Agriculture Committee on Feb. 27th, 2007

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

No, I'm not going to give you examples as to what is being talked about, but I can tell you that there are huge pressures when you get into negotiation. Just on agricultural products, we export $25 billion a year—$25 billion a year. So it's extremely important for us to have the best possible access to markets, the lowest possible tariffs for other countries, the least amount of domestic support and trade-distorting domestic support, and the elimination of export subsidies. All this is hugely important for Canada, which exports $25 billion in agricultural products from the country.

So getting a good aggressive deal is of course in Canada's interest. Here's what I would tell the young farmers who are starting out. Canada's government fully supports supply management. We're standing behind it in word but also in deed, as you've seen in the last few weeks. We are standing tall, and sometimes all alone, in Geneva and elsewhere as we stand up for the SM5, and they should put that into their overall decision-making process. Everybody is going to make business decisions as to what they want to get into and expand, how far they want to get into it, or how big an outfit they want to have, how their business plan will work, and how their financing is.

We don't tend to make those business decisions for them, but they know they have a government that stands behind supply management and a government that's working hard to make sure that $25 billion of exports doesn't fall by the wayside either.

That's why we have both defensive and offensive interests, and always will have, and they will continue within these negotiations.

[The Chair, Conservative, James Bezan]

Thank you.

We had originally booked your time until a quarter after four. We are over that time. I do have two other questioners. Are you in a rush to leave, or can you take two more questions?

[Wayne Easter, Liberal, Malpeque, PE]

As long as they're tough questions.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

We have to leave at 4:30. I think I have another meeting.

[The Chair, Conservative, James Bezan]

For sure we'll be out of here by 4:30, so we're going to go to Mr. Gourde and then Mr. Gaudet.

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

Thank you, Mr. Chairman.

I would like to thank the minister and the witnesses for coming here.

Grain prices are climbing and this trend seems to be holding. Given the situation, will it be easier for you, as a negotiator, to enter into bilateral agreements while at the same time defending supply management?

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

I'm not sure that the price of grain is going to actually make a difference in our overall efforts to achieve reductions in domestic support. It may make it easier for other countries to accept a reduction in support. For example, my hope is that corn prices have come up quite a bit, the soybean prices are up quite a bit, and so on. I'm hoping that may be a factor in the Americans, for example, reducing their overall level of support in their next farm bill, because it just makes it easier for them when prices are on the upswing. So I guess there's some hope there.

I don't think it affects our position too much, because we're already well within the limits of the kinds of numbers that the WTO is talking about on support programs, generally, but I'm not sure.

Did you have something you wanted to add?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Minister Strahl has commented well on the WTO. I would just make the general observation that when grain prices are high, it's evidence that there's a shortage of grain out there.

Outside of the WTO context, there are opportunities for bilateral trade deals, many of which would create opportunities for agricultural products. It's much like when energy prices are high. We're seen as a petro-giant, if you like, and I think it gives us some pretty good opportunities when it comes to negotiating some trade bilaterals that we wouldn't see if our grain was in surplus.

In fact, I know there are countries out there today that we don't have free trade agreements with that would like to be buying Canadian grain. They basically are being disadvantaged in buying Canadian grain because they're in a free trade agreement with somebody else and not with us.

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

Thank you.

With respect to article 28, I think that the application timeline and, during the second phase, the cheese composition standards, will represent an enormous challenge.

Do you think that it will be difficult to tie the two, in a coordinated fashion, so that we can protect supply management?

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

I don't know about coordinating the two issues you're talking about. As I mentioned earlier, one of the best long-term measures that I can see for supply management is to have a government that supports supply management. That helps, and we have that right now. A second is to have the dairy industry working group, both the

processors and dairy farmers, to work together for the industry. I think that the composition standards are part of the solution. Indeed, if the farmers are happy with the agreement and the processors' products are in demand on the Canadian market and elsewhere, I think that this will be the beginning of a good solution for the industry.

The taskforce must continue working because there are other issues that need to be resolved, such as, for example, the price of milk, yogurt and other dairy farm products. I think that industry members should work together.

Article 28 is, I think, necessary at this time, given what has happened on milk protein concentrate imports over the last year or two. The dairy farmers brought this to our attention, and we did our own investigation into how much of that product was coming in. With the trend, the graph of what's happening there, it just became clear to us that we had to take some action. By using article 28, we capture not all, but most of that MPC import into Canada and can cap it at a certain level.

So I think there are two issues that we addressed the other day. One is a long-term solution dealing with milk use. The working group will talk about everything from pricing to other issues that exist in the industry. As well, we took the measures to address the other issue, which is milk protein concentrate imports.

The other thing it does is send a message to the industry that the government is serious about long-term answers for the SM5, and particularly for the dairy industry. We're serious about it, we're willing to take action, and we're willing to work with them. I meet often with the executive of the dairy farmers. I met with them a couple of times in Davos when we were there, because obviously part of the answer is to work closely together for the good of the industry, and we're doing that.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Gaudet, for the last round.

[Roger Gaudet, Bloc, Montcalm, QC]

Thank you, Mr. Chairman.

