Agriculture Committee on Nov. 5th, 2013

[John Masswohl]

I would say for Quebec, on the beef side of things, the main detail we still need to know is when. When will the agreement be implemented? That is important because it will take about two years to get cattle ready. So producers want to know what year they start. In Quebec, dairy cows outnumber beef cows, which is a little unusual.

In Quebec, veal is very important. We made sure that in the new quotas veal is eligible. In the existing quotas that have to meet the high quality, veal just can't get to that level of marbling. It doesn't qualify in the existing quota, so that is a brand-new opportunity. The reason this is so important is that if you're a Holstein bull or a dairy bull, the only reason you exist is to become veal.

Veal becomes meat at a younger age, so Quebec producers could perhaps be a little more nimble in responding to that opportunity.

[James Laws]

I would add that the pork producers of Quebec are very important. There are a lot of them: ATRAHAN Transformation, Aliments Lucyporc, Agromex and Aliments Asta. Quebec is home to a lot of production and a lot of diverse factories, which is very important because ham is much more valued in Europe. So that will boost prices.

As John said, there's also Viandes Laroche, Montpak International and Ecolait. A lot of companies are moving into veal processing and will no doubt profit from that. This agreement will be very beneficial to the dairy industry. Absolutely.

[The Chair, Conservative, Bev Shipley]

Thank you.

Mr. Preston.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Thank you, Mr. Chair.

We have a bit of a saying in my business: as long as our competitor has one more customer, we have room for growth. This all of a sudden gave Canada 500 million new customers. That's a heck of a lot of growth for our producers. I think it's significant for us to be here talking about it. As for which groups will be winners, there's a strong list here.

As one of my colleagues said, there have been a lot of smiles back home. I come from a very diverse agricultural riding. Just about everything is grown there, and everybody is excited about the quality of the products they grow.

Do you still have that box? The new Dr. Oetker's plant being built in my riding will also be using all of these Canadian products. They made the same commitment to Canadian farmers—that they'll be using all of those Canadian products.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

The only problem is that it's empty.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Well, that box is empty, but I plan the ones at my house not to be. I'm also in the restaurant business, selling pizza. But Dr. Oetker's is a welcome addition to what we're doing down there.

That leads me to one question, and it may be for all of you. We have great estimates here, $600 million in new beef exports, pork exports. Our market is already opened and it's not being exploited by the other side. But we can really exploit theirs in that money, in the millions of dollars that we can send. How many new processing jobs are we talking about here? We have a lot of agricultural products that we're going to sell to Europe, but almost all of them are going to have to go in a box and have something done to them before they go. Could somebody estimate what the jobs are in the CETA agreement? For an area that's had some people out of work, this sounds like a fantastic thing. Does anyone want to start that?

[James Laws]

I'll start it. It's tricky to estimate. One of the concerns we hear in our sector is that the meat processors are having trouble finding enough labour.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

I have a place they can come.

[James Laws]

If they could find more labour, they could do more value-added activity. That's something of a challenge. But we are hopeful. We haven't seen the details of the agreement, but there's probably a labour mobility section that we're going to be looking at very closely, because a lot of Canadian meat processing equipment actually comes from Europe. Some of our processors have a challenge in getting technicians over from Europe to repair things quickly. We hope that this will help solve that problem, and it might even solve some Canadian labour shortages as well.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Right. No estimate there yet, though?

Ms. Sullivan.

[Kathleen Sullivan]

We don't have an estimate yet, but you're right, we need to start pulling those numbers together. It's still fairly early days.

I think that's one thing overall. This is the largest trade agreement we've signed as a country in a long time. We need to start putting in place the tools that will help us going forward to start to estimate these things. Hopefully, there will be a lot more reasons for us to need those tools in the future.

I think we're seeing a signal that everybody's getting very, very serious about these significant trade deals and we need to do some math on our end to figure that out.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Even the producers I've had a chance to speak to last week and on the weekend are talking about gearing up.

John, you mentioned how long it will take beef farmers to really decide how they're going to get to the next piece. But if they're deciding to expand or change the way they grow, we also find employment in each of those things. It is critical that we get to those numbers too.

[John Masswohl]

I think you've hit on an important point here about how things evolve over time and the 500 million customers. As good an agreement this is for today, it will be an even better agreement for the future.

If you look at Europe 20 years ago, they were a net beef exporter, right? Where do they put those people? For those of you who have ridings around large cities, you see that the cities are expanding out into the farmland. Well they're not making more land in Europe either. You know, 25 years from now they'll have 600 million people and less farmland. They're already a net beef importer. They consume 8 million tonnes of beef per year. That consumption number is going to grow and import is going to be where it comes from.

We really see that this poises us to be that agriculture superpower to provide and supply that food well into the future.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Absolutely. As I've stated, I hope it makes us that processing superpower, too. That's the answer to this.

Our producers are fantastic at growing things. I'll hold them up against anybody. But if we can also do a couple of things to each of those products before we send them off to someone else, this is more than a win for us. We won't be able to wipe the smiles off agricultural producers' faces for a couple of years on this one. But also, their kids, my kids, and other people in urban Canada will have jobs because of what we've done for our farmers.

