Evidence of meeting #6 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 industry.
A recording is available from Parliament.
10:35 a.m.
Director, International Trade, Dairy Farmers of Canada
With respect to price, it's a different story.
10:35 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
As far as economics go, if you look at the elasticity of demand, somebody will pay a premium for a quality product. Have you done any research in your association to look at price comparability? People go to the grocery store and buy a specialty cheese, whether it's 30¢ or 50¢ more. It's like buying a bottle of wine if it's 50¢ or $1 more, they're buying quality. In some cases, it is $10, $20, or $30 more for the finished product, if it's a large amount.
10:35 a.m.
Vice-President, Dairy Farmers of Canada
It's interesting that you mention grocery stores, because although we think about consumer choice, consumers can only choose what is on offer in the grocery store shelves. Grocery stores will make decisions about what to stock or what not to stock depending on the margin they can make. If they can import subsidized European cheese at a lower cost to them than the equivalent quality Canadian cheese, they'll bring in the EU cheese and offer it to the consumer at the same price. They'll just charge whatever the market will bear. That then means that the high quality Canadian cheese will be pushed off the shelf because it's not competitive because of the subsidies the EU cheese benefits from. The consumer then doesn't even get to choose that Canadian cheese because all he or she can choose from is what's on the grocery store shelves.
10:35 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
That's true to a degree. I used to own a grocery store, so I know that consumers will dictate what we stock on the shelves. Canadians will support Canadian producers as well.
Thank you.
I'd like to share my time with Mr. Holder.
10:40 a.m.
Conservative
Ed Holder Conservative London West, ON
Thanks.
Mr. Leduc, I'm the urban guy, but I get a sense that you're saying they can't compete on price. I'm not sure if it's can't or if you're in kind of a comfortable place right now. With regard to the export opportunities, you made the reference that the EU has 99% of the market, and—oh, my God—what an opportunity that is. We have the best cheese in the world. You know that is true. It just strikes me that if someone is milking 50 cows today, for example, how much more labour-intensive is it to milk 60 cows? I've only ever milked a cow once, I have to tell you, and I won't ever do it again. Imagine this: it may not be exactly the same prices you get in Canada, but when I imagine what the potential is on the upside for that, we can compete on a quality basis with anybody in the world. Frankly, I would challenge your producers to take that very same perspective, because I'm proud of the quality in Quebec and Ontario in terms of cheeses. Maybe it's not exactly the same profit level, but I think the opportunity for us to bring their 99% down to something better for our sake is very much within the cheese producers' grasp. It's my challenge to them to take advantage of that, grab it hard, and make some money at it.
10:40 a.m.
Conservative
10:40 a.m.
Director, International Trade, Dairy Farmers of Canada
I'll just respond to that by saying that, as I pointed out, the world marketplace is a highly distorted marketplace to begin with. In the mid to late 1990s we tried to participate in the export market. We put in place programs that would allow producers to participate in the export market, and the response from the farmers was positive. We were challenged before the WTO and all of these exports were deemed to be subsidized according to the WTO panel and so we had to stop.
Currently if we were to ship cheese or any other dairy products into the European market at the European price, which is a price below the domestic price here in Canada, those exports would be considered subsidized and would not have access to the European market.
10:40 a.m.
Conservative
The Chair Conservative Rob Merrifield
I'm sorry but the time is gone. I know it's kind of cheesy but that's the way it is.
I want to thank you for the testimony and we're encouraged that both your industries support the CETA deal. We look for opportunities within it to enhance both of your industries. Thank you for your testimony, and with that we will suspend as we move in camera.
[Proceedings continue in camera]