International Trade Committee on April 19th, 2016

[The Chair, Liberal, Mark Eyking]

Well, it was a good omen.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

I'm happy to be back here.

My question goes to Mr. Robertson.

My concern is about small family farms, because bigger companies can protect themselves. I would like to know your view on how they will be able to benefit from this TPP agreement.

[Doug Robertson]

I think there's a great tendency when we talk about farming anywhere in Canada to try to split off these nasty corporate farmers. I haven't met any of them yet.

About 98% of the farms in Canada are family farms; they're run by families. They may be bigger farms, but they're still run by families.

The same concerns that drive a small family farm, of say 500 acres, which in Alberta would not be economically possible to run, drive those larger farms. There's an extreme need to try not to make a mess because you have to sell that land again if you do go broke.

Farmers are a couple of things. Farmers are really cheap. This always gets a laugh from the green groups who claim that we're over-spraying things and over-applying things, but I guarantee you that farmers don't put a dollar more on the land than they have to. In fact, we cheat. We try to put on 75% of the label amounts. We try all kinds of things to put as little input money into getting a living as possible.

It's expensive to do this work. When it comes to dealing with our livestock, we try to treat them as well as possible, because mistreating livestock costs you money too. Their performance goes down, and it really costs you money. I think if more environmental groups understood that I, as a farmer, cannot afford to abuse what I've been given to work with....

I've found, actually, that bigger farms have been able to hire more people to do the work for them because they have more acreage for staff to cover. The smaller farmer is doing that on his own. He's out there walking the fields, looking at his own weeds.

We're starting to get to the place where these kinds of technicians you can hire are getting relatively inexpensive for what it costs to do the job right. Most small farmers now are using exactly the same technology; they're just using it on a smaller number of acres.

I'm not concerned about the difference between the two of them. The concern I have is about making agriculture unaffordable through regulation. That's what really concerns me. Trade agreements have a tendency to open things up rather than close them up. This is the problem that we've had in the past. It's been talked about, especially under the table. Europe has a tremendous number of unassigned trade barriers. We've taken them to court and we've beat them in court, and it didn't matter anyway.

Smaller farmers actually have more to lose from not getting a good trade agreement than I think the bigger ones do. Bigger farmers have a little more manoeuvring room, and bigger farms tend to be in the better producing areas. Where I'm producing, I'm an hour and a quarter from Banff, which is great for skiing, but it's really crappy for growing crops. I have to get a crop in 90 days, so I can't afford to mess around.

That's the reality of what we're dealing with.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

To the whole panel, do you have any concerns about limiting food labelling? I ask because other countries say that their standards are equivalent to Canadian standards. Would that be good enough, or do you think we should go further on those?

[The Chair, Liberal, Mark Eyking]

The answers will have to be quick. You only have a half a minute, Mr. Dhaliwal.

[Bryan Walton]

I think labelling should deal with the ingredients and food safety issues. I think if it's not going to be an impact for human health or the consumer, then I'm not sure that extreme labelling beyond that is necessary.

[John Weekes]

We've just been through a lengthy labelling dispute with the United States on beef and cattle, so we've experienced how it can be abused to restrict trade.

[Rich Smith]

From our perspective, we don't believe labelling should be a trade barrier. One of the misconceptions with country of origin labelling is that we're opposed to labelling beef as Canadian beef, which we're not at all. When we sell beef in other countries, we're proud to call it Canadian beef. The way that country of origin labelling was implemented, it was implemented as a trade barrier, not as true labelling.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Dhaliwal.

Mr. Robertson commented about some people saying that farmers were cheap, but my dad said, “They call us cheap, but we're just thrifty”. It's a different word. I don't know if it changes or makes a difference, but yes, we're thrifty.

Okay, we're going to move to the NDP for five minutes, with Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

Thank you for your presentations. I also represent a rural riding with many farmers in it. I appreciate the work you do and the effort you put into being stewards of the land and ensuring not just that you're frugal but that you're leaving the land and the environment in good shape when you're done with it. I thank you for that.

I think this morning it's been touched on that trade deals have changed dramatically from where we were. The concerns in this deal aren't around the tariff reductions that would obviously benefit your sector, and we see that. We know the opportunity is there for the beef industry. That's been clearly highlighted to us on numerous occasions. We do recognize that for your particular group it would be a positive thing to sign the TPP. But of the 30 chapters in the TPP, six are really about trade in that traditional sense where we talk about removing those barriers and reducing tariffs.

I want to speak a little bit about the studies we have currently. We don't have a study from Global Affairs Canada. By their own admission, they don't have one available. When we're looking at economic impact studies on Canada, we have a few that we can reach to. One of them is from Tufts University, which shows 58,000 job losses.

I wonder if you could speak a little bit about how many people are employed in your sector and what opportunities you see for employment, with the understanding, of course, that spinoff jobs could be created from the work you produce.

[Bryan Walton]

As a global number, I guess, in Canada our industry is directly or indirectly responsible for 228,000 jobs. As I said, the important thing to remember here is that it's an integrated industry, and an impact on one element of the supply chain can ripple across the others. We're challenged by getting labour in our meat plants here and that affects cattle feeders, because it disrupts our ability to get the cattle, or we're held back because they can't process it at the level they need to. That affects us.

