WORLD TRADE
ORGANIZATIONG/STR/N/4/CAN
5 November 2002
(02-6071)
Working Party on State Trading Enterprises Original:  English
STATE TRADING
New and Full Notification Pursuant to Article XVII:4(a) of the GATT and
Paragraph 1 of the Understanding on the Interpretation of Article XVII
CANADA
The following communication, dated 10 October 2002, has been received from the Permanent
Mission of Canada.
_______________
Pursuant to the provisions of Article XVII:4(a) of the GATT 1994 and paragraph 1 of the
Understanding on the Interpretation of Article XVII, Canada submits herewith its notificationconcerning state trading enterprises.  This notification covers the Canadian Dairy Commission, the
Canadian Wheat Board, the Ontario Bean Producers’ Marketing Board, the Freshwater Fish
Marketing Corporation and the Provincial Liquor Control Authorities.
I. Enumeration of State Trading Enterprises
A. Identification of state trading enterprises.
Canadian Dairy Commission (CDC)
B. Description of products affected (including tariff item number(s) encompassed in
product description).
04.05 Butter and other fats and oils derived from milk; dairy spreads.
II. Reason and Purpose
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
The statutory objectives of the CDC are to provide efficient Canadian producers of
milk and cream with the opportunity of ob taining a fair return for their labour and
investment, and to provide consumers of dairy products with a continuous and
adequate supply of dairy products of high quality.G/STR/N/4/CAN
Page 2
B. Summary of legal basis for granting the relevant exclusive or special rights or
privileges, including legal provisions a nd summary of statutory or constitutional
powers.
Imports of butter are subject to control as items listed on the Import Control List
under the authority of the Export and Import Permits Act .  The Department of
Foreign Affairs and International Trade is responsible for the administration of the
Import Control List (information respecting the importation of butter may be obtained
at the website of the Department of Foreign Affairs and International Trade,
www.dfait-maeci.gc.ca ).
Under the import regime in place until 1 August 1995, the CDC had exclusive or
special privileges with respect to butter imports.  Butter was on the Import Control
List under the Export and Import Permits Act, with no existing quota provided for
imports on a regular basis.  Import permits were issued on occasion when the CDC
determined that imports were necessary to relieve a temporary market shortage.  By
historical practice, when butter imports were allowed, the CDC acted as importer ofrecord.
Since the implementation of the tariff rate quota (TRQ) for butter on 1 August 1995,
import permits for the butter TRQ have been allocated by the Export and Import
Controls Bureau (EICB) of the Department of Foreign Affairs and International Tradeto the CDC annually with the proviso that these imports be directed to the further
processing sector.
III. Description of the Functioning of the State Trading Enterprise
A. Summary statement providing overview of operations of the state trading enterprise.
The CDC is a government-owned corporation which advises the Minister of
Agriculture and Agri-Food on matters relating to dairy policy and administers the
federal government's monthly payment to producers on eligible milk and cream
shipments.  In carrying out its mandate, the CDC chairs and supports the work of the
Canadian Milk Supply Management Committee (CMSMC).  Its work includesproviding the technical support necessary for the operation of Canada’s milk supply
management system, administering revenue pooling agreements on behalf of the
industry, purchasing and storing dairy products for use in times of low milk
production, establishing the target price for industrial milk, the assumed processor
margin and the support prices for butter and skim milk powder, as well asadministering other marketing programmes.
B. Specification of exclusive or special rights or privileges enjoyed by the state trading
enterprise.
Since the implementation of the tariff rate quota (TRQ) for butter on 1 August 1995,
import permits for the butter TRQ have been allocated by the Export and Import
Controls Bureau (EICB) of the Department of Foreign Affairs and International Trade
to the CDC annually with the proviso that these imports be directed to the further
processing sector.G/STR/N/4/CAN
Page 3
C. Type of entities other than the state trading enterprise that are allowed to engage in
importation/exportation and conditions for participation.
The CDC is not the sole importer of butter,  as certain markets, such as the kosher
market for Passover, are supplied through specific import permits issued by theEICB.  The allocation of import permits for other dairy products subject to TRQs is
administered by EICB under the authority of the Export and Import Controls Act
(information respecting the importation of dairy products may be obtained at the
website of the Department of Foreign Affairs and International Trade, www.dfait-
maeci.gc.ca)
D. How import/export levels are established by the state trading enterprise.
Pursuant to Canada’s Uruguay Round market access commitments, a butter tariff rate
quota was established and implemented on 1 August 1995.  To date, the CDC has
acted as the first receiver of these imports, under permits issued by the EICB, and
directed this product through processors to the benefit of the further processingsector.
E. How export prices are determined.
The CDC, in its export sales, receives prices resulting from normal commercial
negotiations based on market conditions.
F. How the resale prices of imported products are determined.
The CDC, in its sales of imported butter, generally prices this butter at prices
comparable to those for butter in further processing uses.
G. Whether long-term contracts are negotiated by the state trading enterprise.  Whether
the state trading enterprise is used to fulfil contractual obligations entered into by the
government.
Not applicable.
H. Brief description of market structure.
The major participants in the Canadian dairy industry are dairy producers and dairy
processors.  Dairy producers operate approximately 22,632 farms in Canada.Virtually all of these farms produce milk for two markets: the fluid market (table milk
and cream) and the industrial market (manufactured dairy products such as butter,
cheese, yogurt and ice cream).  Dairy processors include dairies that process raw milk
for fluid consumption or industrial use, and further processors who use dairy
ingredients and products as inputs for other finished goods.
The marketing of fluid milk is regulated at the provincial level by producers through
provincial milk marketing boards.  Industrial milk production and management is
governed by a federal/provincial agreement called the National Milk Marketing Plan
overseen by the CMSMC.  This committee, chaired by the CDC, is comprised ofproducer and government representatives from all provinces (Newfoundland has
observer status). Representatives of national producer, processor, and consumer
organizations participate as non-voting members.  Each year, the CMSMC sets a
national industrial milk production target called the market sharing quota (MSQ),G/STR/N/4/CAN
Page 4
taking into consideration: stocks of dairy products, the estimated surplus butterfat
from fluid milk processing, anticipated imports, planned exports, and domestic
demand for industrial milk in the coming year.  This target is monitored regularly and
adjusted when necessary.  The MSQ is distributed among the provinces according to
the terms of the National Plan , and allocated by each province to its producers
according to its own policies.  The share of the MSQ that each dairy producer
receives sets the limit on the amount of milk production that is eligible for sale in
domestic markets (including planned exports).  However, producers may decide to
ship more than that amount for export use at prices reflecting returns from dairy
products sold into world markets.
Imports of dairy products are subject to control as items listed on the Import Control
List under the authority of the Export and Import Permits Act .  In keeping with
Article 4 of the WTO Agreement on Agriculture, Canada established market access
commitments in the form of TRQs for fluid milk, specialty creams, condensed
milk/cream, yogurt, powdered buttermilk, dry whey, other products of milk
constituents, butter, cheese, other dairy preparations and ice cream.   The Departmentof Foreign Affairs and International Trade is responsible for administering these
TRQs.
IV. Statistical Information
See attached Tables I - III.
V. Reason why no foreign trade has taken place ( as appropriate)
Not applicable.
VI. Additional Information ( as appropriate)
Not applicable.G/STR/N/4/CAN
Page 5TABLE I
STATE TRADING: CANADIAN DAIRY COMMISSION
STATISTICAL INFORMATION, IMPORTS
Description of product Year Total
quantity
importedQuantity imported
by state trading
enterpriseAverage
import
priceAverage
representative
domestic sales
priceMark-up National
production
1 234 5 6 7
August-July >000 kg >000 kg $Can/kg $Can/kg >000 kg
1994-1995 596 ... .. 90,600
1995-1996 2,519 1,922 2.66 ...196,230Butter and Other Fats andOils Derived from Milk04.051996-1997 3,520 2,214 2.50 3.21 89,922
Notes: “-” indicates zero
“..” indicates not available
“...” indicates not applicable
1.Not sold.
Sources: Column 2: Statistics Canada, Canadian Merchandise Trade Statistics, Trade Information Enquiry and Retrieval System (TIER S), Sept.98.
Columns 3,4,5: Canadian Dairy Commission.
