Notices

ITEMS 96 TO 104 - CHICKEN AND CHICKEN PRODUCTS

Serial No. 698
Date: August 28, 2006

Table of Contents

1.0 Purpose
2.0 Duration
3.0 General Information
4.0 Allocation Method for 2006
5.0 Traditional allocation holders
6.0 Allocation of the non-ICL portion of the chicken TRQ
7.0 Allocation of the processor pool
8.0 Allocation of the distributor pool
9.0 Allocation of the foodservice pool
10.0 Further Information

Appendix 1: Meat-on-Meat Policy Provision

1.0 Purpose

1.1 The purposes of the present Notice are:

1. to further outline the Minister of International Trade (“the Minister”) allocation policies and practices respecting import allocations of tariff quota (TRQ) for chicken and chicken products in 2006, by supplementing Notice to Importers No. 686 of October 7, 2005;

2. to indicate that the present Notice and Notice to Importers No. 686 should be read together as outlining the policies and practices of the Minister respecting TRQ import allocations for chicken and chicken products in 2006. These Notices should be read with the Import Allocation Regulations and the Import Permit Regulations. Where elements of these Notices augment these Regulations, those elements are to be read as expressions of the Minister’s normal practices and procedures.

1.2 As it was done in 2004 and 2005, the 2006 chicken TRQ will be allocated on the basis of accommodating 61% of the excess demands on the TRQ (estimated at 2.4 million kilograms (kgs), excluding “Import to Compete”) through special supplementary imports and 39% through a reduction in the allocations under the TRQ that would otherwise have been allocated to the traditional group and the processor, distributor and foodservice group. The 2005 policy regarding meat-on-meat products not on the Import Control List (non-ICL) will continue and the amount of chicken TRQ available for these products will be capped at 5.7 million kgs annually, equal to the TRQ allocation for such products in 2003 (see paragraph 4.7 and 6.3 and Appendix 1 of this Notice).

1.3 The policy outlined in this Notice is intended to be an “interim” policy, in effect in 2006, in order to provide time for consultations with industry stakeholders with the objective of seeking a longer-term allocation policy for 2007 and future years.

2.0 Duration

The present Notice and Notice to Importers No. 686 remain in effect until December 31, 2006.

3.0 General Information

3.1 The annual import access level for chicken (i.e., the TRQ level) for 2006, calculated as 7.5% of the previous year’s domestic chicken production as reported by Statistics Canada, is 73.3 million kgs.

4.0 Allocation Method for 2006

4.1 The chicken TRQ will be allocated to three groups: to the traditional group (i.e., firms importing chicken before the introduction of import controls in 1979); to eligible processors producing chicken products not on the ICL (e.g., TV dinners) to the extent of their needs for such production with the exception of meat-on-meat products (see para 4.7 of this Notice) (i.e., the non-ICL group); and to members of the processor, distributor and foodservice sectors (i.e., the processor, distributor and foodservice group).

4.2 Further to paragraph 1.2 of this Notice (and subject to paragraph 4.9 of this Notice), and in order to limit “special non-ICL supplementary import authorizations” (see paragraph 4.8 of this Notice) to 2.4 million kgs, the amount of the TRQ to be allocated, in total, to the traditional group and the processors, distributor and the foodservice group will be reduced, as necessary, from the sum of the initial amounts indicated in paragraphs 4.3 and 4.4 of this Notice by an amount such that the allocation to the non-ICL group, except for 2.4 million kgs that will be accommodated through “special supplementary import authorizations”, is accommodated within the adjusted import access level determined under para 3.1 of this Notice. Regardless of the level of the allocation to the non-ICL group, the allocations to the traditional group and to the processor, distributor and foodservice group will not exceed the “initial amounts” indicated in paragraph 4.3. and 4.4 of this Notice, respectively.

4.3 For purposes of calculating the reduction in the allocation to the traditional group described in paragraph 4.2, the “initial amount” for the traditional group is defined as the amount equivalent to the level of allocation to the traditional group in 2003, adjusted, where necessary, for under-utilisation or as a result of a choice made under paragraph 5.3 of this Notice.

4.4 For purposes of calculating the reduction in the allocation to the processor, distributor and foodservice group described in paragraph 4.2 of this Notice, the “initial amount” for the processor, distributor and foodservice group is defined as the amount equivalent to 40.7% of the adjusted import access level determined under paragraph 3.1 of this Notice.

4.5 The resulting reductions determined under paragraph 4.2 of this Notice to the allocations to the traditional group and the processor, distributor and foodservice group will be equal in percentage terms.

