Canada Gazette, Part I, Volume 154, Number 11: Regulations Amending the Health of Animals Regulations (Hatchery)

March 14, 2020

Statutory authority

Health of Animals Act

Sponsoring agency

Canadian Food Inspection Agency

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The following issues exist with the current hatchery regulations.

(1) The current regulations are outdated and contain rigid requirements

The regulations have not kept pace with industry practices, including technological changes and scientific developments, nor do they reflect modern methods for disease control. Regulations such as these, with requirements that are too rigid, hinder industry from adopting new innovations and technologies. In addition, Canada’s trading partners have recently updated and implemented programs to keep up with the pace of scientific innovations as well as with new and emerging strains of Salmonella. However, Canada cannot do the same until the regulations are updated.

(2) The current regulations present limitations in addressing diseases

The CFIA does not have the authority under current regulations to develop policy or programs for pathogens such as Salmonella Enteritidis. Without requirements for proper control and monitoring mechanisms, there is a risk that such emerging pathogens would contaminate supply flocks, their eggs and then chicks and eggs that would eventually enter into the food chain and could result in public health concerns.

(3) The current regulations do not provide for national consistency

The regulations are inconsistent among provinces and this results in a lack of standardized program nationally. For example, section 79 of the Health of Animals Regulations provides that for a flock to be an approved hatchery supply flock, it must be designated as one in accordance with any regulations in force in the province in which the flock is located. Some provincial regulations are stronger than the Health of Animals Regulations, while other provinces have less stringent requirements. National consistency in hatchery requirements would promote uniform monitoring and surveillance of diseases of concern (such as Salmonella Enteritidis).

Background

Hatcheries and industry structure

A hatchery is a place where hatching eggs are incubated and birds are hatched for an intended purpose (e.g. further breeding, to produce table eggs or meat) at another location. Hatching eggs are fertilized poultry eggs that come from breeder birds (also known as supply flocks) for incubation and hatching. These supply flocks are made up of one or more generations (e.g. grandparents, great-grandparents) of flocks maintained for establishing, continuing, or improving parent lines — the last of which act as the parent breeding flock that produces birds for the food supply (e.g. table eggs and broiler chickens). Commercial poultry production therefore reflects a pyramid, with a few breeding birds at the top, followed by hatcheries supplying chicks to a large number of producers for meat and table eggs, to then be sold to consumers.

Hatcheries and disease dissemination

Given its place between supply flock operators and processors, the hatchery is a critical point of potential dissemination of diseases (e.g. Salmonella, avian influenza) that are a risk to human health and animal health. In Canada, human health incidences of Salmonella illnesses have steadily increased since 2008. A recent study estimates that on a per-year basis, Salmonella infections are the cause of 87 500 illnesses, 1 000 hospitalizations, and 17 deaths. ^{footnote 1} Another study estimates the direct annual medical costs of Salmonella infections to be CAN$17 million. ^{footnote 2} Salmonella Enteritidis causes the majority of these Salmonella illnesses in humans; however, it is often undetected in birds and the number of overall infections attributed to hatcheries is not known.

Salmonella Enteritidis can be transmitted vertically, from the hen to chicks through the egg, which means that if present and undetected, it can be transmitted from the breeding flock supplying the grandparent chicken, down to the processed birds, the retail level and the consumer (through improper handling or cooking). Salmonella Enteritidis can also be transmitted horizontally from one bird to another through contact with feces, dead carcasses, barn dust, and rodents and other pests, as well as through feed infected with Salmonella.

It is generally agreed upon in veterinary communities around the world that the most effective way to limit the transmission of Salmonella diseases such as Salmonella Enteritidis is to address risks at the top of the pyramid — hatcheries. Proper monitoring, sampling, and testing are required to mitigate risks throughout the production chain.

Legislative and regulatory context

The federally regulated poultry breeding and hatching production environment begins with supply flocks and ends with day-old chicks. The Health of Animals Act governs the regulatory requirements on hatcheries for disease control and production processes. Regulatory requirements are organized through three separate regulations: the Hatchery Regulations, the Hatchery Exclusion Regulations and sections 79 to 79.2 and Schedule VI of the Health of Animals Regulations.

The Hatchery Regulations regulate hatcheries that receive fertile eggs for incubation and produce chicks that enter the food chain.

Sections 79 to 79.2 of the Health of Animals Regulations apply to approved hatchery supply flocks, which are limited to chickens and turkeys, and outline their required testing to check for freedom from Salmonella Pullorum and Salmonella Gallinarum. Under the Health of Animals Regulations, tests for these diseases must be performed and results immediately reported to the CFIA. The Hatchery Exclusion Regulations exclude certain buildings and premises from the definition of “hatchery” by the number of eggs and type of bird handled. Any buildings or premises that have an incubator capacity of fewer than 1 000 eggs and are not used to store for incubation chicken, turkey, duck, goose, or game bird eggs are excluded from the definition of hatchery.

International context

Canada is a member of the World Organisation for Animal Health (OIE), an intergovernmental organization responsible for improving animal health worldwide. The OIE sets standards for animal disease prevention and control that members adhere to, in order to facilitate trade. Of particular importance for hatcheries is the OIE Terrestrial Animal Health Code, which contains recommendations for the prevention of dissemination of infectious agents and advocates for a “written biosecurity plan” (e.g. preventive control plan), cleaning and disinfection, and surveillance to detect infectious agents. This code is a result of consensus among veterinary authorities of OIE members.

International approaches to disease management for hatcheries and supply flocks are changing. Canada’s main trading partners (i.e. the United States and the European Union) have recently taken steps to bolster their regulatory regime and programming to enhance Salmonella surveillance. The European Union adopted regulations in 2006 that applied to all segments of poultry production, with a strong focus at the top of the pyramid. The United States modernized their poultry slaughter inspection standards in 2014 by establishing higher standards for Salmonella.

Objective

The objectives of this proposed regulatory amendment are the following:

• Put all of the federal animal health requirements pertaining to hatcheries and supply flocks into the Health of Animals Regulations to be applied consistently across the hatching sectors of the poultry industry in Canada;
• Incorporate by reference two documents, one that sets disease and monitoring standards for hatcheries and supply flocks, and one that sets the requirements for the care and handling of poultry; updates can be made as required to reflect modern science and technology; and
• Adopt a modernized approach to inspection through the requirement of a preventive control plan to verify that industry is controlling identified risks and achieving the required regulatory outcomes.

The proposed regulatory amendments would result in stronger policies and programs to reduce the level of Salmonella Enteritidis infection risks in poultry and poultry products with the objective of having a safer Canadian food supply.

Description

The proposed amendments would replace requirements relating to hatcheries that currently exist under three separate sets of regulations (i.e. the current Hatchery Regulations, the Hatchery Exclusion Regulations and sections 79 to 79.2 and Schedule VI of the Health of Animals Regulations). The current regulations would be repealed or amended, and all health of animals regulations pertaining specifically to hatcheries would be modernized and found in one new part of the Health of Animals Regulations. The Hatchery Exclusion Regulations are ministerial regulations and that repeal would occur separately, following the 12-month transitional period after the requirements for hatchery operators in the Health of Animals Regulations come into force. This is also described in the “Implementation, compliance and enforcement, and service standards” section, at the end of this document.

The amendments would include the application of ambulatory incorporation by reference. Incorporation by reference is a drafting technique that may be used to bring the content of an incorporated document into a regulation. Documents incorporated by reference have the same force as the regulation into which it is incorporated. An ambulatory reference refers to the incorporation of a document in such a way as to include any future changes to that document without a need to remake the regulation. The relevant authorities that allow for the use of incorporation by reference are found in section 64.1 of the Health of Animals Act.

The amendments would incorporate by reference two documents: (1) the Code of Practice for the Care and Handling of Hatching Eggs, Breeders, Chickens and Turkeys (hereinafter referred to as the Code), written and published by the National Farm Animal Care Council; and (2) the Canadian Hatchery and Supply Flock Testing Standards (hereinafter referred to as the Testing Standards), written and published by the CFIA.

The Code is a nationally developed guideline for the care and handling of poultry. It promotes sound management and welfare practices for housing, care, transportation, and other poultry husbandry practices. The amendments would incorporate by reference the Requirements sections of the Code that refer to industry’s expected and acceptable practices that are fundamental to the care of poultry. Meanwhile, the Testing Standards describe the environmental sampling and testing frequency and standards for hatcheries and supply flocks. The disease classifications, sampling and testing standards are based on clear and scientifically justified principles.

The proposed amendments would also provide hatcheries with the flexibility to use new technologies to meet regulatory requirements. For example, the amendments would not prescribe the procedures for maintenance, cleaning, and disinfection of equipment, facilities, and materials, but would prescribe that measures taken to mitigate risks in this respect be documented, implemented, and reviewed. Hatchery operators would develop and implement a preventive control plan and CFIA inspectors would use this information to verify that the implemented approaches are effective. This approach to regulations allows industry to continue to meet regulatory requirements while incorporating changing science and technology.

