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.

[Cathy Jo Noble]

Thank you.

Bill C-282 is quite simply bad trade policy that profoundly changes Canada's historic approach to trade negotiations. The bill sets a harmful precedent that impacts all sectors but provides limited benefit to the supply-managed sector.

Bill C-282 would share our universal negotiating position before we've even sat at the table. In response, our trading partners will model this and will also take products off the negotiation table at the outset. Canada's upcoming trade policies are with many countries that do not even have a strong interest in our supply-managed products, yet this proposed legislation would give these countries free licence to begin to take products off the trade table before we've even begun.

One of Canada's senior trade negotiators, Aaron Fowler, stated to this committee that he was “not aware of any” of Canada's trading partners that had legislation prohibiting negotiations in the manner that this bill does. I ask why Canada would want to be a global leader on this front. Mr. Fowler also stated to this committee that Canada has “consistently been able to conclude high-quality trade agreements and support” the supply-managed sector. He said he thought there was no reason “we could not continue to do [this] with or without this piece of legislation”.

The reason he said that was that there are safeguards built into the system through required cabinet approval of negotiating text and the federal government publicly stating their commitment to supply management. If this bill passes, there are limited gains to the supply-managed industries but significant losses to the rest of the Canadian sectors. Why are we doing this to ourselves? What will we do when the next Canadian sector puts forward trade protection legislation?

This bill is not a one-off trade policy: It will be incredibly difficult to reverse the momentum and the damage to our global reputation, the damage to our trade opportunities and the impact on food security.

NCFA asks that the committee not support Bill C-282.

Thank you.

[James Bekkering, Board Chair, National Cattle Feeders' Association]

Thank you, Madam Chair.

Good morning. I am James Bekkering, past chair of the National Cattle Feeders' Association. I am joined by Cathy Jo Noble, vice-president of NCFA, who is there with you today.

I speak to you today from my farm in Taber, Alberta. I own and operate a cattle feeding operation with my family. We operate four feedlots with a total capacity of 30,000 head. Of the cattle we ship out of our yards, approximately 25% are exported directly to the United States.

By way of background, Canada's beef industry contributes $21.8 billion to the national GDP annually. Each year we export about half the value of Canada's live cattle and beef. The U.S. receives about 75% of those exports. Thus, we have a strong interest in diversifying to other markets through new trade agreements.

I would like to clearly state NCFA's strong opposition to Bill C-282 due to the profound, immediate and negative impacts it will have on Canada's economy if passed into law. I am a cattle feeder, but first and foremost I am a Canadian farmer. I work every day, the same way all Canadian farmers do, to produce high-quality food while providing for my family and contributing to my community. Unfortunately, this bill will not only tie the hands of our trade negotiators; it will also pit Canadian farmer against Canadian farmer, neighbour against neighbour, even though they are part of the same agriculture community.

Over the years, the agriculture sector has worked hard to find solutions that ensure that all succeed, and yet Parliament, by pushing this bill forward, is damaging that sector partnership. There is so much global opportunity for Canadian agriculture—enough for all of us to win—so when I consider government legislating trade negotiations to protect my neighbour down the lane at the expense of my own business, I become frustrated. I implore all MPs to prioritize the long-term economic and trade stability of Canada and not support Bill C-282.

It's over to you, C.J.

[Roger Pelissero, Chair, Egg Farmers of Canada]

Thank you.

Good day, Madam Chair, vice-chairs and members of the committee.

My name is Roger Pelissero. I'm an egg farmer from Ontario and chair of Egg Farmers of Canada. With me today is Emmanuel Destrijker, who is an egg farmer from Quebec and second vice-chair of Egg Farmers of Canada.

Egg Farmers of Canada manages the national egg supply and promotes egg consumption while representing regulated farmers from coast to coast, as we have done since 1972. We had a 50-year celebration at our AGM this year, so it's a fantastic system we have.

