6.1 The Minister may authorize the importation of quantities of chicken and chicken products and turkey and turkey products in excess of the import access quantity if he judges that the importation of these products is required to serve overall Canadian market needs.
6.2 Applications for supplementary import permits
should follow procedures set out in paragraphs 5.0, 6.4, 6.5, 6.6 and
6.7 in this Notice, and should, as well, use the appropriate EICB commodity
codes for each type of supplementary import permit (see Appendix
1 and Appendix 2 (PDF format
only)).
6.3 There are four categories of supplementary permits; each category is subject to different conditions and procedures. To ensure eligibility for a supplementary import permit, an applicant must follow procedures outlined in the following paragraphs.
6.4 To Import Chicken and Turkey for resale (market shortages)
The following points are taken into consideration in issuing supplementary import permits for shortages:
A) Market Assessment:
i) Whole Bird Policy: Market shortages are assessed in terms of the domestic industry's supply and demand situation, based on production for the whole bird market. Applications for poultry parts will be authorized only when there is a shortage of whole birds. Shortages of poultry parts may result from the supply and demand for various parts, even when there is an adequate supply of whole birds. Supplementary imports of parts when whole birds are available would interfere with the adjustment mechanisms in the market. Exceptions will be considered when parts are used for the manufacture of end products that do not compete with poultry products (e.g. pet food).
ii) Supplementary import permits are issued for purposes of addressing unusual circumstances. Normally, the Minister will not issue supplementary permits unless there is a disruption of customary arrangements between an applicant and its supplier.
iii) To assess market shortages various indicators of the supply and demand situation in the market are considered separately and in combination. Market indicators are obtained from federal agencies, such as Agriculture and Agri-Food Canada (AAFC), Statistics Canada and the Trade (e.g., price trends of young toms; production trends of youngtoms and trends of wholesale price margins).
B) Eligibility of Applications:
i) An application may be made by any firm that normally meets the definition of processor, distributor or foodservice .
ii) An application for supplementary import permits must be made on the application form for supplementary import permits (form EICB - A1). The application must identify the product required and the specific week for which the product is requested. An application shall cover only one product and a specific delivery period. A separate application shall be made for each product and for each delivery period.
iii) An applicant shall demonstrate that normal supply sources have been exhausted before applying for a supplementary import permit. The application shall describe the applicant's own procurement efforts and should explain the basis for assessing that a shortage exists in the whole bird market. The application shall indicate the end use of the product and should identify customers.
iv) Applicants who have a global import quota of less than 100,000 kilograms must have used all of their global import quota before an application for a supplementary import permit will be considered. Applicants with global import quota allocations of 100,000 kilograms or more must have used at least 25% of their global quota allocation per quarter. When assessing an applicant for supplementary import permits, the global quota of affiliated companies will be taken into account.
v) In general, applicants are advised to allow the maximum possible leadtime for their applications and should, therefore, inform the EICB and either the Canadian Turkey Marketing Agency (CTMA) or the Chicken Farmers of Canada (CFC) of anticipated shortages as soon as these are identified. Normally, applications will not be accepted if the proposed week of entry is more than three weeks after the week of application.
vi) Normally, officials will process applications within [no less than] eight (8) working days. However, the actual leadtime required will vary with the nature and quantity of the product requested (i.e. its normal procurement cycle), market conditions and availability.
C) Assessment of Applications:
i) Each application is assessed in terms of the product and quantities requested. The quantity requested should reflect the applicant's normal throughput, while the product should be a product normally used by the applicant, and should be consistent with theend product normally sold to the applicant's customer(s).
ii) The applicant's own procurement efforts are also evaluated. A supplementary import permit will be issued when there are general market shortages as defined in Section A. Supplementary import permits will not be issued if shortages are the result of the applicant's own procurement problems.
iii) Applications may be made for any controlled product that is normally traded in Canada. Product specifications shall reflect normal trading practices.
Applications shall describe accurately the product required, the acceptable quality level, size variations and acceptable substitutes. A new application shall be made where specifications are changed after sourcing has begun.
iv) Special product specifications will only be considered if the applicant is known to have specialized in that product and if the leadtime is adequate.
v) Applicants must indicate the week in which they wish to import the product. Normally, the delivery period will be a 6 day period from Monday through Saturday.
It is expected that the applicant will have made a reasonable effort to contact 7 potential suppliers to procure required materials from domestic sources, prior to applying for a supplementary import permit for shortages. Officials will pay particular attention to the reasons for the shortage, such as: when the shortage could have been identified, when it was actually identified and what steps were taken by the applicant to correct the situation. It is recommended that applicants contact the EICB, the Chicken Farmers of Canada (CFC) or the Canadian Turkey Marketing Agency (CTMA) regarding possible medium to long term supply shortages.
In case of product substitution, the applicant's ability to use the domestically-sourced product for the intended end use will be considered. Please see section D (iii) of this Notice for the definition of product substitutions.
