Agriculture Committee on June 1st, 2006

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

Amongst the table here, we have some quite solid representation and skilled people with consummate experience, and I'm just wondering if there is an overriding philosophy that drives you to say that Canadian milk producers, and other parts of the agricultural component, are things that we should be doing our best for in government to help these people, as opposed to perhaps saying, well, there are these international rules, so we'll just acquiesce.

[Richard Tudor Price]

As Graham said in his introductory statement, we are strong supporters of supply management and strongly subscribe to its principles. Over the years it has had to adapt to changes, and it's been very successful in doing that. I think back to the Canada-U.S. trade agreement, which brought about a lot of change, and the change from import controls to tariffication, which changed the rules of the border. But I think supply management in dairy has been a considerable success story, and we will do our very best to support what the industry has planned to keep it that way.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Boshcoff.

Mr. Atamanenko, any redirect?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

No.

[The Chair, Conservative, Gerry Ritz]

Mr. Steckle.

[Paul Steckle, Liberal, Huron—Bruce, ON]

As we discuss this matter this morning, we can talk about tariff lines and we can talk about numbers, but really, the average person out there doesn't understand. I'm sure the average farmer doesn't understand. But there is one thing he does understand--namely, is he going to be in business tomorrow, given the circumstances of the last four years, given our BSE issue, and given everything else that's happened in the dairy sector?

A dairy farmer has to seriously evaluate, especially the new generation of farmers coming along, with sons taking over the farming operations, if it's really in their interest to do so given the uncertainty in WTO and all the rest of it.

A number of years ago it was butter oil. That product displaced much of the product we used to garner from the dairy, with the butter fat. In a number of products, but certainly in the ice cream business, we reduced the ice cream business domestically, the use of product found here, to about 50%. There's been a huge cut in our ability as dairy people to supply a market with our own product. Now we have the MPCs, and we have this product in here now displacing the proteins in a variety of products.

You have to really wonder, do we have in this country a food policy? I don't believe we do. We sort of tweak away at the edges, but we really haven't gotten down to the seriousness of what food means to this country.

There isn't a consumer in this country who would seriously believe they're paying too much for a product on the shelves. I mean, they pay a high price for the product on the shelves, but relative to what the farmer gets, they're paying very little. The farmer is getting absolutely nothing for his product. If it weren't for supply management.... It's really the only sector we have left that has any degree of stability and future, if we can hope that we continue with supply management at WTO. If we don't, then I don't think we have very much left.

That sounds much like a defeatist, but that's coming from the farm community, one who has family in the dairy business. I can tell you that my own family members are getting out of the dairy business because they simply see no end to these kinds of things happening.

We have a surplus of milk powder in this country. Who pays for the storage of that milk powder? The farmer. Should not the further processors who are displacing that product with other product also share in that? Should consumers somehow share in the costing of the storage of that? Obviously you can't simply put it back onto the backs of farmers every time you make a decision.

We would like to think that the departments--CFIA, Agriculture Canada, Trade, or whatever it is--first and foremost think about what's right for Canadians. Let's stand up for Canadians once and for all. Let's let farmers believe we stand up for them.

I don't believe they've heard that message for a long time, and it's time they hear that message again.

[The Chair, Conservative, Gerry Ritz]

Any comments from the panel? No? All right.

Mr. Steckle, all done?

[Paul Steckle, Liberal, Huron—Bruce, ON]

I'm all done.

[The Chair, Conservative, Gerry Ritz]

Mr. Bellavance.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Earlier, we heard that legislation was required. I have here a document from the Fédération des producteurs de lait du Québec indicating that with respect to customs tariffs, the Minister of Finance or governor in council can also make decisions regarding the denomination of tariff line 04.04, making it cover all milk protein concentrates, regardless of protein concentration. The advantage of taking this route is that we avoid amending the legislation, and this route is perfectly valid under Canadian law and solves the problem in a very direct manner. Could someone comment on this?

[Dean Beyea]

If what we're doing by changing an explanatory note is having the effect of changing the tariff rate--in this case, changing it from where it's classified now in chapter 35, under a 6.5% tariff, and moving it to chapter 4, which would classify it under a 270% tariff--and raising the tariff for those products, then that would require a legislative amendment. There's no provision within the tariff to allow the Minister of Finance to recommend such a change.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I understand that a number of avenues have been explored. Has the Department of Finance—in fact, I'm asking the same question I did about section 28—obtained a legal opinion on what you have just told me? Do you have any documentation in support of your statements?

[Carol Nelder-Corvari]

I want to be as clear as possible here. The customs tariff is the taxing authority; it's tax legislation. If the Minister of Finance chooses to raise taxes, the normal procedure—and it's a basic principle—is that it goes forward as legislation before Parliament.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

So you do not have a legal opinion on this.

[Carol Nelder-Corvari]

We're provided legal advice on an ongoing basis on issues such as this. And, yes, we have been provided legal advice that we would have to go forward with legislation if we were going to change the status of milk protein concentration.

[The Chair, Conservative, Gerry Ritz]

Is there anyone else?

Madame DeBellefeuille.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Since you began testifying for us this morning, I have heard nothing reassuring. The government's philosophy does not seem based on the need to safeguard Canada's dairy farms, or to help them grow. I am quite concerned, because I feel the government does not need to wait for the results of a task force before it introduces a bill in Parliament. Parliament is flooded with bills at the present time. If the government wanted to send a clear signal today to dairy producers to let them know that it considers this sector important and is concerned with furthering its development and stability, the replies might be more encouraging than the ones we heard this morning.

[Graham Barr]

The government has been very clear in its support of supply management, both currently and for the future. We're just here today to provide the facts, including on the process for undertaking some of the options we've been discussing, and also to discuss the possible implications.

[The Chair, Conservative, Gerry Ritz]

Great.

Thank you, ladies and gentlemen, for your presentations here today.

Thank you to the committee for all of the great questions.

We will be going ahead with a report that will go back to the House, of course, at the end of this.

I guess, Mr. Satherstrom, you're the only one with some homework. There was one question that you were going to get back to us on with some material. I thank you for that in advance.

That brings this meeting to an end. We stand adjourned.