Agriculture Committee on Oct. 18th, 2006

[The Vice-Chair, Liberal, Paul Steckle]

We're almost out of time, but do you have a short question?

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I was going to comment on the golden nematode. That issue was resolved pretty quickly and the border was going.

Maybe you could just briefly comment on what exactly happened such that this one was allowed to get back on track and get the border open in a hurry, compared to some other products.

[Gary C. Groves]

It's one we both know we've got to get a handle on very quickly because of the impact it can have. We both have a long history of dealing with potato-related concerns, diseases and so forth. The scientists on the U.S. side and on the Canadian side know each other. They actively talk to each other. I can guarantee you when that came out there were a lot of late-night discussions to figure out just what the reaction should be, how we can deal with this, and so forth.

What made it successful is that close relationship, not only at the political level--if one side doesn't feel it's on track--but also at the technical level; they have confidence in each other, they trust each other, what they're saying. We have that, but we have a long relationship in particular on potatoes.

[The Vice-Chair, Liberal, Paul Steckle]

Thank you very much. I think it was also not a health issue.

[Gary C. Groves]

Right.

[The Vice-Chair, Liberal, Paul Steckle]

Okay.

Where's Mr. Boshcoff?

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you, Mr. Chair. I have two questions. One deals with the water issue. The International Joint Commission recently commissioned a very extensive study to determine the decrease in water levels in the Great Lakes. I am a former mayor who worked with the Great Lakes-St. Lawrence mayors. Mayor Daley and I had several protocols for water in terms of the population demands in the southwest U.S., and the agricultural demands, not only in the Great Lakes but also in western Canada and the western United States.

What is your view of the next five years in terms of demand? We can see that kind of pressure happening in other countries in the world.

The second one is this. Recently in Alberta the sugar beet harvest has come in, and there is protectionist pressure on the United States government on the heavy juice. Some have said the sugar beet lobby in the United States makes R-CALF look like cub scouts.

I would like your comments on the future of those and the resolution of them, please.

[Gary C. Groves]

On your first question, water levels in the Great Lakes, that is completely out of my area of expertise. I know meetings are going on this week.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

I meant the diversion for agriculture and the pressures for both drinking water and agriculture.

[Gary C. Groves]

I have no ability to comment on that with any sort of U.S. government position or anything like that. Sorry about that. I hear things, but that's just like you hear things, so I don't really want to make comments based on that.

On sugar beets, sugar, when you're talking about the sugar program in the United States, that is obviously one of our most sensitive products. You have sensitive products, and we all know what they are, and we have sensitive products. Sugar is an issue we have had for a long time--our import program with sugar. It's a very regulated program. We find with regulated programs, there are always going to be efforts to get around that sort of regulation. I don't know enough about the heavy juice to know exactly how that fits into the scheme of things, but the answer to the sugar issue is really found in multilateral trade negotiations.

In terms of changing some of our import programs and so forth, it's something we'd be willing to deal with, but this is legislation, this is the law of the United States. So we implement those laws regarding sugar, ensuring that whatever comes in is coming in according to the import program and what it allows.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

With what has happened on the softwood issue over the past number of years--essentially the ignoring of panel decisions--do you see that something like that may lead to disputes about sugar beets, where even though we may have a justifiable case, duties or surcharges may still be levied, knowing that with the precedent of the softwood deal the Americans would never have to pay the money back, or only part of it, or something like that?

[Gary C. Groves]

I don't consider that to be a precedent for the sugar program. The way we administer that program, we buy a lot of sugar from outside the country, but it's very much controlled.

In terms of challenges and so forth, our basic approach is that we're going to take the actions that we feel we are permitted to take under the WTO, under the international trade agreements. If anybody doesn't necessarily agree with those actions, they can challenge us, but those are the actions we take on that program or whatever program. We feel we're consistent with our international obligations.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

For organizations such as that, is there an atmosphere of friendliness as opposed to an adversarial one, or is it just healthy competition? On this committee, I think we're perhaps trying to build some bridges in terms of understanding. Having gone through some of the BSE issues previously, we don't really want to see that happen in that tenor again. Could you say that some organizations are perhaps more assertive in their defence?

[Gary C. Groves]

I think most organizations are assertive in what they see as their rights, whether they're cattlemen or whatever, but it's always good if we can develop alliances between the industries. It has really helped us in the case of the BSE. The relationship between the National Cattlemen's Beef Association and the Canadian Cattlemen's Association has been a close one and one of trust. They obviously are competitors, but they've realized that their future is tied together.

