This document is part of a consultation.
The Canadian Food Inspection Agency (CFIA) is proposing to implement new licensing fees for hatchery and feed establishments. This page describes the context, policy rationale and analyses that informed the proposed changes.
On this page
- Executive summary
- Purpose
- Context
- Current environment
- Cost analysis
- Proposed fee
- Proposed service standards
- Implementation
- Consultation with users and other interested parties
Executive summary
The CFIA's licensing system plays a critical role in safeguarding the health, safety and security of Canada's agriculture and agri-food sector. It operates within a robust regulatory framework that provides legislative authorities to ensure that businesses across Canada meet rigorous safety standards by implementing preventative control plans designed to effectively reduce risks such as:
- food contamination
- animal health threats
- environmental hazards
The modernization of the Health of Animals Regulations (2022) and Feed Regulations (2024) implemented a new licensing system for hatcheries and feed establishments. The system is aligned with the Safe Food for Canadians (SFC) licensing model, sharing the same delivery flow—digital intake, verification and inspection oversight.
Under this fee proposal, we intend to align the hatchery and feed licences with the SFC licensing fees and apply uniformly to all future licensing services that share the same digital delivery flow. This approach:
- maintains the cost recovery aligned across similar licensing structures, ensuring consistency and transparency
- aligns with the cost of delivering the service in a fair and equitable manner
- supports the sector's sustainability and competitiveness
The proposed fee was determined by considering the total cost of providing licensing services. We also looked at factors such as the benefits to businesses and individuals and the potential impact on service users.
This initiative aligns with the Government of Canada's Red Tape Reduction efforts and reflects our commitment to streamlining processes and reducing burden associated with regulatory authorizations, such as licensing, while strengthening service delivery.
By standardizing licensing fees across commodities subject to similar licensing delivery model, we will achieve operational efficiencies. These efficiencies support timely service delivery and lead to improved outcomes.
Purpose
We seek feedback from stakeholders on our proposal to align the cost recovery for licensing services for hatcheries and feeds establishments with the Safe Food for Canadians fees. This fee proposal describes the context, policy rationale, costing and pricing analysis that we considered.
Context
We issue licences to authorize businesses to carry out activities related to interprovincial or international trade in compliance with regulatory requirements.
Over time, fees charged for similar licensing services have evolved differently across commodities, resulting in misaligned fee levels.
This proposal seeks to simplify our licensing cost recovery by introducing a single, consistent fee for all licences that follow a standardized, fully digital service delivery model. Today, this applies to:
- food
- hatcheries
- feed establishments
This proposal intends to introduce the same approach to any future licensing services that follow the same process.
In alignment with the Government of Canada's Red Tape Reduction efforts, we are committed to enhancing service delivery by streamlining processes and simplifying service fee administration.
Current environment
Program profile
Our licensing system helps protect the health, safety and security of Canada's agriculture and agri-food sector by requiring businesses to meet strict safety standards through preventive controls that reduce risks such as food contamination, animal disease, and environmental hazards.
Over the past years, a common licence service delivery model has been introduced to certain commodities following regulatory modernization:
Safe Food for Canadians Regulations (2019)
Regulations require food businesses involved in importing, exporting, or trading food across provinces to hold a licence to operate.
Health of Animals Regulations – Hatcheries (updated 2022)
Updated regulations require hatchery establishments to hold licences to operate if they receive eggs from a supply flock. They also need a licence if they incubate eggs to produce commercial poultry or have a minimum setting capacity of 1,000 eggs.
Feeds Regulations (updated 2024)
Updated regulations require specific feed businesses—including manufacturers, retailers, on-farm feed mills, and importers and exporters—to hold a licence when they handle livestock feed that is imported, exported, or moved across provincial or territorial borders.
These legislations require a new licence renewal fee for hatcheries and licensing fees for feeds, as identified in the CFIA's 2025-2027 Forward Regulatory Plan.
All licences are valid for 2 years. They also require renewal, following a standardized digital workflow and online process through the My CFIA Portal.
Statutory framework
Subject to regulations, section 25 of the CFIA Act provides the CFIA Minister the authority to fix fees in respect of rights and privileges provided by us.
Current fees
We charge licence fees (see table 1).
Table 1. CFIA Fees Notice: Current licence fees for food, hatchery, and feed establishments
| Commodities | Licence | Current fee |
|---|---|---|
| Food: Part 1 - Dairy Products Fees Part 2 - Egg Fees Part 3 – Processed Egg Fees Part 6 – Fresh Fruit and Vegetable Fees Part 7 – Honey Fees Part 8 – Livestock and Poultry Carcass Grading Fees Part 9 – Maple Products Fees Part 10 – Meat Products Inspection Fees Part 13 – Processed Fruit or Vegetable Products Fees Part 16 – Fish Inspection Fees Part 17 – Other Food Commodity Fees |
Application | $299.86 |
| Renewal | $299.86 | |
| Hatcheries: Part 11 – Health of Animal Fees |
Application | $383.82 |
| Renewal | to be set | |
| Feeds: Part 4 – Feeds Fees |
Application | to be set |
| Renewal | to be set |
Cost analysis
Based on the Financial Administration Act and related Treasury Board policies and guidance, such as the Directive on Charging and Special Financial Authorities, a department must follow strict rules. These rules state that a department cannot recover more than the full cost of the activities targeted by the cost recovery scheme.
