Evidence of meeting #38 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was negotiations.
A recording is available from Parliament.
5 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chair.
Apart from the issue of article 28, there's that of compositional standards for products. Can you tell us how that will work and within what timeframes it will work?
5:05 p.m.
Executive Director, Food Safety, Canadian Food Inspection Agency
Our minister has announced that he has asked the CFIA to launch the regulatory process to work toward implementing the recommendations of the moderator of the dairy industry working group into our regulatory framework. We have begun that process already, and we have begun our internal processes toward the regulatory process, which includes the writing of the regulations themselves and also the writing of a regulatory impact analysis statement.
We have been in contact with key stakeholders to seek information that will be included in that regulatory impact analysis statement. Although the regulatory process can take 12 to 18 months, we are doing what we can to accelerate that process. It will follow Government of Canada regulatory policies, so it will be transparent and there will be the opportunity to comment when the regulations are pre-published in the Canada Gazette, part I.
Also, in keeping with our international obligations, there will be a comment period of 75 days and a notification to the WTO that these regulations are available for comment. Any comments that we do receive will be considered before we go to Canada Gazette, part II, so we are looking at trying to have a regulatory process that is approximately a year.
5:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
If I understand correctly, while these negotiations take place, the market continues to operate with the deficiencies observed by the dairy producers. We didn't turn off the tap.
For how long will we be dealing with that?
5:05 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
You're right. Until we've made a modification and negotiated that modification with the WTO, our current obligations will continue to apply.
5:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Time is working against the producers. The negotiation could last a very long time. So we could be dealing with this situation for three, four, five years or until a settlement is implemented. Am I completely dreaming? Otherwise, could these timeframes materialize?
5:05 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
As I said earlier, it's hard to predict the time this will take. I forgot to clarify one point earlier, and I'd like to do that now.
Once the negotiations have concluded, if everyone has agreed, we can begin the implementation process at the national level. The tariff change that we would propose would be implemented by means of an act. The normal legislative process would then take place. This information appears in the document that was distributed to you earlier.
5:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Can you give us any examples of situations in which this article was invoked, either in or outside Canada? I'd like to know the timeframes and the results obtained.
5:05 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
I can speak to you from my own experience. The situations I have known, but which are not recent...
5:05 p.m.
Bloc
5:05 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
Indeed, thank you.
That concluded within timeframes of less than four or five years. Those were much more reasonable timeframes. That memory goes back more than 20 years, I believe.
5:05 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Was the regulatory framework similar?
5:05 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
That was a modification implemented following a review of the tariff structure of a certain sector of the customs tariff. That review was conducted by an independent agency of that time, the Tariff Commission. Other negotiations took place under article 28. For example, a few years ago, we significantly simplified the Customs Tariff. Rates were subsequently affected, but that was technical and quite insignificant.
The rules of that simplification proved to be very interesting for Canadian merchants. For the government, that exercise resulted in foregone revenue of $90 million. The trading partners saw that that was really profitable for them. The simplification of the Canadian tariff was viewed by Canadian businessmen as a positive measure. That process didn't take very long.
5:10 p.m.
Conservative
The Chair Conservative James Bezan
Mr. Crête, your time has expired.
Mr. Devolin for five minutes, please.
5:10 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
Thanks, Mr. Chair. Thanks for being here today.
Earlier one of the other members asked a question about where the MPCs that are currently coming into Canada are originating from, what the volume was, and whether there has been a significant change in the volume in the last year or so.
I think the answer was that's difficult to determine, both where they come from and the volumes. If that's true, if you don't have access to that information, do these other countries declare themselves in terms of where the MPCs are coming from? When they declare themselves, do they tell you how much they're sending into Canada, and since you are unable to confirm that, do you take their word for it?
It would seem to me there's some basic information--which countries the MPCs are coming from, how much from each, and how that has changed. If you don't have that information now, how are you going to have that information before you get into these negotiations?
