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The Canadian Hatching Egg Producers (CHEP) is the National Agency responsible for the orderly production and marketing of broiler hatching eggs and chicks in Canada. CHEP was proclaimed in 1986, pursuant to subsection 16(1) of the Farm Products Marketing Agencies Act (known as the Farm Products Agencies Act (FPAA) since 1993) and a federal-provincial agreement between the federal agriculture minister, provincial agriculture ministers (in Alberta and Quebec, the Ministers of Intergovernmental Affairs are also signatories), provincial supervisory boards, broiler hatching egg producers in member provinces and CHEP.
CHEPâ€™s Board of Directors and Structure
Six provinces are party to the Federal-Provincial Agreement for Broiler Hatching Eggs: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. Producers in each member province elect a representative to sit on CHEPâ€™s Board of Directors. Two additional representatives are appointed by the Canadian Hatchery Federation (CHF); one representing broiler hatcheries in Western Canada and one representing broiler hatcheries in Ontario and Quebec, for a total of 8 directors and the Chair who is elected amongst the Agencyâ€™s membership.
CHEPâ€™s Role, Responsibilities and Objects
CHEPâ€™s objects are listed in section 21 of the FPAA:
- to promote a strong, efficient and competitive production and marketing industry for the regulated product or products in relation to which it may exercise its powers; and
- to have due regard to the interests of producers and consumers of the regulated product or products.
CHEPâ€™s Board of Directors meets, at least three times a year, to plan and manage broiler hatching egg production and marketing. This mainly involves setting or adjusting production quotas, and setting an annual levy to defray the administrative, marketing, and other costs and expenses deemed essential by the Agency for the realization of its objects. This levy is included in the price payed by hatcheries for broiler hatching eggs.
Within the Canadian broiler hatching egg market, supply comes from two sources: domestic production and imports from the U.S. Under a 1990 bilateral agreement, pursuant to Article XXII of the 1947 General Agreement on Tariffs and Trade (GATT), U.S. broiler hatching egg producers are granted access to the Canadian market in amounts equal to 21.1 percent of the anticipated domestic production for the current year. This access is split into separate commitments for broiler hatching eggs and chicks, 17.4 percent and 3.7 percent respectively.
Domestic production levels are established by quota allocations, the regulation is called the Canadian Hatching Egg Producers Quota Regulations. Every year, at its July board meeting, the Agency sets two allocations: the final allocation for the current year; and a preliminary allocation for the coming year. The preliminary allocation gives an indication of the total production of hatching eggs needed for the chicken sector in the coming year (including a breakdown by province) to aide in planning chick placements.
CHEPâ€™s levies order (the Canadian Broiler Hatching Egg Marketing Levies Order) is expressed in dollars per broiler hatching egg and is set during the Agency November meeting and is derived out of the annual budget for the upcoming year.
Amendments to Regulations and Orders
Both quota regulations and levies order amendments need to be approved by Council members before they can be put into effect by CHEP. Prior to Council membersâ€™ review of the proposed amendments, the amendments must be examined by Justice Canada to ensure that CHEP has the authority via the FPAA and the Agencyâ€™s Proclamation to undertake the amendments.
The amendments are then scrutinized by FPCC staff to assess the potential impact on the market for broiler hatching eggs and chicks in Canada. Council members review the proposed amendments and the briefing material prepared by FPCC staff as well as any relevant documents sent by CHEP. Using this information as well as their own knowledge and expertise, Council members either approve or decline the amendments. Council members must be satisfied that in approving CHEPâ€™s order or regulation amendment, it is both in accordance with, and necessary for the implementation of CHEPâ€™s marketing plan as outlined in the Agencyâ€™s Proclamation. FPCC informs CHEP through a transmittal letter of the decision and the rationale behind the decision taken. FPCCâ€™s decision letters are available on its Website.
As part of their obligations and in order to meet the requirement of section 29 of the FPAA, the financial transactions of CHEP must be audited by an independent auditor appointed by the Governor in Council. The report of each audit must be made to CHEP, FPCC and the Minister of Agriculture and Agri-Food Canada (Minister).
The annual report, as per section 30 of the FPAA, must be submitted to FPCC and the Minister within three months of the end of each fiscal year. The Minister has the power to direct CHEP to report on its activities in a form and manner the Minister so decides. CHEPâ€™s annual report is then laid before the Parliament of Canada within fifteen days after receipt by the Minister or, if Parliament is not sitting, on any of the first fifteen days when Parliament resumes.
For additional information on CHEP and its activities, please go to: http://www.chep-poic.ca/