In terms of jobs, I alluded to the Balzac meat plant. The construction of a meat plant is a rare event these days. We're down to three large plants, or four, we'll say, as there are some other small ones, but these are federally inspected plants. That Balzac plant will have a direct impact on unemployment of about 300 to 400 jobs, so that's positive. It's also about moving product offshore, reducing our dependency on the United States. As was mentioned, it's not only for Japan. The operators of that plant will be looking at Europe as well as the other plants in the country. If they can move product to more markets, that means more employment opportunities.

[Rich Smith]

The Canadian agriculture industry is chronically short of labour. The shortage is probably most acute in the processing plants, but it goes right through the farming and ranching sector. We're missing opportunities now because of lack of labour. Our ability to prosper as an industry will increase significantly the amount of jobs that are available and will increase job opportunities for Canadians.

[Tracey Ramsey, NDP, Essex, ON]

You've mentioned some numbers that you think would be potentials in going into the Japanese market. It's interesting, because the positive that we hear from folks is really about that access to Japan, right, and that need for, if not this agreement, then a bilateral agreement, which may make more sense to have with them versus the Trans-Pacific Partnership.

When you talk about that access and those numbers, you're saying that you would have an increase of a certain amount or hundreds of million of dollars in access. Do you have a study that you're basing those figures on or is that just based on your market knowledge?

[Doug Robertson]

Speaking from any numbers I gave, mine are based on market work that we've done through the Alberta Barley Commission, through the different grain organizations, and now with the Barley Council of Canada.

We're constantly looking at any of these agreements to see if they are positive for our industry. We're not going to support something that doesn't do something for agriculture.

But the critical thing, I think, is the following concern that we're now running into. We're seeing Bill 6 in Alberta, for example, which is supposed to help agricultural labour, but it's really scaring a lot of people who are employing agricultural labour, because the rules aren't set out. If you have unsure rules and unsure situations, it really messes up an industry, and it cascades down through the whole industry. That's why good, clear trade rules and good, clear trade agreements are important. I think we have a chance here to put some better rules in place, and that's basically why we're supporting this.

Japan is terrible for having lots of neat little things that keep our products out of its market, just to protect its own domestic industry. It's bad that way.

[The Chair, Liberal, Mark Eyking]

Thank you very much, Mr. Robertson.

The time is well over, Ms. Ramsey, and we have to move on now to the Liberals.

We have Mr. Peterson, for five minutes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Good morning, gentlemen, and thank you for being here and participating in the panel. I find it insightful and informative so far.

I have a few questions, not surprisingly. I'm going to start with Mr. Smith.

You mentioned the decline in your market share in Japan from 2014 to 2015. I think you said there was a 9% drop in value and a 23% or 24% drop in volume.

I take it Australia picked up that market difference, or were there other factors at play?

[Rich Smith]

I believe most of it was a result of the free trade agreement Australia has and the tariff advantage it provided to Australia. When we look at the potential benefits of the trade, I think part of our information goes back to history and the values of exports that we had before there were disadvantages based on tariffs and other market restrictions.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thanks for that.

With those numbers—you said there was a 24% decrease in volume, but only a 9% decrease in value—I take it that the Japanese market was more profitable over those two years as well.

[Rich Smith]

One of the great advantages of export markets is the ability to sell products to an export market for greater value than you would receive selling those products within North America—taking each cut of beef and selling it to the best market for that cut. Japan and the Asian markets represent very good markets for cuts of beef that aren't as valuable here. That's one of the significant benefits, and that's why there was a greater drop in volume than in value.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

It seems like a lucrative market for you.

Now, I have some concerns about the declining cattle herd in Canada, in Alberta. We have heard of this from panellists and from other information sources. If the TPP comes to fruition and there is that great market for you, are you going to be able to meet those market needs?

[Rich Smith]

Certainly we are concerned about a declining cattle market, and the other members of the supply chain, the processing and feeding sector, are concerned about that too.

I think reversing the decline in the cattle market—and we hope that it is starting to take place right now—is based on overall economic factors, one of which is increased export market access and reduced basis for cattle. That encourages people to take a longer-term view.

What is happening is that we are seeing younger people who were not coming into our industry starting to see a bright future in the industry. These are people who like the industry but simply weren't coming back to farms and ranches, or acquiring farms and ranches, because they weren't certain about the economic future. Stronger prices—and part of that signal is increased export market access and agreements such as the TPP—will encourage people to raise more cattle.

We have a large land resource and the ability to raise the cattle, if the market signals are there.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Okay. Thank you.

Turning to Mr. Robertson, can you give me an idea of the size of your market? You didn't really mention the size. Coming from Ontario, I'm not necessarily aware of the size of the western barley market.

[Doug Robertson]

It depends on which province you're in, but I think between Alberta and Saskatchewan we're probably about 90% to 95% of the total barley market in Canada. Saskatchewan has been expanding mostly on the malted side. Malting barley is mostly what Saskatchewan has always grown. Saskatchewan's climate works better with warmer weather stuff like wheats and lentils and pulses and things like that. Barley likes it a little bit cooler, so Alberta is absolutely the prime place to be producing barley.

This why I mention the States. They don't grow a lot of barley in the States because it's too hot, not just because corn is ridiculously easy to grow in the areas where they can grow it. There's quite a good market down into the Pacific northwest for barley, into dairies and things like that, that we have not been able to access in the past.

We have to get better north-south trade routes working. We have a terrible railway agreement right now. We're especially having a heck of a time with CP this year—I don't know what they're doing—but we need to get that figured out and fixed. We need to put our railways a little more under our thumb here for underperformance. Let's call it that.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Okay. I—

[The Chair, Liberal, Mark Eyking]

That's it, Mr. Peterson.