CEO.CA Chairman's Briefing

OTTAWA, ONTARIO--(Marketwired - Nov 18, 2016) - Agriculture and Agri-Food Canada

Agriculture and Agri-Food Minister Lawrence MacAulay announced today, as part of the Government's strong support for supply management, the Government of Canada is taking steps to address the concerns of import predictability and effective border controls for supply-managed commodities, while ensuring that Canadian processors who use dairy and poultry inputs can remain competitive in export markets.

The Duties Relief Program enables qualified companies to import goods without paying duties, as long as they later export the goods. Earlier this year, Canada Border Services Agency verifications found that five participants in the Duties Relief Program were improperly selling supply-managed commodities in the Canadian market without reporting these sales and without paying the required duties. As a result, applicable duties, interest and penalties were assessed, and the importers' Duties Relief Program licences were suspended.

Program consultations will be launched with industry stakeholders regarding potential changes to the Duties Relief Program and the Import for Re-Export Program. In the interim, the Government of Canada is also exploring measures with dairy and poultry users of the Duties Relief Program regarding inventory reporting in an effort to improve the predictability of these imports.

In its efforts to ensure appropriate tariff classification of spent fowl, the Government will also look at specific options regarding certification requirement for imports of spent fowl product, while ensuring that any such requirement would be fully consistent with Canada's international trade obligations. At the same time, Government officials are assessing the feasibility of using a DNA test to screen imports of spent fowl at the border.

Quote

"The Government strongly supports supply management. We will continue to work with dairy and poultry stakeholders across the value chain to ensure effective border controls for supply-managed goods, while allowing processors to remain competitive."

- Honourable Lawrence MacAulay, P.C., M.P., Minister of Agriculture and Agri-Food

Quick Facts

• Combined, the Canadian dairy and poultry sector generates:
  
  
  • More than $10 billion in revenue at the farm gate;
  • More than $24 billion in processing sales;
  • Nearly 332,000 jobs for Canadians.
    
    
• Dairy is the third-largest sector of the Canadian agri-food economy, after grains and oilseeds, and red meats.

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BACKGROUNDER

Duties Relief Program

Both the Duties Relief Program and the Import for Re-Export Program enable qualified companies to import goods without paying duties, as long as they later export the goods. The Import for Re-Export Program was designed specifically for supply managed products.

The Government recognizes the various perspectives of dairy and poultry producers and export processing companies regarding the Duties Relief Program. As such, a comprehensive approach is required to reconcile industry views and provide increased transparency and policy cohesion in support of Canada's supply management system and Canadian export activities.

Spent Fowl

Spent fowl meat is meat processed from hens that are no longer laying eggs. Because spent fowl meat can be imported duty-free, it is alleged that some importers declare broiler chicken meat as spent fowl meat.

AAFC will continue to study the feasibility of DNA testing to verify imports of spent fowl. This primarily includes a cost analysis, scientific validation of the test and assessing the operational feasibility of using this test in the field. The validation process requires collaboration with federal departments, Trent University, and certain industry stakeholders.