Bill C-216 (Historical)

An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management)

This enactment amends the Department of Foreign Affairs, Trade and Development Act so that the Minister of Foreign Affairs cannot make certain commitments with respect to international trade regarding certain goods.

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

Thank you, Madam Chair.

I again want to appreciate the valuable input from Mr. Forsyth and Mr. Fowler on this topic.

Carrying on, Parliamentary Secretary Bendayan was asking a question. If we set up this new Bill C-216, it will set a precedent that will probably affect other industries as well. Other people will come to us. I mean, every industry brings in a bill.

I would like to get an explanation in detail on the trade policy objectives are that are going to come from particular sectors.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

It is important to recall that the reason we are here is that the milk producers and the producers who are under supply management have little or no confidence in governments' policy decisions, particularly the ones that have been made recently by the Liberal government.

The government just kept repeating ad nauseam that it was going to protect the supply management system, and at the very end, we realized that it had made truly extraordinary concessions regarding that system.

I understand the intention of Bill C-216, proposed by my colleague Mr. Plamondon. He wants to prevent new cracks in the system from being created. However, I'm afraid that passing this bill will hurt supply management more, because, as Mr. Forsyth said, the fact that we are protecting a sector will attract other countries' attention when it comes time to negotiate.

Unfortunately, this sector will probably, once again, find itself, at the very end of the negotiations [inaudible] our negotiators are going to want to give yes and no answers.

The other reason why the producers who are under supply management have little confidence in government decisions is that in connection with the recent Canada—United States—Mexico Agreement, they were given promises of compensation but they have not yet seen an inkling of a hint of the beginning of an agreement on compensation, unfortunately.

Speaking for Agriculture and Agri-Food Canada, can you tell us where this stands, Mr. Fowler?

Where the problem lies at present is that the producers are being told things, but the politicians provide no assurances. We then feel that we have to propose a bill to fix things and put barriers in place that ultimately create a bigger risk of imposing constraints on the agriculture sector in Canada rather than helping it.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair, for allowing me the extra time because of the translation problem.

If Bill C-216 receives royal assent, would it be helpful to you in success in negotiations with the U.K. to protect Canadian supply-managed sectors, or would you say that it would make no difference in the prioritizing of it?

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

If I could just squeeze this in, would royal assent for Bill C-216 be helpful to you in the success of our negotiations with the U.K. to protect Canadian supply-managed sectors, or would you say that it will make no difference in the prioritization of protecting it?

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you Madam Chair.

Thank you to the witnesses for being here. It's good to see you again, Mr. Forsyth.

As my first question, if Bill C-216 is adopted, could this potentially have a negative effect on supply-managed sectors, in your opinion?

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you very much.

If Mr. Blaikie's motion is defeated, does the meeting on Monday still go on in regard to Mr. Savard-Tremblay's Bill C-216? If it's defeated here, is that the end of it, and then we go to a new topic on Monday? If that's the case, I can't imagine that Mr. Savard-Tremblay wants that to happen.

I'd like a clarification on what happens on Monday.

[Rachel Bendayan, Liberal, Outremont, QC]

I simply want to clarify the situation.

With all due respect, Mr Savard-Tremblay, I tried to move the study of Bill C-216 forward. Then there was a discussion about the forestry industry and the possibility of holding an emergency debate on other equally important questions, I agree. Certainly not all of the committee members didn't want to have this discussion earlier.

I do not share Mr. Blaikie's opinion, given that some committee members still have questions to ask, but I will obviously respect the decision that the committee members make.

[Doug Forsyth]

I'd be happy to elaborate on some of those risks and what would happen in a trade negotiation if one were to be negotiating with not the full basket of items on the table. I highlighted it in one of my earlier answers, but I'm happy to flag it again.

I think that as a trade negotiator you like to start the negotiation with as many items on the table as possible. It does potentially allow for trade-offs and allows for a broad discussion with your trading partner in order to understand what is within in the art of the possible.

It is incumbent on us as trade negotiators to make sure that our trading partners understand our key defensive interests and what our red lines are and what things we cannot do. As I've said, throughout my negotiating career, it's been clear that concessions made in the supply management sector are red lines. That is what was in my mandate for the Canada-UK TCA and that was what was respected.

If we were to start from the position that we would not be dealing with 100% of the items that we would negotiate on, it does risk having an agreement that's not necessarily completely beneficial to Canadian exporters and producers and it does risk being an agreement that does not necessarily provide the full economic benefits to Canada that one might have expected.