4.6 For purposes of the calculation in paragraph 4.2, the allocation to the non-ICL group will be determined in accordance with section 8 of Notice
to Importers No. 686, on the basis of eligible applications for non-ICL allocations by processors producing chicken products not on the ICL to the extent of their needs for such production with the exception of meat-on-meat products described in paragraph 4.7 of this Notice.

4.7 Manufacturers of non-ICL products containing less than 7% non-meat ingredients (non-meat ingredients do not include spices and seasonings) will receive 0.84 kg of TRQ per kg of chicken used (see paragraph 6.3 and Appendix 1 of this Notice). Products identified in Annex 706 of the Canada-U.S. Free Trade Agreement are exempt from this provision.

4.8 For purposes of this Notice, “special non-ICL supplementary import authorizations” are supplementary import authorizations that are issued to processors producing chicken products not on the ICL in conjunction with, and at the same time as, the allocations issued to such producers under the non-ICL portion of the chicken TRQ pursuant to section 8 of Notice to Importers No. 686. As indicated in paragraph 6.2 of this Notice, eligible processors producing chicken products not on the ICL are provided allocations to the extent of their needs for such production (with the exception of meat-on-meat products-see paragraph 4.7 of this Notice). “Special supplementary authorizations” are provided to such processors to the extent that their needs cannot be accommodated within the TRQ under the allocation policy. “Special non-ICL supplementary imports” do not include supplementary imports authorizations issued pursuant to sections 5.4, 5.5, 5.6, 5.7 and 5.8 of Notice to Importers No. 664 dated November 25, 2003, “Items 96 to 113: Chicken and Chicken Products and Turkey and Turkey Products - Supplementary Imports.” Please note that applicants for “Import to Compete” supplementary import authorizations under paragraph 5.6 of Notice to Importer No. 664 may be required, before such applications will be considered, to demonstrate and substantiate that:

1. in the case of applications for new non-ICL products, the non-ICL products for which they are applying for such authorizations are new and distinct from other non-ICL products produced by that applicant before September 1, 2005; or

2. in the case of applications related to increases in production of current non-ICL products, the amount requested reflects a clear increase in the level of production of the non-ICL products in question by the applicant from the amount produced in 2005.

All other conditions set out in paragraph 5.6 of Notice to Importers No. 664 for applications for “Import to Compete” supplementary import authorizations continue to apply.

4.9 Non-ICL supplementary import authorizations for dark meat issued pursuant to paragraph 8.2.10 of Notice to Importers No. 686 are excluded from the application of the limitation of 2.4 million kgs for projected non-ICL supplementary imports stipulated in paragraph 1.2 of this Notice and therefore excluded from the calculation stipulated in paragraph 4.2 of this Notice.

4.10 Any reductions to allocations under this section (section 4) are without prejudice to other types of reductions (e.g. due to underutilization) pursuant to the Export and Import Permits Act (EIPA), the EIPA Regulations and to the Export and Import Controls Bureau (EICB) policies, including those set out in this Notice.

4.11 Except for individual processor and distributor applicants who are eligible for both a share of the traditional, processor or distributor pool and a share of the non-ICL portion of the TRQ, applicants are eligible for a chicken TRQ allocation within only one pool. In cases where applicants would otherwise qualify for more than one share of the
TRQ, the specific import allocation that the applicant receives will be determined by the EICB.

5.0 Traditional allocation holders

5.1 The allocation to the traditional group will be determined in accordance with Section 4 of this Notice and Section 7 of Notice to Importers No. 686.

5.2 Each traditional allocation holder eligible to receive an allocation may receive a percentage share of the TRQ level allocated to the traditional group as determined under section 4 of this Notice that is equal to the percentage share of the allocation to the traditional group in 2003 that was received by that traditional allocation holder in 2003, adjusted, where necessary, for under-utilization in 2005.

5.3 Traditional allocation holders may choose between a traditional import allocation and an allocation in the processor, distributor or foodservice pool. On request, the EICB will advise a traditional importer of its’ prospective share under the other pools. Each company will be given the opportunity to indicate its preference between obtaining another traditional import allocation or an allocation in one of the other pools. Until a traditional allocation holder has opted for an allocation in the processor, distributor or foodservice pool, as the case may be, it will normally be given the choice each year if found to be eligible that year. Once the option of a one-time move to the processor, distributor or foodservice pool is exercised, the size of the traditional pool will be decreased by the amount transferred and the pool selected will be increased by the same amount. The amount transferred will be determined in accordance with section 4 of this Notice.

6.0 Allocation of the non-ICL portion of the chicken TRQ

6.1 The allocation to the non-ICL portion of the TRQ will be determined in accordance with section
4 of this Notice and section 8 of Notice to Importers No. 686.