In further detail, the proposed regulatory amendments would require the hatchery operators to comply with the following:

• Develop a preventive control plan that would identify the risks and describe the mitigation procedures applied to prevent the introduction and spread of pathogens or contamination in animals and, thereafter, the food supply. The preventive control plan would also detail measures that would be implemented by the hatchery operator to meet the requirement to maintain a licence to operate. Those preventive control plan elements would be for management of access premises, employee training in biosecurity measures, proper maintenance of equipment, facilities and related materials, cleaning and disinfection, hatchery debris and garbage disposal, neonatal feed (e.g. hydration gels) and vaccine, water management, and pest control in order to mitigate the risk of introduction and spread of biological hazards.
• Maintain an existing licence, contingent on developing, implementing and maintaining (i.e. annual review) a preventive control plan.
• Meet all applicable requirements listed in select sections of the Code (housing and environment, feed and water, personnel knowledge and skills, euthanasia, flock health management).
• Perform regular sampling and testing for sanitation and diseases as outlined in the Testing Standards.
• Source only eggs and chicks from supply flocks that meet the sampling and testing requirements detailed in the Testing Standards.
• Require their supply flock operators to develop, implement and maintain a preventive control plan.
• Require their supply flock operators to meet all requirements (housing and environment, feed and water, personnel knowledge and skills, euthanasia, flock health management) listed in selected sections of the Code.

Preventive control plans

The proposed requirement to prepare, implement, and maintain a written preventive control plan would require hatchery operators setting 1 000 eggs or more (i.e. commercial operators) to identify the specific risks in their operations and describe in writing the actions they have in place to mitigate these risks. Hatchery operators would be required to ensure that their supply flock operators also have a written preventive control plan to address the risks in their operation. The proposed preventive control plan requirement is new for some operators that do not have a preventive control plan yet. The requirement would impose a cost for those operators. However, this requirement aims to provide flexibility to industry by allowing hatchery operators to identify risks that are unique to their operation and describe how those risks would be mitigated, in contrast to the current state where requirements are rigid, prescriptive, and not responsive to current and individual operating conditions.

Other jurisdictions and standard-setting bodies strongly recommend written preventive control plans, referring to them more generally as “biosecurity plans.” For example, the National Avian On-Farm Biosecurity Standard, a program developed by the joint government–industry committee known as the Avian Biosecurity Advisory Committee, advocates for a “written on-farm biosecurity plan regardless of the size or type of facility.” In Ontario, the Ministry of Agriculture, Food and Rural Affairs’ “Biosecurity Fundamentals for Visitors to Livestock Facilities” states that “each farm needs to develop a specific, documented biosecurity plan.” The OIE’s Terrestrial Animal Health Code, referenced earlier, also recommends a “written biosecurity plan.” Canada’s two biggest poultry trading partners (the United States and the European Union) require that every poultry farm (e.g. breeders, hatcheries, egg layers, and meat-producing farms) have a written biosecurity plan.

Regulatory development

Consultation

Background

Hatchery operators and supply flock operators are a small group within the poultry industry. There are five major organizations at the national level that are involved in the poultry production environment: the Canadian Hatchery Federation (under the umbrella of the Canadian Poultry and Egg Processors Council), the Canadian Hatching Egg Producers, the Chicken Farmers of Canada, the Turkey Farmers of Canada, and the Egg Farmers of Canada. There are currently 92 regulated hatcheries (as of April 2018), 51 of which are members of the Canadian Hatchery Federation and form part of the supply-managed system. Those hatcheries outside of the supply-managed system are generally smaller hatcheries such as waterfowl and game birds.

History

Since April 2013, the CFIA has undertaken extensive engagement with its stakeholders, including

• The five major national poultry organizations defined above,
• The remaining 41 permitted hatcheries that are not members of the Canadian Hatchery Federation (i.e. these are waterfowl and game bird producers, as well as research-oriented producers such as those who are affiliated with universities),
• All provincial and territorial ministries of agriculture, through the Council of Chief Veterinary Officers, and
• The joint government, industry, and academia consultation working group, known as the Federal-Provincial-Territorial Working Group on the Prevention and Control of Salmonella Enteritidis and Campylobacter in Poultry (the working group).

In 2013, the CFIA consulted stakeholders by sending a questionnaire and a document describing the intent of proposed amendments to the regulations. A draft version of the Hatchery and Supply Flock Program was also included. While the overall reaction was positive, the response rate of these stakeholders was low.

In 2014, stakeholders received a document detailing, by theme, the current Hatchery Regulations and the intent of the proposed changes. Later in 2014, the CFIA completed the drafting instructions for the proposed amendments and consulted with stakeholders on a description of the instructions. The overall response rate improved for both of these consultations compared to 2013.

Also in 2014, the working group produced the National Strategy for the Control of Poultry-Related Human Salmonella Enteritidis Illness in Canada, which recommended initiatives to address gaps in poultry and egg sectors that impact the control of food-borne Salmonella Enteritidis in Canada. One “high priority” initiative recommended by the working group was “regulatory actions to improve control of Salmonella Enteritidis in the poultry sectors.”

The most recent round of formal consultations took place in April 2017 with the purpose of generating more recent consultation feedback to inform the draft regulatory text. The CFIA provided a summary document detailing the proposed amendments, as well as more information about the concept of preventive control plan.

The CFIA has continued to meet with the working group, and individually with industry on multiple occasions since the last consultation round. Most notably, the CFIA has met with the members of the Canadian Hatchery Federation, breeder farm owners and operators of broiler breeders, turkey breeders and layer breeders on four occasions since fall 2017, and most recently in February 2019. These meetings consisted of discussions on CFIA’s stated commitment to prepublish the proposed amendments to the current set of three hatchery regulations and the path forward, as well as changes in industry structure and innovation to further inform the amendments. The working group has also met four times during that span over similar dates.

Both industry and members of the working group have repeatedly expressed their support to amend the federal regulations that govern hatcheries.

Key messages and themes expressed by stakeholders

Overall, the response provided by stakeholders has been positive. Industry, in particular, indicated that the proposed amendments are overdue and the consolidation of the three regulations was appropriate. Still, stakeholders expressed the following concerns:

Concerns

1. Incorporation by reference

Some stakeholders expressed concern about incorporating an OIE chapter, “Biosecurity Procedures in Poultry Production.” Although Canada is a member of the OIE and is consulted during all chapter revisions, there would be no assurance that the comments and suggestions of Canada would be included as all member countries are also given the opportunity to comment. Concerns were also raised on the document containing provisions as “recommendations,” rather than “requirements,” which would make them unenforceable.

Responders recommended that CFIA’s National Avian On-Farm Biosecurity Standard should be considered since this document is written by the CFIA in collaboration with industry. Lastly, concern was raised that the Code was written specifically for only chickens and turkeys. In summary, concerns were raised over the choices of documents to be incorporated by reference rather than the use of incorporation by reference.

CFIA response

Following the consultations, the CFIA reviewed and decided not to proceed with the tentative plan to incorporate by reference the OIE chapter. In its place, the CFIA considered incorporating by reference three sections from the National Avian On-Farm Biosecurity Standard (i.e. Access Management, Animal Health Management, and Operational Management); however, after a round of internal review, this proposal was also dismissed. Rather than incorporate by reference, the CFIA determined the best approach was to incorporate components of the outcomes of the Standard in the proposed amendments.

The CFIA also reviewed the proposed new hatchery and supply flock program and after internal discussions concluded that the document was not suitable for incorporation by reference due to its length and style (i.e. not legally enforceable). As a result, the disease classification and monitoring procedures sections in the document were simplified and became a new document, CFIA’s Canadian Hatchery and Supply Flock Testing Standards. The document presents the classification and testing requirements for hatcheries and supply flocks. Stakeholders are aware of this change as communicated through the planned industry meetings described earlier. While the CFIA has not formally consulted on this specific document, its contents formed part of the larger CFIA’s Hatchery and Supply Flock Program document, which stakeholders are aware of from previous consultations.

The CFIA obtained official permission from the National Farm Animal Care Council to incorporate the Code by reference into the regulations. The chapters are written in a universal manner whereby best management practices can be made applicable to every poultry operation regardless of species. For example, cleaning and disinfection requirements and provision of adequate temperature and humidity in incubators are applicable for all types of poultry.

2. Testing for Salmonella Enteritidis

Some stakeholders expressed concern over new requirements to test for Salmonella Enteritidis, stating that current industry-led testing levels for Salmonella Enteritidis, which is voluntary, are adequate and they do not see the need to change.

CFIA response

As part of CFIA’s disease prevention approach to pathogens, the proposed amendments include standards for sampling and testing of zoonotic and emerging pathogens that can be reviewed and updated as needed. Currently, Salmonella Enteritidis is the zoonotic pathogen of concern. Therefore, the monitoring and testing for Salmonella Enteritidis are included in the above-mentioned standards document. By using ambulatory incorporation by reference, the CFIA can in the future update the document in a timely manner, following consultation, to reflect changes around animal health and food safety concerns. This would assist in mitigating any future risks from emerging diseases that may appear in Canadian hatcheries and supply flocks, especially those that do not currently exist in Canada (e.g. recent Salmonella Braenderup outbreak in eggs in the United States).

Furthermore, industry-led testing for zoonotic Salmonella (e.g. Enteritidis) is considered voluntary and is therefore inconsistently applied across Canada between provinces and operators. Federally mandated testing would require all regulated parties to comply in a manner that is uniform across Canada and meet the underlying objective of mitigating risks of poultry disease and dissemination at the top of the poultry production pyramid.

3. Preventive control plans

Hatchery and supply flock operators expressed concern about the development, implementation and maintenance of a preventive control plan; seeking assurances that their respective food safety enhancement program and on-farm food safety programs would be recognized by the CFIA as sufficient to meet this new requirement.

CFIA response

Under the proposed amendments, a person would be required to have a preventive control plan developed before a licence may be issued to them. A preventive control plan provides flexibility for industry to utilize a number of management systems to mitigate risks and minimize hazards. For example, Salmonella Enteritidis is a disease risk that can be spread to humans via poultry and poultry products. This organism can enter a facility through various ways; however, risks can be lessened through mitigation measures such as effective cleaning and disinfection, personnel biosecurity, pest control, and proper garbage disposal. Regulated parties would be required to document how these risks would be mitigated within their respective establishments.

