Evidence of meeting #15 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ceta.
4:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Thank you to all of you for being with us this afternoon.
Mr. Van Keulen, you ran out of time at the end of your testimony when you were talking about the milk product fractionation that occurs in new technology. Would you like a few minutes to elaborate on what you wanted to say?
4:55 p.m.
Board Member, British Columbia Dairy Association
Yes. The legislation that protects us.... There are three pillars of supply management, and one of them is import controls. We have legislation that establishes what those products are that we have controls over. What the industry has been capable of doing in the last five or six years, and the last three of four years especially, is they've been able to fractionate the products down and then reconstitute them back into products. Those fractionated products were left behind in the last WTO agreement and were left behind in a lot of the agreements that are taking place. That's where the problem arises. There are no tariff lines on that.
We have supply management that is a bucket right now with a few holes in it. Consumption or sales are keeping up with those particular holes of leakages of whatever we're losing in the market. That's the dilemma we have right now. That's why we need government support if we're going to keep supply management intact the way that it's working. We need the government's support. There are people who are trying to circumvent the rules. There are very creative individuals who will try to bring in blends, milk powder that has a tariff on it, but they'll put rock salt in it or something like that and then filter out the rock salt later, or they'll throw something else in there. That's what those creative people were doing years ago. There are other creative things happening. Now with the new fractionated products, it's hard.
4:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
You highlighted the fact that European farms are subsidized to the degree of 40%. I'm wondering if you could elaborate on how that compares to the amount of support that Canadian farmers receive from all levels of government.
4:55 p.m.
Board Member, British Columbia Dairy Association
There's no direct cash benefit from the Canadian government. There are direct payments in the European markets to producers. Because of the supply management system, we do not have any subsidies in that regard, cash benefits.
4:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
If we were to take an unbiased clinical comparison between farms in both regions, would there be a way of determining what kind of support, direct or indirect, through taxation or other policies, each farm would be receiving? Is there a comparison that has been made or that could be made?
4:55 p.m.
Board Member, British Columbia Dairy Association
I don't think so, not that I'm aware of. Maybe there are smarter people out there who can, but I can't.
4:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
You talked about the potential losses to the industry. With the expansion to this market, 100 million new consumers, is there any hope or prospect of exporting more product into the European Union and seeing this as an opportunity as opposed to a threat?
4:55 p.m.
Board Member, British Columbia Dairy Association
There was a question that was alluded to earlier here that we had a panel ruling against us because supply management is considered a subsidy when it comes to the pricing mechanisms. I did talk to one of my colleagues earlier about there being no reciprocal right now because of supply management. CETA says that we have unfettered access into the EU on dairy products and cheese. The reality is that's true if we get rid of supply management. My understanding is what has been told to me right now. I hope it's not true because then it's an opportunity. Clearly it's an opportunity. That's if it's not true.
4:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Thank you.
Mr. McCauley and Mr. Drohan, you talked about an orphan drug policy and attracting talent. On the orphan drug policy I didn't fully capture what you were trying to articulate. You're saying something should be adopted, a new orphan drug policy should be adopted. Could you briefly elaborate on that?
5 p.m.
Chair, Board of Directors, LifeSciences British Columbia
Sure. The idea of creating patent and tax-based incentives for developers to go after orphan drugs, so the niche indication, has been a dramatic success from every perspective in the EU and the U.S. The U.S. originated it in 1983. In the EU I think it was in 2000 they implemented it.
What it does is provide an incentive for developers to go after very niche markets. It has proven to be an area where developers can actively prove out the effectiveness of a drug. It's critical for those patients, obviously, because you find yourself suffering from a particular orphan disease and there's nothing out there and there's no economic incentive, candidly, for a large drug developer because they tend to have bigger fish to fry. They go after larger markets than—
5 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
And right now there's no incentive within the Canadian regime?
5 p.m.
Chair, Board of Directors, LifeSciences British Columbia
None. In fact, for the company that I referenced, the final clinical trial we ran was actually going after an orphan indication. Had we been successful it's a product that wouldn't have been launched in Canada because it doesn't make economic sense.
5 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Right. To the Canadian market, but there would be a worldwide market and when you combine the beneficiaries would there be a large enough pool of people who would need the drug to make it worthwhile?
5 p.m.
Chair, Board of Directors, LifeSciences British Columbia
If you were to develop that drug in Canada and go for approval in the EU and the U.S. exclusively, you'd almost certainly see the company leave the country, almost certainly. It wouldn't make any economic sense whatsoever to have the company here.
5 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
You also highlighted attracting talent and the temporary access, but then you suggested that it didn't go far enough. Could you elaborate on what more needs to be done to permit visa-free access?
5 p.m.
Conservative
5 p.m.
President and Chief Executive Officer, LifeSciences British Columbia
What we're asking for is about how when we looked through CETA we didn't have clear guidance that research scientists were going to be covered under a temporary entry into the country. If that is indeed the case, fantastic. If it's not the case, we're asking to make sure that as we implement CETA this is one aspect of CETA that is covered off.
5 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chair.
Thank you to the witnesses for coming today.
My first question is to you, Mr. Van Keulen. I'm not sure if I understood. The Canada-European Union comprehensive economic and trade agreement, will it or will it not help your industry innovate?
Did you say it will or will not? I'm not sure what I understood. Did you say that at all?
5 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Okay. I wasn't sure in what fashion you would be able to innovate. You're stuck in a sector where you're just selling milk in your province. How far can you go with your product?
5 p.m.
Board Member, British Columbia Dairy Association
All across the country. There are some export opportunities in certain areas, but not a lot. Under the trade agreements that we have there are some quotas that we can fill abroad.
5 p.m.
Liberal
5 p.m.
Board Member, British Columbia Dairy Association
The U.S., and I think Europe. In England we have a cheese quota, a cheddar cheese quota, of a certain amount.
5 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
With free trade would you be able to go to Europe? Would you be able to increase your capacity?
