Order Amending Certain General Import Permits Issued under the Export and Import Permits Act (Nos. 1, 13 and 100): SOR/2020-78

Canada Gazette, Part II, Volume 154, Number 9

Registration
SOR/2020-78 April 7, 2020

EXPORT AND IMPORT PERMITS ACT

The Minister of Foreign Affairs, pursuant to subsections 8(1.1) footnote a, 8.3(3) footnote b and 10(1) footnote c of the Export and Import Permits Act footnote d, makes the annexed Order Amending Certain General Import Permits Issued under the Export and Import Permits Act (Nos. 1, 13 and 100).

Ottawa, April 6, 2020

François-Philippe Champagne
Minister of Foreign Affairs

Order Amending Certain General Import Permits Issued under the Export and Import Permits Act (Nos. 1, 13 and 100)

General Import Permit No. 100 — Eligible Agriculture Goods

1 Items 21 to 23 of the schedule to General Import Permit No. 100 — Eligible Agriculture Goods footnote 1 are replaced by the following:

21 Carcasses and half-carcasses of bovine animals, fresh, chilled or frozen, that do not originate in Chile, a CUSMA country or an EU country or other CETA beneficiary and are classified under tariff item No. 0201.10.20 or 0202.10.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

22 Cuts of meat of bovine animals, fresh, chilled or frozen, with bone in, that do not originate in Chile, a CUSMA country or an EU country or other CETA beneficiary and are classified under tariff item No. 0201.20.20 or 0202.20.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

23 Boneless meat of bovine animals, fresh, chilled or frozen, that does not originate in Chile, a CUSMA country or an EU country or other CETA beneficiary and is classified under tariff item No. 0201.30.20 or 0202.30.20 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

2 Item 32.2 of the schedule to the Permit is replaced by the following:

32.2 Milk protein substances with a milk protein content of 85% or more by weight, calculated on a dry matter basis, that do not originate in a CUSMA country, an EU country or other CETA beneficiary, Chile, Costa Rica or Israel and that are the subject of two commitments signed by the Government of Canada on June 12, 2008, one with the European Communities and the other with the Government of Switzerland, relating to the modification, in Canada’s schedule of concessions pursuant to the Agreement Establishing the World Trade Organization, to Canada’s concession on tariff item No. 3504.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff with regard to those substances.

General Import Permit No. 1 — Dairy Products for Personal Use

3 Item 13.2 of the schedule to General Import Permit No. 1 — Dairy Products for Personal Use footnote 2 is replaced by the following:

13.2 Milk protein substances with a milk protein content of 85% or more by weight, calculated on a dry matter basis, that do not originate in a CUSMA country, an EU country or other CETA beneficiary, Chile, Costa Rica or Israel and that are the subject of two commitments signed by the Government of Canada on June 12, 2008, one with the European Communities and the other with the Government of Switzerland, relating to the modification, in Canada’s schedule of concessions pursuant to the Agreement Establishing the World Trade Organization, to Canada’s concession on tariff item No. 3504.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff with regard to those substances.

General Import Permit No. 13 — Beef and Veal for Personal Use

4 Items 1 and 2 of the schedule to General Import Permit No. 13 — Beef and Veal for Personal Use footnote 3 are replaced by the following:

1 Cuts of meat of bovine animals, fresh, chilled or frozen, with bone in, that do not originate in Chile, a CUSMA country, or an EU country or other CETA beneficiary, and that are classified under tariff item No. 0201.20.10 or 0202.20.10 or under heading No. 98.04 or 98.26 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

2 Boneless meat of bovine animals, fresh, chilled or frozen, that does not originate in Chile, a CUSMA country, or an EU country or other CETA beneficiary, and that is classified under tariff item No. 0201.30.10 or 0202.30.10 or under heading No. 98.04 or 98.26 in the List of Tariff Provisions set out in the schedule to the Customs Tariff.

Coming into Force

5 This Order comes into force on the day on which section 40 of the Canada–United States–Mexico Agreement Implementation Act, chapter 1 of the Statutes of Canada, 2020, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the orders.)

