Evidence of meeting #60 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 programs.
Mary-Ann Hendrikx
I think we're really pleased with the actions that have been taken about the U.S. grain subsidies. The WTO is the place to start fighting these things.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
I believe we can do that. I believe there are ways around that. We've discussed various ways in which that can be accomplished.
But talking about programming and delivery of programming and where the money goes, the most recent program announced by government was, of course, the farm options program, which has now been scuttled, for those who thought they were in the program in 2005. So we really don't know where that one is, but $170 million out of $550 million being dedicated to account is certainly not a way to deliver money to farmers.
I'm wondering whether we should look at some of the other programs we delivered, CAIS being one of them, because it was very unpredictable and certainly there was a huge cost involved in getting the money to people--and of course the clawbacks in some cases. Surely we can learn from some of these systems.
I'm also wondering whether one government delivery would not be a better way of delivering, rather than having eleven governments trying to deliver money to farmers. There is one farm bill for the United States. Maybe we should take some lessons from the United States.
Conservative
Mary-Ann Hendrikx
That is true. Having seen how well Agricorp does it, though, I would hope that at some point there would be some efficiency and perhaps it would be delivered by the most efficient person to deliver it.
Conservative
President, Perth Federation of Agriculture
I think certain programs definitely would be better administered by the federal government. But I know the provincial government has also expressed on occasion that they'd be better able to address regional concerns, so I think certain things would be better addressed regionally by the provincial government.
Conservative
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you, Mr. Chair.
Thank you, madam, gentlemen, for being with us today.
My first question goes to Mr. Woods. In your presentation, one phrase caught my attention right away. You said that supply management should be a focus of domestic policy development under the market development trade pillar. I am quoting your phrase as I heard it. You have nothing to fear, Mr. Woods, since the government says that it will defend supply management. I don't see what you're worried about.
You understand that I am being a bit ironic.
No matter which government is in power, we just have to look at what happened in Cancun in 2003, for example, during the WTO negotiations. A preliminary document was made public, in which the government said that it was ready to make concessions on the supply management system.
More recently, the Minister of International Trade, Mr. Emerson, in a long interview that he gave to the Western Producer newspaper, said that supply management was slowing down current negotiations at the WTO. Even though he came to this committee afterwards to try and explain his statements, the fact remains that we are a little worried about supply management.
I would like you and Mr. Murray, who is a dairy producer, to respond to the allegation that supply management is slowing down current negotiations. We know that other countries in the world attack supply management and the Canadian Wheat Board, but I'd like you to tell me what you think about it.
Chair of Board of Directors , District 7, Chicken Farmers of Ontario
I think there was a question in there, but I will comment on some of the items I picked up.
With respect to the government support, yes, we have the House motion that the government supports supply management.
There have been some actions recently that give us concern. The Wheat Board was one, and most recently in the chicken industry is the decision on the non-import control list. I won't go into the technical details of that, but that basically adds.... Instead of having 7.5% access to our markets, it's now, with the extra 7 million, about 8.5% access to our markets, given that recent decision. That doesn't give me comfort that the support that has been pledged is actually being followed through on.
As far as holding up negotiations on international trade--this is only my personal opinion, but I suppose it is as valid as any of the other opinions that have been expressed on it--there are two or three big players in this. The two big players are the European Union and the United States. Until they come to some kind of agreement, no matter what we do, say, or offer is not going to sway them. So I guess our position is that there's little point in offering up supply management or any other items that are of benefit to Canadian farmers to try to push the trade deal, because it's going to have little impact.
I hope that's enough comment on what you asked.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
You are right. It was a comment as well as a question, just to find out what your opinion is.
Mr. Murray, do you want to jump in?
Board Member, Dairy Farmers of Ontario
Gladly.
I don't believe the supply-managed commodities are holding anything up at the negotiations. Of course the House motion in November of 2005 has sort of put a handcuff on our agricultural negotiator, Steve Verheul. The bottom line is zero tariff reductions and zero increase in the TRQs.
However, the thing that disturbs me is that we're not the only ones with that position. The European Union and the Americans are talking about a 60% reduction in the over-quota tariffs, but that will not require them to increase their market access to any other country. They're being very hypocritical when they're talking about reducing the tariffs by 60% and then talking about an increase in the TRQs, because they don't have to do anything.
We're being very honest when we're stating zero-zero, because if there is any deal that says that there's a reduction in tariffs or an increase in the TRQs, supply management is going to need help. It's going to be very serious. We need to talk about honesty and hypocrisy when we're talking about the WTO.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
We also hear it said that this motion is currently preventing Canada from doing anything. The same motion asked both that there be no compromise on supply management, and that producers wanting to export be given special treatment.
I have a hard time with the idea that Canada is down there, not saying a word to anyone and waiting to see what will happen. But the minister has said that he is going to sign an agreement anyway.
Do you think that that is a good position?
Board Member, Dairy Farmers of Ontario
No. From my perspective, of course it's not.