We have identified every step involved in the licensing of hatcheries and feeds establishments then used this information to calculate the full cost of providing the service. This includes all the resources needed to carry out the work, covering both direct costs (such as staff time) and indirect costs (such as administrative support):
- employee salaries and benefits
- operating and maintenance costs
- accommodation
- inspection support and operations branch indirect support
- internal services, internal management
- international services
- science advice and research development
- digital services and services provided by other departments
- depreciation of the digital service delivery platform
We applied the Government of Canada's costing model to assign costs to activities carried out. This model divides costs according to the full-time staff needed to provide each service, so every group pays a fair share based on its role. For licensing services, the cost estimates come from past program delivery data and resources used to deliver those services.
Based on the analysis, we incur nearly $7.9 million each year to review applications as well as to issue and manage licences for all current 22,633 licence holders (2022-2024). Since each licence is valid for 2 years, the total program cost for that period is divided by the number of licence holders to find the cost per licence. This results in $697 cost for each licence, whether it's a new application or a renewal, since both take about the same effort to process.
Proposed fee
Licensing fee design
We propose to charge a single fixed fee for licensing services, as required by regulations for hatchery and feed establishments. Licence fees, whether for new applications or renewals, must be paid when the application is submitted through the My CFIA Portal, whether the licence is issued or declined.
Pricing factors
We reviewed several pricing factors to develop the fee structure outlined in this proposal. The proposed licence fee supports the CFIA's cost-recovery and service-delivery objectives and is based on principles of fairness and equity.
Although we calculated the full cost of delivering the licensing service, this amount represents the maximum that could be charged.
In setting the proposed fee, we considered a range of factors, including:
1. Public-private benefit assessment
This assessment looks at whether a service mainly benefits individual users or the public, which helps set the maximum fee. It also guides decisions on whether to charge a fee and how much of the cost users should cover.
This assessment found that about 60 to 75% of the benefits from licensing services go to private companies, enabling them to carry out commercial activities and earn revenue. The remaining 25% to 40% benefits the public by improving health and safety for:
- people
- animals
- the environment
Based on this, we set a cost-recovery ceiling of 60% for hatchery and feed licensing services. The full cost of a 2-year licence is $697, the most that can be recovered from private service users is $418.20.
2. Environmental scan
Countries handle licensing cost recovery for agriculture and agri-food in different ways. Like Canada, many countries have adopted fixed fees for providing licensing services.
In Canada, many use fixed fees for licensing services.
Direct comparisons are difficult because cost recovery models vary. Differences include:
- regulatory requirements
- what government activities the fee covers
Feeds sector
- In the U.S., establishments are regulated at the state and federal level, with variable state fees. At the federal level, certain medicated feed mills must be licenced with the U.S. Food and Drug Administration, without fees.
- In the U.K., registration is usually needed with little to no fees, while formal licensing is limited.
- In Australia, states set fees that typically range from $90 to $360, depending on the region.
Hatchery sector
- In the U.S., licensing is mostly handled by states, with no standard federal fee and costs varying widely.
- The U.K. regulates hatcheries nationally, but fees are usually minimal or not required.
- In Australia, states oversee licensing, with fees generally ranging from $135 to $360, depending on the jurisdiction.
3. Impact on stakeholders
The proposed changes aim to create a fair transparent fee structure that considers the economic and financial impact on businesses. It also strives to supporting sector sustainability and maintaining quality service delivery.
- Feed licence holders: These users are mostly commercial businesses that need licences to access domestic and international markets and to ensure feed production is safe and efficient. Currently 1,984 establishments that require these licences.
- Hatchery licence holders: These users are mostly specialized agricultural businesses that need licences to operate commercially and meet biosecurity and animal health standards. Currently 82 establishments that require these licences.
- Indirect stakeholders: individuals and organizations affected by licensing requirements and fees, even if they do not hold a licence. This includes farmers, producers, processors, distributors, retailers, and consumers who may experience cost impacts, as well as industry associations and trade partners. Other users and agricultural sectors could also be affected in the future, as we intend to apply the same pricing strategy and fee approach to similar licensing systems. This could influence broader market operations and public confidence in the agri-food system.
Recent analysis shows Canada's agriculture and agri-food sector stayed strong in 2024, with net cash income reaching $22.4 billion—above the 5-year average.
Although cash receipts dropped slightly and expenses rose a bit, the sector still performed well despite challenges like:
- climate impacts
- global market swings
- trade uncertainty
Overall, regulated sub-sectors are performing well. There has been a slow decline in recent years after a short recovery in 2021 to 2022 in livestock numbers for:
- cattle
- hogs
- sheep
In contrast, poultry and turkey placements have grown steadily over the past 5 years, showing strength in those areas.