The Food Safety Enhancement Program is CFIA’s quality management program that is based on the principles of Hazard Analysis and Critical Control Points (HACCP). Following industry’s response, the CFIA communicated to hatcheries that establishments that are recognized through the Food Safety Enhancement Program would satisfy most parts of the requirement for a preventive control plan. Regulated parties would still be required to modify the program to make sure that all the required preventive control plan elements are addressed. For example, the Food Safety Enhancement Program has a very strong focus on biological, chemical and physical hazards, but it may be that some requirements related to animal welfare (as found in the Code) would need to be incorporated.

4. Small operators

Smaller, independent hatcheries (i.e. those that are not part of the supply-managed industry) commented that the provisions, such as developing and maintaining a preventive control plan, would be too onerous for them to comply with. They also commented that the required minimum setting capacity of 1 000 eggs is too low and suggested that the dimensions or size of the incubator should be used instead. ^{footnote 3}

CFIA response

This threshold is based on the smallest size of commercial incubators available in the market. Despite provincial health partners’ concern with human health hazards and the international reputation for these small operations to spread avian diseases of international concern (e.g. avian influenza, Newcastle disease, Salmonella), the Hatchery exclusion Regulations do not consider hatcheries with a minimum setting capacity of under 1 000 eggs to be commercial and are maintaining the exemption of these smaller operations.

Those hatchery operators with a setting capacity of under 1 000 eggs would continue to be exempt from all federal requirements for hatcheries. This is a result of the CFIA’s intent to maintain the requirement to mandate licensing and written preventive control plans only for hatcheries that have a minimum setting capacity of 1 000 eggs.

The Safe Food for Canadians Regulations included an exception from the requirement to prepare a written preventive control plan for those food businesses with gross food sales under $100,000, unless those food businesses are involved in a list of activities that includes a food animal, meat product, egg, or processed egg product. Rather than gross sales, the Hatchery Regulations define a population of businesses eligible for an exception by egg-setting capacity.

The exception in the Safe Food for Canadians Regulations was based on an analysis of the food safety risks. The Hatchery Regulations regulate a very small and discrete part of the poultry supply chain in Canada that deals with food animals, similar to the food businesses that do not qualify for the exemption under the Safe Food for Canadians Regulations. As stated earlier in this Regulatory Impact Analysis Statement, the most effective way to limit the transmission of biosecurity hazards is to address risks at the top of the pyramid, i.e. hatcheries and supply flock breeders. Risks introduced at the top of the poultry production pyramid would have an impact on an exponentially larger number of operators and products as it travels down the pyramid or poultry supply chain.

For example, a hatched chick that is infected with Salmonella Enteritidis (e.g. due to lack of sanitation at the operator premises) is to be sold to a poultry producer. The infected chick could transmit the disease to its hatch mates (i.e. other chicks) in that hatchery, then, as the chicks are sold for use as broilers or layers, the infected chicks would be distributed to a greater number of production barns, leading to a possible larger-scale problem at each farm (e.g. horizontal disease transmission via equipment, farming materials). This problem is particularly acute if the premises have multiple barns and flocks. It could then eventually lead to a contaminated product in the slaughter and processing plants and down to the public for consumption, affecting a larger and larger number of individuals and businesses as it travels down the supply chain. For this reason, the mitigation of risks for operators that represent the first components of poultry production is the most effective way to ensure that risks do not get distributed widely into the subsequent levels of the production pyramid.

To assist operators in identifying the risks to their operation and developing their plans, the CFIA would develop a preventive control plan template. For instance, the CFIA would publish a guide to complement the Testing Standards. This document would explain the Testing Standards in greater detail and provide further guidelines for disease monitoring, sampling, and response to positive disease isolations. As part of transitioning the industry to the proposed Regulations, there would be a 12-month transitional coming into force from the day on which the Regulations are registered under the Statutory Instruments Act. During this period, hatchery operators would have the opportunity to review and understand the updated requirements and apply guidance materials that would be made available to them by the CFIA.

Modern treaty obligations and Indigenous engagement and consultation

No impacts on Indigenous peoples have been identified, in particular in relation to the Government’s obligations to rights protected by section 35 of the Constitution Act, 1982, modern treaties and international human rights obligations.

Instrument choice

1. Repeal all federal regulations

This option would repeal all the federal regulations relating to hatcheries, leaving the provinces to regulate hatcheries within their jurisdiction and industry to set and maintain their own standards. Since some provinces have stronger regulations (i.e. for sampling and testing of Salmonella Enteritidis) than the current federal regulations, impacts for products moving within provincial borders would be minor. Hatcheries in provinces without provincial hatchery regulations would therefore go unregulated. These provinces would either have to make or modify any poultry regulations to make up for the repeal of the federal requirements. Industry groups that have insurance programs would follow the standards set by the insurance system, but this is not true for all commodity groups and not true for all provinces.

This option is not a realistic or proposed option. It could expose animals and Canadians to a potential increase in risk of infection of current and emerging forms of Salmonella. There is also the potential for a loss of integrity in terms of trade and Canada’s standing with trading partners. For example, there would no longer be requirements to demonstrate the animal as being part of a Salmonella pullorum eradication program as partial fulfillment of an export certificate (pullorum disease is a notifiable disease according to the OIE).

2. Make amendments to the current regulatory framework

The option to make amendments to the current regulatory framework was chosen, as it is the most effective way to simultaneously keep pace with industry advances in technology and science, consolidate existing regulations into one location in the Health of Animals Regulations, and harmonize requirements to enable national consistency.

This option would allow the Regulations to be more responsive to new and emerging diseases (through incorporation by reference). While this option has elements that would impose costs (e.g. development of a preventive control plan), it is preferred as it would allow the Regulations to keep pace with innovations in science and technology. By making amendments to an outdated regulatory framework, the Regulations would provide a better understanding of provisions, concentrate on diseases that are emerging or re-emerging, and direct resources of both the regulator and the regulated parties to policies and programs that would address poultry and human health together. As a result, the general public could potentially benefit from an enhanced protection of the risks from poultry production, and animal health could similarly be enhanced.

The poultry industry is a proactive industry that is always seeking ways to improve and that has initiated some industry-led programs to meet current challenges. These programs are all on a voluntary basis and, at times, are not consistent across poultry commodities. By bringing these amendments forward, policies and programs would be developed and applied to the entire country to consistently cover all the identified poultry commodities and align with the regulations of key trading partners.

Regulatory analysis

Benefits and costs

This section assesses the incremental impacts (i.e. benefits and costs) resulting from the difference between the baseline and regulatory scenarios. The baseline scenario describes the situation under the current regulatory framework and what it would look like in the future if the proposed amendments did not come into force. The regulatory scenario describes the alternate situation should the proposed amendments come into force. The complete descriptions of the baseline and regulatory scenarios and the methodology used to assess the incremental impacts (including detailed assumptions) are fully documented in a cost-benefit analysis report, which is available from the CFIA by request.

I. Affected stakeholders

It is anticipated that the following stakeholders would be affected:

• hatcheries
  • a total of 92 hatcheries, including 89 hatcheries that supply the food chain and 3 hatcheries that do not supply the food chain;
• supply flock farms
  • a total of 609 farms;
• Canadians; and
• the CFIA.

II. Baseline versus regulatory scenario

The key elements of the baseline and regulatory scenarios are described below.

1. Shifting from a permit regime to a licensing regime

Under the current Hatchery Regulations, any person operating a hatchery in Canada is required to have a permit. The permit has no expiry date and there is currently no renewal process after an initial permit is granted. The proposed amendments would shift registration with the CFIA from this permit framework towards a licensing regime. Existing hatcheries with a permit would automatically be granted an initial licence once the proposed amendments come into force. There would be no fees associated with the initial licence granted. However, all licence holders would need to apply for renewal every two years and be subject to a fee with each renewal.

Table 1: Proposed licensing requirements

Stakeholder	Baseline Scenario	Regulatory Scenario
Hatcheries	Required to operate with a permit No renewal fees and renewal process once the initial permit is granted	Required to operate with a licence Renewal fees and renewal process would be required every two years

2. New preventive control and preventive control plan requirements

Preventive controls and preventive control plans are not required by the current regulations. However, there are many existing programs that are similar to preventive control plans. In addition, for supply flock farms, the CFIA provides the voluntary Food Safety Recognition Program (FSRP) to recognize food safety programs that have been developed by the poultry organizations in line with a systematic and preventive approach to food safety.

The proposed requirements for preventive controls and preventive control plans would be broader and more comprehensive than any of the existing programs and would be mandatory for all hatcheries and supply flock farms.

Hatcheries and supply flock farms that do not currently have any type of preventive control plans would carry costs to develop a written plan for the first time. Those with a plan (e.g. Food Safety Enhancement Program) might need to modify it to be 100% compliant with the regulatory proposals. The required time to modify these plans may be minimal if these plans are based on HACCP principles.

Table 2: Proposed preventive control and preventive control plan requirements

Stakeholders	Baseline Scenario	Regulatory Scenario
Hatcheries	Voluntary enrollment in food safety programs (e.g. Food Safety Enhancement Program)	Mandatory use of preventive controls and preventive control plans
Supply flock farms	Voluntary enrollment in food safety programs (e.g. On-Farm Food Safety Program)	Mandatory use of preventive controls and preventive control plans

3. New testing requirements for Salmonella Pullorum, Gallinarum and Enteritidis

Under the current Health of Animals Regulations, hatcheries are required to submit samples for testing for Salmonella Pullorum and Salmonella Gallinarum and to keep all testing records.