We've had this where we've had tomatoes. Finally the industry is realizing that they need to cooperate rather than litigate. The more we can have industries doing that, whether it's in hogs or whatever, and the more that we as governments can encourage that, the better off we're all going to be.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you.

[The Vice-Chair, Liberal, Paul Steckle]

Thanks very much, Mr. Boshcoff.

Before I go to the next questioner, I just want to elaborate a little bit on one of Mr. Boshcoff's questions that you responded to, and that has to do with the response you gave on trade rules.

While trade rules should be clearly written and understood by both sides, you say we may not always agree with your interpretation of those rules. That's a fair statement, but somehow when we enter into that arena, we then find ourselves into an appeal process and we have to prove the onus. That is what has led us into many of the areas where we've had disagreement.

I think we need to clearly and perhaps better understand or try to understand and agree that we try to live by the same rules. I think Canadians have sometimes felt that we have tried to live by the rules, or that we're the smaller player and we have to live by the rules, but somehow others—namely the United States in this case—do not always live by those rules. We then have to spend our money to prove that you haven't. Of course, the appeal process then goes on and this becomes a long, drawn out process.

This has caused some of our problems, and we need to get beyond it. I think we need to do better on that front.

Mr. Gourde, for seven minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

First, I would like to thank the USDA officials. About ten days ago, I was at the Canadian Food Inspection Agency with our own officials, and we had excellent co-operation from the American officials on the golden nematode issue. Our two countries are making good progress. I think it is important for the future of both our countries to have sound agreements and to find ways to sort out our problems.

There is a lot of talk about intervention protocols. I think it is quite beneficial for Canadians and Americans to find joint solutions to the problems that can and will certainly arise.

In a context of globalization, many parasites can spread to the North American continent, either in the United States or in Canada. In the future, we will most probably have to regionalize the issues, just like we did with the nematode issue. It is important for both our markets in Canada and the United States. Whether we like it or not, we share this continent, and the market is becoming more and more globalized.

Do you think that in the next five to ten years we could agree on memoranda of understanding on a wide range of potential problems, or should we do it just on a case by case basis? What is the position of the American government on this?

[Gary C. Groves]

We would like to go about it as broadly as possible. Case by case, it obviously takes longer, but we are very much for harmonizing and integrating the industries on both sides of the border to the extent that we can. I think we are fully prepared to talk about ways to better do that or to do that in a quicker fashion.

There are obviously certain sectors in which that's not going to be the case, but, by and large, there is a lot more potential for harmonization. For example, in fruits and vegetables, there are areas that we can work on together to adopt similar regulations, similar standards, and really help to integrate some of these markets. It serves both of our economic trade interests to do so.

Often it ends up being on an individual sector basis or whatever, but our position is that we're ready to go forward in a number of other areas. You just can't do them all at once, but to the extent possible, we are willing to talk about further areas of harmonization. That's really what the whole process of the security and prosperity partnership is about. It's about looking at further ways....

We have NAFTA. We have the integration that we have. But where do we go next? What are the areas that we still need to be working on? All three sides are identifying these areas with priorities and so forth, and the basic goal is to move that forward. That gives us the broad umbrella to go forward, but a lot of the work is going to be done by individual working groups and individual sectors.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

I would simply like to mention that we appreciate this new cooperative climate. I know it did exist in the past, but I think that for the well-being of our two countries, we should keep this same direction.

The problems we will meet in the future will most likely be problems we have in common. I am sure the Canadian Food Inspection Agency will co-operate with the USDA in the interest of both our markets.

Thank you.

[The Vice-Chair, Liberal, Paul Steckle]

Are you finished, Mr. Gourde?

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Yes.

[The Vice-Chair, Liberal, Paul Steckle]

Going to the opposition side, we'll hear from Mr. Thibault—and if you can't conclude your seven minutes, you can share the time.

[Robert Thibault, Liberal, West Nova, NS]

Thank you very much. I have two questions.

First, I'd like to come back to the sugar beet issue, because I'm not too familiar with it. I learned this week about that issue, but I understood it to be an area of trade that had been ongoing between our producers and your market for a long time, and that it was coming to an end because of protectionist measures or lobbies within the U.S. market that would have until now been operating under the program, under your importation programs, with great fear that that market would be removed from those growers or from that area. I was wondering if you could explain your perspective or your understanding of this problem.

[Gary C. Groves]

I must say that I was not aware of this problem coming in, so I really would have to look into it in order to really give an answer to that. I'm sorry about that, but I just really don't know enough of the specifics to be able to answer your question.

[Robert Thibault, Liberal, West Nova, NS]

I thank you. I can't give you the specifics either because it's something I've learned about as an evolving question rather recently. But we would be interested to have follow-up if possible.