There are 1,200 of our family farms. They are in every province and in the Northwest Territories. Together we produce fresh, local, nutritious eggs that Canadians enjoy every single day. In fact, our sector produces over nine billion eggs per year. We support nearly 19,000 jobs and deliver over $1.3 billion to our nation's GDP.

We appreciate the committee's dedication in supporting the federal government as they negotiate trade deals on behalf of all Canadians. These trade agreements are an important part of helping Canada's agriculture sector achieve its full growth potential. However, pursuing these ambitious targets must not be—I can't emphasize it enough—at the expense of food security for Canadians.

This is why we are here to express our support for measures to strengthen Canada's system of supply management and offer stability to a broader agriculture and agri-food sector. Bill C-282 recognizes the unique agriculture landscape we have in Canada, where the combination of our domestic and export-oriented industries brings advantages to Canadians and our entire country.

You see, while export-oriented commodities are subject to the ups and downs of the global market and to volatile world prices, the supply-managed sectors are like a blue chip investment that balances these risks. They are a stabilizing force in our agriculture sector. The balance that is achieved through the combination of our export and domestic-focused commodities is a competitive advantage for Canada.

How is this achieved? At times when world prices plunge, making it difficult for export-oriented farmers to recover their cost of production, supply management farmers continue to receive a steady income. These farmers continue to purchase feed, equipment and other services from their local suppliers, ensuring that rural businesses like our local feed mills, veterinarians and equipment dealers remain in business. They offer steady employment to the community members and directly support local economies while other sectors navigate unpredictable market forces through growing export opportunities. Because of this dynamic, when the global commodity prices return to their normal profitable cycles, export-oriented farmers have a thriving rural infrastructure to tap into.

In our opinion, it's not a question about one sector versus another or judging the merits of one system against the other. That view is both narrow and careless. The opportunity ahead of us is about celebrating the benefits that supply management and non-supply management commodities bring to our system of agriculture and leveraging this platform that delivers growth for everyone.

The second matter I wish to highlight is the vital importance of maintaining small family farms. Through our global engagement, we've seen first-hand the struggles of farmers around the world who cannot recoup their cost of production. This results in family farms disappearing and young or newer farmers no longer seeing a future in farming.

We have to only look to our American neighbours to witness the effects of centralized systems, where becoming bigger is the only way to survive. This model favours industrial farming and drives smaller farms out of business. These farms disappear, as do their local businesses and the people who live and work in these rural regions. This high degree of consolidation has triggered serious issues in the U.S. food supply, with over 47 million layers out of production due to the unprecedented impact of avian influenza, which has erased 18% of production in the U.S.

Our main strength here in Canada is that we have smaller farms and a greater number of farms, with production distributed across the country. With the model we have, we are well positioned to handle supply chain pressures and do not experience the market disruption impact that we've seen in a highly concentrated industry. Last year in Canada, only 1.4 million layers were affected by high path AI, which was 4.6% of our production.

If there is an influenza outbreak again here in Canada in one of the regions, we can move production around. We can increase it in other provinces and keep a supply balance to make up for potential gaps. This allows farmers across Canada to work together to maintain the domestic supply of eggs.

The final item I wish to highlight today is the impact of trade agreements on our sectors.

Excluding supply management sectors from trade agreements is not a barrier that prevents other sectors from conducting trade abroad. However, trade agreements should not be at the expense our domestic sectors.

Market access concessions made under CUSMA, combined with the requirements under the WTO and CPTPP, will have a lasting impact on the livelihood of our farms. Under these agreements, a total of 51.4 million dozen eggs will come into our country from the U.S. and other parts of the world. The combined impact is a total of 7% of our current market production for the entire annual production of eggs each and every year.

That would be removing every egg farm east of Quebec. There would be no egg production in Atlantic Canada at all. Can you imagine those devastating effects and what it would mean to those rural communities? This outcome would result in billions of eggs that Canadian farmers and their children will never be able to produce. It also has an impact on communities across the country that rely on farms for jobs and to support their local businesses and communities.