Similarly, the primary breeding supply flock farms are required to conduct Salmonella Pullorum and Salmonella Gallinarum testing on their flocks and keep records of these tests under the current Health of Animals Regulations. Any supply flock farms that are engaged in international trading activities also participate in other disease monitoring programs as required by their trading partners. There are also some voluntary provincial programs, such as the Ontario Hatchery and Supply Flock Policy, that provide disease monitoring schedules. In addition, some supply flock farms have purchased private insurance, as these insurance policies provide financial compensation for lost revenue due to disease incursions such as Salmonella Enteritidis.

The requirements of the Testing Standards for hatcheries and supply flock farms would be incorporated by reference in the proposed Regulations. The Testing Standards include newly modified testing and testing record-keeping requirements for Salmonella Pullorum and Salmonella Gallinarum, and new testing and testing record-keeping requirements for Salmonella Enteritidis.

Table 3: Proposed testing requirements

Stakeholders	Baseline Scenario	Regulatory Scenario
Hatcheries	Voluntary Salmonella Enteritidis testing record keeping of the supply flock farms	Mandatory Salmonella Enteritidis testing record keeping of the supply flock farms
Supply flock farms	No Salmonella Enteritidis testing and testing record-keeping requirements Mandatory Salmonella Pullorum and Salmonella Gallinarum monitoring and testing	Mandatory Salmonella Enteritidis testing and testing record-keeping requirements Mandatory Salmonella Pullorum and Salmonella Gallinarum monitoring and testing, but with fewer testing samples required

III. Description of benefits and costs

This section provides a list and a brief description of the incremental benefits and costs. The listing is divided into categories based on the benefits and costs, by stakeholder group, that were monetized and the benefits that were assessed qualitatively.

1. Monetized benefits for industry

a. Reduced Salmonella Pullorum and Salmonella Gallinarum testing for supply flock farms

The requirement for the number of screening samples (for example blood samples) for Salmonella Pullorum and Salmonella Gallinarum at supply flock farms would be reduced, thus resulting in cost savings on an ongoing basis.

b. Reduced testing for three hatcheries that do not supply the food chain

Three hatcheries would not meet the new definition of commercial poultry; therefore, they would no longer have to perform activities that are required by the current Hatchery Regulations, which include fluff or egg testing for Salmonella and record keeping. These hatcheries would also experience some administrative benefits on an ongoing basis associated with reduced record keeping.

c. Avoided inspection fees for three hatcheries that do not supply the food chain

Three hatcheries would not meet the new definition of commercial poultry; therefore, they would no longer have to pay inspection fees to the CFIA.

d. Reduced administrative burden associated with accompanying an inspector for three hatcheries that do not supply the food chain

Three hatcheries would not meet the new definition of commercial poultry; therefore, they would no longer have to be inspected by the CFIA. This means that they would no longer accompany an inspector during inspections.

2. Monetized benefits for the CFIA

a. Resource savings for inspection

There would be savings for the CFIA since it would no longer have to provide inspection services to the three hatcheries ^{footnote 4} that do not supply the food chain. The CFIA’s resource savings were calculated using the inspector’s time saved from not having to inspect the three hatcheries.

3. Qualitative benefits for Canadians

a. Minimized disease risks in poultry and enhanced food safety

Hatcheries are a critical point of potential disease dissemination (e.g. Salmonella) in the poultry production pyramid. They are positioned between the supply flock farms and the processing industry. Therefore, there is the possibility of diseases such as Salmonella Enteritidis, known to be vertically transmitted from hen to offspring, being transferred from the supply flock farms down to the offspring via the hatcheries. These diseases can pose a risk to poultry health and food safety. In Canada, human health incidences of Salmonella illnesses caused mostly by Salmonella Enteritidis have steadily increased since 2008.

The proposed amendments would implement monitoring requirements at the top of the pyramid — hatcheries — which is generally agreed in veterinary communities around the world as the most effective way to limit the transmission of Salmonella diseases like Salmonella Enteritidis. In turn, the requirements would minimize the Salmonella Enteritidis infection risks in poultry and poultry products and in humans who consume poultry products.

The analysis was unable to monetize the benefits of reduced Salmonella Enteritidis infection risks in poultry or in humans as a result of exposure to poultry or poultry products. There is no national database to track poultry illnesses caused by Salmonella Enteritidis infections, as symptoms of the infection in poultry are not typically present. Thus, it is hard to diagnose such cases. In addition, there is a lack of Canadian baseline data to track sources of human illnesses back to the contaminated poultry or poultry products, even though poultry and poultry products have been identified as the primary sources of Salmonella Enteritidis. Data gaps limited the ability to assess the baseline risk and to quantify any potential change in the risk.

b. Increased consumer confidence

With up-to-date standards and regulations regarding preventive control plans, Canadian consumers would have increased confidence in food safety.

4. Qualitative benefits for industry

a. Improved clarity and consistency for commercial poultry

By introducing a definition of a commercial poultry, the proposed regulatory amendments would introduce a clear and consistent definition across the country.

b. Improved alignment with international standards

The proposed amendments would better align Canadian standards with those of its major international trading partners, which include the United States and the European Union. As a result, this would lead to greater market access for Canadian poultry products.

c. Improved alignment of regulations across provinces

The proposed amendments would result in alignment among provincial requirements in testing, biosecurity and animal welfare for all hatcheries and supply flock farms.

d. More responsive regulations ^{footnote 5}

The proposed amendments would require testing of zoonotic pathogens, as outlined by the Testing Standards, which would be incorporated by reference. Using incorporation by reference would allow the CFIA to respond more quickly and efficiently to emerging diseases and practices.

5. Qualitative benefits for the CFIA

a. Enhanced enforcement tool for the CFIA through licensing

The proposed amendments would provide better defined procedures for dealing with suspensions and cancellations of licences for hatcheries (i.e. licensing would be better than the existing permit regime under the baseline).

b. Consistency with other regulatory approaches

This approach promotes a more consistent method of using and applying outcome-based regulatory instruments, such as preventive controls and preventive control plans, among a mix of other regulatory instruments used by the CFIA.

6. Monetized costs for the industry

a. Increase in the administrative burden associated with reviewing information obligations for hatcheries and supply flock farms

Hatcheries and supply flock farms would have to spend time reviewing materials associated with the proposed regulatory changes. This would be required in order for them to familiarize themselves with the new information obligations (e.g. record-keeping requirements).

b. Preventive control plan development for hatcheries and supply flock farms

Hatcheries and supply flock farms without a food safety plan in place would have to spend time developing a written preventive control plan. Those with a different type of plan already in place would have to spend time modifying it to be compliant with the regulatory proposal. Table 4 ^{footnote 6}shows that approximately 34% of hatcheries (i.e. supply the food chain) and 84% of supply flock farms are estimated to currently have a food safety–oriented program in place. The sources for the data are CFIA Hatchery Program subject matter experts, the CFIA Food Safety Enhancement Program database, and private insurance companies’ membership information.

Table 4: Number of establishments with and without a food safety–oriented program

Affected Stakeholders	With Food Safety–Oriented Program	Without Food Safety–Oriented Program	Total
Hatcheries that supply food chain	30 table b4 note *	59	89
% share	33.7	66.3	100
Hatcheries that do not supply food chain	3	0	3
% share	100	0	100
Supply flock farms	514 table b4 note **	95 table b4 note ***	609
% share	84.4	15.6	100
Table b4 note(s) Table b4 note * The CFIA Food Safety Enhancement Program database shows that there are 13 CFIA certified Food Safety Enhancement Program hatcheries. In addition, CFIA Hatchery Program subject matter experts estimated that 17 hatcheries have internal veterinarians on-site and assumed they would have a food safety–oriented program. Return to table b4 note * referrer Table b4 note ** Members of industry associations (i.e. Canadian Hatching Egg Producers, Canadian Poultry and Egg Processors Council and Turkey Farmers of Canada) are assumed to have on-farm food safety assurance programs,which are industry-led food safety–oriented programs. Return to table b4 note ** referrer Table b4 note *** Farms producing game birds and waterfowls are not currently regulated and do not belong to any of the associations. Consequently, CFIA Hatchery Program subject matter experts assumed that these farms do not currently have any food safety–oriented program. Return to table b4 note *** referrer

c. Preventive controls implementation for hatcheries and supply flock farms

Once a written preventive control plan has been developed, it would have to be implemented. Implementation would include training/educating employees, preventive control plan record keeping (i.e. administrative costs) and performing activities related to biosecurity and animal welfare.

d. Preventive control plan maintenance for hatcheries and supply flock farms

Costs would be assumed given the annual reviewing of the preventive control plans.

e. Testing for hatcheries and supply flock farms

Testing would include ongoing Salmonella Enteritidis testing costs and employee time for keeping all testing records (i.e. administrative costs).

f. Increase in administrative burden associated with licence renewal applications for hatcheries

The 89 hatcheries would be automatically granted with their initial licences as the proposed amendment would trigger a shift from the current permit framework to a licensing regime. Therefore, there would be no administrative costs associated with their initial licences. However, there would be costs associated with renewing the licences every two years. The administrative costs would be the time required to prepare and submit the necessary documentation to the CFIA.

g. Renewal licence fees for hatcheries

Hatcheries would have to pay a renewal licensing fee every two years to the CFIA. The fee per licence is assumed to be $320. ^{footnote 7}

7. Monetized costs for the CFIA

a. Processing licence renewal applications

There would be processing costs for the CFIA to process the 89 licence renewal applications every two years. This was calculated using CFIA processing costs minus licence fees.

IV. Methodology

This section briefly describes the model parameters and key assumptions, key data sources and industry survey used to estimate the monetized benefits and costs.

1. Model parameters and key assumptions

The key parameters and key assumptions include the following:

• the analysis covered a 10-year time period from 2020 to 2029;
• a discount rate of 7% was used;
• the Standard Cost Model (SCM) was used to monetize the time required to perform a task. The SCM uses the following formula: ACTIVITY COST = PRICE × TIME × POPULATION × FREQUENCY;
• all monetary values are represented using 2017 prices;
• wage rates for working level employees and managers were from the Statistics Canada Labour Force Survey (2012) and obtained via the Treasury Board of Canada Secretariat Regulatory Cost Calculator. Wage rates were increased by 25% to account for overhead costs;
• no growth in the annual number of hatcheries and supply flocks over the 10-year time period; ^{footnote 8}
• twelve-month transitional provisions would provide cost savings for businesses; and
• for the purpose of this analysis, the inspection and licensing fees charged to the hatcheries are assumed to reflect 10% of the government costs of providing the service. ^{footnote 9}

2. Key data sources

Various data sources were used, including the following:

• the CFIA database on the number of registered hatcheries that are currently part of the Food Safety Enhancement Program;
• industry associations’ membership information on the number of supply flock farms and hatcheries that currently have food safety programs;
• information from private insurance companies, including Poultry Insurance Exchange Reciprocal of Canada and the Canadian Egg Industry Reciprocal Alliance, on the number of supply flock farms that are currently conducting Salmonella Enteritidis tests; and
• provincial programs such as the Ontario Hatchery and Supply Flock Policy on the number of supply flock farms that are currently performing other tests.

3. Industry survey conducted by the CFIA

Despite the publicly available information, further data/information was required to perform the analysis. The CFIA therefore conducted an industry-wide survey in August 2017 to gauge the impact of the proposed regulation changes on Canadian hatcheries and supply flock farms. The survey was distributed to the following associations, which sent the survey to their members:

• Canadian Hatchery Federation, which also covers the layer supply flock producers;
• Canadian Hatching Egg Producers; and
• Turkey Farmers of Canada.

The survey was also sent by email and direct mail to hatcheries and supply flock farms that were not members of the above-mentioned associations.

In total, 54 survey responses were received by the CFIA.

V. Monetized benefits and costs

The approaches used to monetize the most significant impacts are discussed below. The “One-for-one rule” section provides details on the monetized administrative costs and benefits.

1. Monetized benefits for industry

a. Reduced Salmonella Pullorum and Salmonella Gallinarum testing for supply flock farms

There are approximately 99 675 samples tested for Salmonella Pullorum and Salmonella Gallinarum at supply flock farms every year. Under the regulatory amendments, there would be a reduction in the number of samples required. As a result, it is anticipated that supply flock farms would assume less testing costs and spend less time collecting samples. According to CFIA subject matter experts, there would be a reduction of 61 560 samples required.

According to CFIA subject matter experts, laboratory costs are calculated based on a cost per sample of $0.30.

Labour savings are associated with employees not having to spend time collecting the samples, on an annual basis. It was assumed that one employee would spend close to five minutes to collect each sample.

2. Monetized costs for industry

a. Preventive controls implementation for hatcheries and supply flock farms

All 89 registered hatcheries are currently implementing biosecurity and animal welfare measures as required by the existing Hatchery Regulations. Therefore, no additional time would be needed to implement related activities. However, survey results indicated that all registered hatcheries would still require additional time to train their employees and to keep additional preventive control-related records.

The 514 supply flock farms with food safety–oriented programs are already implementing some of the proposed activities. However, they would require some additional time to be fully compliant with the proposed requirements (e.g. training, biosecurity, animal welfare and record keeping). The 95 supply flock farms without food safety–oriented programs are not currently performing any of the proposed activities.

Those without food safety–oriented programs may not know the time needed to implement the preventive controls. The additional time was therefore assumed to be equal to the time reported by survey respondents to implement their current food safety program.

Table 5 presents the survey results used for estimating preventive controls implementation costs.

Table 5: Survey results on preventive controls implementation

Affected Stakeholders	Current Training (hr/yr)	Additional Training (hr/yr)	Current Activities Performed (hr/yr)	Additional Activities Performed (hr/yr)	Current Preventive Controls Record Keeping (hr/yr) table b5 note *	Additional Time Spent on Preventive Controls Record Keeping (hr/yr)
Hatcheries	12.7	2.7	1 167.8	N/A table b5 note **	N/A	128
Supply flock farms	11.2	5.1	1 127.6	73.7	N/A	20.1
Table b5 note(s) Table b5 note * According to CFIA Hatchery Program subject matter experts, every establishment is currently keeping some preventive control plan (PCP) records; therefore, only additional time is required to meet the proposed requirements. Return to table b5 note * referrer Table b5 note ** No additional time is needed to perform biosecurity and animal welfare activities for all registered hatcheries because the proposed requirements (i.e. biosecurity and animal welfare) are the same as in the current Hatchery Regulations. Return to table b5 note ** referrer

N/A = Not applicable

The number of affected hatcheries and supply flock farms, by activity, was determined using the voluntary rates ^{footnote 10} that are presented in Table 6.

Table 6: Survey results on preventive controls implementation at hatcheries and supply flock farms [voluntary rates (%)]

Affected Stakeholders	Training	Performing Preventive Controls	PCP Record Keeping
Hatcheries (89)	0	100	0
Supply flock farms with a food safety–oriented program (514)	48	24	21.5
Supply flock farms without a food safety–oriented program (95)	0	0	0

VI. Estimated results

1. Cost-benefit statement

The results below reflect all monetized costs for the industry and the CFIA. The monetized and qualitative benefits are also listed. The estimated total present value of the costs over 10 years would be $10.6 million (or $1.5 million annualized). The estimated total monetized benefits over 10 years would be $0.9 million (present value) [or $0.1 million annualized]. This would result in a net cost (i.e. costs minus benefits) of $9.7 million (present value) [or $1.4 million annualized] over 10 years (see Table 7). The analysis covered the period 2020–2029.

Table 7: Cost-benefit statement (in Canadian dollars [Can$], 2017 prices, rounded values)

Monetized Impact by Stakeholder		Year 2	Year 5	Year 10	Total Present Value table b7 note *	Annualized Value table b7 note *
Costs — Hatcheries	Administrative burden — Review information obligation	6,661	0	0	5,818	828
	Preventive control and preventive control plan	401,694	329,470	329,470	2,069,227	294,611
	Renewal of licence fees table b7 note **	0	0	28,480	71,758	10,217
	Administrative burden — Renewing licensing	0	0	3,309	8,336	1,187
	Testing	25,150	25,150	25,150	153,136	21,803
	Total hatcheries costs	433,505	354,620	386,408	2,308,275	328,646
Costs — Supply flock farms	Administrative burden — Review information obligation	45,581	0	0	39,812	5,668
	Preventive control and preventive control plan	1,293,694	1,098,490	1,098,490	6,859,208	976,597
	Testing	139,616	139,616	139,616	850,121	121,038
	Total supply flock farms costs	1,478,891	1,238,106	1,238,106	7,749,141	1,103,303
Total industry costs		1,912,397	1,592,726	1,624,514	10,057,417	1,431,950
CFIA	Processing licence renewal applications table b7 note *** (i.e. net of fees received)	0	0	213,600	538,185	76,626
Total costs (industry + CFIA)		1,912,397	1,592,726	1,838,114	10,595,602	1,508,575
Benefits — Hatcheries	Testing	5,866	5,866	5,866	35,716	5,085
	Inspection fees	1,920	1,920	1,920	11,691	1,665
	Reduction in administrative burden to accompany inspectors	1,933	1,933	1,933	11,771	1,676
	Total hatcheries benefits	9,719	9,719	9,719	59,178	8,426
Benefits — Supply flock farms	Testing	124,005	124,005	124,005	755,068	107,505
Total industry benefits		133,724	133,724	133,724	814,246	115,930
CFIA	Resource savings on inspection (i.e. net of fees received)	17,280	17,280	17,280	105,218	14,981
Total benefits (industry + CFIA)		151,004	151,004	151,004	919,464	130,911
Net cost (i.e. costs minus benefits)					9,676,138	1,377,664
Table b7 note(s) Table b7 note * Values were calculated using 2020 as the base year and a 7% discount rate. Return to table b7 note * referrer Table b7 note ** Hatcheries would be required to pay licensing fees to the CFIA every two years, starting in year 4. Return to table b7 note ** referrer Table b7 note *** Costs to the CFIA are associated with the licensing services provided to the industry. This service would only be provided when businesses submit a licence renewal application, which would be required every two years, starting in year 4. Return to table b7 note *** referrer

The following table shows all monetized costs and benefits by category. The analysis covered the period 2020–2029. For small business impacts, see the “Small business lens” section.

Table 8: Monetized costs and benefits by impact (Can$, 2017 prices)

Monetized Impact by Category	Total Present Value table c1 note *	Annualized Value table c1 note *
Administrative burden — Review information obligation	45,631	6,497
Preventive control and preventive control plan	8,928,435	1,271,208
Renewal licence fees table c1 note **	71,758	10,217
Administrative burden — Renewing licensing	8,336	1,187
Testing	1,003,257	142,841
CFIA processing licence renewal applications table c1 note *** (i.e. net of fees received)	538,186	76,626
Total costs	10,595,602	1,508,575
Testing	790,784	112,590
Inspection fees	11,691	1,665
Reduction in administrative burden to accompany inspectors	11,771	1,676
CFIA resource savings on inspection (i.e. net of fees received)	105,218	14,981
Total benefits	919,464	130,911
Net cost (i.e. costs minus benefits)	9,676,138	1,377,664
Table c1 note(s) Table c1 note * Values were calculated using 2020 as the base year and a 7% discount rate. Return to table c1 note * referrer Table c1 note ** Hatcheries would be required to pay licensing fees to the CFIA every two years, starting in year 4. Return to table c1 note ** referrer Table c1 note *** Costs to the CFIA are associated with the licensing services provided to the industry. This service would only be provided when businesses submit a licence renewal application, which would be required every two years, starting in year 4. Return to table c1 note *** referrer

2. Sensitivity analysis

A sensitivity analysis was conducted to deal with uncertainty in estimates that are inherent in predicting the future. The first approach used for the sensitivity analysis was to vary the discount rate. The medium estimate of 7% used in the analysis was varied to 3% and 10%. The second approach used was to vary the preventive controls implementation (i.e. biosecurity and animal welfare) costs for 95 waterfowl and game bird supply flock farms. This was done since the survey results did not reveal any information about the costs of preventive control implementation for these farms. As well, preventive controls implementation is the largest component of the estimated costs.

The analysis assumed that both waterfowl and game bird farms would experience 70% less preventive control implementation costs than other types of farms. This approach is primarily due to the fact that the average number of birds per flock at waterfowl and game bird farms is significantly lower than other farms. For example, a broiler breeder flock is three times larger than a waterfowl and game bird flock. This implies that there is less work for an employee to perform biosecurity (i.e. dead bird collection) and animal welfare at a waterfowl or game bird supply flock farm compared to other types of farms.

The sensitivity analysis then used the following rates:

• Low: 50% less cost than other supply flock farms
• High: 90% less cost than other supply flock farms

Table 9 presents a summary table for the estimated results of the sensitivity analysis. The range of the annualized costs is between $1.3 million and $1.8 million. The analysis covered the period 2020–2029.

Table 9: Sensitivity analysis results (Can$, 2017 prices)

Discount Rate	Annualized Benefits table c2 note *	Annualized Costs table c2 note *	Net Cost (i.e. Annualized Costs Minus Annualized Benefits)
	Medium (waterfowl and game bird supply flock farms carry 70% less costs than other supply flock farms)
Medium (7%)	130,911	1,508,575	1,377,664
Low (3%)	133,817	1,540,537	1,406,720
High (10%)	128,663	1,483,924	1,355,261
	Low (waterfowl and game bird supply flock farms carry 50% less costs than other supply flock farms)
Medium (7%)	130,911	1,715,483	1,584,572
Low (3%)	133,817	1,752,038	1,618,221
High (10%)	128,663	1,687,278	1,558,615
	High (waterfowl and game bird supply flock farms carry 90% less costs than other supply flock farms)
Medium (7%)	130,911	1,301,668	1,170,757
Low (3%)	133,817	1,329,036	1,195,219
High (10%)	128,663	1,280,570	1,151,907
Table c2 note(s) Table c2 note * Values were calculated using 2020 as the base year. Return to table c2 note * referrer

VII. Small business lens

The small business lens applies because there would be impacts on small businesses. The breakdown of industries, as defined by the North American Industry Classification System (NAICS), is not well aligned with the activities of hatchery and supply flock farms. Therefore, the distribution of businesses by their size, based on this classification system, could not be used. This led to the assumption that the share of small businesses in Canada (i.e. 98%) would be representative of the share of small businesses in hatcheries and supply flock farms.

The CFIA is sensitive to the needs of small businesses and is aware of the importance of finding the right balance between maximizing poultry health and food safety while minimizing costs to businesses. Therefore, the CFIA included some flexibility in its regulatory proposal for small businesses, which would be expected to reduce costs. The following flexibilities are included in the proposed regulation for all businesses regardless of their size:

• a 12-month transitional period provided to all hatcheries after the registration of the Regulations Amending the Health of Animals Regulations (Hatchery) [the Regulations];
• a model system provided to businesses with examples to achieve compliance with the proposed regulatory amendments; and
• plain language guidance documents (e.g. preventive control plan templates) that would further assist with compliance.

The small business lens classifies impacts into two categories:

• 1. Administrative impacts
• 2. Compliance impacts

All impacts would occur between years 1 (i.e. 2020) and 10 (i.e. 2029).

Table 10 provides a list of all the administrative and compliance impacts affecting small businesses. The estimated total present value of costs over 10 years would be $9.8 million. The estimated total present value of benefits over 10 years would be $0.8 million. The present value of the net cost (i.e. costs minus benefits) would be $9 million. This would equate to an annualized net cost per affected small business of $3,622. The analysis covered the period 2020–2029.

Table 10: Small business lens summary (Can$, 2017 prices)

Number of small businesses impacted: 352 ^{table c5 note *}
Number of years: 10
Base year for costing: 2020

Costs

	Present Value table c5 note **	Annualized Value table c5 note **
Compliance costs
Preventive control plan development	363,220	51,714
Preventive controls implementation	5,591,270	796,071
Preventive control plan maintenance	1,130,192	160,914
Licence fees	70,323	10,012
Testing	771,359	109,824
Total compliance costs	7,926,364	1,128,536
Administrative costs
Review time for information obligation	44,422	6,325
Administrative burden associated with licence renewal applications	8,170	1,163
Preventive controls implementation—Record keeping	1,559,884	222,092
Testing — Record keeping	214,896	30,596
Total administrative costs	1,827,371	260,177
Total costs	9,753,735	1,388,712

Benefits

	Present Value table c5 note **	Annualized Value table c5 note **
Compliance benefits
Testing	739,967	105,355
Avoided inspection fees	11,457	1,631
Testing — Hatcheries that do not supply food chain	34,224	4,873
Total compliance benefits	785,647	111,858
Administrative benefits
Reduction in administrative burden to accompany inspectors	11,535	1,642
Testing — Record keeping	806	115
Total administrative benefits	12,341	1,757
Total benefits	797,988	113,616

Net costs

Net costs	Present Value table c5 note **	Annualized Value table c5 note **
Net monetized cost (i.e. costs minus benefits)	8,955,747	1,275,097
Net cost per impacted small business	25,442	3,622
Table c5 note(s) Table c5 note * It is estimated that there are 1.2 hatcheries per business and 2.1 supply flock farms per business. Return to table c5 note * referrer Table c5 note ** Values were calculated using a 7% discount rate. Return to table c5 note ** referrer

VIII. One-for-one rule

The one-for-one rule would apply as the regulatory amendments would result in an incremental increase in administrative burden, and the regulatory amendments are considered a burden “in” under the rule.

The one-for-one rule would apply as the regulatory amendments would repeal the existing Hatchery Regulations, resulting in one title being removed. The repeal of the Hatchery Exclusion Regulations , which are ministerial regulations, would occur separately, following the 12-month transitional period after the requirements for hatchery operators in the Health of Animals Regulations come into force.

The administrative costs would be primarily associated with the record-keeping requirements. However, businesses would benefit from some reduced costs as three hatcheries would no longer have to keep testing records. The net annualized administrative cost (i.e. costs minus benefits) would be approximately $155,085. This would equate to an annualized net administrative cost per impacted business of $432. Table 11 presents the one-for-one rule results.

Table 11: One-for-one rule results (Can$, 2012 prices)

Annualized administrative costs table c6 note *	155,085
Annualized administrative costs per business table c6 note **	432
Table c6 note(s) Table c6 note * Values were calculated using 2012 as the base year and a 7% discount rate. Return to table c6 note * referrer Table c6 note ** It is estimated that there are 1.2 hatcheries per business and 2.1 supply flock farms per business. Return to table c6 note ** referrer

These estimated costs were based on information gathered from industry surveys, reasonable assumptions and consultation with affected stakeholders and CFIA subject matter experts. Below are the assumptions used to estimate the administrative impacts.

• All 89 hatcheries and 609 supply flock farms would have to take time to review the information obligations. This would create a one-time cost. The estimated time to review the information was 1.5 hours for small businesses and 2 hours for medium-to-large businesses. It was assumed that this task would be performed by a manager paid $46.26 per hour in 2012 dollars.
• Preventive control implementation record keeping would be an ongoing cost for all 89 hatcheries and 609 supply flock farms. The amount of time spent was obtained through surveys (see Table 5). It was assumed that record keeping would be performed on a weekly basis by an employee paid $21 per hour in 2012 dollars.
• Salmonella Enteritidis testing record keeping would be an ongoing cost for hatcheries (i.e. supply food chain) as they would be required to keep testing records of their supply flock farms. The survey results showed that, on average, small hatcheries would need an additional 33 hours per year. The results from medium-to-large hatcheries showed that no additional time would be needed.
• Salmonella Enteritidis testing record keeping would be an ongoing cost for supply flock farms. Stakeholder input indicated that, on average, supply flock farms are spending 1 hour per year per flock to keep testing records, regardless of their business size.
• Licence applications would be an ongoing cost for businesses as these licences would have to be renewed every two years. It was assumed that it would take 45 minutes for each application to be filled out and completed by a manager paid $46.26 per hour in 2012 dollars.
• Avoided record keeping of testing would be an ongoing savings for three hatcheries that do not supply the food chain, as they would have no obligation to keep any testing records. Since the three hatcheries did not respond to the industry survey, the CFIA assumed the amount of time that these hatcheries would save would be 2 hours per year. This task would be performed by an employee paid $21 per hour in 2012 dollars.
• Administrative savings from not having to accompany inspectors during annual and quarterly inspections would be an ongoing savings for the three hatcheries that do not supply the food chain. It was estimated by CFIA inspectors that, on average, it takes 1 hour to accompany an inspector during the annual inspection and 3 hours during the quarterly inspection. It was assumed that this task would be performed by a manager paid $46.26 per hour in 2012 dollars.