My question, which is for Mr. Emerson, was raised by Mr. Laurent Pellerin in a news release published on January 24, 2007. It reads as follows:

Is the federal government's stubbornness in wanting to weaken the CWB, a cooperative tool, not in keeping with certain statements made by government's spokespersons—and subsequently denied, which, shortly before the Christmas holidays, questioned the future of single-desk marketing and supply management in Canada?

I fear that, by working together, you are both weakening them. I would like to hear your comments on the matter.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Maybe I'll get Minister Strahl to comment, but I don't think there is any significant division in terms of our thinking within Canada. We're committed to supply management. I think Minister Strahl has commented many times that decisions on the Wheat Board would be taken here in Canada, and that's the position we're taking to the WTO talks.

Minister, do you want to add anything?

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

The only thing I would add is that there has been some effort, and a lot of it, frankly, is politically driven by people who are trying to link these two issues.

From our point of view, to ask farmers in western Canada if they would like to have the same matter of choice on barley that people enjoy in Ontario or Quebec is the right thing to do. You go to them and ask them. They never had any say when this legislation was brought in. There are a lot of different opinions on it, but we think by asking in a plebiscite where they would like to go with that is the right thing to do.

But there's no push that I've heard of in the supply-managed world to get out of supply management, to change it in this country. I have not seen any, nor am I aware of any, nor is this government interested in any—

[The Chair, Conservative, James Bezan]

Point of order?

[Wayne Easter, Liberal, Malpeque, PE]

On a point of order, in fact there are some producers who want to market outside the supply management system. I can get you that information, Mr. Minister. Choice in one could apply to choice in the other.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

The two are completely unrelated. You can always find somebody who wants to do almost anything. I don't dispute that may be possible. But the industry from coast to coast in every single province, every provincial government, this federal government, and this party are convinced that supply management is in the best interest of producers, consumers, and the Government of Canada. There's unanimity of support. If you can find a dissenter out there, I'll grant you there's the odd one floating around.

It's far different in the barley market, Mr. Easter. We'll find out when the plebiscite comes in, but there are certainly broad, disparate opinions on this. The best way to find the answer is to have a plebiscite on it. We'll see what people have to say.

The important thing is that this is a grassroots effort on the prairies, where people basically want the same marketing choices that the rest of Canadian farmers enjoy.

[The Chair, Conservative, James Bezan]

Mr. Gaudet.

[Roger Gaudet, Bloc, Montcalm, QC]

Thank you, Ministers.

Earlier, I listened to what you had to say about concessions to the United States and article 28. Don't you feel that we have made enough concessions to the Americans? Take the example of cabbage and asparagus, which is harvested in the spring. We have to use certain herbicides, pesticides and fungicides assessed by the CFIA.

In Canada, we are not authorized to use the same pesticides and fungicides that are used in the United States. Why is it that the Americans can use them and you, Minister, leave the door wide open for them?

I have been a member of the Standing Committee on Agriculture and Agri-food for some time now and, since you are the Minister of International Trade, I was not able to meet you beforehand. Now, I would like to ask you this question. Why is it that all of these products can come into our country but we are not allowed to use the same tools as they are?

As for the protestations that are going on in the United States, I would like to talk to them a little bit. I would tell them that they sell us many things that are not very good for our health, in my opinion. But you let them in any way. I would like to have a clear answer from you.

Thank you.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

I agree with you.

[Roger Gaudet, Bloc, Montcalm, QC]

Wait a minute! When I put this question to the Minister of Agriculture from the previous government, he told me that the Minister of International Trade could answer the question. You are now before me and I would like to have an answer from the minister.

I would like to have your answer, Minister.

[Chuck Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

I don't disagree with much of what you've said about the need to try to level the playing field with the Americans. When I'm travelling across the country I hear people's complaints about the CAIS program and a lot of things. But they often come back to me on the need to have a level playing field on things like access to pesticides, fertilizers, and all the other tools that input costs and that Canadian farmers use and need to be competitive.

Minister Clement, who is in charge of the PMRA, and I have been working within Agriculture Canada and the PMRA to try to find ways to harmonize our testing mechanisms and our approval processes with the Americans so Canadian farmers can get quicker access to the same types of pesticides at the same prices and compete across the border.

I share your concerns. We had examples in western Canada and other places this year. One example I can give you is the blueberry industry. We're using pesticides that are 10 or 15 years old, and you have to withdraw the use of these pesticides 10 days before harvest. The Americans are using pesticides that are cheaper and more effective on the pests, and they can use them to within three days of harvest. There's less residual pesticide on the product, they're better for your health and cheaper for farmers, but we won't let our farmers have access to them. We simply have to change those kinds of rules.

Ironically, blueberries from Washington State are in the supermarkets in Canada at cheaper prices because we don't have access to the same pesticides. It's a crazy system and we have to fix it.

[The Chair, Conservative, James Bezan]

We're out of time. I appreciate you extending your time to be with us, Minister Emerson and Minister Strahl. I thank you for your presentations and clarifications on government support for supply management. Thank you.

We are going to go in camera now.

[Proceedings continue in camera]