[The Chair, Conservative, Bev Shipley]

That's sort of the ending statement.

Thank you, Mr. Preston.

We'll go to Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

I hate to disagree with my friend, Mr. Masswohl, since he's from my home district, but the reality of Germany is its reproductive piece is 1.4 children per mother. Germany will actually shrink in the next 25 years according to a just-retired member of the Bundestag. It's actually not going to grow, and they say 500 million may not become 600 million without immigration.

They're actually older than we are on this continent. As much as 500 million is a great market, John, it may not grow to 600 million without immigration, and they have some difficulties with immigration, much more so than us.

Anyway, that's an aside. I want to talk to Kathleen about GIs because the word I heard on GIs going back to a number of different folks I talked to—and it wasn't you, it was actually the EU ambassador. This thing got stuck somewhere because his estimates to me were that at some point he thought we'd be down in the low 50, 60. I've heard a number that's 140-some-odd GIs. Sorry for the acronym, those are geographical indications.

Is that the number? Is it stuck at that? That poses difficulties: Mr. Laws has articulated a couple of their processors that it may pose a potential difficulty for. We don't know yet for sure until the text comes. It may not. It will undoubtedly, according to the technical document, pose difficulties for folks in the future who are new, who will not be able use...and the ones that have been thrown out so far are Parmesan, Parma Ham.

But if there are 140-some-odd, that's a big impact for folks as they develop the new businesses that Mr. Preston's talking about.

If they're competing against the GI, which, quite frankly, is a non-tariff barrier.... We don't really have GIs in this country. We've never had that culture. I know Europeans do, and they love them to death. But I watched the champagne industry in Niagara disappear. There is no such thing as Canadian champagne. It's gone. You can buy brut, but you can't buy champagne. It's the same thing, by the way, for those who like champagne, buy Canadian brut. It's extremely good. But the problem is it's not champagne, you can't call it that, right? Lost it.

Do you have any sense of what the numbers are?

[Kathleen Sullivan]

Yes. I'm just taking a look at the technical document the government put out last week, and they're suggesting 179 names. That is actually consistent with initial lists that I had seen of the names that came over.

We haven't seen the final shakeout, if you will, for the names. The one thing I will say is that our understanding of about 80% of those names is that they're fairly obscure. They're either in indigenous languages for European countries, or they're for products that would never be made here. One almost got the sense that it was a symbolic request.

I would suggest that the number of products where there is some sort of commercial competition in Canada is much smaller than that 179. Now, that doesn't mitigate the importance—

[Malcolm Allen, NDP, Welland, ON]

No; that's fair enough.

I notice that Mr. Chair is going to bang the gavel. Now—

[Kathleen Sullivan]

Yes. We'll have to take a look at the final list.

[Malcolm Allen, NDP, Welland, ON]

Yes, and I think a lot of us are waiting for the final text. I think that's what we keep saying as a party: let's look at the final text.

Mr. Laws, because you actually held up... and I'm happy Mr. Preston is going to get a process for making those pizzas. I think you articulated that—correct me if I'm wrong—where you see the potential for the importation of meat product is on that processed product, and how the door is open to those European processors, to send meat in through the process, then, rather than...as you've very well articulated.

By the way, if you want to know where European pork is, it's at Bâton Rouge. They only sell Dutch pork at Bâton Rouge, according to their CEO.

Do you see that as a major issue as to how that might be how we see red meat come into this country?

[James Laws]

Well, it's certainly going to be reciprocal, though, a tariff reduction on both sides. It'll be a trade, and maybe it will be a good thing when we see Canadian pork getting to Europe, because we can look at this and say that it may be Canadian pork coming back to Canada in a processed form.

But again, all trade is a good thing. It does help. I think there will be plenty of opportunities for Canadian processors to up their game. With 500 million Europeans, there's a huge opportunity for our own processing sector to process.

Even though there aren't any geographical indications in the deal yet, there still would, though, be an opportunity to market Canadian products, for the benefit of Canada, to 500 million Europeans. Also, there are a lot of Canadians who have a lot of European relatives, and hey, in the past, a lot of other exports of certain food products used to go to Europe, etc.

So yes, it's true that part of my message was yes, that product does come in, in that form, and this deal will help to rectify the current situation where we can't get any meat in. We will be able to get some meat in.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Allen.

Mr. Hoback, please, for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I must say that this has been quite the week. The last two weeks have been quite the weeks, actually, with today's Honduras agreement. That's going to get us access of, what, $6 million or $7 million annually in meat products? Fast Eddy has been back at it again doing another trade deal, which is great.

[Voices]

Oh, oh!

[Randy Hoback, Conservative, Prince Albert, SK]

Of course, the agriculture minister was down in Chicago this week with the agriculture ministers from the provinces, talking about COOL and trying to explain to the Americans again how much damage they're doing, not only to the Canadian industry but to their own industry, by their position on COOL and what's going forward there.

I'm just curious. With COOL and what's going on down there, and this agreement, some farmers are asking me if this will offset the damages of COOL. Is COOL going to create more capacity here in Canada for packing and cutting, and that cutting is going to get to other markets like Honduras and Europe.... What do you think of that? Is that a fair statement or not?