WORLD TRADE G/STR/N/2/CAN
19August 1996
ORGANIZATION(96-3244)
Original: English Working Party onState Trading Enterprises
STATE TRADING
Updating Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
CANADA
Thefollowing communication, dated 2August 1996, hasbeenreceived from thePermanent
Mission ofCanada.
_______________
I. Enumeration ofenterprises
Canadian Dairy Commission (re:butter, skim milkpowder).
CANADIAN DAIRY COMMISSION
II. Reason andpurpose formaintaining enterprise
TheCanadian Dairy Commission (CDC) wasestablished bytheCanadian Dairy Commission
Act,which came intoforce on31October 1966, andtheCDC became operational withthestartof
thedairy support yearon1April 1967. TheCDC isaccountable toParliament through theMinister
ofAgriculture andAgri-Food.
Thestatutory objectives oftheCDC aretoprovide efficient Canadian producers ofmilkan
cream withtheopportunity ofobtaining afairreturn fortheirlabour andinvestment, andtoprovide
consumers ofdairy products withacontinuous andadequate supply ofdairy products ofhighquality.
Tothose ends, theCDC has,among otherthings, thepower to"purchase anydairyproduct andpackage,
process, store, ship,insure, import, export orsellorotherwise dispose ofanydairy product purchased
byit".
TheCDC advises theMinister ofAgriculture andAgri-Food onmatters relating todairypolicy;
determines domestic requirements forindustrial milkandcream forthepurpose ofestablishing the
Market Sharing Quota; establishes thetarget priceforindustrial milkbased oncostofproduction data,
andsetssupport prices forbutter andskimmilkpowder andoffers topurchase products attheseprices.
Italsoadministers theGovernment 'smonthly payment toproducers oneligible milk andcream
shipments, administers thespecial classpermit system which governs access tomilkatspecial class
prices, operates thepoolofreturns toshare revenues fromspecial classsalesacross Canada, exports
dairy products notneeded fordomestic consumption, andadministers other marketing andpromotion
programmes.G/STR/N/2/CAN
Page2
III. Description ofthefunctioning oftheenterprise
Whether theenterprise deals withexports orwithimports, orboth.
Under theimport regime inplace until1August 1995, theCDC hadexclusive orspecial
privileges inthesense ofArticle XVII withrespect toimports ofbutter. Butter wasontheImport
Control Listunder theExport andImport Permits Act,under theresponsibility oftheMinister for
International Trade, withnoexisting quota providing forimports onaregular basis. Import permits
wereissued bytheDepartment ofForeign Affairs andInternational Trade onoccasion when theCDC
determined thatimports werenecessary torelieve atemporary market shortage. Byhistorical practice,
when butter imports were allowed, theCDC wastheimporter ofrecord.
Effective 1August 1995, Canada 'sUruguay Round market access commitment ofatariffrate
quota (TRQ) forbutter wasestablished andimplemented. Theadministration oftheTRQ isthe
responsibility oftheDepartment ofForeign Affairs andInternational Trade under theauthority ofthe
Export andImport Permits Act. Information ontheadministration ofthisTRQ wasnotified tothe
WTO Committee onAgriculture. Permits tocover theaccess commitment forbutter wereissued to
theCDC astheimporter ofrecord during the1995-1996 dairy year.
Dairy products maybeexported bytheCDC aswellasbytheprivate trade. TheCDC does
nothaveanexport monopoly foranydairy product.
Whether private traders areallowed toimport orexport and,ifso,onwhat conditions.
Whether there isfreecompetition between private traders andtheenterprise.
Under thecurrent butter import system, import permits issued under theExport andImport
Permits Actaregranted, inpractice, exclusively totheCDC. Private traders havenotbeeninvolved
inthese imports. Effective 1August 1995, Canada 'sUruguay Round access commitment forbutter
wasimplemented, asdescribed above.
TheCDC isnotdirectly involved inimports ofdairy products other thanbutter.
While most dairy exports areconducted bytheprivate trade, theCDC alsosellsskim milk
andwhole milkpowders andevaporated milkdirectly toexport markets. When supplies permit, the
CDC sellsbutter toCanadian private traders, whointurnsellitinexport markets. Inaddition, the
CDC administers export entitlements forcheese under special access arrangements withtheEuropean
Union. TheCDC doesnothaveanexport monopoly foranydairy product, andsalesmayalsobe
made bytheprivate trade.
Thecriteria usedfordetermining thequantities tobeexported andimported.