In closing, we are pleased to hear the government commitment to giving no additional access to our sector in future trade agreements. Going forward, we request that you champion this commitment to protect and defend supply management, as the outcome of recent trade agreements failed to do. By supporting legislation that protects Canada's system of supply management, you are strengthening our vital domestic food supply.

Thank you for the time today and for allowing us to present our views. We look forward to your questions.

[Gyslain Loyer, Vice-Chair, Canadian Hatching Egg Producers]

Thank you, Madam Chair.

Honourable members of the committee, thank you for the opportunity to appear before you today.

My name is Gyslain Loyer, and I am a hatching egg farmer from St. Felix de Valois, Quebec. I am also the vice- chair of the Canadian Hatching Egg Producers, also known as CHEP for short.

CHEP is a national organization that represents close to 225 supply-managed farmers across Canada. Under supply management, our farmers produce high-quality broiler hatching eggs. These hatching eggs contribute to a steady supply of safe, high-quality, and nutritious chicken for Canadian consumers and the food service industry.

Madam Chair, in the simplest terms, we are the very important first step in the chicken supply chain. I am sure that many of you would be interested to know that hatching egg farmers produce more than 835 million broiler hatching eggs every year. These eggs are worth more than $450 million. The broiler hatching egg sector supports close to 8,000 jobs in Canada. We are proud of the important role we play as sustainable farmers in Canada's domestic food security. If COVID taught us anything, it taught us the benefit of local production. Supply management guarantees domestic food security. We would not have the same level of broiler hatching egg production here in Canada without supply management. That is why it should be no surprise that Canada's hatching egg producers strongly support Bill C‑282.

During a previous meeting, the need for this bill was questioned. Madam Chair, I can assure you that this bill is needed. Earlier this month, the Prime Minister publicly promised that there would be no more market access granted to supply-managed commodities in future trade negotiations. I hope that this promise will be kept.

The farmers I represent all advocate for the opportunity to have another support method to strengthen supply management here in Canada. That opportunity for additional support is before you today in the form of this private members' bill, Bill C‑282.

We are not opposed to Canada entering new trade negotiations with other countries. In recent years, Canada has exported more agri-food products at a higher value than ever, while still maintaining support for supply management. I think it is reasonable for our farmers to expect that any future trade negotiation will not negatively impact our sector or the supply management system in Canada.

The recent trade deals that have been negotiated have permitted access that could result in an estimated loss of $343 million for our farms over the next 20 years. Our sector historically has imported over 21% of products to meet Canadians' needs. That amount has been increased by recent deals and is at a level that can impact our predictability. We do not want any of our fellow supply-managed farmers to be in that situation. There simply is no further space for market access concessions in Canada's sustainable system of supply management, and this proposed bill reflects that fact.

The next time Canadians sit down to enjoy chicken, they should realize that they are benefiting from a stable supply from a Canadian-based supply chain supporting quality jobs because of the strong supply-managed system that we have—which is, I might add, the envy of farmers in many countries. That system should not be used as a bargaining chip during our trade negotiations with other countries.

In conclusion, I would encourage all members of the committee to pass this legislation without amendment through the committee stage, and further support Bill C‑282 until it becomes law.

I am prepared to take any questions you may have.

[Keith Currie, President, Canadian Federation of Agriculture]

Thank you, Madam Chair.

As you heard at the beginning, my name is Keith Currie. I'm the president of the Canadian Federation of Agriculture. We represent nearly 190,000 farmers and farm families across this country from coast to coast.

We are, as I mentioned, the largest organization. Because of what we do, we represent nearly $135 billion in GDP annually to the economy of this country.

The agriculture sector is resilient. It is very vital not only to our own national food security system, but also to food security worldwide. In other words, the world needs our products.