Even where production has dropped, the feed sector remains financially strong due to steady demand and close ties to meat and dairy processing. Both processing sectors experienced sales growth in 2024 and are expected to keep expanding in 2025, with stable or improving margins across the supply chain.
Hatcheries have remained strong. Over the past 5 years, egg placements for both meat and egg production have grown steadily, with output up by an average of 12%. Cash receipts from chicks and poults have also increased each year, adding up to a 28% rise overall. Growth is expected to continue in 2026, with chicken production up 1% and egg output rising steadily through 2028. This shows strong market demand and ongoing investment in production capacity.
When setting or adjusting a licence fee, broader market risks are considered. These include:
- global market volatility
- extreme weather
- U.S. tariffs on Canadian agricultural products, including some feed ingredients and additives
Given that Canada's agricultural sector is closely linked to the U.S., trade disruptions could affect exports and put pressure on profit margins, especially for sectors that rely heavily on exports. The upcoming 2026 Canada–United States–Mexico Agreement's review brings some uncertainty but also opportunities to enhance market access and modernize trade provisions, particularly for supply-managed sectors like poultry and eggs.
Food prices and affordability remain a concern for Canadians, driven by higher costs across the supply chain including:
- energy
- labour
- transportation
In this context, licensing fees make up a small, predictable part of most businesses' operating costs and are not expected to significantly affect prices or profits. These fees help fund the regulatory system that ensures:
- food safety
- market access
- consumer confidence
These key factors support business stability and competitiveness, even during uncertain times.
Overall, the agriculture and agri-food sector has shown steady financial strength through 2024. Sub-sectors affected by this fee proposal, including feeds and hatcheries, continue to demonstrate growth, stable margins, and strong demand. While external risks remain, licence fees are a manageable cost designed to support a regulatory system that safeguards market access, upholds high quality standards, and benefits both industry and Canadians without contributing to food price increases.
Proposed fee levels
We propose to apply a fee of $307.96 to all current and future hatchery and feeds licences, as of March 31, 2026, both for new licences and renewal services. This approach represents a 44% cost recovery rate, meaning that for every dollar spent to provide the service, 44 cents are paid by the service recipient.
This approach aligns with the SFC licence fee adjustment scheduled for March 31, 2026. The adjustment is based on the annual percentage change in Canada's April All-items Consumer Price Index, published by Statistics Canada, using data from the previous fiscal year. This yearly update is required under the Service Fees Act. Specifically, the current rate of $299.86 for SFC licences will increase by 2.7%, bringing the fee to $307.96. This approach gives a 22% reduction for licensing fees for hatcheries.
We consider the proposed fee level to be a well-balanced approach that reflects both economic realities and policy goals. This ensures a sustainable fee structure aligned with legislative requirements for cost recovery, while supporting commitments to reduce regulatory burden through:
- streamlined processes
- efficiency gains
- modernized services
This approach is fair, with all users paying equally for the same services. It also supports the sector through ongoing trade uncertainties and their potential negative impacts on the supply chain and the broader Canadian economy.
Proposed service standards
To comply with the Service Fees Act while supporting timely, predictable service for stakeholders, we propose the following service standard for licences issued under the updated licensing cost recovery system:
| Service | Proposed Service Standard |
|---|---|
| Licence initial issuance or renewal |
We aim to process complete licence applications within 15 business days from the date of receipt via the My CFIA portal. Important considerations:
|
Implementation
The fee will come into force on March 31, 2026, through a public notice in Canada Gazette, Part I, on March 28, 2026. Any licence application on and after this date for hatchery or feed establishments will be subject to the new fee.
The CFIA Fees Notice will be updated on the same date, with the proposed service standard taking effect concurrently.
In line with the Service Fees Act, the proposed fee will be adjusted annually according to the Consumer Price Index published by Statistics Canada starting March 31, 2027. The updated fee level, along with the effective date, will be published each year in the CFIA's Fees Report and posted on our website.
Consultation with users and other interested parties
We have previously engaged with the hatchery and feeds stakeholders to seek feedback concerning the new licensing regime. Specifically, we consulted hatcheries about updates to the Health of Animals Regulations (2022) and feeds establishments regarding modernization of the Feeds Regulations (2024). Stakeholders were generally supportive of the new licensing system and aware that licensing services would be cost recovered.
This consultation seeks feedback on the proposed new licensing fee from stakeholders across the agriculture and agri-food sector, as well as the broader Canadian public. Input is being gathered considering the wide scope of this initiative and its potential implications for our long-term plan to adopt a single fee for similar licensing services in the future.
Feedback can be sent by email to Cost-Recovery@inspection.gc.ca. Use "Proposed Changes to Licensing Cost Recovery" in the subject line of the email. We are asking for comments and feedback by February 11, 2026, 30 days from the date of this posting.
Following this consultation, the comments will be reviewed, and publication in the Canada Gazette, Part I, in early spring of 2026 will be made, followed by amendments to the CFIA Fees Notice.