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imported chicken products exceeded the minimum access of the TRQ from 1996 to 2000
(Statistics Canada, 2001) despite over-quota tariffs on chicken imports well in excess of
200 percent.

⁴ We omit, for simplicity, any potential processing costs related to import goods. This
omission does not alter the main arguments of the analysis.

⁵ Information obtained from the Department of Foreign Affairs and International Trade of
Canada confirmed that the ten largest importers of chicken products in Canada held
42 percent of the global number of licences available under the TRQ, suggesting that there
is a certain concentration in the import licence market. A recent study by Agriculture and
Agri-food Canada (1999) revealed also that processing activities in Canada are fairly
concentrated. The five largest companies in terms of volume were processing 59 percent
of all chicken slaughters while the ten largest firms were processing 81 percent of all
Canadian chicken slaughters. Moreover, Fulton and Tang (1999) found significant
departure from competitive behavior in the Canadian chicken industry over the period
1965 to 1996.

⁶ Consult Freund (1992) for further details on the statistical procedure.

⁷ It should be noted that, although the statistical evidence is inconclusive, the survey
results do not imply that the different types of firms have similar preferences towards the
TRQ allocation procedures.

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