Column 7: Statistics Canada, “Dairy  Review”, Catalogue No. 23-001-QXPD.G/STR/N/4/CAN
Page 6
TABLE II
STATE TRADING: CANADIAN DAIRY COMMISSION
STATISTICAL INFORMATION, EXPORTS
Description of product Year Total
quantity
exportedQuantity
exported by
state trading
enterpriseAverage
procurement
priceAverage
representative
domestic sales
priceAverage
export priceNational
production
12 3 4 5 6 7
August-July >000 kg >000 kg $Can/kg $Can/kg $Can/kg >000 kg
1994-1995 936 0 5.39 .. ... 90,600
1995-1996 13,596 2,144 3.36 .. 2.34 96,230Butter and Other Fats andOils Derived from Milk
04.051996-1997 10,987 6,233 2.26 .. 1.90 89,922
Notes: “-” indicates zero
“..” indicates not available
“...” indicates not applicable
Sources: Column 2: Statistics Canada, Canadian Merchandise Trade Statistics, Trade Information Enquiry and Retrieval System (TIER S), Sept.98.
Columns 3,4,6: Canadian Dairy Commission.
Column 7: Statistics Canada, “Dairy  Review”, Catalogue No. 23-001-QXPD.G/STR/N/4/CAN
Page 7TABLE III
STATE TRADING: CANADIAN DAIRY COMMISSION
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES
Description of
 productYear Domestic purchases
 by state trading
enterpriseNational
productionDomestic sales by
state trading
enterpriseNational
 consumption1
12 3 4 5
August-July >000 kg >000 kg >000 kg >000 kg
1994-1995 20,287 90,600 13,038 85,565
1995-1996 13,173 96,230 16,098 81,690Butter and Other Fats and
Oils Derived from Milk
04.051996-1997 17,786 89,922 13,650 72,964
Notes:
1.National consumption is represented by domestic disappearance ca lculated as the sum of net stocks, production and imports, less  exports.
Sources: Column 2,3,4: Canadian Dairy Commission.
Column 5: Statistics Canada, “Dairy Review”, Catalogu e No. 23-001-QXPD; Canadian Dairy Information Centre at
http://www.dairyinfo.agr.caG/STR/N/4/CAN
Page 8
I. Enumeration of State Trading Enterprises
A. Identification of state trading enterprises.
Canadian Wheat Board (CWB)
B. Description of products affected (including tariff item number(s) encompassed in
product description).
1001.00 Wheat
1003.00 Barley
II. Reason and Purpose
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
The statutory objective of the CWB is the marketing in an orderly manner, in
inter-provincial and export trade, of grain grown in Canada.
B. Summary of legal basis for granting the relevant exclusive or special rights or
privileges, including legal provisions a nd summary of statutory or constitutional
powers.
The CWB was established under the Canadian Wheat Board Act , 1935.  To that
end, the CWB's powers include authority to buy, take delivery of, store, transfer,
sell, ship or otherwise dispose of grain.  Only wheat and barley produced in the
CWB "designated area", which includes Manitoba, Saskatchewan, Alberta and the
Peace River area of British Columbia, are marketed by the CWB.
III. Description of the Functioning of the State Trading Enterprise
A. Summary statement providing overview of operations of the state trading
enterprise.
The CWB undertakes to market in inter-provincial and export trade on behalf of
producers, wheat and barley grown in the designated area of western Canada that
is offered by producers for marketing through the CWB.  The CWB also
coordinates the delivery of wheat and barley into grain elevators and railway cars
for inter-provincial movement and shipment to export position.
The CWB pools the returns from sales of wheat and barley over the crop year.
The pooled price for individual grades of wheat and barley is a weighted average
price that reflects the prices received from buyers over the course of the crop year
less selling costs.
The CWB may also sell feed barley and feed wheat into the domestic feed grain
market.  The CWB sources this grain just as it would any other CWB grain, i.e., by
producer delivery contracts.  However, its domestic sales of feed grains, which are
small, compete directly with private grain companies, which source their own
grain and sell to domestic feed grain users.G/STR/N/4/CAN
Page 9
B. Specification of exclusive or special rights or privileges enjoyed by the state
trading enterprise.
The CWB is solely responsible for the sale of wheat and barley grown in the
designated area in export markets and for human consumption in the domestic
market.  In addition, the CWB has legal authority to  control the inter-provincial
movement of wheat and barley and their products produced anywhere in Canada.
C. Type of entities other than the state trading enterprise that are allowed to engage
in exportation and conditions for participation.
Exports of wheat by the Ontario Wheat Producers' Marketing Board and other
eastern Canadian wheat producers must be done under export licenses obtainedfrom the CWB.  In practice, these have been freely granted.
Most export sales involve both the CWB and its  accredited exporters.  The
Canadian Government is only involved in commercial credit exports when and if a
government guarantee is involved.  The degree of participation, by the CWB oraccredited exporters, depends upon the customer.  For example, in sales to large
volume customers, negotiations to establish grade, quantities, prices, shipping
periods and other terms and conditions are carried out directly between the CWB
and the importer.  Once main contract terms have been established, accredited
exporters obtain the necessary documentation and supervise ship loading.  If thebuyer wishes to accept delivery at the port of destination, that is, if it is a c.i.f. sale,
the accredited exporter arranges ocean freight.
For non-credit commercial sales on a cargo (shipment-by-shipment) basis,
however, an accredited exporter often conducts all negotiations, buys the grainfrom the CWB on a cash basis, and assumes responsibility for its foreign
exchange, documentation, and ocean freight, if required.  In these sales, the CWB
is normally involved whether it is in market development or assisting with
negotiations and some aspects of the contract bid itself.
The CWB is in daily contact with its accredited exporters.  Two way
communication with accredited exporters keeps the CWB abreast of price
indications and market developments, and the export trade aware of CWB price
levels by market and shipping period.  As a result of this process, the private trade
has complete knowledge of what CWB grain is available at any time for any
delivery period.  In this respect, the CWB behaves just as any other private grain
company, offering quotes to interested parties, and is fully integrated as acommercial participant.
D. How export levels are established by the state trading enterprise.
The CWB makes sales of wheat and barley for export in line with commercial
considerations such as price, quality, availability, marketability, and
transportation.  The volume of grain exported is primarily a function of the
available supply less domestic use and inventory adjustments.  However, if market
conditions warrant, the CWB will defer sales until the next crop year.  To help
producers make informed production and sales decisions, the CWB uses both thePooled Return Outlook (PRO) and Estimated Pool Return (EPR) as its primary
market signals of prices to western Canadian producers.G/STR/N/4/CAN
Page 10
PROs/EPRs  provide western Canadian producers with an estimate of what they
can expect to receive as a final pooled price from CWB sales over the crop year
for various CWB grains.  Although the PRO/EPR estimates are not price
guarantees, they do provide producers with an approximation of returns, enabling
them to more clearly define their financial situations and make planting and
marketing decisions.  Both processes involve an intense price projection exerciseand are based on anticipated and completed CWB sales.  The PRO for a given
crop year (1 August - 31 July) begins in February and is published each fourth
Thursday of the month with values provided as a range estimate.  As the crop year
progresses, CWB completed sales are entered into the calculation, thus reducing
the forecasting requirement. The PRO process continues throughout the crop year
and as more completed sales are entered into the system, the range estimates are
narrowed.  In March of the following year, the PRO becomes an EPR.  Theprocess for calculating the EPR is essentially the same as the PRO, with the EPR
providing a point, rather than a range, estimate.
E. How export prices are determined.
The CWB determines product prices in line with prevailing market circumstances.
The CWB publishes daily offer prices for wheat and barley sales to the US and
offshore markets.  The following is a brief explanation of CWB export pricing
policies.
1. US truck-offer price
The US truck-offer price is the price at which an exporter (e.g., a producer, an
accredited exporter or a private exporter) can purchase wheat or barley from
the CWB from a country elevator position for export to the US market.  TheUS truck offer price is published daily for all grades and types of CWB grain.
Under the current structure, truck-offer prices are based directly on the
Minneapolis futures and cash wheat markets. In order to establish a daily
truck-offer price for sales by farmers into the US, values in Minneapolis areconverted to an in-store St. Lawrence/Vancouver price.  Applicable
premiums/discounts are applied to Minneapolis futures prices to convert the
value into that of a comparable Canadian product.
2. CWB card price
The CWB publishes a daily CWB Card Price which provides an offer price
for virtually all CWB grains at various port locations along the St. Lawrence
and for domestic use. Offer prices for all locations are based on relevant
Minneapolis Grain Exchange (MGE) futures prices.  Cash premiums are then
added to the futures prices, based on appropriate US competition.  Thunder
Bay prices are based on cash market premiums in Minneapolis.  Appropriatecosts of moving through the St. Lawrence Seaway system are applied to
determine values at other ports throughout the Seaway.
The CWB also publishes a card price for Vancouver, which is made available
on days of tender to the Japan Food Agency.  The Vancouver price is basedon cash premiums in the US Pacific North West market.
Spreads are applied to the card price in order to determine values for various
grades, protein levels, and classes.  The prices represent actual traded valuesG/STR/N/4/CAN
Page 11
in commercial markets, such as the UK, from east coast ports, and Japan,
from west coast ports.