D) Sourcing:
i) The CTMA or the CFC will survey the domestic market for availability of the product requested and will inform the applicant of the results of this survey within three (3) working days from the time the application is received.
ii) The sourcing results will identify suppliers and the quantities offered; after receiving this information, the applicant must contact each supplier identified within one (1) working day to negotiate price and delivery with these suppliers. The applicant is normally expected to purchase the sourced product up to the level of the requested quantity. The applicant shall notify the CTMA or the CFC as soon as procurementfrom domestic sources has been completed.
iii) The sourcing results can include any commercially reasonable substitute product (e.g. eviscerated substitution for live) that can be used by the applicant to produce the identified end product. Substitutions should be reasonable from a technical, quality as well as economic view point.
E) Continuation of Application:
In assessing an application, officials examine the general market conditions and the application to determine whether a true market shortage exists.
i) The applicant shall assess the sourcing results. The applicant may continue the application if the applicant is not satisfied with the sourcing results.
ii) An applicant shall use the application form when continuing an application after discussions with suppliers of products sourced by the CTMA or the CFC (form EICB-A2).
iii) Deadline for Continuation of Application:
Any request to the EICB for relief from the obligation to purchase the sourced product shall be made, in writing, within two (2) working days from the time that the applicant receives the sourcing list from the CTMA or the CFC. The applicant shall state in writing the results of its discussions with all the persons on the sourcing list, including the product offered, the price, product specifications and delivery date. The applicant shall confirm the sourcing results within two (2) working days.
iv) Reasons for Continuation of Application:
The applicant shall substantiate why some or all of the products sourced cannot be used to meet its requirements. The applicant shall state the reasons for the request and the results of the negotiations with companies on the sourcing list.
v) Continuing an application for an exception may be considered under the following circumstances:
(a) the sourcing results indicate a market shortage;
(b) the product offered does not meet industry standards of quality;
(c) the product is not a reasonable substitute;
(d) the product is offered at market prices which appear excessive in comparison to regional current market prices; and,
(e) the offer is subject to terms and conditions incompatible with industry standards.
F) EICB Assessment:
i) After the application has been assessed along with the relevant information described above, a decision will be communicated to the applicant. If supplementary imports are allowed, the applicant will receive an authorization respecting products, quantities and conditions. The EICB will also notify the CTMA or the CFC of the decision.
ii) The EICB may require three (3) working days from the day the applicant appeals the Agency's sourcing results to the EICB, to assess the sourcing results, the application itself and general market conditions.
iii) Any credits for global permits that are returned unused after supplementary permits have been issued will be deducted from the quantity authorised by the supplementary import permits.
G) Issuance of Supplementary Import Permits:
i) Applicants should inscribe the EICB authorization number for supplementary imports on the permit application in the box marked "document number". The applicant may apply for permits up to the total quantity authorized, for the product authorized and for the delivery period authorized. The supplementary import permit will be valid only during the week requested by the applicant.
ii) No substitution of products will be allowed other than those acceptable under the CTMA or the CFC sourcing arrangements and no extension of the permit validity period can be made. Changes in product or validity period would require a new application for supplementary imports and a new sourcing effort by the Agency.
iii) Unused permits shall be returned to the EICB at the end of their validity periods.
H) Administrative measures which may be applied:
i) Administrative measures will normally be applied to suppliers in the following cases:
a) Normally, if product offered by a supplier in response to the CTMA or the CFC sourcing efforts is found not to be available when the applicant contacts the supplier, the supplier will be removed from the sourcing list for a period of 60 calendar days from the date when the product was offered for sale.
b) Normally, if product offered by a supplier and purchased by the applicant is not delivered within the delivery period specified or does not meet the agreed specifications, the supplier will be removed from the EICB supplier's list for a periodof one calendar year.
ii)Administrative measures will normally be applied to applicants in the following cases:
a) Normally, if an applicant does not contact suppliers within the deadline indicated by the CTMA or the CFC (a minimum of one working day from the time the sourcing information was received from the CTMA or the CFC) the application will be rejected for incompleteness.
b) Normally, when two applications from an applicant have been rejected for incompleteness within a 90 day period, no further applications will be accepted from that applicant for a period of 60 calendar days after the second rejection.
c) Normally, if an application is fully sourced and the applicant does not purchase the sourced product up to the level of the request, no further applications will be accepted from that applicant for a period of 60 days from the date when it proposed to import the chicken.
d) Normally, if an application was partially sourced and the applicant was issued supplementary permits for some or all of the shortfall on condition that some or all of the sourced product be purchased and this obligation was not fulfilled, no further applications will be accepted from that applicant for a period of 60 calendar days from the date when it proposed to import the chicken.
Applicants should be ready to provide evidence that they have purchased, or offered to purchase the product for which they applied for a supplementary import permit.
e) Normally, if an applicant withdraws an application after sourcing has been started by the CTMA or the CFC for reasons other than having procured his requirements, no further applications will be accepted for a period of 30 days during which that applicant normally would have been eligible to apply for supplementary imports.
f) Normally, if an applicant applies for, and receives, a supplementary import permit and offers that same product, or a reasonable substitute, for sale on the CTMA or the CFC sourcing list for the same week, no further requests for supplementary import permits will normally be considered for a period of sixty days (60) after the product was offered for sale on the sourcing list.