Our supply management system has been around since the sixties and promotes resilience and stability in the domestic food chain by matching production with demand, with the support of import controls. It also cuts down on overproduction and waste within the food supply chain and ensures that farmers receive a fair and predictable return for their work. This in turn encourages investments in on-farm efficiencies, helps mitigate the impact of diseases such as avian influenza and promotes environmental sustainability.

Something that gets lost in all this is that it also strengthens rural communities by creating stable jobs across the country, yet this has not precluded Canada from becoming a global leader in the world export of quality agricultural food products to markets around the world. As I am sure this committee is aware, Canada exported nearly $93 billion dollars' worth of agri-food products in 2022, making us the fifth-largest exporter of such products. As such, we continue to support the Canadian government in its efforts to secure additional market access and trade diversification opportunities for Canadian agri-food and seafood products.

CFA has long advocated that no additional access to supply-managed sectors should be given in future trade agreements, and all political parties sitting in the House of Commons have committed to no additional access and no reductions in over-quota tariffs. Despite these commitments, significant concessions have been made in recent trade agreements, including CETA, CPTPP and CUSMA.

While we welcome the market access opportunities these trade agreements provide for Canadian agriculture, these repeated concessions threaten to undermine the resilience and stable food supply that supply management affords. Bill C-282 will require federal officials to respect this commitment during both ongoing and future trade negotiations, thereby protecting supply-managed farmers and the Canadians who rely on their products.

I would highlight that Canada currently maintains 15 free trade agreements with 51 countries around the world, providing market access to nearly 1.5 billion consumers. Outside the three recent examples I cited previously, these agreements were possible without requiring significant additional access to the supply-managed sectors. Rather than taking a divisive approach and focusing on agriculture trade negotiation tactics that pit one agriculture sector against another, we should be focusing on what unites us as a sector—i.e., non-tariff barriers to trade, which are limiting real market access to Canadian products even in areas where Canada has made concessions on access to supply-managed goods.

CETA, for example, is often held up as a model of comprehensive free trade by reducing or eliminating a broad range of tariffs. However, while trade generally has increased since CETA came into force, that's not the case for Canadian agriculture sectors. CAFTA reported in 2019 that “Since the entry into force of the agreement, EU exports to Canada have increased by over 10 per cent, while Canadian agri-food exports have decreased by the same amount”. As a result, Canada provided additional access to supply-managed sectors as a leverage to gain greater foreign market access and provided Canadian tax dollars to compensate supply-managed dairy producers for this increased market access—yet we still have not realized the benefits of increased exports.

The real threat to increased global trade is not Canada's supply management system, but non-tariff barriers to trade that are limiting market access. International trade is critically important to the Canadian economy and Canadian agriculture, and we understand and support the need to pursue new market opportunities for export-oriented producers across Canada. However, Canada's three most recent trade agreements have had a considerable impact on supply-managed farm families and the system that supports them. It's our hope this new legislation will encourage Canada's negotiators to look to other negotiating strategies that do not place one agriculture sector against another, and instead focus our energy on issues that unite us, such as reducing non-tariff trade barriers.

It's our belief that this country needs a strong and united agriculture sector that is composed of both robust supply-managed and export-oriented production, particularly as we strive to meet the global challenges of the day around food security, emissions reduction and environmental protection.

I thank you for this opportunity to speak today, Madam Chair, and I look forward to any questions that members may have.

[Tim Carroll, Professor, As an Individual]

Thank you, Madam Chair. I'm appearing as an individual.

I'm a former MLA and minister of agriculture in Prince Edward Island. When I was still a graduate student, before I got into politics, I was directly involved with the PEI Marketing Council in the tumultuous early days that marked the formation of the Canadian Egg Marketing Agency and the Canadian Chicken Marketing Agency. After that, as part of my studies, I was hosted by marketing boards in Manitoba, Alberta, and B.C. to study their marketing board systems. Prior to academia, I served as secretary to the board and manager of the Ontario Processing Vegetable Growers.