5:10 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
We're not saying that we don't have the information. What we're saying is that we have to dig it up, because we don't have statistics that we can point to that contain the import stats for that. It comes in an item that has more than one type of product coming in.
What we need to do is we need to really dig it up, do some more work at the technical level, Agriculture Canada working, for example, with CBSA to try to separate the imports of these products from the others that come under the same item. That's what we are doing right now. That's work that is important to do, because when we go to the WTO, we will need to be able to indicate the imports of these countries. It's just that it's not readily available. That's the word I was looking for.
5:10 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
I'm picturing some great big pile of receipts somewhere, and somebody is going to have to sift through them and determine what's actually included and tally that up.
Given the importance of this issue--I've only been here for two and a half years, but I've been listening to this conversation for two and a half years--I'm just surprised that the department didn't do that already, that somebody six months or two years ago wouldn't have said that we should actually compile this information so that we know. In retrospect, do you not think it would have been a good idea before now to actually pull this information together, so we actually have a sense of the magnitude of the problem we are dealing with?
5:10 p.m.
Chief Agriculture Negotiator, Negotiations and Multilateral Trade Policy Directorate, Department of Agriculture and Agri-Food
Part of the issue that we have been dealing with is that we really weren't sure where it was classified for quite some time. There was a ruling by the Canadian International Trade Tribunal that indicated we should be classifying it under a category that we were not anticipating we should be classifying it under. There was a ruling by the Federal Court that also upheld that. We were at various times sent down different tracks because of different rulings.
We have done some preliminary analysis, as Gilles has referred to, so we do know, but without complete accuracy, that most of these imports are coming from New Zealand, the European Union, Switzerland, and to some extent the U.S. We know where they are coming from. We just need very precise statistics for the purposes of the negotiations. That's what we're trying to nail down, because we don't want to get into any kind of debate or discussion on the statistics themselves with our negotiating partners.
5:15 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
Are these the source of the MPCs? Is that where they are coming from or where they were produced? For example, with respect to a multinational company that maybe produces the MPCs in New Zealand, but then within their own company ships them to the United States, and then they actually arrive in Canada from the United States, is that a trade dispute we have with the United States because that's the country they are coming into Canada from, or do we deal with the country where they are produced? The second part of that is this. What if there is fluid milk that crosses the border somewhere to be produced? How do you sort all that out?
5:15 p.m.
Senior Chief, International Trade Policy Division, International Trade and Finance, Department of Finance
I don't really have an answer to your question, but usually you look at the source in terms of where it's being produced. I don't know if you....
5:15 p.m.
Chief Agriculture Negotiator, Negotiations and Multilateral Trade Policy Directorate, Department of Agriculture and Agri-Food
Perhaps I can add something to that. What we'll be looking at in almost every case is where the product was actually produced. If we're looking at New Zealand, it was actually produced in New Zealand, and produced from raw milk in New Zealand. There are very few cases where we would see a lot of trade that it would be raw milk in one country that would go to another country and be processed. That doesn't really exist in too many places because of the nature of the industry.
We also have certain rules-of-origin obligations that are followed in determining where the product is actually coming from, where the country of origin is. If necessary, we would be looking at those as well. To this point, we think it's quite clear the products are coming and being manufactured in the countries I mentioned earlier.
5:15 p.m.
Conservative
The Chair Conservative James Bezan
Thank you, Mr. Devolin.
The bells are ringing.
I know Mr. Steckle wants to ask a very short question. We have a 15-minute bell, so very briefly, Mr. Steckle.
5:15 p.m.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
Very quickly, since this issue has been on the table for a long, long time, what sealed this deal to bring it forward at the Dairy Farmers of Canada convention? What finally made them take the move? You represent Finance. Were you informed? Were you supportive of it, and were all the departments that were involved--Trade, Foreign Affairs, Finance--supportive of this view going forward? If they were, what was your view towards the day, as someone said, they would “close the tap”? When does that stop? My understanding is that it hasn't stopped yet.
5:15 p.m.
Conservative