Evidence of meeting #44 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was japan.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Steve Verheul  Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs and International Trade
  • Ray Armbruster  Director and President, Manitoba Beef Producers
  • Cam Dahl  General Manager, Manitoba Beef Producers
  • Gordon Bacon  Chief Executive Officer, Pulse Canada

12:30 p.m.

NDP

Marc-André Morin Laurentides—Labelle, QC

Should Canada have a well-defined transportation strategy, a sound plan for transporting all the products we want to export? Shipping Manitoba beef to a port on the west coast…

12:30 p.m.

Conservative

The Chair Rob Merrifield

Very quickly, please.

12:30 p.m.

NDP

Marc-André Morin Laurentides—Labelle, QC

…is not easy, after all. Should we not have a really robust strategy?

12:30 p.m.

Conservative

The Chair Rob Merrifield

Okay. We have a moment. Go ahead.

12:30 p.m.

Chief Executive Officer, Pulse Canada

Gordon Bacon

We have been very supportive of the transportation policy direction that the minister and Mr. Merrifield noted back in March. As I said in my presentation, we've been working with a coalition of exporters from the coal sector, the automotive sector, forestry products, and fertilizers to talk about how we can make a good system work better. We do have to make some improvements, just as all of us have to focus on constant improvement all the time.

I think we have a good system, but we need to make sure that it performs at a high level consistently. If you look at the history over the last five years, consistency is something we've not always had, so that's what we have to try to do—raise the level of the game and keep it at a high level.

12:30 p.m.

Conservative

The Chair Rob Merrifield

Thank you very much.

We'll now move to Mr. Shipley.

I believe you're splitting your time with Mr. Keddy.

If there's any left...? Okay.

12:30 p.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Mr. Bacon, I'd like to follow up with you on the issue you were just talking about. In your statement, along with all the concern about getting products, you mentioned that people have long memories when they don't get their food or don't get their fuel on time. I wonder if you can be just a little more specific about the issues, because quite honestly, we're going to spend a lot of effort and resources building a trade agreement with Japan, as we have—and you may have been in earlier—following up on CETA.

Those types of discussions give us an idea of the amount of effort that it takes on both sides. But if we cannot commit to making sure that those products get to our producers, to you as a producer, to our friends from Manitoba, and to beef producers across Canada when we promised they would, then we have put in some ghost barriers that the Japanese will see through very quickly.

I wonder if you could just expand a little bit about what we need to be doing or about what the big hurdles are with regard to this shipping issue.

12:30 p.m.

Chief Executive Officer, Pulse Canada

Gordon Bacon

We have a very complex logistics system in Canada, especially if we take a look at pulse exports to Japan, which all go in containers. You can imagine the number of steps between moving them from a farm to a processing plant and arranging equipment—whether that be a container in an inland position or a hopper car or a boxcar—to move them to a port position where they have to be reloaded into ocean-going containers and booked on vessels, and we have to find space at the port for them. The whole logistics system has to work in a very coordinated manner.

Taking a look at this issue very closely over the last five years, we've seen that a lot of individuals and individual companies in the system work to optimize it for themselves, which unfortunately can have the effect of sort of suboptimizing the performance of the entire system.

We've talked about our need to optimize system performance. The railways play a key role in this, because they are the link that is common through a lot of these elements of the logistics system. Certainly railway performance has much improved in the last number of months over what it was in the recent past.

But we have to make sure we have some guarantees that we're going to have the kinds of linkages in the system to ensure we can improve. I'll just cite one particular fact that I think illustrates it well, which is that for agricultural exports in containers out of North America, we have the worst record in all container shipping around the world. At one point we had more than 40% no-shows, bookings that were made and cargo that did not arrive. The steamship lines have told us that you pay for that.

Because we have inefficiencies, everyone is trying to make sure they're operating with a full system. It's like airlines that overbook. But can you imagine if airlines overbooked at 40% the kind of chaos we would have? Well, this is the kind of problem that we're having in our shipping system, and we all have to look at the responsibility we have to contribute to those kinds of problems.

