Thank you, Mr. Chairman.
My first part will be done in French and English. I'll do the introduction, and then Richard will give us a lot of facts and figures about what's going on.
I would like to thank you for having us here today. We need to have a debate on this very important issue, and decisions must be taken quickly. We cannot afford to wait six or nine months.
It is a bit strange to be here today. I feel like we are saying the same things that we said a year ago. I hope that you will be patient. We will go through the same exercise.
I will begin by describing the reality of dairy farmers right now. We are very concerned about the impact of future WTO negotiations. We are at the point today where we are wondering about import controls. After nine years of imports of butter oil and sugar mixtures and, since 1999, protein concentrates or isolates—use whichever name you like—milk protein is coming into the country without any controls. We have known that since January. The door is open to imports because of tariff line 35.04.
We are also convinced that all this is a question of price. It has nothing to do with functionality. We could have been making protein concentrates in Canada for a long time, but someone found a very cheap protein source, subsidized or not, depending on whether it comes from New Zealand or elsewhere, and they are trying to find justification in order to import it, because it is functional, etc.
The dairy industry receives no subsidies. Our income comes from the market, from consumers. Right now, the main focus of dairy farmers is the image of the dairy industry. Everything that is at risk is on the producers' shoulders. We buy back surpluses of non-fat solids at the CDC. We buy them back from the same processors who import protein concentrates. That makes no sense. We are taking protein that used to bring in $12 a kilo for cheese production and selling it at $1 a kilo to the animal production industry.
I have to say that this process cannot last if we're going to have a supply management system that is viable. We definitely know the processors are viable. You have to look at their numbers since 1999. They are viable. We're not jealous of that; it's just that if they're viable we don't want it to be done at our expense. There is a form of supply management for processors.
Import control for finished dairy products protects dairy processors in this country. They have high tariffs and they're in a closed environment. They compete with each other, and if they buy the raw material at the same price, they're not treated poorly. The over-quota tariff for them protects them as much as we do.
Coming back to the actual milk protein concentrate scenario, I don't want to play politics too much here. If I look at the scenario over the last two years, the previous minister who started a working group--and we were involved--definitely had the luxury of appealing the CITT decision. That bought time and kind of partly froze the issue. But since January 31, this new minister has had a hell of learning curve to get his mind around this in taking the proper decision. In between that and the confusion of all the technology and everything you can put with that, it's quite an amazing learning curve to take the right decision.
He does not have the luxury of waiting. A short-term decision has to be made here and action taken really fast. I know that Richard will get into some of this, but this matter has to be resolved and solutions found in the next month to month and a half, not 12 months from now.
We've heard from the processors. I think we could get into all kinds of technical debate here on what's right or what's wrong. The question is, do we still have milk supply management in Canada? We have a House motion basically saying that all the parties support supply management, and I think that motion is fairly strong. Now we're waiting for action on import control.
The WTO will be another process, but if we cannot take action on import control, with all the issues facing us.... Our farmers are wondering what the hell is going on and what we are doing.
I'll now pass it to Richard for all the technical aspects that need to be covered here.