3. S.E. Asian market flash
The CWB Market Flash is published each Thursday for S.E. Asian markets,
covering the markets of Hong Kong, Indonesia, Korea, Malaysia, Pakistan,
the Philippines, Singapore and Thailand.  The CWB Market Flash is an offer
price for grain at West Coast ports.  Offer prices for these markets are
established in relation to relevant prices in the US PNW, which are developed
from the Minneapolis cash market, adjusted for quality differences and
represent actual traded values in commercial S.E. Asian markets.  Spreads are
applied in order to determine values for various grades, protein levels, andclasses.
F. How the resale prices of imported products are determined.
Imports of wheat and wheat products, and barley and barley products, are
conducted by the private trade at prevailing market prices , independently from the
CWB .
G. Whether long-term contracts are negotiated by the state trading enterprise.
Whether the state trading enterprise is used to fulfil contractual obligationsentered into by the government.
Historically, long-term supply agreements have been entered into with a number
of grain importing countries (including, for example, the former USSR and the
People's Republic of China).  These have involved CWB-to-government trade andCWB-to-agency and/or sometimes credit arrangements, with the CWB playing the
major role in negotiating the contract and fulfilling its terms.  Under these
arrangements, purchasers have the right to first refusal for CWB wheat or barley.
Actual terms and conditions are agreed at the time a sale is confirmed with respect
to market considerations prevailing.  From time to time, the CWB has entered intoshort term Memoranda of Understanding (MOUs) with various countries such as
Japan.  The MOUs indicate that the CWB will endeavour to supply some
minimum volume of wheat and the importing country will also endeavour to buy
some minimum volume of wheat.
H. Brief description of market structure.
Over 110,000 farms in Alberta, Saskatchewan, Manitoba and the Peace River area
of British Columbia produce most of Canada’s wheat and barley, which are grown
for both the domestic and export markets.  Domestically, Canadian cereal grains
are used mainly in processing (e.g. milling, malting) and livestock feed.  Over the
last decade, the primary processing industry has undergone structural change,including the increased concentration of foreign ownership and an expansion in
processing capacity.  The primary processing industry normally has a close
association with further processors (e.g. bakeries, brewers).  There are
1,110 primary grain elevators in Western Canada which are licensed by the
Canadian Grain Commission.  For Western Canadian wheat and barley destinedfor domestic livestock feed markets, grain companies are free to buy and sell in the
market place.  For Western Canadian wheat and barley marketed for domestic
human consumption or export, grain companies act as handling agents for the
CWB.  The CWB directs the movement of wheat and barley through deliveryG/STR/N/4/CAN
Page 12
quotas and contracts, and allocates shipping orders for rail cars to companies
handling CWB grains.  The CWB can either deal directly with the buyer or
through a handling agent.  There are 24 accredited exporters and two international
exporters who purchase grains from the CWB for resale to customers.  In Ontario,
all wheat sold by producers (other than wheat sold farm to farm for feed or seed
use) must be sold through the Ontario Wheat Producers’ Marketing Board.  Mostof the wheat and barley grown in the province of Quebec is fed to livestock, but
some are also sold to flour mills. In Quebec wheat and barley are marketed by
grain companies.
Until 1 August 1995, the CWB was responsible for the licensing of imports of
wheat and wheat products into Canada from all sources except the US and
Mexico.  However, this changed on 1 August 1995, when Canada's UruguayRound access commitments for wheat, barley and their products were
implemented.  These changes removed all  control of wheat and wheat product
imports from the CWB, ended the requirement for consultations with the CWB
with respect to imports of barley and barley products, and established TRQs for
wheat, barley and their products.  The administration of these TRQs is theresponsibility of the Department of Foreign Affairs and International Trade under
the authority of the Export and Import Permits Act.   The Canada Customs and
Revenue Agency (previously “Revenue Canada”) administers the system at the
border.
IV. Statistical Information
See attached Tables I – III.
V. Reason why no foreign trade has taken place ( as appropriate)
Not applicable.
VI. Additional Information ( as appropriate)
All funds received by the CWB from the sale of grains are pooled.  Separate pools are
maintained each year for each type of grain, i.e., wheat, durum wheat, barley and
designated barley.  All producers will, at any time during the crop year, receive the same
initial payment for the same grade of grain delivered to the CWB.  In the first phase of the
pooling system, producers receive an initial payment when they deliver grain to a primary
elevator.  The level of this initial payment is set by the Government and varies from year
to year according to market conditions.  At the end of a crop year, the net value of grainin each pool account is determined after all grain has been sold and all costs involved in
marketing have been deducted.  These costs include interest, insurance, storage, terminal
elevators' handling charges and the CWB's own operating costs.  All funds remaining in
the pool after deduction of costs are returned to producers in the form of a final payment.
This payment is made in accordance with the number of tonnes and grade of grain eachproducer delivered during the crop year.G/STR/N/4/CAN
Page 13TABLE I
STATE TRADING: CANADIAN WHEAT BOARD
STATISTICAL INFORMATION, IMPORTS
Description of product Year Total quantity
importedQuantity
imported by
state trading
enterpriseAverage
import priceAverage
representative
domestic sales
priceMark-up National
production
12 3 4 5 6 7
August-July tonnes tonnes $Can/tonne $Can/tonne tonnes
1994-1995 2,300 - ... 211.83 ... 22,933,000
1995-1996 19,800 - ... 264.80 ... 25,017,400Wheat10.01
1996-1997 118,400 - ... 214.77 ... 29,801,400
1994-1995 7,600 - ... 166.28 ... 11,690,000
1995-1996 10,400 - ... 221.66 ... 13,034,700Barley
10.03
1996-1997 18,800 - ... 192.92 ... 15,562,000
Notes: “-“ indicates zero
“...” indicates not available
“tonnes” are expressed as grain equivalent
Sources: Columns 2,7: Statistics Canada, "Grain Trade of Canada 1996-97", Catalogue No. 22-201-XPB, Table 2.
Column 5: Canadian Wheat Board.G/STR/N/4/CAN
Page 14
TABLE II
STATE TRADING: CANADIAN WHEAT BOARD
STATISTICAL INFORMATION, EXPORTS
Description of product Year Total
quantity
exported1Quantity
exported by
state trading
enterpriseAverage
procurement
priceAverage
representative
domestic sales
priceAverage
export priceNational
production
1 234 5 6 7
August-July tonnes tonnes $Can/tonne $Can/tonne $Can/tonne tonnes
1994-1995 20,770,600   17,044,147 182.25 211.83 225.43 22,933,000
1995-1996 16,198,400   16,142,079 250.34 264.80 280.39 25,017,400Wheat10.01
1996-1997 19,366,000   21,383,337 199.99 214.77 233.63 29,801,400
1994-1995 3,505,900  2,935,167 137.18 166.77 158.20 11,690,000
1995-1996 2,826,100     3,474,633 216.56 221.66 227.73 13,034,700Barley2
10.03
1996-1997 4,005,400     4,474,133 176.73 192.92 188.52 15,562,000
Notes: “tonnes” are expressed as grain equivalent
1.Total quantity exported may be greater or less than the quantity exported by STE due to the differences in the statistical repo rting periods used by
Statistics Canada (cleared by Customs) and the CWB (marketing year).
2.The average domestic barley price exceeds the average export price in 1994-95 and 1996-97 because of the higher percentage of m alting barley
compared to feed barley being sold domestically.
Sources: Columns 2,7: Statistics Canada, "Grain Trade of Canada 1996-97", Catalogue No. 22-201-XPB, Table 2.
Columns 3-6: Canadian Wheat Board.G/STR/N/4/CAN
Page 15TABLE III
STATE TRADING: CANADIAN WHEAT BOARD
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES
Description of
productYear Domestic Purchases
by state trading
enterpriseNational
productionDomestic sales by
state trading
enterprise1National
consumption2
1 2345
August-July tonnes tonnes tonnes tonnes
1994-1995 18,708,774 22,933,000     1,778,118 7,602,400
1995-1996 18,325,837 25,017,400     2,287,323 7,790,000Wheat
10.01
1996-1997 23,639,426 29,801,400     2,299,159 8,033,700
1994-1995   3,319,896 11,690,000        387,174 9,747,100
1995-1996   3,817,286 13,034,700       358,946 10,290,600Barley
10.03
1996-1997   4,842,188 15,562,000       383,090 10,208,500
Notes: “tonnes” are expressed as grain equivalent
1.Domestic sales include completed sales, open contracts, and unsold stock.
2.National consumption accounts for grain (including imports) used for human consumption, animal feed, seed requirement, industri al use, waste
and dockage, and losses in handling.
Sources: Columns 2,4: Canadian Wheat Board.