We have not faced that yet to date, but it is possible that if we were to go down the path provided in Bill C-216, that is in fact what we would do. It would be quite likely that our trading partners would take off the table something of interest to Canadian exporters and producers, and then we would be faced with the situation of negotiating an agreement that might not be as beneficial to Canada as it could be.

Maybe I'll turn to my colleague from Agriculture Canada to see if he'd like to add anything.

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

Thank you, Madam Chair.

Madam Chair, I would like to welcome all the presenters and my dear friends and colleagues. In particular, I know I missed saying my good morning from beautiful British Columbia to Christine, our clerk.

Madam Chair, contrary to what my dear friend Mr. Blaikie said—that Mr. Forsyth is here to defend the government—it's my understanding that he's here to provide professional non-partisan advice to the committee members on this particular act, which is Bill C-216.

My question is for Mr. Forsyth. He mentioned numerous times that there are some risks involved. One of them, he mentioned, is a narrow outcome. I would like to ask him to explain or elaborate on those risks and the potential impacts.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I am very grateful to the people from the departments for being with us today.

Mr. Forsyth, you said just now that the mandates assigned to the negotiators concerning the protection of supply management are reflected well in the intent of Bill C-216.

Can you explain what happened in the case of the Canada—United States—Mexico Agreement, CUSMA, not just so that we would concede another market to the Americans, but also so that we would permit them to limit Canadian exports, in particular for powdered milk?

How is it that at some point, despite those intentions on the government's part, the negotiating teams go even further than concessions that are not provided in BillC-216, as we have it before us today?

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Perfect, thank you.

If I understand correctly, a government that came after and wanted to make concessions would have to assume the political responsibility and have the courage to include it in its mandate and seek the permission of the House first.

So the power is delegated to the members of the House. That is the aspect that I find interesting. I don't think it conflicts with our interests.

There have been several references to the agreement with Great Britain. I would like to point out specifically that the market shares that had been allocated to Europe had also been allocated to Great Britain. It was obvious that we could not have expected new concessions on its part. Unfortunately, the agreement signed with Great Britain is temporary. There is therefore still a risk of fresh demands.

I would like to bring this point to the attention of the committee members, because I think it is important.

You spoke earlier of the negotiating mandates. When a representative of the government participates in negotiations, they have a mandate from the government. Would the law proposed in Bill C-216 not simply be part of the mandate? Would it not impose a limit to prevent the representatives from touching supply management?

Would that not have the same impact?

There seems to be a desire to dramatize the fact that it is a law, but it could simply be set out in the government's instructions. On the other hand, if it is in a law, we are sure it will be there, regardless of what government is in office.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Okay.

There are other sectors. We offer a wide variety of products and solutions to the world. What would you see as the reaction of other sectors if something like Bill C-216 went forward? What would you see as the reaction as far as opportunities on the world stage with trade go?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Mr. Forsyth and other witnesses.

Thank you, Madam Chair.

With different markets and different conditions when you negotiate trade deals, you have to have flexibility and you have to have options in order to be able to achieve agreements. I know that Bill C-216 is aiming to somehow further protect supply management or preserve it, as Mr. Forsyth just said, but in the meantime, it carries risk, which Mr. Forsyth also stated in his opening remarks.

What I'm interested in is this. Although we've signed so many trade agreements without having to really jeopardize the supply management system and we have successfully done that throughout its history—and we have so many trade agreements that I don't have to mention it at the moment—the question is, are there any live examples out there that can advise us on what the consequences will be in the long run if Bill C-216 is implemented, since we know that we will lose that flexibility and we will be limiting our team of negotiators on the road when they try to achieve trade agreements with countries in the world?

[Doug Forsyth, Director General, Market Access, Department of Foreign Affairs, Trade and Development]

Thank you, Madam Chair and honourable members. Thank you for the invitation to appear before the Standing Committee on International Trade on its review of Bill C-216.

The bill amends the Department of Foreign Affairs, Trade and Development Act so that the Government of Canada cannot make any commitment in an international treaty that would have the effect of increasing tariff rate quota volumes or reducing over-quota tariff rates for dairy products, poultry or eggs.

The intent of the bill is consistent with the long-standing Government of Canada policy to defend the integrity of Canada's supply management system.

I'd like to share with you some considerations regarding this proposed amendment to the departmental act.

First, by introducing specific policy objectives, proposed amendments would fundamentally change the nature of the departmental act. The act is an organizational statute that sets out, in general terms, the powers, duties and functions of the Minister of Foreign Affairs, the Minister of International Trade and the Minister of International Development.