I support Bill C-282. I see Canada's supply management programs in the dairy and poultry sectors as uniquely Canadian business practices that have proven themselves several times to be fair trading practices in the international market.

I recall the founding of the national egg and chicken marketing agencies, which was a response to the chicken and egg wars in the early 1970s between Quebec and Ontario. The response by each province threatened to interfere with open borders among Canadian provinces. As we do in this country, in our uniquely Canadian way, we came up with the concept of parallelism to solve the problem and at the same time respect the shared jurisdiction of the federal government and the provinces.

The federal government's unilateral move and recent trade negotiations to open up more of our market to trading partners was, in my view, disrespectful of the organized marketing system put together by producers under provincial legislation. Bill C-282, as I understand it, will restrict federal authorities from giving away further access to our well-served, organized and safe system of providing food.

I would point out that Canada’s supply management system has survived scrutiny under GATT rounds, the World Trade Organization rounds—which is the new name for GATT—and then the 1988 Canada-U.S. Free Trade Agreement, shortly followed by the North American Free Trade Agreement, the European trade agreement, the TPP; and now the just-concluded USMCA.

What’s the secret to Canada’s brilliance? Could it be that we are tough negotiators? Is it because we are willing to give away anything to preserve supply management? That's nonsense.

Canada’s supply management system has survived close examination over the last 40-plus years of trade negotiations because it has been found to be fair and does not break trade rules, regardless of what the other negotiator may say.

It is seen as not breaking rules because supply management in Canada is not a subsidy program that puts competitors at a disadvantage. Under Canadian law, farmers can stabilize prices legally by getting together and sharing the market. We have always shared a piece of our market with other countries. We are deemed fair because the share of the market is there.

Supply management is a standard business practice. Consider the logic. With any form of supply management, a business is simply trying to limit production of something to closely satisfy the demand in the market. There are great challenges in doing that in agriculture, but each commodity group has designed different systems in different ways of supply and management.

The idea that our trading partner, particularly the United States, doesn't engage in supply management is simply incorrect. Our main trading partners all practise some form of supply management for farm commodities.

I can talk about other examples, but I'm just going to mention one that I was very familiar with when I was with the vegetable board. In this case, the U.S. maintained several food purchasing programs for foreign aid, the military, school lunch programs and food stamp programs.

For example, if I was watching the price of canned peas softening, I could almost predict that within about two weeks or so the USDA would announce a major food purchase of canned peas for school lunches or the military or whatever. The point is that they remove product from the market, and subsequently the price of canned peas rises.

In supply management—

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

I call the meeting to order.

Thank you all very much. It's a pretty impressive group of people at the end of the table. Thank you for being here.

Welcome to meeting number 53 of the Standing Committee on International Trade.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Therefore, members are attending in person in the room and remotely by using the Zoom application.

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Pursuant to the order of reference of Wednesday, February 8, 2023, the committee is resuming its study of Bill C-282, an act to amend the Department of Foreign Affairs, Trade and Development Act with regard to supply management, as we all know it.

We have with us today Tim Carroll, as an individual, by video conference. From the Canadian Federation of Agriculture, we have Keith Currie, president, and Brodie Berrigan, director, government relations and farm policy. From Canadian Hatching Egg Producers, we have Gyslain Loyer, vice-chair; from Egg Farmers of Canada, Roger Pelissero, chair, and Emmanuel Destrijker, second vice-chair; from the National Cattle Feeders' Association, we have Cathy Jo Noble, vice-president, and James Bekkering, board chair, by video conference; and from Tree of Life, we have Lisa MacNeil, president, and Francesco Mastruzzo, director of brand development.

Welcome to all of you on a bright and sunny Monday morning.

Mr. Carroll, I will invite you to give opening remarks of up to five minutes.

[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?