Evidence of meeting #3 for Agriculture and Agri-Food in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was products.
A recording is available from Parliament.
4:55 p.m.
NDP
Francine Raynault NDP Joliette, QC
Ms. Sullivan, you spoke about some grain products. I don't have a lot of time, and neither will you to answer my question.
You said that customs tariffs will not be eliminated immediately for some grain products. Which ones?
4:55 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
The tariffs on grains will all be phased out. None will go to zero on day one; they'll all be phased out over a period of seven years.
4:55 p.m.
Conservative
4:55 p.m.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
Sir, again, thanks for answering our questions and reiterating why we have a CETA in the first place. We think it's a good thing for Canada and Canadians, and some of you have also mentioned that it's not just a good agreement for today. I think, John, you said it's a good deal for the future. I think that's an important point to make in terms of opportunity for Canadians and Canadian producers.
I was in the U.S. talking to the Americans about our COOL agreement. We made some proposals at some Canada-U.S. meetings, and they supported our position on COOL, that it's really not a functional document the way it is. Things need to be changed, for their benefit as well as ours.
Maybe I'll give it to John to speak to the reason that we need to diversify our market because we have that big neighbour to the south. We like them. I like to say we're brothers. We often don't get along, but they're still family, right? Why do we need to diversify our markets and not rely on the U.S. so heavily?
5 p.m.
Director, Government and International Relations, Canadian Cattlemen's Association
We are very dependent on the U.S. for our exports. We export about half of what we produce in the beef sector, and about 80% of that goes to the United States. When you do put so many eggs in one basket, you're vulnerable if something goes wrong. So here we are in the COOL situation. It has cost us a lot of money. It has cost us, over the five years that it's been in, probably over $3 billion. Ultimately, if we have other opportunities to send that product, it's going to mitigate that. We're never going to go away from the United States. It's sitting right there; it's the largest beef-consuming market in the world. Any other beef-producing country would just die to be in our place of having that close access, but it comes with that potential. If something goes wrong, you need to have those other opportunities.
I guess the last thing I would say, as I say fairly frequently, raising cattle is not like making other things. We're not an assembly operation; we raise the animal and then we sell it to the packers who disassemble it, and they have to sell each piece to the market that is willing to pay the most for it. Sometimes that market is the U.S. for certain pieces, but we think Europe is the highest-priced market for certain cuts. For other cuts, it's Japan or Russia or Egypt. You just have to have access to all those markets to get the most value.
5 p.m.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
James, you spoke about pork. For those who weren't part of this committee in previous years as I was, pork has had a really tough go of it over the last few years. Can you explain—you have already—where pork was at, where potentially it can be with this agreement?
5 p.m.
Executive Director, Canadian Meat Council
Well, the pork producers had a very rough time in terms of pricing. The cost of feed ingredients went way up. It makes it very difficult. They have very high capital costs in their barns, etc. They can't just stop producing the animals, so that's very difficult for them. As John mentioned as well, there's a very huge effect on Canadian pork producers who are sending animals down to be finished in the United States. That made it very, very difficult for them. The more animals we can process in Canada to sell out, the better. Canada is a major world exporter of pork, and we're number two in the world, I believe. If we can get Europe as well under this access, there's no reason why we couldn't become a world leader and maybe—possibly—number one in exporting too. We have a lot of capacity to produce a lot of animals in this country.
5 p.m.
Conservative
The Chair Conservative Bev Shipley
Thank you very much.
I'll go to Mr. Eyking for three minutes, please.
5 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
I have three questions, one for each of you.
The first is for Kathleen. In the paper you sent, in the last paragraph you said, “9 out of every 10 farms in Canada depend on exports”. I don't know where that number came from. I find it hard to believe, with so many small farmers, farmers' markets, and supply management in the local horticulture industry. When you look at the exporters, they are big farms. Where did that number come from?
5 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
It's a study that the George Morris Centre did a number of years ago. They basically looked at farms that actually export products, so 50% of all of our products are exported, and then products that are actually priced on world markets. We have a lot of products that we sell domestically, but our farmers are still price takers, and the price is based on world markets. Even if we are growing our product domestically and selling it domestically, we still have to pay a lot of attention to what goes on around the world because it has a significant impact on us. It certainly excludes your supply management industries.