6.2 Eligible processors of chicken products not on the ICL (with the exception of meat-on-meat products - see paragraph 6.3 of this Notice) will receive up to one kilogram of import allocation for each kilogram of chicken inputs used in the production of non-ICL products, in the period September 1, 2004 to August 31, 2005.

6.3 Eligible producers of meat-on-meat products not on the ICL, will receive up to 0.84 kg of import allocation for each kilogram of chicken inputs used in the production of non-ICL products, such as “tournedos” and “coq au porc”, in the period September 1, 2004 to August 31, 2005 (see Appendix 1).

6.4 “Import to Compete” applications for non-ICL products covered under paragraph 6.3 of this Notice are subject to any pro-rata reduction in the applicable year, as outlined in Appendix 1. Producers of meat-on-meat products not on the ICL are required to have manufactured a quantity of a given product equal to that stated in their current year TRQ application before being eligible for an “Import to Compete” allocation for that product.

7.0 Allocation of the processor pool

7.1 The allocation to the processor pool will be determined in accordance with section 4 of this Notice and section 9 of Notice to Importers No. 686.

7.2 The allocation to the processor pool in 2006 will be equivalent to 62.6% of the adjusted import access level allocated to the processor, distributor and foodservice group as determined under section 4 of this Notice (i.e., the quota to be allocated, in total, to the processor, distributor and foodservice pools).

7.3 Shares will be allocated on a market-share basis to larger processors and on an equal-share basis to smaller processors. The proportion of the processor pool allocated to market-share applicants and to equal-share applicants is fixed at the 2001 ratio of 30.5 : 69.5.

8.0 Allocation of the distributor pool

8.1 The allocation to the distributor pool is determined in accordance with section 4 of this Notice and section 10 of Notice to Importers No. 686.

8.2 The allocation to the distributor pool in 2006 will be equivalent to 26.8% of the adjusted import access level allocated to the processor, distributor and foodservice group as determined under section 4 of this Notice (i.e., the quota to be allocated, in total, to the processor, distributor and foodservice pools).

8.3 Shares will be allocated on an equal-share basis.

9.0 Allocation of the foodservice pool

9.1 The allocation to the foodservice pool is determined in accordance with section 4 of this Notice and section 11 of Notice to Importers No. 686.

9.2 The allocation to the foodservice pool in 2006 will be equivalent to 10.6% of the adjusted import access level allocated to the processor, distributor and foodservice group as determined under section 4 of this Notice (i.e., the quota to be allocated, in total, to the processor, distributor and foodservice pools).

9.3 The foodservice pool will be allocated according to the following formula: 70% will be allocated to restaurant and foodservice companies whose volume of chicken purchases is equal to at least 50% of their total volume of meat purchases (i.e. including poultry, fish, beef and pork but
excluding vegetables, french fries, beverages, etc.),
and 30% will be allocated to restaurant and foodservice companies whose volume of chicken purchases is less than 50% of their total volume of meat purchases.

10.0 Further information

Enquiries about import allocations may be addressed to:

Mr. Bernard Paré
Telephone: 613-995-8108
Facsimile: 613-996-0612

10.1 Enquiries about permit issuance and utilization of import allocations may be addressed to:

Mr. Eric Conlon
Telephone: 613-944-0777
Facsimile: 613-996-0612
e-mail: eric.conlon@international.gc.ca

Appendix 1: Meat-on-Meat Policy Provision

1. There will be no increase in quota for FTA products containing meat other than chicken and turkey, unless such a product also contains at least 7% non-meat ingredients (for purposes of this policy provision, non-meat ingredients do not include spices and seasonings). However, products identified in Annex 706 of the Canada-U.S. FTA are exempt from this policy provision.

2. The amount of chicken TRQ available to these FTA products is approximately 5.7 million kg, equal to the TRQ allocation for such products in 2003. (This period is intended to avoid including any increases that were a response to discussions of capping the available TRQ volume.)

3. Any Canadian-resident company is eligible for a TRQ allocation for FTA products covered by this provision, whether or not a company produced such products prior to 2003.

4. If the total quantity of FTA products covered by this provision included in applications for a share of the chicken TRQ exceeds 5.7 million kg, allocations to individual applicants will be reduced as necessary on a pro-rata basis so as to equal, on an aggregate basis, 5.7 million kg. (For 2006, applications total approximately 6.8 million kg, which implies that manufacturers of the affected products would receive 0.84 kg of TRQ per kg of chicken used, rather than 1.00 kg as was previously the case.)

5. “Import to Compete” applications for FTA products covered by this provision are subject to any pro-rata reduction in the applicable year, as outlined in (4) above. FTA producers of meat-on-meat FTA products are required to have manufactured a quantity of a given product equal to that stated in their current year TRQ application before being eligible for an “Import to Compete” allocation for that product.