ARCHIVED — Vol. 147, No. 8 — February 23, 2013

Canadian Hatching Egg Producers Proclamation

Statutory authority

Farm Products Agencies Act

Sponsoring agency

National Farm Products Council

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Proclamation.)

1. Background

The Farm Products Marketing Agencies Act (FPMAA) of 1972, now known as the Farm Products Agencies Act (FPAA), provides the legal foundation for the four national marketing (see footnote 1) agencies (Chicken Farmers of Canada, Egg Farmers of Canada, Turkey Farmers of Canada and the Canadian Hatching Egg Producers), which are responsible for implementing and administering their respective marketing plans. These marketing plans describe the quota, licensing, and levy systems to be implemented as well as provisions for review and other general items specific to the regulated commodity in question. The FPAA also provided the legal foundation for the creation of the Canadian Beef Cattle Research, Market Development and Promotion Agency. Promotion and research agencies provide a stable funding source for research, market development and promotional activities through levies, referred to as check-offs, on beef and beef products.

The FPMAA also allowed for the creation of the National Farm Products Council (NFPC) also referred to by its applied name, the Farm Products Council of Canada (FPCC). The NFPC is a public interest oversight body responsible for ensuring that the national supply management system for poultry and eggs works in the balanced interest of producers, processors and consumers and can withstand public scrutiny. The national supply management system is unique to Canada as federal and provincials laws allow farmers to work together to determine how much of each commodity needs to be produced in order to meet consumer demand. By matching the supply with the demand, supply management results in a stable supply with fair prices. This is achieved through the approval of quota regulations, levies orders and licensing regulations as well as reviewing each national marketing agency’s annual business plan, budget and policies.

A federal-provincial agreement (FPA) links the federal and provincial jurisdictions so as to achieve the necessary cooperation and coordination between the two. An agreement also sets out the specific obligations and responsibilities of the signatory parties so that the agencies are able to implement a particular marketing plan.

Canadian Hatching Egg Producers (CHEP or Agency), which was created in 1986, is a national marketing agency administered by a five-member board. The board of directors is presently comprised of one representative from each provincial commodity board (see footnote 2) (Ontario, Quebec, Manitoba, and British Columbia) as well as a representative from the Canadian Hatchery Federation (CHF).

Canadian Hatching Egg Producers estimates the annual national and provincial demand for broiler hatching eggs and prepares a federal quota regulation (see footnote 3) and an orderly marketing regulation (see footnote 4) to allocate the upper limits of eggs for each provincial commodity board. The Agency enacts the regulations for the provinces once they are approved by the NFPC, and they are then published in the Canada Gazette, Part Ⅱ.

Broiler hatching egg producers are divided into two groups: signatory and non-signatory provinces. Signatory provinces, which include the provinces of Ontario, Quebec, Manitoba and British Columbia, can vote on all Agency decisions and are represented on the board of directors. Non-signatory provinces or territories, which include Nova Scotia, New Brunswick, Prince Edward Island, Saskatchewan, Alberta, Newfoundland and Labrador, the Northwest Territories, Yukon and Nunavut, are not part of CHEP and are therefore not represented on the board.

All signatory and non-signatory provincial commodity boards are allotted their share of the quota production by using a combination of criteria specified in the Canadian Hatching Egg Producers Proclamation (CHEP Proclamation), the Canadian Broiler Hatching Egg and Chick Orderly Marketing Regulations, and the Canadian Hatching Egg Producers Quota Regulations, which establish the allocation process for all provinces. The provincial commodity boards, in turn, allot quotas to the producers. In 2010, there were 252 hatching egg producers.

2. Issue

This amendment is being sought at the request of CHEP as well as the provinces of Alberta and Saskatchewan to readmit the province of Alberta and to admit the province of Saskatchewan into the existing FPA. In order to legally bring them into the existing FPA as signatory members, an amendment to the CHEP Proclamation is required.

Since 2009, Saskatchewan and Alberta have both entered into operating arrangements with the Agency that provided them with a voice during Board of Directors meetings and afforded the representatives from each province many of the rights and privileges accorded to representatives from the existing member provinces. Therefore, both provinces pay the national levy to the Agency and abide by any policy decisions coming from the Agency. However, neither Saskatchewan nor Alberta is able to move any motions or vote on any decisions, nor can they hold the position of Chair or Vice-Chair.

Over the past few years, the Agency has been engaging in efforts to renew and modernize the existing FPA, which would not only better reflect current policies and practices, but would also bring Alberta and Saskatchewan into the agreement as signatory members. However, this process has not been finalized and additional discussions are required to secure a consensus from all signatory members on a renewed FPA. Therefore, in an attempt to bring Alberta and Saskatchewan into the Agreement as soon as possible, an alternate approach has been proposed.

Alberta joined the Agency in 1986 and withdrew in December 2004 (the Agency did not amend its Proclamation until 2007), as the province was constantly facing production penalties and pressure from the Agency and other signatory provinces to adjust its provincial allocation methodology to better conform to the national allocation methodology. The allocation issue was that Alberta’s import share of their total provincial domestic market was significantly lower than the other member provinces which caused imports to move from Alberta to other provinces. Since then, the issues between the Agency and Alberta were resolved by eliminating the production penalty and reaching an agreement that moves Alberta’s import share of their domestic supply up to the level of other member provinces.

