairs Canada access to any information in the files of Agriculture and Agri-Food Canada or the Canadian Food Inspection Agency (CFIA) pertaining to the applicant in relation to the application for an import allocation or to subsequent applications for, or concerning the use of, import permits. Normally, applicants are informed of any such requests for information.

6. Under-Utilization

6.1. An allocation holder with a utilization rate less than 90% of either their chick or egg allocation in the previous quota year may have its allocation adjusted downward by an under-utilization penalty for the new quota year.Footnote 1

6.2. For allocation holders that under-utilized in the previous quota year, allocations in the new quota year will be reduced by the percentage of the allocation not utilized (in egg equivalents) in the previous quota year.Footnote 2

6.3. The calculation will normally take into account the weight of the egg and chicks (in egg equivalents) import allocation relative to the overall total.

6.4. Allocation holders that under-utilized during the previous quota year will be advised of the applicable under-utilization penalty before the allocations are finalized for the new quota year.

7. Transfer Policy

7.1. The Minister may allow the transfer of allocations between allocation holders. All requests for transfer of allocations must be referred to Global Affairs Canada for consideration.

8. Supplemental Imports

8.1. The Minister may authorize imports of broiler hatching eggs and chicks in excess of the import access quantity. The Notice to Importers Broiler Hatching Eggs and Chicks for Chicken Production - Supplemental Imports, explains the administration of supplemental imports of broiler hatching egg and chick.  The Notice is available on the Global Affairs Canada website at Broiler Hatching Eggs and Chicks for Chicken Production Supplemental imports (Items 94 and 95 on the Import Control List).

9. Import Permits

9.1. Types of Permits

9.1.1. An import permit issued by Global Affairs Canada is required for every shipment of goods covered by this Notice to enter Canada. For a given shipment, importers may either present a shipment-specific import permit or invoke the appropriate General Import Permit (GIP).

9.2. Shipment-Specific Import Permits

9.2.1. Shipment-specific import permits are normally issued on demand to allocation holders up to the amount of their allocation under Canada’s broiler hatching eggs and chicks TRQ. Shipments entering Canada under a shipment-specific import permit can normally do so at the within access rate of duty.

9.2.2. To claim the within access rate of duty for a shipment, the importer must present the shipment-specific import permit to CBSA at the time of final accounting.

9.2.3. Shipment-specific import permits will not normally be issued retroactively for shipments that have already been imported into Canada, including under the authority of a GIP, regardless of the importer’s allocation.

9.2.4. For a shipment-specific import permit to be considered valid, the name on the permit must match exactly the name of the importer on CBSA’s B3 Customs entry and related documents at time of final accounting. Furthermore, the quantity on the permit must be the same as the net quantity on the Customs invoice. It is incumbent on the recipient of the permit to ensure that a permit application is made in the name of the importer of record and includes the correct quantity. Questions about the proper procedures to fill out customs entry documents should be addressed to local CBSA officials.

9.3. General Import Permit

9.3.1. The GIP that applies for broiler hatching eggs and chicks is General Import Permit No. 100 – Eligible Agricultural Goods. There is no limit to the quantities of broiler hatching eggs and chicks that can enter Canada under the GIP; however, such imports will be subject to the higher over access rate of duty.

9.4. How to Apply for a Permit

9.4.1. Information about the permit application process, including information about fees, the monthly billing system, and information required from applicants, is available on the Global Affairs Canada website: Applying for an Import Permit.

9.4.2. Importers that wish to apply for an import permit are required to submit Form EXT1466, "Application for Permit", which can be obtain on the Global Affairs Canada website (a paper copy will be provided upon request): Application for Import/Export Permit (PDF*, 95.2 KB).

9.5. EIPA commodity codes

9.5.1 In completing import permit applications, the following codes should be used to describe the product to be imported:

  • Broiler Hatching Eggs (hatching eggs import allocation): 0407.11.11.00.0000 (Dozen).
  • Chicks (chicks import allocation): 0105.11.21.00.0200 (Number) (Chicks imported under this code will be charged to an applicant's chicks import allocation).
  • Chicks (converted from hatching eggs import allocation): 0105.11.21.00.0000 (number). (Note: Chicks imported under this code will be charged to an applicant's hatching egg import allocation).
  • Broiler Hatching Eggs other than for broilers: 0407.11.91.00.0000

10. Contact Us

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

10.2. For directory assistance, you may call 343-203-6820.

Footnotes

Footnote 1

The utilization rate (%) will be calculated for every allocation holder as follows:

Utilization Rate (%) = (Actual Level of Use (EE) / Total Allocation Granted (EE)) X 100%

Where:
Actual Level of Use (EE) = Permits Used (EE) + Transfers Out (EE)

And:
Total Allocation Granted (EE) = Initial Allocation (EE) + Transfers In (EE)

Return to footnote 1 referrer

Footnote 2

The under-utilization penalty will be calculated as follows:

Underutilization Penalty (EE) = Pre-penalty Allocation (EE) X Underutilization Rate (%)

Where:
“Pre-penalty Allocation (EE)” is the allocation that the allocation holder would have been eligible for in the new quota year, if the allocation holder had not under-utilized in the previous quota year.

And:
Underutilization Rate (%) = 100% - Utilization Rate (%)

Return to first footnote 2 referrer