Issues

On September 30, 2018, Canada, the United States (U.S.) and Mexico announced the completion of negotiations toward a revised North American Free Trade Agreement (NAFTA). Following more than a year of negotiations, the three countries reached important outcomes in key areas, including market access, rules of origin for automotive manufacturing, agriculture, labour, environment, intellectual property rights, culture, and dispute settlement. This outcome is expected to strengthen the trilateral commercial relationship and provide much-needed stability and predictability for Canadian businesses and workers.

The Canada-United States-Mexico Agreement (CUSMA), signed by all Parties at Buenos Aires on November 30, 2018, was signed in amended form, through the Protocol of Amendment to the Agreement between Canada, the United States of America and the United Mexican States, at Mexico City, on December 10, 2019. An Act to implement the Agreement between Canada, the United States of America and the United Mexican States (the “Act”) obtained Royal Assent on March 13, 2020. Among other changes, the Act amended the Export and Import Permits Act (EIPA) to implement elements of CUSMA related to trade controls. Consequential regulatory measures and amendments are also needed to support full implementation of these commitments.

Background

A good listed on the Import Control List or Export Control List may normally only be lawfully imported or exported under the authority of a permit or certificate issued by the Minister of Foreign Affairs (the Minister). Certain textile goods may be imported or exported without a permit or certificate issued by the Minister, but such imports and exports will not qualify for preferential tariff treatment.

The purposes for which the Governor in Council may add goods to a control list are specified in the Export and Import Permits Act and include implementing an intergovernmental arrangement or commitment, such as a trade agreement. Goods may also be added to the Export Control List for the purpose of ensuring the orderly export marketing when the goods are subject to a limitation by another country, and eligible for a benefit when imported into that country under that limitation.

Amendments to General Import Permits Nos. 1, 13, and 100

Certain goods (milk protein substances, and beef and veal) originating from a country covered by NAFTA are currently not subject to import controls under the EIPA and have no import permit requirements, as per Canada’s commitments under that agreement. Under CUSMA, Canada agreed to maintain these commitments and is amending the Import Control List to reference CUSMA. In order to ensure consistency between regulations under the EIPA, general import permits Nos. 1, 13, and 100 require amendments to align these with the control text in the Import Control List.

Beef and veal originating from a country of the European Union or other Comprehensive Economic and Trade Agreement (CETA) beneficiary are currently not subject to import controls under the EIPA and have no import permit requirement, as per Canada’s commitment under the agreement. During the Comprehensive Economic and Trade Agreement implementation process, Global Affairs Canada amended the Import Control List to implement this commitment, but neglected to amend General Import Permit No. 13 to ensure consistency between regulations. Global Affairs Canada is seeking to remedy this oversight by amending General Import Permit No. 13 at this time.

Cancelling General Export Permit No. Ex. 31 - Peanut Butter

During negotiations at the World Trade Organization, Canada secured market access for peanut butter in the United States through a tariff rate quota. To implement this access, Canada added peanut butter to the Export Control List for the purposes of ensuring the orderly export marketing as these goods were subject to a limitation by the United States, and eligible for a benefit when imported into the United States under that limitation. However, this change required exporters to cite a general export permit even for exports to non-U.S. countries, despite the tariff rate quota being U.S.-specific. Amendments to the Export Control List are removing export controls for peanut butter exports to non-U.S. destinations, so the associated General Export Permit No. Ex. 31 is redundant and, therefore, is being cancelled.

Repealing certain allocation method orders

Allocation method orders are ministerial regulations that establish the method for allocating the import access quantity for products covered by tariff rate quotas. These orders were intended to apply to tariff rate quotas Canada agreed to at the World Trade Organization. To avoid confusion regarding the application of these regulations to tariff rate quotas negotiated under CUSMA, certain allocation method orders are being repealed and replaced by ministerial policy statements specific to the tariff rate quotas negotiated under each agreement.

