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Skim Milk Powder and Milk Protein Concentrate Export Thresholds – Serial No. 993

Date: June 22, 2020

This Notice to Exporters sets out the policies and practices pertaining to the administration of Canada’s export thresholds for skim milk powder (SMP) and milk protein concentrate (MPC) 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.

In brief

In accordance with its commitments under CUSMA, Canada has established a charge of $0.54 per kg on global exports of SMP and MPC above a set export threshold.

Exports of SMP and MPC below the threshold will not incur a charge.

For the 2019-2020 dairy year, the below-threshold quantity (BTQ) is set at 55,000,000 kg. This quantity decreases to 35,000,000 kg for the 2020-2021 dairy year. For each subsequent dairy year, the BTQ increases by a cumulative 1.2%.

Table of contents

1. Definitions

“Dairy year” means August 1 to July 31.

“Distributor” means an establishment that buys SMP and/or MPC and re-sells it to other businesses.

Market share” means an allocation method that apportions an allocation on the basis of an applicant’s level of activity in the reference period in proportion to the activity levels of other similar eligible applicants.

Milk protein concentrate” means a product that is included in Item 5200 of the Export Control List (ECL), namely products that are classified under subheading 0404.90.

“On demand” means export permits are issued on a shipment-by-shipment basis until the specified below-threshold quantity is reached (there is no official application/allocation).

“Processor” means an establishment that carries on the manufacture of SMP or MPC in its own facility and is licenced under the Safe Food for Canadians Act.

Reference period” means the period of time used to measure an applicant’s activity in the processing of SMP and MPC in Canada. For the purpose of this Notice, the reference period is from May 1 to April 30 immediately preceding the applicable dairy year.

“Skim milk powder” means a product that is included in Item 5200 of the ECL, namely products that are classified under subheading 0402.10.

“Standard dry milk protein concentrate” means dry milk protein concentrate with a protein content greater than 42% on a dry matter basis, with a casein to whey protein ratio similar to that of the original skim milk.

“Year 1” means July 1, 2020 to July 31, 2020.

“Year 2” means August 1, 2020 to July 31, 2021.

2. Allocation policy

3. Calculation of allocations

CommodityConversion factors
Standard dry MPC product (e.g., MPC-42, MPC-80 etc.)= X/34
Where X is the protein content of the standard dry MPC product

Company A allocationCompany B allocation
Production = 40,000,000Production = 20,000,000
Protein-adjusted production = 40,000,000 * 1 = 40,000,000

Market size = 40,000,000 + 44,117,648 = 84,117,648

Market share = 40/84.117648 = 47.55%

Protein-adjusted production = 10,000,000 * (70/34) + 10,000,000 * (80/34) = 44,117,648

Market size = 40,000,000 + 44,117,648 = 84,117,648

Market share = 44.117648/84.117648 = 52.45%

Allocation = 35,000,000 * 0.4755
= 16,642,500 kg

Allocation = 35,000,000 * 0.5245
= 18,357,500 kg

4. Transfer, return and under-utilization policies

Starting August 1, 2020 (Year 2):

5. Applications for allocation

6. Export permits

7. Payment of the export charge

8. Contact us

Date Modified: