Bill C-282

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.

[Greg Northey]

The Indo-Pacific is incredibly important for the same reasons Dennis outlined. One of the biggest things for us in that region is to present to all of those potential markets, the developing markets, how to model behaviour around dealing with trade: making sure it's predictable, making sure there are no irritants and making sure it's open and free.

One of the things we absolutely need, as we move into those markets, is to ensure that what we're modelling in Bill C-282, particularly around how to protect a sector through legislation, will not be damaging for us as we try to achieve our objectives in that region. If we're taking things off the table, and it doesn't matter what sector it is or what protection of the sector we're doing, it means we will never be able to have commercially viable deals with any country. In fact, we won't be able to speak to countries around their regulatory system about anything, because they will simply say to us, “Well, you're protecting a sector. We're going to do it, but we're going to do it in a different way with a non-tariff trade barrier or some kind of SPS issue.”

We won't have the standing, as Canada, if we're demonstrating a behaviour where we're legislation a protection for a sector, a region or any kind of issue that we deem should be protected.

[Daniel Turp]

Of course. You should know that. You are all parliamentarians, after all.

Bill C‑282 carries weight. It would prevent Canadian negotiators from being able to make concessions. The bill very formally sets out a commitment restricting the prerogative of the government and the minister.

I'd like to say something, if I may. When I hear people describe the supply management system as outdated or protectionist, it brings to mind a question. Instead, why not suggest that other countries adopt the system?

The system has proven its worth. What's more, it contributes to food sovereignty. Some U.S. states—Wisconsin, for instance—are now looking at the system. They think it may be the way to protect farmers and ensure food sovereignty.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Vice-Chair.

Just to put it on the record, on December 8, 2022, Conservatives voted against Bill C-32, which certified the $1.7 billion for supply management. Furthermore, the leader of the official opposition did not commit his full support of Bill C-282.

I'd like to ask my first question of Mr. Slomp.

In your policy briefing on the previous verison of the bill, the National Farmers Union stated that passing the bill was in the national interest. Do you believe that this bill, Bill C-282, will impact the competitiveness of the Canadian agriculture sector on the global market?

[Tony Baldinelli, Conservative, Niagara Falls, ON]

If I can just build on the second comment, which I just want to follow up on, Mr. Lampron, you talked about how the legislation would lead to greater stability and predictability. I fear that, if we legislate this, if we codify it, it may lead to the opposite result.

For example, building on what my colleague said in the last meeting, look at dairy production in Canada. We went from 75 million hectolitres in 2000 to 94 million hectolitres in 2021. Today I just pulled off the exports of dairy products by country of destination and, to the United States, the value of our dairy exports went from $189 million in 2019 to $241 million. It went up by $52 million.

I would imagine that those exports were negotiated—weren't they? That market access was gained through a trade negotiation—wasn't it? If we codify through Bill C-282, what would stop the Americans from renegotiating our trade agreement and saying, “Forget it. Trade dairy exports into Canada are not permitted”.

Do you not feel that's a risk to the sector, a risk we want to try to avoid?

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

This is kind of interesting. I'll just build on what I indicated at our last meeting in the interest of disclosure. During the late 1990s and early 2000s, I worked as a lobbyist for a consulting firm in Ontario. One of my clients was Dairy Farmers of Ontario. I'm pleased to have worked for them and the school milk program throughout Ontario. I think all of us recognize the importance of supply management to our farm organizations and our farm families.

I want to follow up on two comments.

Mr. Darling, you indicated in your comments the fear of the possibility of a protectionist response, in that if Bill C-282 were implemented, it would encourage, for example, our largest trading partner, the United States, to adopt similar legislation. What would be the impact on our farm sector if that were to occur in certain sectors such as, for example, the beef sector?

Mr. Phinney, you can follow up as well.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

I want to talk about this because I think it's important. I wholeheartedly support Bill C‑282, and I'd like to thank the members on the other side for their support. We work together closely on this issue.

Other falsehoods were going around during the pandemic. One of them was that we could use a tube to get cows to stop producing milk, and then all of a sudden, supply management was blamed for it all.

Again, a professor whom I won't name blamed supply management, and people knew this was going on in the states. The market changed. Consider this. Last year on December 24, my region was hit by a big storm. When drivers can't get to the farm to pick up the milk, producers have to dump it. That has nothing to do with supply management.

I would just like to hear your opinion on that.

[Colin Carrie, Conservative, Oshawa, ON]

If Bill C-282 passes, would industries such as yours seek economic compensation for the missed market access opportunities that the bill could create? Is that something you guys have pondered?

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair.

Mr. Darling and Mr. Phinney, I come from Oshawa. We do cars. Our supply chain is important. It's very sensitive and very accurate. We just want to make sure we get trade deals that are the best we can get for all Canadian interests.

The government committed to not giving up any more concessions to supply management. That's something that all parties agreed on. In the last iteration of this bill, which was Bill C‑216, trade negotiators pointed to the risk of losing future trade opportunities for Canada in the sectors that depend on trade.

Based on that type of consideration, would you say Bill C-282 poses more risks or benefits to the Canadian economy? Could our trade partners retaliate by adopting similar legislation? What would you say the risk is?

Mr. Darling, could you start?

[Daniel Turp]

No.

In fact, I think that Parliament, and you, parliamentarians, should demand more power in your dealings with the government when it comes to negotiations, to transparency in negotiations.

Before agreements are signed, before they are ratified, Parliament should approve them. It should also be continuously updated on the negotiations.

The benefit of the proposal in Bill C‑282, in restricting the prerogative and powers of the minister to negotiate on supply management issues, is to ensure that there will be no negotiations on these issues and that there will be no concessions.

That is strong and sustainable, unless a new government wants to change that provision later. In my view, this is a very definitive way of ensuring the objective is met. I will say, as I did at the beginning of my remarks, that in this particular case of supply management, it comes down to keeping a promise.

I hear some parliamentarians saying the opposite of what their leader said today. All leaders of all parties have said they would protect the supply management system.

I think that parliamentarians and the parties should respect their respective leaders and honour their word; they should agree to pass this bill because it would ensure this system is upheld.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair. You may be vice-chair, but today you're the chair.

I would like to say hello to all of my colleagues.

I thank all the witnesses for their evidence today.

Mr. Turp, you are an expert in international law, I believe. You have taught, you have been a professor, and you have supervised many master's theses and doctoral dissertations on these issues.

In your previous career as a member of Parliament, you worked on the making of trade deals and accountability to Parliament.

We've heard all kinds of arguments today, both for and against Bill C‑282. Among the concerns that have been raised, we are told that it could undermine the way negotiations are concluded.

As an expert on the subject, do you share that concern?

[Daniel Gobeil, President, Les Producteurs de lait du Québec]

Good afternoon, members of the committee.

My name is Daniel Gobeil, president of the Producteurs de lait du Québec and a dairy farmer in La Baie, Saguenay—Lac-Saint-Jean.

It is clear to me and to the 4,500 dairy producers in Quebec, spread over 14 beautiful regions, that the adoption of Bill C‑282 is essential to the survival and predictability of dairy farms in Quebec and in Canada.

My predecessors talked about concessions. They mentioned these various agreements: the CETA, the CPTPP and the CUSMA. These agreements include concessions that have resulted in a market loss of 8.4%. In addition to this figure, there are tariff quotas already imposed by the World Trade Organization, the WTO. Today, 18% of the Canadian market is occupied by products supplied by other countries.

The supply management model dates back to 1971. It is not a business model, it is an agricultural policy that Canada has maintained over the years. All countries have agricultural policies and more fragile sectors, which they want to protect when they sit at the negotiating table. The European Union's Common Agricultural Policy, or CAP, is one example. The large subsidies associated with the U.S. Farm Bill are another.

During negotiations, each sector works to protect certain policies. In our case, however, it is always the same thing at every negotiation: the dairy sector is sacrificed at the last minute. It is very important to protect the supply management sector, i.e., milk, eggs and poultry produced throughout Canada. Supply management ensures profitability and balance on the farm, while meeting Canadian demand.

This model allows Canadian producers to offer a quality product that fills grocery store shelves. We have seen this in recent events following the pandemic and supply chain breakdowns. It is very important that our food and our health are supported by quality local products. It is important to protect those sectors that want to provide those products to Canadians.

By protecting the supply management system, Canada has, over the years, been able to negotiate trade agreements with many countries. In terms of trade, we have access to over two thirds of the world's population. It is not the supply management sector that has been detrimental to these agreements.

We hear comments from some players. We sincerely believe that it is possible to protect interesting market sectors and production methods such as supply management in Canada, while developing export markets for certain products for which there is a global demand. As we have proven in previous agreements, in Canada, we are able to do this.

We are really counting on the support of all political parties for Bill C‑282. That is what we have seen. The last few weeks have shown us that there is real support from all four major parties, and especially from their leaders, to protect jobs across Canada.

I thank you for listening and for giving me the opportunity to speak to you. I am available to answer your questions.

[Pierre Lampron]

Dairy farmers recognize that some sectors are highly dependent on the export market, but Canadian trade policy must also ensure that the needs of all sectors are balanced.

A truly Canadian model must ensure the success and long-term viability of all sectors, without pitting some sectors against others.

The compensation for dairy farmers and the investments in dairy processing announced in the 2022 fall economic statement will help our sector make the transition that will be required as these agreements are implemented.

Granting repeated market access concessions, followed each time by compensation, is not a model that will support the long-term success of our industry, nor would it work in any other sector of the Canadian economy.

Canada's dairy, poultry and egg producers have paid their dues.

Bill C‑282 would protect the sustainability and viability of Canadian farms under supply management by preventing the granting of further market access concessions under current or future trade agreements.

Parliamentarians sent a very strong signal in the second reading vote. They can send an even stronger message by quickly passing the bill and putting dairy protection into law.

Thank you, Mr. Chair.

[David Wiens, Vice-President, Dairy Farmers of Canada]

Thank you.

I'd like to point out that Bill C-282 comes at an inflection point for the country. Since the pandemic, Canadians have come to understand in very concrete terms what it means to be vulnerable to unreliable foreign suppliers. Canada's unique system of supply management was designed to put the needs of Canadians first. It ensures that Canadian families have secure and stable access to dairy, eggs and poultry products. For dairy farmers, it also means producing nutritious, sustainably produced, high-quality milk under some of the world's most stringent standards and practices for food safety and animal care.

This unique Canadian framework is weakened any time that dairy, poultry and egg market access concessions are negotiated and granted as part of international trade agreements. This results in replacing Canadian-made products with imported products on our store shelves. It significantly impacts our producers' ability to plan and make needed investments for the future of their farms, such as for our commitment to reaching net-zero emissions on Canadian dairy farms by 2050.

[Pierre Lampron, President, Dairy Farmers of Canada]

Mr. Chair and honourable committee members, thank you for the invitation to address the committee today.

My name is Pierre Lampron. In addition to being a dairy farmer myself, I am the president of Dairy Farmers of Canada.

Joining me for this presentation is our vice-president, Mr. David Wiens. We welcome this opportunity to express the strong support of Canada's 10,000 dairy farmers for Bill C‑282.

If passed, this legislation will ensure that supply management will no longer be on the table in current or future trade negotiations, thereby strengthening the Canadian dairy sector. It will give us greater predictability and stability to invest and plan for the future. It will also allow us to continue to play the vital role we need to play for the benefit of Canadian families.

The past few years have been challenging for all Canadians. In addition to a global pandemic and the resulting high inflation, there was the war in Ukraine and unreliable global supply chains because they were weakened.

Dairy farmers have also faced these significant challenges and have done their utmost to adapt. However, we have also faced an additional challenge: the impact of market access concessions granted under three successive trade agreements: the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, and the Canada-United States-Mexico Agreement, or CUSMA.

Dairy farmers in Canada estimate that the combined market access afforded by these agreements equates to an average annual loss of revenue of $450 million for dairy farmers.

I will now turn the floor over to Mr. Wiens.

[Nathan Phinney, President, Canadian Cattle Association]

Thank you, Mr. Chair.