Amendments to the Import Permits and Certificates Fees Order

In CUSMA, Canada agreed to introduce an “export thresholds” regime to limit global exports of (1) skim milk powders and milk protein concentrates; and (2) retail-ready infant formula containing 10% of cow’s milk (“the covered dairy products”). CUSMA obligates Canada to monitor exports of these products and, once exports exceed annual quantities, to apply the specified export charge. As part of implementing the export threshold regime, Canada will require all exporters of the covered dairy products to obtain an export permit to legally export these products. To ease the administrative burden of this new permit requirement, the Minister of Foreign Affairs is amending the Import Permits and Certificates Fees Order to waive permit fees for “services rendered” on all export permits for the covered dairy products.

Objective

The objective of this initiative is to ensure Canada complies with its international commitments and supports the implementation of CUSMA.

Description

Changes to general import permits

Cancelling General Export Permit No. Ex. 31 – Peanut Butter

General Export Permit No. Ex. 31 – Peanut Butter is being cancelled to reflect changes to the Export Control List, which now limits the geographical scope for peanut butter export controls to only exports to the United States.

Repealing allocation method orders

The following allocation method orders are being repealed:

Changes to the Export and Import Permits and Certificates Fees Order

The Export and Import Permits and Certificates Fees Order is being amended to exclude the application of fees for export permits for the new dairy products added to the Export Control List. The addition of these products to the Export Control List is discussed in a separate regulatory impact analysis statement.

Regulatory development

Consultation

The Government of Canada consulted regularly through the CUSMA negotiations with provincial and territorial governments and stakeholder groups. As the amendments in this proposal are consequential to CUSMA, further consultation and prepublication were not necessary.

Modern treaty obligations and Indigenous engagement and consultation

Pursuant to the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted for CUSMA as a whole. No potential modern treaty impacts were identified. The Agreement contains provisions that preserve and confirm the government’s ability to adopt or maintain measures it deems necessary to fulfill its legal obligations to Indigenous peoples, as well as policy flexibility necessary for the government to provide preferential treatment to Indigenous peoples in various areas. The Agreement includes a general exception that clearly confirms that the government can adopt or maintain measures it deems necessary to fulfill its legal obligations to Indigenous peoples.

As the regulatory measures cited above are consequential to CUSMA, no additional modern treaty assessment was undertaken.

Instrument choice

Canada’s long-standing practice has been to implement trade commitments related to trade controls under the authority of the Export and Import Permits Act and its associated regulations. Continuing this approach for the CUSMA trade control commitments is the most efficient and effective approach to their implementation.

Canada relies on regulations made under the Export and Import Permits Act to control the imports and exports of goods into and from Canada. Effective administration of Canada’s systems of import and export controls requires concordance between the control lists and the text of associated general permits, allocation method orders, and other regulations. Therefore, there are no instruments required other than procedural amendments to, or repeal of, the existing regulations used to ensure that any conditions attached to the legal import or export of goods are enforced.

Regulatory analysis

Benefits and costs

These regulatory amendments implement CUSMA commitments and ensure that Canada is consistent with its international trade obligations. Most amendments support the continuation of Canada’s existing regulatory framework under the Export and Import Permits Act by replacing references to NAFTA with CUSMA. These amendments create no practical impacts.

Repealing certain allocation method orders for agriculture products will result in no impact to businesses, as the commitments implemented through these orders are now administered under the long-standing ministerial policy frameworks set out in notices to importers.

Cancelling General Export Permit No. Ex. 31 – Peanut Butter will create no practical impact, as changes to the Export Control List have rendered this permit redundant and exporters will no longer be required to cite it when exporting peanut butter to non-U.S. countries.

The amendments to the Export and Import Permits and Certificates Fees Order will create neither costs nor benefits to businesses. The effect of this change is to exempt, from fees prescribed in this Order, export permits for certain dairy products recently added to the Export Control List, creating no new benefits or costs for exporters.

Small business lens

Regulatory amendments will have no practical impact, and therefore will create no impact on small businesses.