In 2001, the Agency began to draft a renewed FPA for broiler hatching eggs. During that time Saskatchewan expressed interest in joining the Agency. Saskatchewan decided to wait for the renewed FPA, as it seemed the drafting process was progressing and the draft FPA would be completed within a couple of years. As mentioned above, the drafting of the renewed FPA has not been finalized and additional discussions are required. Therefore, while additional discussions take place, Saskatchewan has taken the decision to sign the existing FPA.

The renewal of the FPA, which remains a priority for the Agency, would resume once Alberta and Saskatchewan have been added as signatory provinces.

3. Objectives

The major amendments to the Canadian Hatching Egg ProducersProclamation are the following:

  • — To amend paragraph 2(2)(a), a residency requirement, so that signatory provinces, rather than appointing board members from their respective provinces, appoint a Canadian resident. This would allow provincial commodity boards greater flexibility in determining who would represent them on the Agency board of directors.
  • — To amend subsection 2(3) to permit CHF to appoint an alternate (temporary substitute) member and to allow for an independent Chair of the Agency. Pursuant to paragraph (2)(a), whenever a member is absent or unable to act, a temporary substitute member of the Agency can be appointed to act in the place and stead of the member appointed by that Commodity Board.
  • — To delete subsection 2(6), which limits under subsection (2) the appointment of any member for a maximum of four consecutive terms.
  • — To remove from the French text in the interpretation section of the Proclamation “Commission ontarienne de commercialisation des œufs d’incubation et des poussins de poulet” and replace it with its official name “Ontario Broiler Hatching Egg & Chick Commission.”

4. Description

This proposal would allow the provinces of Alberta and Saskatchewan to

  • — be signatory members;
  • — vote on Agency business; and
  • — add three extra members to the Agency’s board of directors, from five to eight, including a second member of CHF who can serve as an alternate member.

The addition of the provinces of Alberta and Saskatchewan as signatories would ensure better representation within the national supply management system. It would also serve to stabilize the hatching egg sector by adding two provinces and one extra member from CHF to the board.

The amendments stated above would facilitate the operations of the Agency and also allow for greater succession planning by removing the limitations of tenure and residency and allow for an independent Chair of the Agency.

5. Consultation

Preliminary discussions were held with the provincial commodity boards and supervisory boards (see footnote 5) from all of the current signatory provinces, as well as with Alberta and Saskatchewan. Every board indicated their support for this approach. Formal consultations on the amendment of the existing Proclamation to allow Alberta and Saskatchewan to join CHEP followed in November 2011. Since then, a series of meetings have taken place between the signatory provinces, CHEP and NFPC. In addition, multiple discussions between provincial supervisory boards and the NFPC have occurred.

In order to finalize these consultations, the NFPC, Agriculture and Agri-Food Canada and CHEP have sent out letters clearly explaining the proposed amendments to the Proclamation to all current signatory provinces, as well as the provinces of Alberta and Saskatchewan. The non-signatory provinces and territories were copied on these letters as well. After extensive consultations with signatory provinces and Alberta and Saskatchewan, all parties expressed their support for the proposed amendments of the CHEP Proclamation.

6. Rationale

The proposed amendments are consistent with the wording found in the Proclamation and would provide more flexibility to the provinces in determining who, subject to their own legislation, would represent them on CHEP’s Board of Directors. These amendments would also expand and aid in the administration of the Board with regard to the appointment of a substitute member for the CHF and an independent Chair. The elimination of term limits would allow for greater continuity on the Board and facilitate succession planning.

7. Implementation, enforcement and service standards

Implementation of this proposal is being brought forward pursuant to paragraph 16(1) of the FPAA which states that “The Governor in Council may, by proclamation, establish an agency with powers relating to any farm product or farm products the marketing of which in interprovincial and export trade is not regulated pursuant to the Canadian Wheat Board Act or the Canadian Dairy Commission Act if the Governor in Council is satisfied that a majority of the producers of the farm product or of each of the farm products in Canada is in favour of the establishment of an agency.” The enforcement of any provisions in this amendment is the responsibility of CHEP, under the monitoring of the NFPC, and may be found clearly identified in the CHEP Proclamation, the FPA and all applicable provisions of the FPAA.

8. Contact

Primary contact

Marc Chamaillard
Director
Corporate and Regulatory Affairs
Farm Products Council of Canada
Telephone: 613-759-1706

Secondary contact

Pierre Bigras
Manager
Regulatory Affairs
Farm Products Council of Canada
Telephone: 613-759-1712

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsections 16(1) (see footnote a) and 17(1) and (2) (see footnote b) of the Farm Products Agencies Act (see footnote c), proposes to direct that a Proclamation do issue amending the Canadian Hatching Egg Producers Proclamation (see footnote d) in accordance with the annexed schedule.