Under thecurrent butter import system, quantities aredetermined onthebasisofimport licenses
issuedbytheDepartmentofForeignAffairsandInternationalTradeundertheExportandImportPermits
Act,based, inpart,onadvice fromtheCDC related tomarket needs inconjunction withcommercial
considerations suchasprice, quality, availability, marketability andtransportation. Under Canada 's
Uruguay Round market access commitments, abutter tariffratequota wasestablished andimplemented
on1August 1995 of1,964 tonnes, rising inequal increments to3,274 tonnes by1August 2000.
TheCDC exports products inaccordance withopportunities inworld markets. Insome cases,
availability ofproduct surplus totherequirements oftheCanadian market influences thequantities
available forexport. Other exports areplanned exports, such asthose forcheese under quota
arrangements totheUnited Kingdom andtheUnited States, orother traditional markets.G/STR/N/2/CAN
Page3
Howexport prices aredetermined. Howthemarkup onimported products isdetermined .
How export prices andresale prices ofimports compare withdomestic prices.
TheCDC, initssalesofbutter, bothdomestic andimported, tothedomestic market, prices
products available forsaleatwholesale prices.
TheCDC, initsexport sales, receives prices resulting fromnormal commercial negotiations
based onmarket conditions.
Whether long-term contracts arenegotiated bytheenterprise. Whether theenterprise
isusedtofulfil contractual obligations entered intobytheGovernment.
Notapplicable.
IV. Statistical information
(Seeattached table.)
V. Reason whynoforeign trade hastaken place (ifthisisthecase) inproducts affected
Notapplicable.
VI. Additional information
Notapplicable.
I. Enumeration ofenterprises
Ontario Bean Producers 'Marketing Board: white peabeans.
ONTARIO BEAN PRODUCERS 'MARKETING BOARD
II. Reason andpurpose forintroducing andmaintaining enterprise
TheOntario Bean Producers 'Marketing Board wasestablished in1944 following avoteof
beanproducers intheprovince ofOntario. Itsoperating authority isprovided bytheFarm Products
Marketing ActofOntario.
TheBoard operates acentral selling agency system withpooled pricing forthemarketing of
white peabeans produced inOntario. Thisauthority, granted totheBoard in1967, provides forthe
control andregulation inanyorallrespects oftheproducing andmarketing ofOntario produced white
peabeans. Allproducers arerequired tooffer toselltheproduct toorthrough theBoard.
Allbeans aredelivered tolicensed dealers 'facilities. Thelicensed dealers areprivately-owned
andoperatedcompanies.TheBoardlicensesthesecompaniesafterconcludingthattheyhavethefacilities
andabilities necessary tooperate inthetrade.
Theproducerdeliversthecropandreceivesaninitialpaymentfromthedealer,whoisreimbursed
bytheBoard. Theinitial payment isguaranteed bytheFederal Government under theAgricultural
Products Co-Operative Marketing Act. AstheBoard markets thecrop, interim payments andafinal
payment arethenmade toproducers.G/STR/N/2/CAN
Page4
TheBoard isoperated byaBoard ofDirectors whoarebeanproducers andelected bygrowers.
Staffcarry outtheoverall policy oftheBoard andadminister theoperations.
III. Description ofthefunctioning ofthestatetrading enterprises
Whether theenterprise deals withexports orwithimports orboth.
TheBoard participates ininterprovincial andexport tradeofOntario white peabeans through
itslicensed dealers. Itdoesnotengage inimports.
Whether private traders areallowed toimport orexport, andifso,onwhat conditions.
Whether there isfreecompetition between private traders andtheenterprise.
TheBoard hastheexclusive authority tomarket Ontario white peabeans domestically,
interprovincially oronexport markets. TheBoard willnormally sellthecropthrough licensed dealers.
Thelicensed dealers areprivately-owned andoperated companies. TheBoard doesnotcompete with
private traders inexport sales. Theimportation ofwhite peabeans isconducted byprivate traders.
Thecriteria usedfordetermining thequantities tobeexported andimported.
TheBoard purchases theentire cropandoffers products toitsdealers whothenselldomestically
oronexport markets, based onprevailing market circumstances. TheBoard doesnotengage inimports.
Howexport prices aredetermined. Howthemarkup onimported products isdetermined.
How export prices andresale prices onimports compare withdomestic prices.
Export market prices arebased onworld market conditions. AstheBoard isnotinvolved
inimports, ithasnoroleindetermining markups, resale prices orprice differentials between market
outlets.
Whether long-term contracts arenegotiated bytheenterprise. Whether theenterprise
isusedtofulfil contractual obligations entered intobytheGovernment.
TheBoard isnotinvolved innegotiating long-term salescontracts.
IV. Statistical information
Therelevant statistical information isattached.
V. Reason whynoforeign trade hastaken place (ifthisisthecase) intheproducts affected
Notapplicable.
