Vol. 143, No. 24 — November 25, 2009

Registration

SOR/2009-299 November 10, 2009

EXPORT AND IMPORT PERMITS ACT

Order Amending the Allocation Method Order (Beef and Veal)

Whereas the Minister of Foreign Affairs has, pursuant to subsection 6.2(1) (see footnote a) of the Export and Import Permits Act (see footnote b), determined an import access quantity for beef and veal;

Therefore, the Minister of Foreign Affairs, pursuant to paragraph 6.2(2)(a) (see footnote c)of the Export and Import Permits Act (see footnote d), hereby makes the annexed Order Amending the Allocation Method Order (Beef and Veal).

Ottawa, November 6, 2009

CANNON
Minister of Foreign Affairs

ORDER AMENDING THE ALLOCATION METHOD ORDER (BEEF AND VEAL)

AMENDMENTS

1. (1) The portion of subsection 3(1.1) of the Allocation Method Order (Beef and Veal) (see footnote 1) before paragraph (a) is replaced by the following:

(1.1) Despite subsection (1) and subject to subsection (2), the method for allocating the import access quantity for beef and veal that may be imported into Canada in the 2010 calendar year is as follows:

(2) Subparagraph 3(1.1)(a)(ii) of the Order is replaced by the following:

(ii) the 12-month period beginning on August 1, 2008 and ending on July 31, 2009; and

COMING INTO FORCE

2. This Order comes into force on January 1, 2010.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issue and ob jectives

On May 20, 2003, the Canadian Food Inspection Agency announced that it had discovered a single case of bovine spongiform encephalopathy (BSE), commonly known as mad cow disease, on an Alberta farm. Following this announcement, many countries, including the United States, imposed restrictions on the importation of cattle, beef and their products. Many of these restrictions still affect the beef industry.

The present change in the Allocation Method Order (Beef and Veal) is necessary to address the needs of the affected industry sector. By making this Ministerial Order, the government intends to minimize disruption to industry and to comply with the Export and Import Permits Act. Specifically, Beef and Veal Tariff Rate Quota (TRQ) applicants will have the choice between a 16-month period (i.e. January 1, 2002, to April 30, 2003, prorated to a 12-month period) or a more recent 12-month period (i.e. August 1, 2008, to July 31, 2009, to serve as a base for the establishment of their quotas.

Description and rationale

Prior to 2004, the TRQ for beef and veal was allocated based upon the company’s throughput of non-NAFTA beef during the previous 12-month period of November 1 to October 31 each year. The market fallout from the BSE situation resulted in ample supplies of inexpensive Canadian beef being available to domestic processors. Many traditional beef importers decided to switch to domestic beef to help alleviate the situation.

In order to avoid penalizing these traditional importers, a decision was taken to amend the Allocation Method Order (Beef and Veal) to base the 2004 quota allocations on usage of non-NAFTA beef during a 16-month period prior to the BSE discovery (January 1, 2002, to April 30, 2003). The decision made by the Minister at the time was supported by the Tariff Quota Advisory Committee (TQAC) and the Ad Hoc Beef and Veal Industry Committee (Ad Hoc Committee). The amendment was for one year only.

Given that the North American beef market remained disrupted, the TQAC and the Ad Hoc Committee recommended a similar amendment to the allocation method in 2005, 2006, 2007, 2008 and 2009. The industry members of the TQAC made a consensus recommendation aimed at allocating most of the TRQ to established industry members without penalizing those who had switched their usage to Canadian beef during 2004, 2005, 2006, 2007 and 2008. They acknowledged that the needs of new industry entrants should be addressed and recommended reserving some portion of the TRQ for such new entrants. It was decided to give all TRQ applicants a choice between one of two possible base periods for 2005, 2006, 2007, 2008 and 2009. The periods were the 16 months from January 1, 2002, to April 30, 2003 (pro-rated to a 12-month period), or a more recent 12-month period from August 1 to July 31 of each year. The Minister’s allocation method orders for 2005, 2006, 2007, 2008 and 2009 reflected the substantive intent of the consensus recommendation from the TQAC and Ad Hoc Committee. Again, this required amendments of the Allocation Method Order (Beef and Veal) for 2005, 2006, 2007, 2008 and 2009.

A Canadian market review and forecast of the beef industry provided by Agriculture and Agri-Food Canada indicates that the market may normalise in the next few months partially due to a tighter supply of Canadian non-fed beef. It is the opinion of the stakeholders that an amendment to the 2010 Allocation Method Order is required to allow appropriate adaptation to the market without fear of facing import allocation reductions in 2011.

The revised base period may result in minor changes to import allocation quantities in 2010 but it will not affect our international trade commitments. The revised period change will provide applicants with a choice to apply for a quota share based on the optimal period under their individual circumstances. Not making this change in the revised period would result in further disruption to the industry.

Therefore, the Minister has approved the TQAC recommendation that the method used for 2005, 2006, 2007, 2008 and 2009 allocations be continued in 2010.

Consultation

The proposed amendment was discussed with members of the TQAC. The committee consists of representatives from all the major beef and veal industry associations, including the cattlemen, packers, processors, distributors, importers, retailers and foodservice operators, Agriculture and Agri-Food Canada and Finance Canada.

The TQAC recommended unanimously giving all import allocation applicants a choice between one of two possible base periods for the 2010 allocation.

Provision of false information in an application pursuant to the Export and Import Permits Act is an offence and may lead to prosecution under the Act.

Contact

Ms. Katharine Funtek
Director
Trade Controls Policy Division (TIC)
Export and Import Controls Bureau
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 613-996-0640

Footnote a
S.C. 1994, c. 47, s. 106

Footnote b
R.S., c. E-19

Footnote c
S.C. 1994, c. 47, s. 106

Footnote d
R.S., c. E-19

Footnote 1
SOR/96-186

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