Columns 3,5: Statistics Canada, "Grain Trade of Canada 1996-97", Catalogue No. 22-201-XPB, Table 2.G/STR/N/4/CAN
Page 16
I. Enumeration of State Trading Enterprises
A. Identification of state trading enterprises.
Ontario Bean Producers' Marketing Board.
B. Description of products affected (including tariff item number(s) encompassed in
product description).
0713.33.10 White pea beans, dried shelled, whether or not skinned or split.
II. Reason and Purpose
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
The Ontario Bean Producers' Marketing Board was established in 1944 following a
vote of bean producers in the province of Ontario.
B. Summary of legal basis for granting the relevant exclusive or special rights or
privileges, including legal provisions a nd summary of statutory or constitutional
powers.
The Board’s operating authority is provided by the Farm Products Marketing Act  of
Ontario.  The Board operates a central selling agency system with pooled pricing for
the marketing of white pea beans produced in Ontario.  This authority, granted to the
Board in 1967, provides for the control and regulation in any or all respects of the
producing and marketing of Ontario produced white pea beans.
III. Description of the Functioning of the State Trading Enterprise
A. Summary statement providing overview of operations of the state trading enterprise.
The Board is operated by a Board of Directors who are bean producers and elected
by growers.  Staff carry out the overall policy of the Board and administer the
operations.  All beans are delivered to licensed dealers' facilities.  The licensed
dealers are privately owned and operated companies.  The Board licenses these
companies after concluding that they have the facilities and abilities necessary to
operate in the trade.  The producer delivers the crop and receives an initial payment
from the dealer, who is reimbursed by the Board.  The initial payment is guaranteed
by the Government of Canada under the Agricultural Marketing Programmes Act
(AMPA).  As the Board markets the crop, interim payments and a final payment are
then made to producers.
B. Specification of exclusive or special rights or privileges enjoyed by the state trading
enterprise.
The Board has the exclusive authority to market Ontario white pea beans
domestically, inter-provincially or on export markets.  All producers in Ontario are
required to offer to sell the product to or through the Board.   For 1998/99 producers
could apply to market outside the Board’s pool.  The Board normally sells the cropthrough licensed dealers.  The licensed dealers are privately owned and operated
companies.G/STR/N/4/CAN
Page 17
C.  Type of entities other than the state trading enterprise that are allowed to engage in
importation/exportation and conditions for participation.
The Board does not compete with private traders in export sales.  The importation of
white pea beans is conducted by private traders.
D. How import/export levels are established by the state trading enterprise.
The Board purchases the entire crop produced in Ontario and offers products to its
dealers who then sell domestically or on export markets, based on prevailing market
circumstances.
The Board does not engage in imports.
E. How export prices are determined.
Export market prices are based on world market conditions.
F. How the resale prices of imported products are determined.
Not applicable.
G. Whether long-term contracts are negotiated by the state trading enterprise.
Whether the state trading enterprise is used to fulfil contractual obligations entered
into by the government.
The Board is not currently involved in negotiating long-term sales contracts.
H. Brief description of market structure.
Statistics Canada estimates the white pea bean seeded area in Canada for 1998/99 at
43,900 ha.  Based on the Statistics Canada seeded area estimate, white pea bean
production in Canada for 1998/99 is forecast at about 72,000 tonnes (t), with about24,000t produced in Ontario, 39,000t in Manitoba and the remaining 9,000t spread
out across Quebec, Saskatchewan and Alberta.  During the past few years, there has
been a shift of white pea bean production from Ontario to Manitoba, as Ontario
producers increased acreage of soybeans in place of white pea beans.
In Ontario, there are approximately 800 white pea bean producers.  Up until
1997/98, all of the white pea beans grown in Ontario had to be marketed through theOntario Bean Producers’ Marketing Board.  The Board markets white pea beans
through six licensed dealers, who in turn sell beans both domestically and
internationally.  The price of white pea beans is largely based on the Michigan
market as the US is the world’s largest exporter of beans. For the first time in
1998/99, farmers have the option to market up to 0.56t/ha outside the Board’s poolsystem under the Partial Production Contract (PPC).  This represents about one-third
of each farmer’s production.  The PPC allows producers the flexibility to contract a
predetermined quantity of their crop for delivery to the dealer, and gives control to
the producers to oversee both the timing and pricing of this contracted quantity.
Producers had to declare by 30 June 1998 how much they plan to market outside ofthe Board’s pool, but  the pricing window of the PPC extends to 1 May 1999.  The
Board indicates that 2,903t was committed for marketing outside the Board, out of
forecast production of 24,000t.G/STR/N/4/CAN
Page 18
In Manitoba, there are about 300 white pea bean producers.  Marketing is done
strictly through private dealers in Manitoba, Ontario, North Dakota and Minnesota.
During the past three years, many of the white pea bean dealers in Ontario have
developed partnerships with dealers in Manitoba because of the decreasing
production in Ontario.  There are now at least six Manitoba dealers buying white pea
beans, whereas there were none five years ago.  As a result of the increased dealernetwork in Manitoba, the volume of white pea beans marketed through dealers
outside the province is decreasing.  Pricing of white pea beans is done mostly at time
of delivery, although dealers usually offer some pricing options for future delivery.
The Manitoba Pulse Growers Association (MPGA) represents white pea bean
growers, as well as other type of pulse growers, but they are not a marketing
organization.  The MPGA  administers an advance payment programme for white
pea beans under the AMPA.
There are approximately 100 white pea bean producers in Quebec, Saskatchewan
and Alberta.  Marketing is done through dealers, as in Manitoba.  There are also
pulse grower associations in Saskatchewan and Alberta, but they are not involved in
marketing.
On average, about 20 per cent of the white pea beans in Canada is consumed
domestically and the balance is exported to over 70 countries.   Canadian domestic
consumption of white pea beans is forecast at 13,600t in 1998/99.   Most of the
beans are canned in plants located in Ontario and Quebec, but some are alsopackaged for retail sale as dry beans.  The remainder (forecast at 58,400t for
1998/99) are exported mainly to the United Kingdom, Italy and USA.  White pea
beans are used for human consumption, both domestically and in export markets.  In
1997/98, there were 2,852t of white pea beans imported into Canada, generally for
seed.
IV. Statistical Information
The relevant statistical information is attached.  See attached Tables I-III.
V. Reason why no foreign trade has taken place (as appropriate)
Not applicable.
VI. Additional Information (as appropriate)
Not applicable.G/STR/N/4/CAN
Page 19TABLE I
STATE TRADING: ONTARIO BEAN PRODUCERS MARKETING BOARD
STATISTICAL INFORMATION, IMPORTS
Description of
productYear Total quantity
importedQuantity
imported by
state trading
enterpriseAverage
import priceAverage
representative
domestic sales
priceMark-up National production1
12 3 4 5 6 7
August-July tonnes tonnes $Can/tonne $Can/tonne tonnes
Canada Ontario Canada Ontario
1995-96 2,093 1,965 - ... 608.11 115,800 90,700
1996-97 5,352 5,246 - ... 672.62 61,200 40,400White Pea Beans
0713.33.10.10
0713.33.99.10
1997-98 2,852 2,427 - ... 522.05 82,600 43,500
Notes: “-“ indicates zero
“...” indicates not applicable
1.May include other white beans.
Sources: Column 2. Statistics Canada, Canadian Merchandise Trade Statistics, Trade Information Enquiry and Retrieval System (TIER S), Sept. 98.
Column 5. Ontario Bean Producers Marketing Board.
Column 7. Statistics Canada, “Grain Trade of Canada, 1996-97.”  Catalogue 22-201-XPD, Table 1.G/STR/N/4/CAN
Page 20
TABLE II
STATE TRADING:  ONTARIO BEAN PRODUCERS MARKETING BOARD
STATISTICAL INFORMATION, EXPORTS
Description of
productYear Total quantity
exported1Quantity
exported by
state trading
enterpriseAverage
procurement
priceAverage
representative
domestic sales
priceAverage
export priceProduction2
12 3 4 5 6 7
August-July tonnes Tonnes $Can/tonne $Can/tonne $Can/tonne tonnes
Canada Ontario Canada Ontario
1995-96 82,753 67,321 57,360 $486.86 $608.11 $608.11 115,800 90,700
1996-97 49,726 37,499 25,155 $546.74 $672.62 $672.62 61,200 40,400White Pea Beans
0713.33.10
1997-98 41,639 31,438 24,947 $400.80 $522.05 $522.05 82,600 43,500
Notes:
1.Crops are usually marketed in the 12-15 month period following pr oduction.  This explains some of the discrepancy between produ ction and export
in a given year.
2.May include other white beans.
Sources: Column 2: Statistics Canada, Canadian Merchandise Trade Statistics, Trade Information Enquiry and Retrieval System (TIER S), Sept. 98.