5 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
But it changes the makeup of the way you presented it.
John, is it possible that we could ship the cattle from out west and finish them off in the east coast—corn or whatever—and process them, if we needed more labour for processing and slaughtering, and then ship them to Europe? Is it possible to do that nowadays, to ship cattle on cars again? Or is it just not feasible?
5 p.m.
Director, Government and International Relations, Canadian Cattlemen's Association
It's not happening right now, at least sending cattle out to your neck of the woods. But there are lots of young cattle that come from western Canada into Ontario, for example, because the infrastructure is there in Ontario for the feeding and for the processing. Part of the challenge in Atlantic Canada is that the infrastructure isn't there. But if we get that packing plant....
5 p.m.
Director, Government and International Relations, Canadian Cattlemen's Association
—say Atlantic Beef in Charlottetown, P.E.I., if it's approved for export to Europe, I don't see why things like that couldn't occur.
5:05 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Mr. Laws, my last question is for you. We've seen a Brazilian company buy a major killing plant lately in Alberta. Where is the processing industry going? Do you see big companies outside Canada buying our plants, or do you see companies outside Canada setting up plants? What do think is the makeup, and is there a problem with that foreign ownership of our killing plants?
5:05 p.m.
Executive Director, Canadian Meat Council
That's a good question. Certainly the beef side is different from the pork side in Canada. Almost all of the pork processing facilities in Canada are owned by Canadian processors but, having said that, JBS Canada certainly expressed a great interest in being ready and taking advantage of this Canada-EU deal, which really quite pleases us a lot. All of the other countries as well are looking at—
5:05 p.m.
Liberal
5:05 p.m.
Executive Director, Canadian Meat Council
JBS Canada. Their headquarters is in Brazil. But nevertheless they certainly are devoted to growing the business in Canada. They have Canadian management in that facility. We're glad that they came to Canada to do that. That's really good news.
5:05 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
It doesn't leave us vulnerable and it could help us expand with foreign ownership.
5:05 p.m.
Executive Director, Canadian Meat Council
Well, in that particular case as well, they did purchase Establishment 38, which we all know had a problem with an E. coli recall in that facility. It was really good news that they did come and bring their international expertise to that facility to make sure that the product coming out of that facility was top rate. That's what they are doing.
5:05 p.m.
Conservative
The Chair Conservative Bev Shipley
Thank you very much.
I'm going to go to Mr. Preston, but I have one question first.
You've talked about, in the beef part of it specifically, the need for 500,000 head. Out of that, I think, 100 kilograms of that animal would be used for an advantage of $11 a kilogram. Is that the total amount of that animal that would likely be exported to the EU? If it is, we're likely left with another 300 kilograms, in terms of dressed weight and what have you. Are we in a position then to deal with that much extra market for the rest of the animal? I wonder if you could give us a bit of a highlight on it.
5:05 p.m.
Director, Government and International Relations, Canadian Cattlemen's Association
Yes. Those animals and that extra weight would still be beef that was produced under that EU protocol, so produced without hormone implants, produced without any growth enhancers. Certainly, there is a market for that product in Canada, in the United States, and it's also a higher value niche market and perhaps that segment is growing. If the money is there it will grow.
We've seen in the last year countries like Russia and China also insisting that the product be produced without those technologies as well. We see that there are outlets for that product and, of course, it can still be sold in conventional markets as well.
5:05 p.m.
Conservative
5:05 p.m.
Conservative
Joe Preston Conservative Elgin—Middlesex—London, ON
We did talk about there being a phase-in on the grain side, but it's my understanding that sweet corn gets an exemption from that, that some 8,000 tonnes of sweet corn gets to go duty free as of the start of the agreement. First of all, will that cut into my supply and is there a market for 8,000 tonnes of sweet corn in Europe at the moment?
5:05 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
Sweet corn has remained a bit of a mystery for us throughout the negotiations. The Europeans, particularly the French, I believe, are very sensitive to concerns about Canada flooding European shores with our sweet corn. My last understanding was there was no one in Canada actually exporting sweet corn to the EU, so I'm not sure there is—