VI. Additional information
Theinitial payments forOntario white peabeans areguaranteed bytheFederal Government
byannual agreements withtheBoard under theAgricultural Products Co-Operative Marketing Act.
Thecriterion usedforsetting initial payment levels isthattheybelower thantheexpected average
market returns pertonne overthepooling period.G/STR/N/2/CAN
Page5Statistical information
Imports Exports
Commodity Units 1August
to31July
YearTotal (a) ByArt.XVII
EnterpriseTotal ByArticle XVII Enterprise Canadian Product
Qty $1,000 Qty $1,000 Qty $1,000 Qty $1,000 Qty $1,000
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
B.Canadian Dairy
Commission
Butter 1,000 Kg 1990-91 122 255 0 0 10,459 14,566 10,408 14,279 94,379 n.a.
1991-92 167 332 0 0 9,647 13,633 9,785 12,581 90,964 n.a.
1992-93 175 357 0 0 10,081 17,555 10,071 16,908 83,933 n.a.
1993-94 1,036 2,039 750 1,400 2,179 3,875 2,256 3,745 86,511 n.a.
Skim milk
powder1,000 Kg 1990-91 1,859 3,153 0 0 35,772 70,355 30,409 66,141 80,069 n.a.
1991-92 236 492 0 0 56,822 106,558 53,094 100,341 66,626 n.a.
1992-93 1,705 3,778 0 0 13,432 32,107 12,487 27,527 50,519 n.a.
1993-94 6,974 12,165 0 0 26,169 56,268 23,778 52,154 54,185 n.a.
Whole milk
powder1,000 Kg 1990-91 1,586 2,649 0 0 8,610 21,853 11,815 32,103 n.a. n.a.
1991-92 1,878 3,212 0 0 8,988 24,304 8,522 23,882 n.a. n.a.
1992-93 2,632 4,159 0 0 7,503 23,873 7,027 21,822 n.a. n.a.
1993-94 4,476 6,079 9,029 27,620 8,187 25,457 n.a. n.a.G/STR/N/2/CAN
Page6Imports Exports
Commodity Units 1August
to31July
YearTotal (a) ByArt.XVII
EnterpriseTotal ByArticle XVII Enterprise Canadian Product
Qty $1,000 Qty $1,000 Qty $1,000 Qty $1,000 Qty $1,000
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
B.Canadian Dairy
Commission
Evaporated
milk1,000 Kg 1990-91 109 254 0 0 7,271 9,103 7,270 9,994 98,382 n.a.
1991-92 145 279 0 0 13,791 14,894 13,725 16,337 103,075 n.a.
1992-93 131 300 0 0 86 116 14 23 90,668 n.a.
1993-94 75 160 0 0 4,994 6,079 4,923 6,583 81,427 n.a.
Notes
(a) Mayinclude imports inbond forre-export.
n.a. notavailable.
Datasource
Total import anddomestic export data(revised) from Statistics Canada, Trade ofCanada.
Enterprise import andexport datafrom Canadian Dairy Commission.
Production datafrom Statistics Canada, Catalogue No.23-001, "Dairy Review".G/STR/N/2/CAN
Page7Ontario Bean Producers Marketing Board (OBPMB)
Statistics
CommodityImports Exports* Production
Units Year Total
Qty$1,000 ByArticle
XVII
Enterprise
Qty$1,000 Total
Qty$1,000 ByArticle
XVII
Enterprise
Qty$1,000 Total
Qty$1,000 Ontario
Qty$1,000
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
OBPMB OBPMB OBPMB
White peabeans tonnes 1992 1,459 1,712 0 0 78,075 34,462 71,712 31,766 53,100 n.a. 41,752 n.a.
tonnes 1993 2,107 2,228 0 0 36,219 21,211 30,219 17,653 77,800 n.a. 70,549 n.a.
tonnes 1994 2,519 2,568 0 0 68,330 49,293 62,557 45,323 84,800 n.a. 61,023 n.a.
tonnes 1995 2,020 3,152 0 0 67,153 55,489 57,360 48,441 115,800 n.a. 88,500 n.a.
Notes
* Crops areusually marketed inthe12-15 month period following production, which explains thediscrepancies between production andexports
inagiven year.
n.a. notavailable.
Datasource
1.Total import anddomestic export datafrom Statistics Canada, Trade ofCanada.
2.Exports fromOntario inStatistics Canada dataaredeemed tobethose bytheOntario BeanProducers 'Marketing Board, although thesemayinclude
some transhipment ofproducts from other producing provinces (Manitoba andQuebec) toexport from Ontario.
3.Total Canadian production datafrom Statistics Canada, Catalogue No.22-002.
4.Ontario production datafrom Ontario Bean Producers 'Marketing Board, Annual Report.