Columns 3-6: Ontario Bean Producers Marketing Board.
Column 7: Statistics Canada, “Grain Trade of Canada, 1996-97.”  Catalogue 22-201-XPD, Table 1.G/STR/N/4/CAN
Page 21TABLE III
STATE TRADING:  ONTARIO BEAN PRODUCERS MARKETING BOARD
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES
Description of
productYear Domestic purchases
by state trading
enterpriseNational production1Domestic sales by state
trading enterprise2National
consumption3
12 3 4 5
August-July tonnes tonnes tonnes tonnes
Canada Ontario
1995-96 86,706 115,800 90,700 19,942 16,710
1996-97 40,155 61,200 40,400 14,456 16,710White Pea Beans
0713.33.10.10
0713.33.99.901997-98 40,208 82,600 43,500 13,269 16,710
Notes:
1.May include other white beans.
2.Estimates only.  Board sales are made through dealers who supply to both domestic and export markets.
3.Estimates only.  Consumption figures for white pea beans are not collected.
Sources: Columns 2, 4, 5: Ontario Bean Producers Marketing Board.
Column 3: Statistics Canada, “Grain Trade of Canada, 1996-97.”  Catalogue 22-201-XPD, Table 1.G/STR/N/4/CAN
Page 22
I. Enumeration of State Trading Enterprises
Freshwater Fish Marketing Corporation.
II. Reasons and Purpose for introducing and maintaining the enterprise
The Canadian Freshwater Fish Marketing Corporation (FFMC) was established in 1969 for
the purpose of trading in and marketing freshwater fish and fish products and by-products.
As provided under the Freshwater Fish Marketing Act , and pursuant to bilateral agreements
between the Government of Canada and the governments of Alberta, Saskatchewan,
Manitoba, Ontario, and the Northwest Territories, the FFMC has the exclusive right in the
inter-provincial and export trade to market and trade in fish and fish products from the
freshwater commercial fisheries of those provinces and territories.  The agreement withOntario covers only production from an area of north-western Ontario bordering the province
of Manitoba.  This paper will use the term "agreement areas" to denote areas within Canada
covered by these agreements.
On 14 June 1995, the government announced the introduction of measures allowing
fishermen in the agreement areas to sell their catch of certain under-utilized species through
alternative channels if they so desire.  The FFMC remains responsible for the inter-provincial
and export marketing of the main commercial species from the agreement areas.
The objects of the FFMC are: to market freshwater fish and fish products sourced in
agreement areas in an orderly manner; to increase returns to fishermen; and to promote
international markets for, and increase inter-provincial and export trade in, freshwater fish
and fish products.  The FFMC is required by statute to operate on a self-sustaining basis.  It
has been profitable since 1973, and annual income has ranged between Can$40 million and
Can$50 million since 1990.
III. Description of the functioning of the enterprise
Whether the enterprise deals with exports or with imports or both.
The FFMC is concerned with the orderly marketing of freshwater fish sourced in the
agreement areas in inter-provincial trade and in export markets.  The FFMC does not deal
with, govern or handle imports.
Whether private traders are allowed to import or export and, if so, on what conditions.
Whether there is free competition between private traders and the enterprise.
The FFMC has the exclusive right to market fish from the agreement areas in inter-provincial
and export trade.  The Corporation competes with the private trade in marketing such fish in
domestic and export markets.  With respect to fish sourced from areas of Canada outside the
agreement areas, the FFMC does not control or govern private traders' activities – including
their exports and domestic sales.  In all parts of the domestic market, private traders are freeto market freshwater fish sourced from Canadian "non-agreement areas" or from imports.
The criteria used for determining the quantities to be exported and imported.The FFMC sells fish for export as determined by commercial considerations such as price,
quality, availability, marketability and transportation.G/STR/N/4/CAN
Page 23
How export prices are determined.  How the markup on imported products is determined.
How export prices and resale prices of imports compare with domestic prices.
The FFMC determines export prices in line with prevailing market circumstances in light of
its legislated requirements to maximize returns to fishermen and operate on a self-sustaining
basis.
Whether long-term contracts are negotiated by the enterprise.  Whether the enterprise is used
to fulfil contractual obligations entered into by the Government.
Not applicable.
IV. Statistical information
See attached table I.
V. Reason why no foreign trade has taken place (if this is the case) in products affected
Not applicable.
VI. Additional information
Not applicable.G/STR/N/4/CAN
Page 24
TABLE I
STATISTICAL INFORMATION
Commodity Year Imports Exports Canadian production
Total By Art. XVII
EnterpriseTotal By Art. XVII Enterprise1
Tonnes $'000 Tonnes $'000 Tonnes $'000 Tonnes $'000 Tonnes $'000
Freshwater
fish1994
19951996
19973,548
4,3793,464
4,52014,640
14,73713,423
16,926nil
nilnil
nilnil
nilnil
nil22,351
22,73423,145
22,984121,657
128,244132,610
136,3797,233
6,8608,468
8,34436,776
35,46039,476
37,67036,076
38,75638,295
38,79872,337
77,73769,249
70,505
1.    Data on a fiscal year (1 May to 30 April) basis.G/STR/N/4/CAN
Page 25
I. Enumeration of State Trading Enterprise
A. Identification of state trading enterprises
Provincial Liquor Control Authorities.
B.Description of products affected (including tariff item number(s) encompassed in
product description).
2203.00 Beer from malt.
2204.00 Wine of fresh grapes, including fortified wines; grape must other than that
of heading 20.09.
2205.00 Vermouth and other wine of fresh grapes flavoured with plants or aromatic
substances.
2206.00 Other fermented beverages (for example, cider, perry, mead); mixtures of
fermented beverages and mixtures of fermented beverages and non-
alcoholic beverages, not elsewhere specified or included.
2208.00 Undenatured ethyl alcohol of an alcoholic strength by volume of less than
80 per cent vol; spirits, liqueurs and other spirituous beverages.
II. Reasons and Purpose
A. Reason or purpose for establishing and/or maintaining state trading enterprise.
In Canada, the importation of and inter-provincial trade in alcoholic beverages is
governed by the federal Importation of Intoxicating Liquors Act  (IILA). The objective
of the IILA relates to the control of the consumption of alcoholic beverages in Canada
for the purpose of protecting public health and morals.
B. Summary of legal basis for gaining the relevant exclusive or special rights or
privileges, including legal provisions a nd summary of statutory or constitutional
powers.
The IILA provides the provinces, within their respective jurisdiction, with control over
the sale of intoxicating liquor, and over the importation, sending, taking or
transportation of such liquor into the provinces. The provinces have delegated this
activity to the provincial liquor control authorities. The statute expressly provides that
nothing in the IILA forbids the importation, sending, taking or transportation of
intoxicating liquor for sacramental or medicinal purposes, or for manufacturing or
commercial purposes not related to the use of liquor as a beverage.
As well, under the IILA, an exception exists for persons licensed by the Government
of Canada under the Excise Act  to carry on the business or trade of a distiller or
brewer where the intoxicating liquor is imported solely for the purpose of being used
for blending with or flavouring the products of the business or trade of that person.
III. Description of the functioning of the state trading enterprises
A. Summary statement providing overview of operations of the state trading enterprise.
The provincial liquor control authorities deal with the importation and sale of
alcoholic beverages within their respective jurisdictions. Exportation of alcoholic
beverages is a private matter of beverage manufacturers.G/STR/N/4/CAN
Page 26
B. Specification of exclusive or special rights or privileges enjoyed by the state trading
enterprise.
The IILA provides the provincial liquor control authorities with the delegated
authority to import alcoholic beverages in Canada.
C. Types of entities other than state trading enterprises that are allowed to engage in
importation/exportation and conditions for participation.
Private traders are allowed to import if they are licensed by the Government of
Canada under the Excise Act  to carry on the business or trade of a distiller or brewer
where  the intoxicating liquor is imported for the purpose of being used for blending
with or flavouring the products of the business or trade of that person.  Alcoholicbeverages may be sold through stores operated by the provincial liquor control
authority or through provincially authorized private retailers or a combination of both.
The private trade determines its own criteria pertaining to exports.
D. How import/export levels are established by the state trading enterprise.
Provincial liquor control authorities purchase or permit the purchase of alcoholic
beverages in line with market needs as related to such commercial considerations as
price, quality, availability, marketability, transportation and other conditions ofpurchase or sale.
E. How export prices are determined.
Export prices are determined by the private trader.
F. How the resale prices of imported products are determined.
The retail sales price of the imported product is a function of its landed cost (invoice
price, federal customs and excise duties and taxes, and freight), to which are addedthe applicable provincial mark-up and federal and provincial sales taxes. The federal
and provincial sales taxes and federal excise levies do not distinguish between
domestic and imported product. The mark-up varies by product type and by provincial
jurisdiction. As a result of two GATT  Panels
1, provincial liquor control authorities
have modified mark-up practices on alcoholic beverages to bring them into
conformity with the GATT 2.