One-for-one rule

Order Amending Certain General Import Permits Issued under the Export and Import Permits Act (Nos. 1, 13 and 100)
Order Cancelling General Export Permit No. Ex. 31 – Peanut Butter

The one-for-one rule is not triggered by the cancellation of this regulation as it neither increases nor decreases administrative burden on businesses. This cancellation removes the permit requirement for exporters of peanut butter to non-U.S. destinations. It cancels a regulation made redundant by the removal of export controls for peanut butter to non-U.S. destinations, a change which is covered under a separate regulatory import analysis statement.

Order Repealing Certain Orders Made Under the Export and Import Permits
Order Amending the Export and Import Permits and Certificates Fees Order

The one-for-one rule is not triggered by this amendment as it neither increases nor decreases administrative burden on businesses. This amendment exempts, from fees prescribed in this Order, permits for the export of products newly added to the Export Control List (i.e. skim milk powder, milk protein concentrated, infant formula made with 10% or more milk).

Regulatory cooperation and alignment

While these amendments implement non-discretionary obligations that Canada agreed to in a binding international agreement, these are not related to a work plan or commitment under a formal regulatory cooperation forum.

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 for these regulatory amendments is not required as these are unlikely to result in important environmental effects.

Gender-based analysis plus

A gender-based analysis plus (GBA+) assessment was not conducted specifically for these amendments given these are consequential to CUSMA. A GBA+ assessment for CUSMA anticipated a net positive impact on the gender, Indigenous, and small and medium enterprise sub-populations identified as being impacted by the Agreement.

Implementation, compliance and enforcement, and service standards

Implementation

Global Affairs Canada’s Trade and Export Controls Bureau is responsible for issuing permits and will lead implementation of these amendments. Information concerning any changes arising from these amendments will be made publicly available to both importers and exporters via publication on the website of Global Affairs Canada prior to CUSMA’s entry into force. Information related to imports will also be included in a Canada Border Services Agency D-memorandum, which will be made available on the CBSA website with a link to the Global Affairs Canada website.

Compliance and enforcement

The Trade and Export Controls Bureau will promote compliance with these regulatory measures and permit requirements through its regular mechanisms. Alleged violations may be brought to the attention of Global Affairs Canada directly (e.g. a Canadian exporter or importer brings a suspected violation to the attention of Global Affairs Canada) or indirectly, as the result of an inspection and/or audit. Global Affairs Canada maintains a team of inspectors who, for any purpose related to the administration or enforcement of the Export and Import Permits Act, may inspect, audit or examine the records of any person who has applied for an authorization under that Act. Global Affairs Canada has verification teams deployed to four major metropolitan areas to support the administration of import and export permits related to trade commodities: Ottawa, Montréal, Toronto and Vancouver. Between 100 and 140 verification exercises are conducted annually.

Non-compliance with any of these amendments could lead to prosecution under the Export and Import Permits Act. The Canada Border Services Agency and the Royal Canadian Mounted Police are responsible for the enforcement of import and export controls.

Service standards

Global Affairs Canada’s Trade and Export Controls Bureau maintains general performance standards and specific service standards for permits for non-strategic goods (e.g. all goods covered by these amendments). The Bureau’s current service standards require that

The Bureau’s complete service standards can be found at the following address: https://www.international.gc.ca/controls-controles/about-a_propos/service.aspx?lang=eng

Contacts

General Import Permits No. 1 and No. 100, Allocation Method Orders, Import Permits and Certificates Fees Order

Blair Hynes
Deputy Director
Supply-Managed Trade Controls Division
Global Affairs Canada
111 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑4353
Fax: 343‑996‑0612
Email: Blair.Hynes@international.gc.ca

General Import Permits No. 13 and No. 100, General Export Permit No. Ex. 31

Elizabeth Clarke
Deputy Director
Non-Supply Managed Trade Controls Division
Global Affairs Canada
111 Sussex Drive
Ottawa, Ontario
K1A 0G2
Telephone: 343‑203‑4366
Fax: 343‑996‑0612
Email: Elizabeth.Clarke@international.gc.ca