IX. Regulatory cooperation and alignment

Provinces and territories

The current regulations vary among provinces and territories and are applied inconsistently. There are provinces without regulations for hatcheries and none to a few for supply flocks (e.g. Newfoundland and Labrador, Prince Edward Island, the territories). There are also provinces (e.g. Ontario, Manitoba) where registration for hatcheries and testing for Salmonella Enteritidis go beyond the current federal Hatchery Regulations. Since the federal regulations do not have any provisions to test for Salmonella Enteritidis, for example, such specific provincial regulations result in national inconsistency.

The provinces and territories support the update and consolidation of the current federal regulatory regime.

United States

The United States is Canada’s main trading partner in hatchery eggs and chicks, as it is with other commodities. Regulatory requirements for hatcheries and supply flocks under these proposed amendments would be aligned to the extent possible, which should maintain and potentially broaden market access.

The Animal and Plant Health Inspection Services (the CFIA counterpart in the United States) of the U.S. Department of Agriculture has a National Poultry Improvement Plan (the Plan) that provides a cooperative industry and state federal program through which new diagnostic technology can be effectively applied to the improvement of poultry products. The Plan has program standards for supply flocks, hatcheries and commercial meat products, with a predominant focus on supply flocks. The Plan provides various levels of disease-related certification, such as United States Pullorum-Typhoid State Clean, United States Sanitation Monitored, and United States Salmonella Enteritidis Clean. In 2017, requirements were added for biosecurity and compartmentalization (i.e. to define and manage animal subpopulations of distinct health status and meet the need to have a common biosecurity program and enable movement of products without interruption during disease incursion).

Under the proposed regulatory amendments, alignment with the U.S. requirements for hatcheries and supply flocks would be improved. The United States has had programs and testing for Salmonella Enteritidis in place for many years and Canada currently lags behind. The proposed regulatory amendments would provide a standardized program that would require disease classification, monitoring and testing as set out in the Canadian Hatchery and Supply Flock Testing Standards, similar to the Plan.

The CFIA has been consulting with the United States on the proposed modernization of the three hatchery regulations since 2010. During this time, the CFIA and the Animal and Plant Health Inspection Services of the U.S. Department of Agriculture have held ongoing discussions through biennial conference meetings and regular forms of communication (e.g. email). In May 2017, as part of its general consultation, the CFIA requested a formal comment regarding Canada’s proposed regulatory framework. The response received was positive, in particular that the proposed requirements for Salmonella Enteritidis, Salmonella Pullorum and Salmonella Gallinarum were well aligned with the National Poultry Improvement Plan.

Some differences would still remain between the two trading partners, although they are considered relatively minor. For example, the proposed amendments would not cover other minor species (e.g. emus, rheas, ostriches, birds for release), birds for direct meat production (e.g. broilers and turkeys), table egg layers, and slaughter plants, which are all covered in the U.S. regulations. In Canada, these sectors are covered under the existing provisions of the Health of Animals Regulations and the Safe Food for Canadians Regulations.

In the United States, certificates or permits are issued for supply flocks and hatcheries at the state level, once they meet the classification standards of the National Poultry Improvement Plan, and they are used mostly for export purposes. With the proposed amendments, Canadian hatchery operators would require a licence to operate (currently permits to operate) and they would have the added responsibility of ensuring that their supply flock operators meet certain standards to be able to qualify as their supplier of fertile eggs (e.g. adhere to the Testing Standards, maintain a preventive control plan). The United States views Canada’s national hatchery licensing regime and strengthened supply flock programs as strong, positive steps.

Other trading partners

In 2006, the European Commission adopted two new regulations to reduce and control the prevalence of Salmonella in poultry and eggs across the European Union. These regulations require member states to actively work to reduce the presence of Salmonella in poultry and eggs at all levels of production by setting up national control programs that are unique to each member state.

Many countries in the European Union already have zoonotic Salmonella programs that aim to reduce and/or control the prevalence of salmonellosis from supply flocks, hatcheries and live bird production. For example, Denmark has been able to eliminate Salmonella Enteritidis in poultry with strict monitoring and testing in all areas of production. In the United Kingdom, there are now four National Control Programmes to target and reduce Salmonella; each is targeted at broilers, layers, supply flocks and turkeys.

Canadian exporters must abide by the E.U. regulations to enable their products to enter countries such as Denmark. The proposed amendments improve alignment with the European Union through enhanced surveillance and monitoring of Salmonella Enteritidis, and the use of incorporation by reference would allow for surveillance requirements to be updated as the need arises. However, some differences remain as the E.U. regulations are generally more stringent (i.e. requirement of Salmonella vaccinations and depopulating Salmonella Enteritidis–positive flocks).

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The main objective of the regulatory amendments is to minimize disease risks in hatcheries, which may enter the food supply chain; thus, result in public health concerns for all Canadians. As such, the proposed amendments would bring benefits to all Canadians in general.

The analysis also considered the potential impacts due to the proposed amendments on businesses according to geographical location and business size (i.e. based on annual gross sales) of hatcheries and supply flock farms. Since Ontario and Quebec are more populated with hatcheries and supply flock farms, these two provinces would likely experience more than half of the total costs (see Table 12). In the table, the values were calculated using 2020 as the base year and a 7% discount rate. Territories include the Yukon, Northwest Territories and Nunavut.

Table 12: Annualized total industry costs distributed by province (Can$, 2017 prices)

Affected Stakeholders	B.C.	Alta	Sask.	Man.	Ont.	Que.	N.S.	N.B.	N.L.	P.E.I.	Territories	Canada
Hatcheries	40,619	29,541	11,078	40,619	118,165	59,083	14,771	11,078	3,693	40,619	29,541	328,646
Supply flock farms	163,050	135,875	34,422	92,395	365,956	237,328	41,668	32,610	—	163,050	135,875	1,103,303
Total costs	203,669	165,416	45,500	133,014	484,121	296,410	56,439	43,688	3,693	203,669	165,416	1,431,950

The proportion of small businesses was estimated using the Canadian average, which suggests that 98% of businesses are considered small (see the “Small business lens” section). The costs by business size are presented in Table 13. The analysis covered the period 2020–2029.

Table 13: Annualized total industry costs distributed by business size (Can$, 2017 prices)

Affected Stakeholders	Small Businesses	Medium-to-Large Businesses	Total Industry
Hatcheries	320,413	8,233	328,646
Supply flock farms	1,068,299	35,004	1,103,303
Total	1,388,712	43,237	1,431,950

Note: Values were calculated using 2020 as the base year and a 7% discount rate.

Rationale

Regulatory requirements in Canada for hatchery and supply flock operators provide a set of rules to adhere to in the sampling, testing, and caring of supply flocks, eggs and chicks. While industry plays an active role to prevent and mitigate risks to the poultry supply, the CFIA supports this awareness through clear regulations and compliance promotion tools and services.

Industry is proactive and continues to move forward in their efforts to improve animal husbandry, especially on biosecurity. But Canada must continue to adapt and improve as supply chains between breeders and hatcheries become more integrated and threats of diseases continue to evolve. Hatcheries and supply flocks are the first critical points of potential disease spread downstream in the poultry production system. There are 92 hatcheries (as of April 2018) supplying thousands of poultry farms domestically and outside of Canada. The typical poultry raising farm receives thousands of chicks per placement from a hatchery and raises them until ready for either the meat or table egg production/market. Given the variety of potential sources for contamination and the ability of disease-causing organisms to multiply quickly, known and emerging diseases will always present risks.

Efforts by the industry and the provincial and municipal governments should be continued with complementary federal regulations, policies and programs. With evolving challenges, like the emergence of zoonotic Salmonella, revised complementary federal regulations and improved farming practices would be the best approach to take. The current regulations need to be amended to keep up with the changing production environment and to manage risks at the top of the food supply. The main objective of the proposed amendments is a healthier poultry supply chain from the top of the pyramid. This would mirror the approaches of other trading partners and follow the recommendations of international standard-setting bodies. The proposed amendments would streamline requirements for hatchery operators and provide better means for CFIA inspectors to verify that a hatchery is mitigating risks in accordance with the requirements. It would also potentially lead to an overall health and safety benefit for Canadians and poultry.

The use of incorporation by reference would allow the CFIA to respond quickly to evolving industry and scientific and technological advancements in poultry production. Updates to the Testing Standards document would be proposed and consulted upon through the CFIA Incorporation by Reference Policy. Updates to the Code would be undertaken by the National Farm Animal Care Council through stakeholder consultation.

In general, industry has been supportive of this regulatory proposal. Some businesses, in particular those that are not members of industry associations, would likely have concerns related to increased cost (e.g. development, implementation, and maintenance of a preventive control plan). To assist these operators with mitigating the costs of new requirements and to promote the updated requirements among small businesses, the CFIA would provide guidance materials to enhance the uptake of the updated requirements. The CFIA would prepare plain language guidance documents and offer a 12-month transitional period from the date at which the Regulations Amending the Health of Animals Regulations (Hatchery) [the Regulations] are registered to give industry flexibility to transition to the updated requirements.

Canada’s main trading partners for poultry products have modernized their poultry requirements, and this regulatory proposal aims to reduce regulatory differences with international partners, particularly the United States. There would be improved regulatory alignment between the two trading partners in the areas of disease monitoring, disease testing, and premises and operational requirements (e.g. preventive control plan) — particularly for provisions related to Salmonella Enteritidis. An incidental effect of the proposed amendments is an anticipated potential increase in trade, as they would create greater alignment between the partners.

