Today's announcement focused on the fact that the Government of Canada is taking steps to address the concerns related to the Duties Relief Program, and the fraudulent imports of broiler chicken making its way across the Canadian border illegally labelled as spent fowl. Launching 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, 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 over 87,200 jobs from coast to coast in Canada, and contributes $6.8 billion to Canada's GDP.
The Duties Relief Program administered by the Canadian Border Services Agency (CBSA) was not designed for agriculture 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, we have identified the following concerns with respect to the Duties Relief Program:
·Marinated products, which were banned from Global Affairs Canada's Import to- Re-export Program due to concerns regarding the possible diversion to the domestic market, are permitted under DRP.
·Participants have up to 4 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 Global Affairs Canada's Import to- Re-export Program, which was created specifically for agricultural goods, and has in place adequate verification and safeguard processes
The Canadian government announced, on October 5, 2015, that dairy, poultry and egg tariff lines subject to the TRQ would be excluded from the Duties Relief Program. Canada's government must move quickly to enact this change and ensure that no further damage occurs from the misuse of the Duties Relief Program.
Economic Impacts from Duties Relief Program for the Canadian Chicken Sector (2015):
·$44.5 million in Farm Cash Receipts
·1,423 lost jobs
·$35.7 million lost in taxes
·$107 million to Canada's GDP
Spent fowl are old laying hens: a by-product of egg and hatching egg production. While broiler chickens are raised for meat consumption, spent fowl hens lay eggs and when their productivity declines, they are processed for their meat.
Chicken coming into Canada is subject to import controls, and 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 of course impossible, 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 Government of Canada must incorporate the DNA test developed by Trent University that can distinguish broiler meat from spent fowl meat; to ensure that no broiler meat is being imported illegally as spent fowl in order to circumvent import controls.
Economic Impacts from Illegal Spent Fowl imports for the Canadian Chicken Sector (2015):
·$86.7 million in Farm Cash Receipts
·2,771 job losses
·$69.6 lost in taxes
·$208 million to Canada's GDP