Good afternoon. My name is Nathan Phinney. I'm a beef farmer from New Brunswick and president of the Canadian Cattle Association. With me today is Dennis Laycraft, executive vice-president of CCA.

We appreciate the opportunity from the committee to provide input on Bill C-282 from the perspective of the Canadian beef industry. Specifically, we will address our concerns regarding the detrimental and unprecedented nature the bill presents for future trade negotiations.

CCA represents nearly 60,000 beef producers from coast to coast. The beef industry is a significant driver of our economy, as Canada's second-largest single source of farm income, contributing $21.8 billion to our country's gross domestic product and supporting nearly 350,000 full-time equivalent jobs.

We, Canadian beef producers, pride ourselves on creating a high-quality, nutritious and sustainable protein that is less than half of the world's greenhouse gas emissions intensity per pound of beef. Simply put, we are producing food, benefiting the economy and at the same time protecting and conserving environments across Canada.

Free and open trade is key to the beef industry's success in Canada, with 50% of Canadian beef being exported around the globe. In being in an export industry, CCA has always emphasized the need for strong trade rules and principles in facilitating global trade.

Today we will outline some important considerations both specific to Canada's beef producers and the broad interests of the Canadian economy. We encourage the committee and all parliamentarians to consider these comments before moving forward with this bill unamended.

Increased market access has been essential to our sustainability as an industry. Beef producers earn approximately an additional $1,500 per animal because of our ability to sell on international markets. For our industry to continue to grow and diversify our exports, we will need the improved market access that comes through trade negotiations.

Closing future market opportunities is closing our economic growth as an industry. Allow us to demonstrate how impactful trade negotiations have become for economic success in an export-driven sector.

First, since the start of the CPTPP in 2017 and the removal of tariffs that followed, Canada's beef exports increased 192% to Japan. In 2022 we exported $500 million to Japan in beef and beef products. Additionally, when NAFTA was adopted, the Canadian beef industry saw an increase in value of exports of 650% from 1994-2022. Without these high-value agreements, we would not be exporting $6 billion a year.

If Bill C-282 moves forward, Canada will be at a disadvantage before negotiations even begin. Bill C-282 will tie the hands of our trade negotiators and severely constrain the Government of Canada's ability to negotiate and renegotiate the best deals for all of Canada. We understand, from previous trade officials' testimony under the bill's previous iteration as Bill C-216, that their ability to negotiate would be limited and that our trading partners would also limit their offers to Canada.

Canada's most beneficial and progressive trade deals, like CPTPP and CUSMA, have been achieved through flexibility and compromise. Our negotiators have balanced the need for ambitious outcomes while protecting Canada's interests. Bill C-282 takes away this needed flexibility to secure ambitious trade deals. In an already tense trading environment with protectionism on the rise, it is counterintuitive for Canada to add more barriers to trade. Bill C-282 sets a dangerous precedent that certain industries and sectors would have their trade interests protected through legislation. Further, this bill could see a domino effect around the globe for further protectionist actions from our trading partners. This risk is not worth the economic impact to Canada's economic sector, which relies on trade, and the broader interests of Canadians.

Market access losses will be counterproductive to Canada's wider economic interests. While many other countries have trade-sensitive sectors, we understand that no other country has chosen to legislate the work of trade negotiators. Bill C-282 is unprecedented in terms of global trade principles. Trade is essential for Canada and the world's food security. Closing ourselves to future trade is closing access to food for Canadians and the countries that depend on food exports.

Open and free trade allows access to food at lower costs. Canadian cattle producers provide some of the most sustainable beef to the world at a time when we're globally discussing climate change, sustainability and food security. The world needs more beef from Canada, not less.

To conclude, I want to emphasize that the growth of the Canadian beef industry will depend on international trade. Hindering trade is hindering our ability, as an industry, to grow. We strongly encourage members of Parliament to oppose Bill C-282 as currently written in order to allow Canada to preserve its robust ability to negotiate comprehensive trade agreements that help secure Canada's long-term economic success with the national interests of Canadian consumers in mind.

CCA appreciates the opportunity to provide input on Bill C-282 and would be pleased to provide any further information that the committee may seek.

Thank you.