Addressing border controls for supply-managed goods

Nov. 18, 2016 – The Government of Canada says it 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 (DRP) 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’ DRP licences were suspended.

Program consultations will be launched with industry stakeholders regarding potential changes to the DRP and the Import for Re-Export Program. In the interim, the Government is also exploring measures with dairy and poultry users of the DRP 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.

Chicken Farmers of Canada (CFC) welcomed the news, saying that the consultations will hopefully result in a timely implementation of better rules to stop the distortions into the Canadian chicken market created by inappropriate program duplication and design, and circumvention of tariff classifications.

“Our farmers and processors have been afflicted by leakages in the market that have been occurring for many
years now, meaning they face uncertainty in their own production, and consumers face uncertainty in the
safety of their food,” says Dave Janzen, CFC chair. “We are hopeful that a meaningful consultation process will result in changes benefitting the chicken sector in Canada, and all Canadians.”

CFC goes on to say that addressing these critical issues will not affect the significant amount of legal imports of chicken that make Canada the 13th largest importer of chicken in the world. The Canadian chicken sector supports over 87,200
jobs from coast to coast in Canada, and contributes $6.8 billion to Canada’s GDP.