                                                     
1 Canada - Import, Distribution and Sale of Alcoholic Drinks by Provincial Marketing Authorities
(1988).  This panel resulted in the 1989 "Agreement between the European Economic Community and Canada
concerning trade and commerce in alcoholic beverages" which requires the complete phase out of mark-updifferentials between wine of the Community and Canadian wine by  1 January 1998.  Mark-up differentials ondistilled spirits were to be eliminated as of 1 January 1993.
Canada - Import, Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies
(1992).  The US-Canada Memorandum of Understanding on Provincial Beer Marketing Practices (August 1993)
resulted in the elimination of discriminatory differential mark-ups on beer.
2 The Canada-US Free Trade Agreement immediately eliminated discriminatory markups on distilled
spirits and required a complete phase out of differential markups on wine by 1 January 1995.G/STR/N/4/CAN
Page 27
G. Whether long-term contracts are negotiated by the state trading enterprise.  Whether
the state trading enterprise is used to fulfil contractual obligations entered into by the
Government.
Not applicable.
H. Brief description of market structure.
The alcoholic beverages sub-sector is made up of the brewery, wine and distilling
industries.  In 1997, shipments by the sub-sector stood at $4.7 billion, which
accounted for 8.2 per cent of total food and beverage sector shipments (excluding
fish).   Alcoholic beverage imports amounted to $1.22 billion in 1998, while total
exports stood at $904.7 million the same year.
The brewing industry3 comprises those establishments primarily engaged in the
steeping, boiling and fermenting of malt and hops to manufacture malt beverages.
The industry produces a variety of beer, lager, ale, porter and stout, in bottles, cans
and draught for the consumer market and for the food service industry.  The industryis now characterized by two major nationa l brewers, several large regional brewers
and a significant number of small micro-brewers catering to the market for specialty
beers of unique tastes.  The volume of per capita consumption of domestic beer in
Canada has increased from 80.14 litres per person in 1987 to 83.4 litres per person in
1997.  Approximately 70 per cent of beer consumption in Canada takes place in thehome; the remainder is consumed in licensed premises.  This breakdown has been
relatively constant over the years.
The wine industry,
4 in terms of its value of shipments, exports and contribution to
GDP, is by far the smallest of the three al coholic beverage industries.  The industry
has evolved in response to rapid changes stemming from adjustments to trade
liberalization under the FTA and GATT such that only a few Canadian vintners are
now considered to be large (over 200 employees) corporations.  The majority of
production in these large firms is in the manufacture of mainstream "vin ordinaire"
products that involve bottling/blending.  However, most of the large corporationshave also acquired smaller estate wineries that retain their own identity and which
help them to define their "signature" premium products.  The volume of per capita
consumption of wine in Canada has increased from 9.5 litres in 1988 to 10.6 litres per
person in 1997.
The distillery industry
5 produces a variety of spirits (e.g. whisky, rum, vodka, gin,
liqueurs, brandy, spirit coolers and basic ethyl alcohol) but its primary reputation,domestically and internationally, remains the production of a distinctive high-quality
Canadian whisky.  The product is distilled from cereal grains (rye and corn primarily),
aged in oak barrels for a minimum of three years, then bottled or sold in bulk.  The
industry is highly concentrated.  Most companies are subsidiaries of multinational
corporations with production facilities maintained in Canada in order to produceCanadian whisky, which is a registered geographical indication in Canada.  Higher
prices, changing lifestyle trends as a result of health consciousness, and social
concerns about drinking and driving have contributed to a decrease in annual per
capita consumption of spirits in Canada from 6.08 litres in 1987 to 5.4 litres in 1997.
                                                     
3 Canada’s brewing industry is defined by the Standard Industrial Classification (SIC) 1131.
4 Canada's wine industry is defined by the Standard Industrial Classification (SIC) 1141.
5 Canada's distillery industry is defined by the Standard Industrial Classification (SIC) 1121.G/STR/N/4/CAN
Page 28
IV. Statistical Information
The relevant statistical information is attached.
V. Reason why no foreign trade has taken place (if this is the case) in the products affected
Import data are given in Table I.  Exporting is not within the mandate of provincial liquor
control authorities.
VI. Additional information
Summaries of provincial liquor marketing practices are attached.  The figures are current
as of 1 January 1998.
ALBERTA
ACTS AND REGULATIONS- Gaming and Liquor Act  (Assented to May 24, 1996)
- Gaming and Liquor Regulation  (Alta. Reg. 143/96)
SUMMARY OF LIQUOR MARKETING PRACTICES
All retail sales of alcoholic beverages in Alberta are privatized.  The last government-
operated Alberta Liquor Control Board (A LCB) stores closed in March 1994.  The
Alberta Gaming and Liquor Commission (AGLC) was formed in June 1995 to regulate
liquor and gaming activities in the Province.
The products for listing are chosen by liquor agencies who determine whether a product
is brought into the province. Suppliers have the option of acting as their own agents and
making transportation arrangements or employing the services of agents to expedite theprocess of consolidating and shipping orders.
The AGLC is the Importer and Wholesaler of Record.  All new orders are placed on
consignment with the agent/supplier named as consignee.
Beer suppliers may apply to establish their own warehousing arrangements.  Final
approval for such arrangements is required from the AGLC.
Provincial mark-up rates under a wholesale pricing structure are a flat rate per litre.
Retailers may set retail prices according to market forces.
The warehousing and distribution of beverage alcohol products from the AGLC
warehouse and distribution facility in St. Albert, operated by the ALCB up to
19 June 1994, has since been managed by a private company, Connect Logistics Services
Inc., a division of Tibbett and Britten Group Canada Inc. Charges reflect the cost of
receiving, storing and shipping products by the pallet or by the case.
Under the new Alberta system, imported and domestic products are given the same treatment.G/STR/N/4/CAN
Page 29
BRITISH COLUMBIA
ACTS AND REGULATIONS- Liquor Distribution Act , R.S.B.C. 1996, c.238 and the regulations thereto, and their
amendments, including:
-Regulatory Streamlining Miscellaneous Statutes Amendment Act, 1998 , S.B.C. 1998, c.42.
SUMMARY OF LIQUOR MARKETING PRACTICES
The Liquor Distribution Branch (LDB) operates 223 stores selling all types of alcoholic
beverages (e.g., beer, wine, spirits, coolers, and cider).  There is also a large private retailsystem consisting of 288 beer and wine stores, 143 rural agency stores, 19 wine stores,
and 54 manufacturer stores at wineries.  All these stores operate under agreements with
the LDB.
The LDB is the importer of record for all alcoholic beverages imported into British
Columbia.  Section 2(2) of the Liquor Distribution Act  states that the LDB “has the sole
right to purchase, both in and out of British Columbia, liquor for resale and reuse in
British Columbia in accordance with the provisions of the Importation of Intoxicating
Liquors Act (Canada).”  No import levels are set.  Products, domestic and international,
are purchased for resale based on anticipated consumer demand.
Before products can be sold in British Columbia, they must be listed with the LDB. The
listing process is described in the document "British Columbia Liquor Distribution
Branch, Merchandise Services, Listing and Marketing Policy and Procedures Manual."
Most retail outlets, including all government-run stores, may sell any approved product,
regardless of origin.  Some types of privately-run outlets are restricted in the types of
products they can sell (e.g., beer and wine only).  A limited number of privately-run
outlets which pre-date the Canada-US Free Trade Agreement are restricted to selling
British Columbia wines and manufacturer stores can only sell products made by thatmanufacturer.
Suppliers or their agents determine the prices at which products are sold to the LDB. The
LDB applies a pricing formula to the supplier price to determine the retail price. The
pricing formula is described in the document "British Columbia Liquor Distribution
Branch Markup Schedule."
MANITOBA
ACTS AND REGULATIONS
- The Liquor Control Act , R.S.M. 1988, c.L160 and the regulations thereto, and their
amendments, including:
-The Liquor Control Act and Consequential Amendments Act , S.M. 1993.
SUMMARY OF LIQUOR MARKETING PRACTICES
The Manitoba Liquor Control Commission (MLCC) is the importer of record for all
liquor imported into Manitoba.  All liquor sold in the Province must meet the MLCC'sG/STR/N/4/CAN
Page 30
listing criteria and gross profit quotas. The criteria and quotas apply to all beverage
alcohol in a uniform and non-discriminatory manner, irrespective of country of origin.
