As discussed here and here, Canada has one of the most protectionist agricultural product sectors in the world. Indeed, we have import restrictions and incredibly high tariffs on many basic groceries like cheese, eggs and poultry – all leading to fuel inflation in Canada today, and continuing disputes with countries like the US and New Zealand over our protectionist approach.
This affects consumer and commercial importers of these products, with our current government enforcing import restrictions through tariff rate quotas (“TRQs”).
What is a TRQ?
Among other things, importing supply-managed goods into Canada requires TRQ allocation from Global Affairs Canada (“GAC”). That is required in order to avoid paying huge tariffs that would otherwise provide a cost-prohibitive barrier to entry of these products in the Canadian market, and allowing Canadian-produced alternatives a basic monopoly to raise prices. (For more information, also see our prior blog here).
TRQ Applications Deadlines are Forthcoming
Fortunately, Canada does allow some bare-minimum TRQs to outside parties, and while there is no “one-size-fits-all” answer here, the 2023 deadlines for cheese, concentrated milk, ice cream, powdered buttermilk, yogurt, poultry and eggs are all quickly approaching between October 1 to November 15, 2023.
The 2024 deadlines for butter, cream, milk, and various powdered products will all be hitting between May 16 to June 15, 2024.
With the application window for these TRQ applications coming up very soon, importers should start getting their ducks in a row now!
How Do I Apply?
The TRQ process can appear deceptively simple at first – namely, an application form needs to be submitted to the applicable government email address. Unfortunately, there are plenty of potential pitfalls (particularly for newcomers). For example, each type of product has its own requirements and limitations, and that applications for an allocation need to be made with reference to a particular trade regime involved (e.g., CPTPP, CETA, CUSMA or WTO rules, etc.).
For example, “Cheese of All Types” has applications available under all four of these trade regimes – with different allocation rules and policies for each (e.g., retailers are ineligible under CPTPP and CUSMA, but can apply for an allocation under CETA!).
Legal guidance is often necessary to help navigate the rules!
What Can I Expect?
The TRQ system is (in our view) notoriously stacked against new market entrants and well-biased in favour of established Canadian players. This means that new entrants (start-ups and importers) will need to carefully consider their strategies and plans for achieving or securing allocation. With the right strategy, however, success can be achieved!
Do you require assistance in this area? If so, please click here.