It does not prescribe specific policy objectives. This way, the act sets up a framework that provides flexibility to the government of the day to implement its particular foreign, international trade and development policy without having to change the underlying legislation; thus, it accommodates the policy perspectives that different governments may bring to the management of foreign affairs over time.

As an example, in terms of international trade negotiations, paragraph 10.2(c) of the act provides that the Minister of Foreign Affairs is to conduct and manage international negotiations as they relate to Canada. Section 13 of the act elaborates on the specific duties of the Minister of International Trade, which include improving the access of Canadian products and services to external markets through trade negotiations.

Second, specific foreign international trade and development policy objectives, including how to address sectoral interests or specific constituent concerns, are generally established elsewhere. For international trade negotiations, negotiating objectives and how to accommodate specific sectoral interests are set in the negotiating mandates that are approved by cabinet. This allows the government of the day to develop specific policy objectives in response to evolving international circumstances.

Third, Parliament has the final say over the outcome of any international trade negotiations. Parliament ultimately decides whether or not to pass the legislation necessary to implement any free trade agreement. Additionally, moving forward, trade agreements will be subject to even more parliamentary oversight. The updated policy on tabling of treaties strengthens transparency of trade negotiations and provides additional opportunities for members of Parliament to review the objectives and economic merits of new free trade agreements. The new policy includes the tabling of a notice of intent to enter into negotiations towards a new FTA, objectives for negotiations and, finally, an economic impact assessment.

Fourth, amendment of the departmental act in the way in which Bill C-216 proposes carries risks. By limiting Canada's ability to engage on these issues, this amendment would invite negotiating partners to narrow the scope of their own potential commitments, taking issues off the table from the outset of negotiations, likely in the areas of commercial interest to Canada. This narrows possible outcomes, precludes certain compromises and makes it harder to reach an agreement.

Addressing the interest of any specific sector in the act would set a precedent that could lead to demands for additional amendments to reflect other foreign and trade policy objectives, including sectoral interests, further constraining the government's ability to negotiate and sign international trade agreements and, more generally, to manage Canada's international relations.

Lastly, maintaining the nature of the departmental act unchanged does not affect the government's policy to defend the integrity of Canada's supply management system, nor the ability of negotiators to defend this position at the negotiating table.

The government has made public commitments not to make further concessions on supply-managed products in future trade negotiations. In fact, Canada has been able to successfully conclude 15 trade agreements that cover 51 countries while preserving Canada's supply management system, including its three pillars: production control, pricing mechanisms and import controls.

Most recently, the Canada-United Kingdom Trade Continuity Agreement fully protects Canada's dairy, poultry and egg sectors and provides no new incremental market access for cheese or any other supply-managed product. Where new market access has been provided, specifically and exclusively in the Canada-European Union Comprehensive Economic and Trade Agreement, CETA; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP; and the Canada-United States-Mexico Agreement, CUSMA, the access was deemed necessary to include an agreement that was in Canada's interest.

While new access was provided in those agreements, the supply management system and its three pillars were maintained. These outcomes were part of the overall balance of concessions through which Canada maintained preferential market access to the United States and secured new access to the European Union, Japan, Vietnam and other key markets.

In conclusion, while the spirit of Bill C-216 is consistent with the government's policy of defending the integrity of Canada's supply management system, amending the Department of Foreign Affairs, Trade and Development Act as proposed by the bill would change its nature and create risks.

Along with my colleagues here today, I welcome your questions. Thank you very much.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order.

This is meeting number 36 of the Standing Committee on International Trade.

This meeting is being held pursuant to the order of reference of January 25, 2021, and the order of reference sent to the committee on March 10, 2021.

The committee is resuming its study of Bill C-216, an act to amend the Department of Foreign Affairs, Trade and Development Act with regard to supply management.

Today we have the pleasure to welcome officials from the Department of Agriculture and Agri-Food and from Global Affairs Canada.

From the Department of Agriculture and Agri-Food, we have Marie-Noëlle Desrochers, acting executive director, strategic trade policy division, and Aaron Fowler, chief agriculture negotiator and director general, trade agreements and negotiations.

From the Department of Foreign Affairs, Trade and Development, we have Doug Forsyth, director general, market access, and Kevin Thompson, executive director, market access and trade remedies law.

You are people who have been before the committee many times, so you're familiar faces to us.

Mr. Forsyth, you have the floor, please.