Spirits, wine, coolers and beer are warehoused by the MLCC and distributed to 45 owned
stores, 180 privately-owned agency stores, 8 specialty wine stores, 4 duty-free stores, and
1,500 licensed premises.  In addition, 3 privately-owned beer distributors warehouse andservice the 45 government-owned stores, 300 privately-owned beer stores, duty-free
stores and 1,500 licensed premises.  Gross profit quotas do not apply to privately
distributed beer.
Beverage alcohol's retail price is determined by applying a category ad valorem mark-up
to the landed cost. Minimum mark-ups apply to all products but there are no minimum
prices. The same category and minimum mark-ups are applicable to like productsregardless of country of origin for products warehoused by the MLCC.
Audited cost of service differentials (commercial considerations) are applied at a flat per
litre charge per category.
NEW BRUNSWICK
ACTS AND REGULATIONS
- New Brunswick Liquor Corporation Act , R.S.N.B. 1973, c.N-6 and the regulations thereto,
and their amendments.
- Liquor Control Act , R.S.N.B. 1973, c.L-10, and the regulations thereto, and their
amendments.
SUMMARY OF LIQUOR MARKETING PRACTICES
Importation of alcoholic beverages into New Brunswick is done through the New
Brunswick Liquor Corporation (NBLC).  All suppliers have full and equal access to theNBLC's listing process.  Listed products receive distribution to the entire retail system,
including agents and licensed establishments.  Marketing programmes are available to all
suppliers on an equal access basis.
The NBLC maintains a retail system of 50 stores and 68 agency outlets.  This system is
the exclusive retailer of all alcoholic beverages in the province.  In addition,
approximately 1,200 establishments are licensed for on-premise consumption.  Theselicensees buy exclusively through the NBLC retail system described above.
Suppliers have the option of establishing their own in-province warehouse and
distribution or going through NBLC's centr al warehouse and distribution system.  A
service charge is applied to all beer products going through the NBLC warehouse anddistribution system.
Retail price is determined by applying an ad valorem  mark-up to the product's landed
cost (at point of sale).  Rates are listed in the Mark-up Structure document and are
applied uniformly to all products regardless of origin.  Minimum and maximum mark-ups, floor retail prices and minimum social reference retail prices, where applicable, are
listed in the Mark-up Structure and Beer Listing Policy documents.G/STR/N/4/CAN
Page 31
NEWFOUNDLAND
ACTS AND REGULATIONS- The Liquor Corporation Act , R.S.N. 1990, c.L-19, and the regulations thereto, and their
amendments.
- The Liquor Control Act , R.S.N. 1990, c.L-18, and the regulations thereto, and their
amendments.
SUMMARY OF LIQUOR MARKETING PRACTICES
Importation of alcoholic beverages to the Newfoundland market can only be done by the
Newfoundland Liquor Corporation (NLC).  In order for the NLC to import alcoholic
beverages for sale in its stores, the producer must complete a listing application, and the
Listing Committee of the NLC must approve the application.  Details of the listing
procedures may be found in the NLC's Listing Policy and Procedures.
Spirits and wine which are listed by the NLC are distributed by the NLC from the NLC
warehouse for sale in the NLC's 21 Government stores and 81 agency outlets. The retail
price of a product is determined as follows:
(a) Wines - landed cost plus 67.3 per cent of landed cost plus $2.45 per 750 ml bottle plus
H.S.T. (Harmonized Sales Tax) plus container deposit.
(b)Spirits - landed cost plus 69.5 per cent of landed cost plus $6.67 per 750 ml bottle
plus H.S.T. plus container deposit.
(c) Liqueurs - landed cost plus 62.7 per cent of landed cost plus $6.27 per 750 ml bottle
plus H.S.T. plus container deposit.
Current H.S.T. is 15 per cent.
NOVA SCOTIA
ACTS AND REGULATIONS- The Liquor Control Act , R.S.N.S. 1989, c.260 and the regulations thereto, and their
amendments.
SUMMARY OF LIQUOR MARKETING PRACTICES
Importation of liquor is done through the Nova Scotia Liquor Commission (NSLC). The
NSLC's listing policies provide equal access to all products regardless of origin.Suppliers, both domestic and imported, are all required to operate through the NSLC
central warehouse and related distribution system. All beer suppliers, regardless of
origin, with sales of one million equivalent dozen are permitted to operate a separate
warehouse facility.  All products, regardless of origin, may be sold in the 99 Government
liquor stores operated by the NSLC.  There are 6 farm-gate stores permitted to sell theirown wine products direct to consumers.
Markups are established by package size within product categories and are the same
regardless of product origin.G/STR/N/4/CAN
Page 32
In accordance with the trade agreement definitions, all products which go through the
warehouse are charged the same cost-of-service.
ONTARIO
ACTS AND REGULATIONS
- Liquor Control Act , R.S.O. 1980, c.243 and the regulations thereto, and their amendments.
SUMMARY OF LIQUOR MARKETING PRACTICES
Ontario's beverage alcohol distribution and retail system is characterized by a mix of
private and public operations. The Liquor Control Board of Ontario (LCBO), agovernment agency, distributes and sells domestic and imported spirits, wine and beer.The LCBO is responsible for the importation, quality assurance, distribution and sale ofalcohol in government-run stores across Ontario.
Under the Ontario  Liquor Control Act  (and its regulations), the LCBO approves all
beverage alcohol products sold in Ontario; tests products for quality control and safety;and, approves beverage alcohol prices.
The LCBO applies specific warehousing and retailing fees to beer products, but does not
have specific service fees for wine or spirit products. In the case of those products, Board
costs are recouped from LCBO mark-ups.
The LCBO is the major retail channel for spirits. In 1994, on-site manufacturers' stores
were allowed. The LCBO is the primary outlet for imported wine (including out-of-province wine) but it is also sold by licensed agents for private and consignment sales.
There is a network of privately-operated wine stores across the province selling
exclusively domestic wines.
Brewers Retail Inc. (BRI) is a privately owned company operating under the authority of
the Liquor Control Act . It operates stores which sell imported and domestic beer to the
public. The primary distribution channel for beer is BRI; the LCBO is a secondary
channel for beer. BRI has an open listings pol icy (will sell any brand) and no delisting
policy or volume minimums, but it restricts lower volume brands to one package size.
All imported beverage alcohol products which are sold in Ontario must first be received
by the LCBO, pursuant to authority delegated to it under the Importation of Intoxicating
Liquors Act . Ontario has maintained physical import receivership to ensure quality
control and adequate monitoring for revenue collection purposes.
The LCBO purchases imported products at wholesale and arranges and pays for freight
costs to Ontario. The LCBO warehouses all imported beer, wine and spirits, and virtuallyall domestic spirits and wine sold by the LCBO. Foreign beer manufacturers, like theirdomestic counterparts, have the option of distributing from LCBO warehouses to retail
outlets. The LCBO applies the same volume and ad valorem  charges to domestic and
imported beer based on the worldwide production volume of the supplier.G/STR/N/4/CAN
Page 33
PRINCE EDWARD ISLAND
ACTS AND REGULATIONS- Liquor Control Act  and Regulations , R.S.P.E.I. 1988, c.L-14 and the regulations thereto, and
their amendments.
SUMMARY OF LIQUOR MARKETING PRACTICES
Importation of alcoholic beverages into Prince Edward Island (P.E.I.) is done through the
P.E.I. Liquor Control Commission.  All suppliers have full and equal access to the
P.E.I.L.C.C. listing process.  Listed products receive distribution to the entire retail
system.  Marketing programmes are available to all suppliers on an equal access basis.
The P.E.I.L.C.C. maintains a retail system of 18 stores and one agency.  This system is
the exclusive retailer of all alcoholic beverages in the Province.  In addition,
approximately 360 establishments are licensed for on premise consumption.  These
licensees purchase exclusively through the P.E.I.L.C.C. retail system.
The following mark-up structure is used to calculate the retail price of imported and
domestic products:  manufacturers’ price, customs/excise, freight, an applicable mark-up
applied to landed costs (differs per category), Provincial Health Tax (25 per cent), Goods
and Services Tax (7 per cent), Provincial Sales Tax (10 per cent), and bottle deposit.
QUEBEC
ACTS AND REGULATIONS
Act respecting the Société des alcools du Québec , (RSQ, c. S-13, s. 16)
SUMMARY OF LIQUOR MARKETING PRACTICES
The Société des alcools du Québec  (SAQ) is an independent publically owned
commercial corporation administered by a board of directors.  It has sole authority over
the importation, sending, taking or transportation of any intoxicating liquor in Quebec,
from any place within or outside Canada.  The SAQ is not the sole vendor of alcoholic
beverages in the province.
The SAQ distributes to both its own network of 350 government stores and 146 agencies,
as well as a network of grocery and corner stores which accounts for over 11,000 outlets .
Products for distribution are warehoused in three distribution centres with a combined
storage capacity of 2.5 million cases.