6.5 To import chicken and turkey for the manufacturing of products exempt from the Import Control List (import permits to compete)
A) A request for authorization may be submitted at any time during the calendar year.
B) Manufacturers having an import allocation for processing of chicken and turkeyproducts that are not on the Import Control List (ICL), referred to as "FTA quota", will normally be required to have exhausted all of their FTA allocation for the year before supplemental import permits may be issued under this provision. The allocation will be considered exhausted only if all permits issued have lapsed and no further entitlements exist for that period.
C) Manufacturers wishing to apply to the EICB for import permits for chicken and turkey under this provision must state the quantity and the specification of the product to be manufactured and the anticipated delivery date.
D) Manufacturers importing chicken or turkey under this provision are subject to the condition that they agree to provide the information listed in Appendix 3: Statement of Inventory Reconciliation and Appendix 4: Letterhead of Accountant. The purpose of the information in the appendices is to substantiate that the chicken or turkey imported will be used to produce the products included in their sales commitments, that the sales have been made and that payment has been received.
E) Manufacturers with future chicken or turkey global import quota allocation will be reduced by the amount of the supplementary permits if they fail to provide the required information, or if the information provided indicates that their company did not both produce and sell the chicken products.
6.6 To import chicken and chicken products and turkey and turkey products for further processing and re-export
A) Applications for supplementary import permits for chicken or chicken products or turkey or turkey products required to bid competitively on export contracts must be accompanied by a confirmed export contract; these applications must also state that the product is for re-export.
B) After submission of the export contract to the EICB, and after the applicant provides a written undertaking to comply with requirements set out in sub-paragraphs C, D and E below, officials will inform an applicant of the authorization number to request supplementary import permits. All products manufactured from the imported chicken or turkey products must be exported within a period of six months from the date of issuance of the import permit.
C) The applicant must subsequently provide the EICB with copies of the import documents:
i) Customs invoice;
ii) supplier's invoice;
iii) a confirmed contract with the foreign buyer; and,
iv) Canadian Food Inspection Agency (CFIA) inspection certificate for each import.
D) The applicant must document the use of imported chicken or turkey in the production of the exported product:
i) ingredient specifications (only once during the year, by product); and,
ii) product specification sheet with CFIA product code.
E) The applicant must subsequently provide the EICB with copies of the export shipping documents:
i) a CFIA inspection certificate for each shipment;
ii) Canada Custom's export declaration B13A document for each shipment other than for U.S. destinations;
iii) the customer's procurement order after each shipment; and,
iv) Custom documents from the importing country which confirm that goods have actually been imported for consumption in that country.
All documents must be forwarded to the EICB within six months of issuance of a supplementary import permit. Moreover, the EICB retains the right to request additional information, including that an independant public accountant (or an accountant named by the EICB) certify the information provided on the application form. Should this prove necessary, all costs will be borne by the applicant. Failure to supply documents may disqualify an applicant for additional import permits for re-export.
6.7 To import chicken and chicken products or turkey or turkey products for the purpose of test marketing.
Import permits supplementary to the annual quota may be issued to facilitate the test marketing of new products that are unique or are produced with unique processes and require a substantial capital investment for their production.
A) Companies that intend to do test marketing on a specific product must normally plan the activity within their annual TRQ allocations. Companies having a basic quota allocation will normally be required to have exhausted this allocation before supplementary imports may be issued under this provision. The supplementary import permits are only available to eligible applicants that market product directly to consumers.
B) Companies are required to commence production in Canada as soon as feasible after the successful completion of the test marketing program.
C) Applications made on company letterhead should contain the following information:
i) a description of the product and its production processes, with indications respecting unique features of same;
ii) a detailed outline of the minimum capital investment and proposed financing required to produce the product, i.e. facilities, equipment, production capacity, and the time required to bring such facilities on line from the time a "go ahead" decision is made; and
iii) a description of a proposed test marketing program, identifying test market areas, market channels, timing, promotion plans and marketing costs, as well as product quantities required for the proposed test marketing program, and an analysis showing the minimum test market results required to decide in favour of the capital investment in Canadian production facilities.
D) Authorization for imports under this provision shall only be made for the products to be test marketed, for the test marketing period and for the quantities considered necessary.
E) Once these quantities or the period have been exhausted, further permits may be authorized only for the same product in quantities sufficient to continue serving the test marketing areas during a period reasonably required for the construction of the domestic production facilities. Once Canadian production has been established, no further permits will be allowed for either the test marketed product or for required raw materials. An applicant may submit only one application to test market for each product.
F) Successful applicants will be required to provide monthly statistics on the sales of the imported products by test area. Failure to submit these statistics may result in suspension of import privileges under this provision.
