This refers to the comments made about Lily's "comfort object," which she is allowed to keep at night during this stage of her life.
Apparently, bears and elephants (among other creatures as well) are now extinct. Since the past has been "erased," except for the safeguarded memories of the Giver, their past is non-existent, too. For this reason, any representation of such creatures is considered purely imaginary and not ever having been part of the real world.
When Jonas finally escapes the Community with Gabe by bicycle, they eventually come across birds and other signs of wildlife, along with an increasing diversity of the countryside (topography, vegetation, etc.). This element leads the reader to think that the "Elsewhere" beyond is not as uniform and sterile as the Community itself.