I think there need to be some better linkages. We need to have some consequences for non-performance through all the players, and that is one of the things we're lacking.

When I talked about service-level agreements, it really was to define what kind of service you're buying, what the obligations of service providers are, and what the consequences for non-performance are. I think it's an incentive to perform well, if you know that you've defined what you're going to do and you've said you're going to do it. I think the concept of service-level agreements is going to go a long way, not only for our industry in agriculture. It was very interesting to see the strong level of support from a number of shippers in other sectors as well.

12:35 p.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

I want to skip to the next one.

Thank you. That deserved a good explanation given some of the concerns we have and some of the remedies that are coming.

I want to actually move to the regulatory issues around the Codex and meeting those requirements in terms of registered use. Do other countries that deal with Japan have these same issues in terms of unmarked pesticides that go into Japan? How do farmers here overcome that barrier and still be competitive, if they cannot use new products while other countries still have access to them? Maybe that's not the way it works.

12:35 p.m.

Chief Executive Officer, Pulse Canada

Gordon Bacon

Here's the challenge we have with Japan, in that Japan's regulatory system does not start looking at establishing an MRL, a maximum residue limit, until it's registered for use in Canada or the United States. The challenge is that farmers can legally use a product, but Japan does not have an established tolerance for that product and may not for a couple of years. So we have this gap between what farmers can do in a producing country and what the Japanese regulatory system will actually approve—

12:35 p.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

So it will be the same for another country also, whether it's the United States or Australia.

12:35 p.m.

Chief Executive Officer, Pulse Canada

Gordon Bacon

Yes. And that's exactly the same system that Codex uses. What we are trying to push for across all crops, because we all face the same issue, is to basically push for regulatory reform so that there's a linkage, harmonization, and more mutual recognition of data. We're seeing that with global joint reviews in the registration of products. I think what we need is continued evolution so that we have some synchronized approaches to registration of product.

A bridge measure may be needed—that is, until Codex. Or perhaps we can talk to the Japanese and say that until they have defined their own import tolerance, we would accept the tolerances that are established by the respected agencies like PMRA or EPA or other agencies, just so that we're taking some of the risk out of trade.

It is an issue. It's an issue for bean producers in Ontario, for example, where they don't have access to a new desiccant, not because it isn't registered in Canada now but because we don't have MRLs established in markets like Japan.

12:40 p.m.

Conservative

Bev Shipley Lambton—Kent—Middlesex, ON

I guess I'm done.

12:40 p.m.

Conservative

The Chair Rob Merrifield

Yes. We may have cut you a little bit short, but that's okay.

Mr. Easter, the floor is yours.

June 19th, 2012 / 12:40 p.m.

Liberal

Wayne Easter Malpeque, PE

Thank you, Mr. Chair.

Thank you to the witnesses, both here and in Winnipeg.

I'll cut my questions short too, Chair, to try to save a little time for the end.

Just on the point you made, Gordon, with the worst record on shipping, I think a lot of that comes back to the service review and the fact that we've been waiting on the Government of Canada for the service review for almost forever now. It's unacceptable. They should act on that service review, take the railways on and do it.

In your paper you talked about addressing the quota and tariff issues, and how that in and of itself is not enough. Further down you talked about the regulators from Japan and Canada. In advance of the trade agreement, should the regulators within Canada and Japan be working more closely to try to solve some of those problems? They're not really a negotiating point, but a lot could be done just by way of discussion and a similar regulatory regime.

You had mentioned, Mr. Dahl, that we need this negotiation, that we not be left on the sidelines. Do you have any comment you want to raise on Korea? Korea is already an established market for Canada—beef and hogs. We don't seem to be in the game. Here we are talking about new agreements, and we're risking the potential of losing a billion dollar market for beef and hogs, because for some reason, the government seems to be asleep at the switch on an established agreement.

So there are two questions.