Question Period Note: SUPPORTING UKRAINE’S AGRICULTURE SECTOR

Q1 – What is Canada doing to open its economy to Ukrainian exports? Q2 – What is the current situation with regards to supply managed goods such as poultry, dairy, and eggs from Ukraine?

R.1 - • The actions taken by Russia – with support from Belarus – have had a significant effect on Ukraine’s economy, including its ability to export its goods to other countries, including Canada.
• To help support Ukraine’s economy, Canada has been temporarily waiving tariffs and trade remedy duties on imports originating from Ukraine since June 9, 2022. R.2 - • On June 9, 2023, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, announced Canada’s extension of the Ukraine Goods Remission Order until June 9, 2024, in order to support Ukrainian manufacturing and trade activities in light of the enduring nature of the conflict and its repercussions.
• Taking into account views expressed by the supply-managed sectors, the scope of goods covered by the Order was amended to exclude over-access supply-managed dairy, poultry, and eggs from duty relief after June 9, 2023.
• This re-establishes the status quo of ensuring predictable levels of imports that support production planning and Canada’s supply management system.

Canada’s support for grain storage and laboratory equipment
• On June 28, 2022, Prime Minister Trudeau announced $52 million for agricultural solutions to respond to Ukraine’s urgent need to increase grain storage capacity and enable the timely diagnostic testing and monitoring of animal diseases to allow for export certification.
• Canada provided the funding via the Food and Agriculture Organization (FAO), as part of its Rapid Response Plan for Ukraine, for grain storage and lab equipment. Of the $52 million, $50M is allocated for grain storage and $2M for lab equipment. Japan and an Australian non-government organization (NGO) also responded with various levels of funding.
• On July 29, the FAO launched two separate tenders for grain storage solutions in Ukraine and through the process, as of December 2023, 29,796 grain sleeves have been successfully distributed (out of a target of 30,000), storing 5,969,200 tonnes of grain for 1679 farmers across Ukraine.
• As a result of FAO’s competitive bidding process for PCR equipment, six regional state laboratories in Ukraine have been equipped with diagnostic lab equipment (for testing and monitoring of animal diseases) to facilitate export certification. These labs are now set up and fully functioning.
Ukraine’s new unilateral shipping corridor
• After Russia withdrew from the Black Sea Grain Initiative in July 2023, Ukraine unilaterally opened up a new shipping corridor in August, hugging the Black Sea coast of its southern neighbors, Bulgaria and Romania.
• This new maritime corridor has enabled the export of more than 3 million tonnes a month of agriculture related goods since the termination of the BSGI.
• In February 2024, during a meeting at AAFC, Ukrainian officials informed that the country's monthly exports of agricultural products via the Black Sea had rebounded to levels seen before the full-scale invasion of 2022.
Eliminating tariffs on goods imported from Ukraine
• While most goods from Ukraine enter Canada duty-free as a result of the Canada–Ukraine Free Trade Agreement (CUFTA), the Remission Order provides the ability to import CUFTA-covered goods duty-free with a lesser administrative burden due to simplified conditions relating to rules of origin and shipment documentation.
• From 2019 to 2022, Ukrainian total merchandise exports to Canada averaged $139.2 million annually, and Canada collected about $2.6 million in duties from these goods. Ukraine Remission Order/Market Access - dairy and poultry access
• The Remission Order came into effect on June 9, 2022, for an initial one-year period. The Remission Order temporarily remitted customs duties, anti-dumping duties, and countervailing duties applicable to all imports of Ukrainian goods. During the initial one-year period, industry associations of the supply-managed sectors raised concerns about supply-managed goods being included under the Order. On June 9, 2023, Finance Canada announced the Remission Order’s extension to June 9, 2024. The scope of goods coverage was amended to exclude over-access supply-managed goods imported after June 9, 2023, unless such goods were already in transit to Canada. Any extension of the remission order would require a recommendation from the Minister of Finance for an Order-in-Council that would be subject to Governor in Council approval.

• Ukraine is currently seeking sanitary market access for egg and egg products, apples and additional poultry exports to Canada.

Egg and egg products

o Canada will be granting access to Ukraine to export processed eggs products. Effective May 16, 2024, the negotiated certificate will become valid and trade can commence as soon as the CFIA’s Automated Import Reference System (AIRS) has been updated.

o Market access for shell eggs will be assessed in the coming months, provided there is no change in Ukraine's Highly Pathogenic Avian Influenza (HPAI) status.

Apples

o On January 17 2024, Canada shared a proposed program for export of apples to Canada, and is currently awaiting a response from Ukranian officials.

Poultry Meat Products Imports

o Canada has informed Ukraine that only meat products approved for export from specific establishments will be allowed into the country.

• The Government of Canada remains committed to supporting the Ukrainian agriculture sector as a major contributor to global food security.

• To help Ukraine and its farmers, Canada has provided $50 million for temporary grain storage and $2 million for lab equipment to facilitate export certificates.