Chicken Farmers of Canada welcomed news that the government of Canada is committed to Canada's supply management system and appreciates that a consultation process is underway to ensure that regulations are not undermining the Canadian chicken sector.
The government of Canada is taking steps to address concerns related to the Duties Relief Program and what it says are fraudulent imports of broiler chicken making their way across the Canadian border illegally labeled as spent fowl.
Launching consultations will hopefully result in a timely implementation of better rules to stop the distortions in the Canadian chicken market created by inappropriate program duplication and design and circumvention of tariff classifications, the group said.
"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," said Dave Janzen, chair of Chicken Farmers of Canada, "We are hopeful that a meaningful consultation process will result in changes benefitting the chicken sector in Canada and all Canadians."
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 more than 87,200 jobs from coast to coast in Canada and contributes $6.8 billion to Canada's gross domestic product (GDP).
Duties Relief Program
The Duties Relief Program administered by the Canadian Border Services Agency (CBSA) was not designed for agricultural goods and does not provide adequate safeguards to address the potential for diversion into the domestic market that is presented when chicken is imported into Canada for further processing and subsequent re-export. Specifically, the group said it has identified the following concerns with respect to the Duties Relief Program:
• Marinated products, which were banned from the Import to- Re-export Program of Global Affairs Canada due to concerns regarding the possible diversion to the domestic market, are permitted under Duties Relief Program.
• Participants have up to four years to re-export the chicken they've imported.
• Imported products can be substituted with lower-value cuts and even spent fowl.
• The program duplicates the Import to- Re-export Program, which was created specifically for agricultural goods and has adequate verification and safeguard processes in place.
The Canadian government announced on Oct. 5, 2015, that dairy, poultry and egg tariff lines subject to the tariff rate quota would be excluded from the Duties Relief Program.
Spent fowl are old laying hens, a byproduct of egg and hatching egg production. While broiler chickens are raised for meat consumption, spent fowl hens lay eggs, so when their productivity declines, they are processed for their meat.
Chicken coming into Canada is subject to import controls, but spent fowl is not; there is no limit on how much can be imported. In 2012, Canada imported more spent fowl breast meat than was actually produced in the entire U.S. This is impossible, of course, and points directly to the existence of import fraud. This still occurs in 2016. Chicken meat is being fraudulently declared as spent fowl in order to bypass import controls, which not only takes away jobs and income from Canada's chicken farmers and processors but also deprives the public coffers of legitimate import-generated revenue, the group said.
In order to ensure that no broiler meat is being imported illegally as spent fowl in order to circumvent import controls, the group is requesting that the Canadian government incorporate a DNA test developed by Trent University that can distinguish broiler meat from spent fowl meat.
Chicken Farmers of Canada estimates that the economic impacts from illegal spent fowl imports on the Canadian chicken sector in 2015 amounted to:
• $86.7 million in farm cash receipts;
• 2,771 job losses;
• $69.6 lost in taxes, and
• $208 million to Canada's GDP.