The selection, purchase and marketing of products are determined by principles defined
in the SAQ’s marketing policy ( Politique de mise en marché),  together with the rules for
registering products to the general inventory (Règles d’inscription des produits au
répertoire général) .
Wines without a varietal indication or an appellation of origin designation that are bottled
in Quebec, beers and light ciders may be sold in grocery stores.  Wines with a varietal
indication or with an appellation of origin designation and spirits may only be sold in
SAQ outlets.G/STR/N/4/CAN
Page 34
Suppliers are responsible for promoting their products.  The services of a marketing
officer are available.  Market forces determine quantities to be imported.  Suppliers
determine the retail price of their products.  A uniform mark-up, by category of product,
whether imported or domestic, is applied.  Revenues are paid in the form of dividends to
the sole shareholder, the Minister of Finance.
SASKATCHEWAN
ACTS AND REGULATIONS- The Alcohol and Gaming Regulation Act , being S.S. 1988-89, c. A-18.01 as amended by S.S.
1989-90, c.15 and S.S. 1993, c.17 and c.45, and the regulations thereto.
SUMMARY OF LIQUOR MARKETING PRACTICES
The Saskatchewan Liquor and Gaming Authority (SLGA) has authority over the
manufacture, possession, sale and delivery of beverage alcohol in Saskatchewan, and isthe importer of record for all wine, spirits and beer imported into Saskatchewan.  The
SLGA maintains a broad listing policy that applies equally to both imported and
domestic products.  Further details are contained in the SLGA Listing Policy.
It is the policy of the SLGA to deal directly with the supplier in the country of origin.
Listing application forms, and product and supplier profiles must be submitted or
approved by the supplier.
The SLGA operates 81 retail outlets in Saskatchewan, four of which offer a full line
selection of specialty products in addition to their assortment of general listings. Inaddition, the SLGA has granted authority to 194 operators of private business
establishments (agencies) in small rural communities to sell beverage alcohol products.
Any beer supplier that chooses to distribute its own products will be required, as are
Saskatchewan suppliers, to adhere to provincial regulations governing, among otherthings, container specifications/returns, SLGA policies related to distribution on a
province wide basis, uniform pricing, and two 24-bottle pack listings, due to space
limitations at the retail level.
The rules governing access to points of sale apply equally to domestic (including in-
province) and foreign suppliers.
Audited cost-of-service charges are applied to all imported products distributed through
the SLGA system.G/STR/N/4/CAN
Page 35TABLE I
STATE TRADING:   PROVINCIAL LIQUOR CONTROL AUTHORITIES
STATISTICAL INFORMATION, IMPORTS
Description of
productYear Total
quantity
importedQuantity
imported by
STEsAverage import
price1Average
representative
domestic sales price2Mark-up National
production3
12 3 4 5 6 7
April-March  '000 litres  '000 litres $Can/litre $Can/litre $Can'000
1994-1995 75,624 73,978 0.99 2.69 3,257,300
1995-1996 84,894 84,897 1.04 2.72 3,283,800Beer
22.03
1996-1997 98,022 96,665 1.05 2.84 3,401,800
1994-1995 164,933 163,367 2.77 6.02    302,600
1995-1996 164,835 163,808 2.99 6.16    322,000Wine4
22.04
22.0522.061996-1997 174,126 172,647 3.09 6.30    367,200
1994-1995 21,739 21,204 11.10 20.28    854,700
1995-1996 25,218 22,894 11.00 20.40    851,400Spirits5
22.08
1996-1997 20,129 16,272 11.04 20.33    891,800
Notes:1.Average import prices are calculated as the value of imports  by STES divided by the quantity of  imports by STEs.
2.Average representative domestic sales price is calculated as the value of domestic sales net of the goods and services tax, div ided by the
quantity of domestic sales.
3.Production figures are represented by the value of shipments on a calendar year basis.  Quantity data is not available.
4.Wine includes vermouth, coolers and ciders.
5.Spirits under column 3 may also include some types of coolers.  Quantity data is reported in litres of pure alcohol.
Sources: Column 2: Statistics Canada, Canadian Merchandise Trade Statistics, Trade Information Enquiry and Retrieval System (TIER S), 15 Sept. 98.
Column 3: Statistics Canada, “Control and Sale of Alcoholic Beverages in Canada”, Cat.63-202-XIB, Table 1.8.Column 7: Statistics Canada, Canadian Socio-Economic Inform ation Management System (CANSIM), Manufacturing Shipments.G/STR/N/4/CAN
Page 36 TABLE II
STATE TRADING:   PROVINCIAL LIQUOR CONTROL AUTHORITIES
STATISTICAL INFORMATION, EXPORTS
Description of
productYear Total quantity
exportedQuantity
exported by
STEsAverage
procurement
priceAverage
representative
domestic sales
price1Average export
price2National
production3
12 3 4 5 6 7
April-March  '000 litres  '000 litres $Can/litre $Can/litre $Can/litre $Can'000
1994-1995 367,194   - Y 2.69 0.72 3,257,300
1995-1996 357,314   - Y 2.72 0.75 3,283,800Beer22.03
1996-1997 350,139   - Y 2.84 0.77 3,401,800
1994-1995     3400   - Y 6.02 1.96    302,600
1995-1996     4967   - Y 6.16 1.55    322,000Wine4
22.04
22.05
22.061996-1997     2623   - Y 6.30 2.40    367,200
1994-1995   74393   - Y 20.28 7.02    854,700
1995-1996   71330   - Y 20.40 7.05    851,400Spirits5
22.08
1996-1997   69335   - Y 20.33 7.32    891,800
Notes: "-" nil or zero
"Y" not applicable
1.Average representative domestic sales price is calculated as the value of domestic sales net of the goods and services tax, div ided by the
quantity of domestic sales.
2.Average export price is calculated as value of total exports divided by quantity of total exports.
3.Production figures are represented by the value of shipments on a calendar year basis.  Quantity data is not available.
4.Wine includes vermouth, coolers and ciders.
5.Spirits under column 3 may also include some types of coolers.  Quantity data is reported in litres of pure alcohol.
Sources: Column 2: Statistics Canada, “Control and Sale of Alcoholic Beverages in Canada”, Cat.63-202-XIB, Table 1.8.
Column 7: Statistics Canada, Canadian Socio-Economic Inform ation Management System (CANSIM), Manufacturing Shipments.G/STR/N/4/CAN
Page 37TABLE III
STATE TRADING:   PROVINCIAL LIQUOR CONTROL AUTHORITIES
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES
Description of product Year Domestic purchases
by STEsNational production1Domestic sales by
STEsNational consumption2
12 3 4 5
April-March  '000 litres $Cdn'000  '000 litres  '000 litres
1994-1995 .. 3,257,300 1,948,991 2,015,035
1995-1996 .. 3,283,800 1,958,780 2,030,837Beer
22.03
1996-1997 .. 3,401,800 1,918,505 1,999,748
1994-1995 ..  302,600 106,589   232,895
1995-1996 ..  322,000 110,340   241,379Wine2
22.04
22.0522.061996-1997 ..  367,200 117,619   253,007
1994-1995 ..  854,700 95,355    126,892
1995-1996 ..  851,400 92,869    127,763Spirits3
22.08
1996-1997 ..  891,800 93,742    129,589
Notes: ".." not available
1.Production figures are represented by the value of shipments on a calendar year basis.  Quantity data is not available.
2.National consumption is represented by the total quantity of domestic sales of imported and domestic products.  It does not inc lude
homemade beer and wine, wine and beer manufactured through brew-o n-premises operations, all sales to Canadian residents in duty  free
shops and any other unreported transactions.  Export sales are not included.
3.Wine includes vermouth, coolers and ciders.
4.Spirits under column 3 may also include some types of coolers.  Quantity data is reported in litres of pure alcohol.
Sources: Column 3: Statistics Canada, Canadian Socio-Economic In formation Management System (CANSIM), Manufacturing Shipments.
Columns 4, 5: Statistics Canada, “Control and Sale of Alcoholic Beverages in Canada”, Cat.63-202-XIB, Table IV.G/STR/N/4/CAN
Page 38
General Notes to Section IV.
1. All trade statistics are reported on an f.o.b. basis.
2. Values in Tables I, II, and III are expressed in Canadian dollars.  Applicable exchange rates
for conversion to US dollars are listed below.
Year January-December Year April-March August-July
$Can/$US $Can/$US
1994 1.366 1994-1995 1.382 1.378
1995 1.372 1995-1996 1.363 1.362
1996 1.364 1996-1997 1.361 1.367
1997 1.385 1997-1998 1.403 1.427
Source:  The annual average of monthly average noon exchange rates supplied by the Bank of Canada.
__________