Implementation, compliance and enforcement, and service standards

As soon as the Regulations are prepublished in the Canada Gazette, Part I, a communications plan will also inform stakeholders of the prepublication and the opportunity to review the amendments and provide feedback. Analysis of this feedback would inform the development of the amendments before the Regulations are made. Once the amendments reach final publication in Canada Gazette, Part II, (anticipated in 2021) program and operational guides would be published to assist compliance.

Upon the coming into force of the Regulations, the current stand-alone Hatchery Regulations as well as sections 79 to 79.2 and Schedule VI of the Health of Animals Regulations would be repealed. The Regulations prescribe a 12-month transition period upon its coming into force and any person may comply with the new or previous regulations during that time. Note that the Hatchery Exclusion Regulations are ministerial regulations, and that their repeal would occur separately, after the 12-month transitional period after the new requirements for hatchery operators in the Health of Animals Regulations come into force. Since the repeal of the Hatchery Exclusion Regulations would only occur after the 12-month transition that begins when the new hatchery regulations have been made, it has not been prepublished as part of this regulatory package.

Following final publication, companion amendments to the Agriculture and Agri-Food Administrative Monetary Penalties Regulations would be made. It is contemplated that the amendments to the Agriculture and Agri-Food Administrative Monetary Penalties Regulations could be made 12 months after the Regulations Amending the Health of Animals Regulations (Hatchery) are made. It is expected that the regulations made under the Agriculture and Agri-Food Administrative Monetary Penalties Act will be amended so that non-compliance with the proposed provisions of the Health of Animals Regulations would be subject to the administrative monetary penalties regime, under the Agriculture and Agri-Food Administrative Monetary Penalties Regulations. If this is done, violations of these Health of Animals Regulations provisions could result in a warning or a penalty (as well as a loss of licence to operate as a hatchery).

The CFIA would continue its monitoring activities and would enforce hatchery requirements through compliance verification and review of the developed, implemented, and maintained preventive control plan (a condition of licence issuance and maintenance). The preventive control plan would detail measures that would be implemented and maintained by the hatchery operator to maintain a licence to operate. The CFIA would continue to maintain open and transparent communication with stakeholders to facilitate the transition and implementation period via the CFIA website and Ask CFIA (i.e. a web portal to ask the CFIA questions).

Contact

Dr. Penny Greenwood
National Manager
Domestic Disease Control Section
Animal Health Directorate
Policy and Programs Branch
Email: cfia.animalhealthregs-reglessantedesanimaux.acia@canada.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to sections 64 ^{footnote a} and 64.1 ^{footnote b} of the Health of Animals Act ^{footnote c}, proposes to make the annexed Regulations Amending the Health of Animals Regulations (Hatchery).

Interested persons may make representations concerning the proposed regulations within 60 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 Dr. Penny Greenwood, National Manager, Domestic Disease Control Section, Animal Health Directorate, Policy and Programs Branch (email: cfia.animalhealthregs-reglessantedesanimaux.acia@canada.ca).

Ottawa, February 27, 2020

Julie Adair
Assistant Clerk of the Privy Council

Regulations Amending the Health of Animals Regulations (Hatchery)

Amendments

1 The Health of Animals Regulations ^{footnote 11} are amended by adding the following after section 72.1:

Part VIII.1

Hatcheries and Supply Flocks

General

72.11 The following definitions apply in this Part.

• balut means a fertilized commercial poultry egg with a partially developed embryo inside that is intended for human consumption. (balut)
• commercial poultry means poultry that are used for the production of meat, poultry products or by-products for human consumption or for breeding to produce commercial poultry or ancestors of commercial poultry, but does not include poultry that are kept for any other reason including poultry that are kept, bred or sold for use in, shows, races, exhibitions or competitions or that are kept, bred or sold as pets. (volaille commerciale)
• supply flock means a primary breeding flock, or a flock descended from a primary breeding flock, of commercial poultry that produces eggs or chicks that are supplied to a hatchery. (troupeau fournisseur)
• Testing Standards means the document, Canadian Hatchery and Supply Flock Testing Standards, prepared by the Agency and published on its website as amended from time to time. (Normes d’épreuve)

Hatchery Licensing Requirements

72.12 (1) This Part applies to a hatchery that has a minimum setting capacity of 1,000 eggs and in respect of which the operator does any of the following:

• a) sets eggs for the production of commercial poultry;
• b) hatches commercial poultry;
• c) acquires eggs for hatching to produce commercial poultry; and
• d) acquires day-old birds to be raised as commercial poultry.

(2) A hatchery operator shall not receive or handle non-incubated eggs that are to be sold for human consumption.

72.13 No person shall operate a hatchery except in accordance with a licence that is issued by the Minister under section 160.

72.14 (1) The licence expires two years after the date of issuance or renewal that is specified in it, unless the licence is revoked before that time.

(2) A licence is revoked if a licence holder who is not subject to a suspension or revocation procedure ceases operation of the hatchery for 12 consecutive months or surrenders the license.

72.15 (1) Every hatchery operator shall prepare, keep and maintain a written preventive control plan as a condition of a license.

(2) Any hatchery operator who is required to prepare, keep and maintain a written preventive control plan must implement that plan.

(3) To mitigate the risk of introduction and spread of the biological hazards set out in Part I of the Testing Standards, and to control and eliminate those hazards, the preventive control plan shall include a description of measures that have been or will be implemented by the hatchery operator in respect of the following matters

• (a) management of access to the premises;
• (b) employee training in biosecurity measures;
• (c) maintenance, cleaning and disinfection of equipment, facilities and related materials;
• (d) hatchery debris and garbage disposal;
• (e) feed and vaccines;
• (f) water management; and
• (g) pest control.

72.16 (1) Every hatchery operator shall meet the requirements in the following sections of the Code of Practice for the Care and Handling of Hatching Eggs, Breeders, Chickens and Turkeys, published by the National Farm Animal Care Council, as amended from time to time as if those requirements were applicable in respect of all poultry

• (a) Personnel Knowledge and Skills;
• (b) Hatcheries;
• (c) Housing and Environment;
• (d) Feed and Water;
• (e) Flock Health Management; and
• (f) Euthanasia.

(2) The hatchery operator’s preventive control plan shall include a description of measures that have been or will be implemented by the hatchery operator to meet the requirements referred to in subsection (1).

Testing Requirements

72.17 (1) Every hatchery operator shall conduct sampling and the testing of these samples in accordance with Part I of the Testing Standards to monitor for

• a) the sanitation of the hatchery during periods of operation; and
• b) the presence of diseases.

(2) Every hatchery operator shall keep records of sampling and testing results conducted in the hatchery.

Supply Flocks

72.18 Every hatchery operator shall source all eggs and chicks from a supply flock operator who

• (a) prepares, keeps and maintains a preventive control plan that describes the measures that have been or will be implemented to meet the requirements set out in paragraphs (d) and (e) and the measures referred to in paragraph (f);
• (b) implements the preventive control plan;
• (c) keeps records of any deviation from the preventive control plan and the corrective measures that are taken;
• (d) meets the sampling and testing requirements that are in Part II of the Testing Standards;
• (e) meets the requirements in the following sections of the Code of Practice for the Care and Handling of Hatching Eggs, Breeders, Chickens and Turkeys, published by the National Farm Animal Care Council, as amended from time to time as if those requirements were applicable in respect of all poultry
  • (i) Personnel Knowledge and Skills,
  • (ii) Housing and Environment,
  • (iii) Feed and Water,
  • (iv) Flock Health Management, and
  • (v) Euthanasia; and
• (f) takes measures in respect of the following matters to mitigate the risk of introduction and spread of the biological hazards set out in Part II of the Testing Standards, and to control and eliminate those hazards,
  • (i) management of access to the premises,
  • (ii) employee training in biosecurity measures,
  • (iii) maintenance, cleaning and disinfection of equipment, facilities and related materials,
  • (iv) mortality handling and disposal,
  • (v) feeds and vaccines,
  • (vi) water management, and
  • (vii) pest control.

Animal and Product Identification

72.19 (1) Every hatchery operator shall ensure that,

• (a) every box or other package received containing eggs or chicks is clearly marked with information that identifies the supply flock; and
• (b) every box or other package that is used for the marketing of eggs and chicks is clearly marked with information that identifies the hatchery and the specific supply flock.

(2) Subsection (1) does not apply if the box or other package is accompanied by an invoice or other document that specifies the information referred to in paragraphs (a) or (b).

Records and Other Documents

72.20 Every hatchery operator shall keep and maintain written documents that include the following information:

• (a) the identification of the flock supplying the eggs and commercial poultry;
• (b) the number of eggs purchased or received and set;
• (c) the number of eggs sold;
• (d) the storage conditions of eggs and commercial poultry;
• (e) the number of chicks hatched, purchased and sold;
• (f) the number of eggs and chicks culled and died;
• (g) the name of any vaccinations and medications given to the eggs and chicks;
• (h) the cleaning and disinfection frequency of the hatchery premises;
• (i) the identification of the place to which chicks or eggs are sent after leaving the hatchery;
• (j) the sampling and testing results of the supply flocks; and
• (k) a record of any deviation from the preventive control plan and the corrective measures that are taken.

2 Sections 79 to 79.2 of the Regulations and the heading before them are repealed.

3 Schedule VI to the Regulations is repealed.

Repeal

4 The Hatchery Regulations ^{footnote 12} are repealed.

Transitional Provisions

5 During the one year period that begins on the day on which these Regulations come into force, any person may, instead of complying with Part VIII.1 of the Health of Animals Regulations as it reads on and after that day, comply with sections 79 to 79.2 of the Health of Animals Regulations as they read immediately before that day and the Hatchery Regulations as they read immediately before that day.

Coming into Force

6 These Regulations come into force on the day on which they are registered.