Interested persons may make representations concerning the proposed Proclamation within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Pierre Bigras, Manager, Regulatory Affairs, Farm Products Council of Canada, Central Experimental Farm, Building 59, 960 Carling Avenue, Ottawa, Ontario K1A 0C6 (tel.: 613-759-1555; fax: 613-759-1566; email: pierre.bigras@agr.gc.ca).

Ottawa, February 14, 2013

JURICA ČAPKUN
Assistant Clerk of the Privy Council

SCHEDULE

1. (1) The third paragraph of the Canadian Hatching Egg Producers Proclamation (see footnote 6) is amended by replacing “five” with “eight”.

(2) Paragraphs (a) and (b) of the fourth paragraph of the Proclamation are replaced by the following:

  • (a) broiler hatching eggs and chicks produced in the Provinces of Ontario, Quebec, Manitoba, British Columbia, Saskatchewan and Alberta for chicken production and marketed in interprovincial or export trade; and

  • (b) broiler hatching eggs and chicks produced for chicken production in the Provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador as well as Yukon, the Northwest Territories and Nunavut and shipped into the Provinces of Ontario, Quebec, Manitoba, British Columbia, Saskatchewan and Alberta in interprovincial trade and not for export.

(3) Paragraph (a) of the fifth paragraph of the Proclamation is replaced by the following:

  • (a) to implement a quota system for persons engaged in the marketing of chicks produced in the Provinces of Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland and Labrador or Yukon, the Northwest Territories or Nunavut for chicken production and marketed in the Provinces of Ontario, Quebec, Manitoba, British Columbia, Saskatchewan and Alberta;

2. (1) The definitions “non-signatory provinces” and “signatory provinces” in section 1 of the schedule to the Proclamation are replaced by the following:

  • “non-signatory provinces” means the Provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador as well as Yukon, the Northwest Territories and Nunavut; (provinces non signataires)
  • “signatory provinces” means the Provinces of Ontario, Quebec, Manitoba, British Columbia, Saskatchewan and Alberta. (provinces signataires)

(2) The definition “Commodity Board” in section 1 of the schedule to the Proclamation is amended by striking out “and” at the end of paragraph (c) and by adding the following after paragraph (d):

  • (e) Saskatchewan, the Saskatchewan Broiler Hatching Egg Producers’ Marketing Board, and

(3) Paragraph (a) of the definition “Commodity Board” in section 1 of the schedule to the French version of the Proclamation is replaced by the following:

  • a) En Ontario, la Ontario Broiler Hatching Egg & Chick Commission;

3. (1) Paragraph 2(2)(a) of the schedule to the Proclamation is replaced by the following:

  • (a) the Commodity Board of each signatory province shall appoint one member, who is a resident of Canada, from among those of the Commodity Board’s directors who are actively engaged in the production of broiler hatching eggs and, where that member is involved in the setting of broiler hatching eggs in incubators, the hatchery of that member shall be licensed by the provincial Commodity Board that is authorized to license or, in the case of the Province of Quebec, shall be covered by an association of hatcheries accredited by that province’s supervisory board;

(2) Subsection 2(3) of the schedule to the Proclamation is replaced by the following:

(3) A Commodity Board or the Canadian Hatchery Federation may appoint a person with the same qualifications for membership as are required for a member to be appointed by the Board or Federation to be a temporary substitute member to act in the place of each member appointed by it when that member is absent, is unable to act or is elected Chairperson of the Agency and to hold office as a temporary substitute member until the member in whose place the temporary substitute member is appointed to act ceases to be a member.

(3) Subsection 2(6) of the schedule to the Proclamation is repealed.

4. The table to section 6.1 of the schedule to the Proclamation is replaced by the following:

TABLE

Province or Area

Total Number of Chicks

Atlantic Provinces

172,702

Yukon

0

Northwest Territories

0

Nunavut

0

[8-1-o]

  • Footnote a
    S.C. 2011, c. 25, s. 35
  • Footnote b
    S.C. 1993, c. 3, s. 9 and 13(F)
  • Footnote c
    R.S., c. F-4; S.C. 1993, c. 3, s. 2
  • Footnote d
    SOR/87-40
  • Footnote 1
    Marketing includes advertizing, assembling, buying, financing, offering for sale, packaging, processing, selling, shipping, storing and transporting.
  • Footnote 2
    Provincial commodity board (created under provincial laws) means an organization created by producers to market their products that is funded by the farmers of those crops. The leadership and strategies of the commodity boards are set through votes by the farmers. They also fund other ventures beneficial to their members such as research.
  • Footnote 3
    A quota regulation enables an agency to establish a quota system for persons engaged in the marketing of broiler hatching eggs chicks produced in a signatory province.
  • Footnote 4
    An orderly marketing regulation enables an agency to establish a quota system for persons engaged in the marketing of broiler hatching eggs chicks produced in a non-signatory province, yet marketed into a signatory province.
  • Footnote 5
    A supervisory board is a provincial (or territorial) government organization mandated to supervise the operations of provincial (or territorial) commodity boards within a province (or territory).
  • Footnote 6
    SOR/87-40; SOR/2007-196