On the one hand, the government says they do support supply management, and they have actually shown that through actions--the implementation of article 28, the creation of compositional standards for cheese. On the other hand, well, they're going to sign a deal whatever it is, and they're not going to be part of the negotiations to create that deal.
Conservative
The Chair Conservative James Bezan
Thank you.
Your time has expired, Monsieur Bellavance.
Mr. Devolin.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
Thanks, Mr. Chair.
Thank you to all the witnesses for being here today.
Before I get to my question, I want to make a point. As the chair mentioned, this is our last stop. We visited nine provinces, and have heard now from all ten provinces in terms of agriculture representatives. Some of the comments that some of you have made are on the record; we've heard them before. If we don't pursue them, it doesn't mean we haven't heard them. It may just mean we had a long discussion about that issue yesterday, and want to try to talk about something else today.
Right now I'd like to talk a little bit about supply management. In general, what we're talking about here is business risk management, and certainly supply management is a part of that. Those two are linked. An important part of supply management is import controls.
Mr. Murray and Mr. Woods, I'd like you to explain something for the committee in terms of your commodities. Currently there are imports coming into Canada that are kind of getting around the rules, so to speak, certainly circumventing the spirit of the rules. I wonder if you could explain to us how that is happening and what you think the government ought to be doing to support supply management and make sure it continues to function properly, and in so doing kind of help you to manage your business risks.
I don't care who starts.
Chair of Board of Directors , District 7, Chicken Farmers of Ontario
I will go first.
As I mentioned before, under our international agreements there is access to the Canadian market of 7.5% of the previous year's chicken production. That's a fixed quantity. The change in the marketplace has changed the dynamics on what is defined on that list of products, or how it fits that list.
The decision by Minister Speller a few years ago basically fixed that at 7.5%. These changed products or changed recipes on the non-import control lists were limited in how many could come in. The recent decision basically reverses that and opens it up. Basically those who ask or request have a mechanism for bringing in imported products. I think the request was around seven million extra this year, where it's been two million historically.
So now that's about 8.5% of our previous year's production. By making that decision, that really breaks down the tariff pillar. That is a way around what the actual rules are.
The other part, and I'm sure Mr. Murray will speak about this, is article 28, restricting access because of like products. Europe recently made that decision. There was product being shipped into Europe from Brazil, basically with salt water in it. The percentages fit the actual definition of the trade agreements, but the European Community implemented the article 28, which gives it the right to say you're just doing that to step around the rules. We have that option to do that in Canada too. As I mentioned in my talk, we haven't chosen that.
So those are ways of circumventing the actual system, breaking down that import control.
Board Member, Dairy Farmers of Ontario
I will try to explain a little bit more how things started to come in and how the borders sort of loosened up.
In 1994, at the conclusion of the last round of WTO negotiations, there were tariff lines established. In somebody's wisdom, not all of our products that existed at that time were caught under those tariff lines. One of the current examples is chocolate milk. Chocolate and flavoured milks are not under any kind of tariff line and have no tariff. It was not until January of this year, when one processor actually started importing chocolate milk in bulk, that the situation was looked after, due to industry cooperation.
Some products were not included in the tariff lines. But then technology has changed since then, so our current problem with the milk protein concentrates.... I mean, the technology was not there at the time. There is a tariff line for milk protein concentrates, and we assumed that everything would have been covered, but the ones coming in are very new, so they have a concentration of 85% protein or higher. Then the Canadian International Trade Tribunal--and the CITT members, by the way, are all government-appointed people--in its wisdom ruled that they are not classified as a milk substitute, even though milk protein concentrates are produced from milk and meant to replace milk in the making of cheese and yoghurt. So the CITT rulings have changed an awful lot of that, as well.
Conservative
The Chair Conservative James Bezan
Thank you, Mr. Devolin. I'm going fast today.
We'll go to Mr. Atamanenko.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you very much for being here.
It seems to me that on this tour there are common threads that have been pointed out. There are crisis situations. I think transportation is one, and if we have some time, I'd like to get back to that, because frankly, the more I hear about what's happening with the railways, the more appalled I am by what they're getting away with.
I'd like to focus on tobacco with Brian and Mark.
We've been around this ever since I've been doing this. We've met. You folks have appeared before the committee. I remember, Paul, that we talked about it and said that there have been enough meetings and that we have to get to a high level. You even suggested a high-level meeting to get industry, government, and producers together to hammer out this exit strategy. Your proposals have been there. They're in black and white. I've talked with another colleague, Joe Preston, and we've gone around this. I've written letters on your behalf, as have others, I'm sure, and we've talked.
Here we are in a situation in which it's really not a cost. It's not going to take away from other producers. As you said, it's not an agricultural issue; it's a health issue. We, as a country, have decided that we're going down this path. It can be financed through tobacco, through taxes. It can be financed through some contributions from industry.
Why are we still at this stage? I don't understand that. What answer are you getting? Why is it so difficult for us to get together, for government to bring people together and hammer this out and let you folks exit with dignity? I don't understand it. Maybe you could explain that to us.