Evidence of meeting #24 for Agriculture and Agri-Food in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was deal.
A recording is available from Parliament.
4:50 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
The NAFTA would be the one that had the greatest impact on us. I think the sectors would vary, but our overall trade between Canada and the U.S. has doubled since the NAFTA, so—
4:50 p.m.
Conservative
4:50 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
A lot of the other countries that we've signed trade deals with so far have not been really.... There may be pockets where some of our agricultural sectors have benefited, but to my point, we really haven't seen the kind of broad trade deal that we need to make a really significant impact across the country for agriculture across the board.
4:50 p.m.
Conservative
4:50 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
Listen, the trade agenda right now is phenomenal. The EU, Korea, Japan, TPP, and India, these are major economies around the world, where in most cases we have trade relationships, but we can also enhance them. These are the kinds of deals that will really make an impact on the agricultural sector. Combined, just those five deals will easily bring in, I would conservatively say, $5 billion in additional trade—$3 billion with the EU alone.
I think the government's current trade agenda, looking forward, is really where the money is for the Canadian agricultural sector, and where the opportunities are. There's a great benefit right now to doing a trade deal with the EU, and also the Asia-Pacific, particularly for sectors like our livestock sector, where of course we have to sell the whole animal around the world. We see different tastes, and we can really start to grow production when we're servicing those two areas of the world.
4:50 p.m.
Conservative
4:50 p.m.
Vice-President, Government and Commercial Relations, Viterra
If I could just add a specific example to your question of do we want to see bilaterals and what's the impact—and the answer is yes—I would turn to the recent free trade agreement Canada signed with Colombia. From an exporter's point of view, what that has given us is immediate, tariff-free access on peas, lentils, and chickpeas. It's especially important because we had difficulty getting into that market because the Americans had preferential treatment. It may not sound like big numbers—a couple of hundred thousand tonnes—but it is worth a lot of money. It, again, provides producers with access. So those types of deals, where it's demonstrable that we do have access and we are growing that market, are important.
4:50 p.m.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Thank you.
I actually had the privilege of being at your Vancouver facility, the Viterra facility. I was standing there watching grain come in and grain being loaded on ships.
You realize, of course, with the passing of the Marketing Freedom for Grain Farmers Act, there's been a change in the way that farmers can market their grain. It's the same for companies that might want to market Canadian grain internationally. So I'd like to ask you, as Viterra, do you see opportunity here? Do you think this is a good thing? Are you looking forward to exporting our high-quality product to other markets?
4:50 p.m.
Vice-President, Government and Commercial Relations, Viterra
To answer your last question first, are we looking forward to it? The answer is absolutely, yes. To be participants in all commodities across a broad spectrum and into the international marketplace, I think at the end of the day it will result in benefits for producers. I think it is a good thing. It will provide producers with more options on who they choose to deal with, whether it's the Canadian Wheat Board, ourselves, or all of our competitors. Choice is always a good thing.
I am convinced that this choice will lead to a more competitive marketplace. With competition you get efficiency, and I think you'll see us, as companies, out there trying to secure that farmer's grain.
Collectively, as an industry, we've spent the last six months, as we go forward to August 1, redoing our systems, finance, and accounting; getting our financing in place; and making sure we have all of our logistical systems ready to take on the new marketing environment. We will be ready, and I think it will be a good-news story for the producers and for the industry.
4:55 p.m.
Conservative
4:55 p.m.
Conservative
4:55 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Thank you, Richard and Kathleen, for coming today.
Kathleen, you talked about the need for the trans-Pacific partnership and the losses that could accrue without gaining access to that trans-Pacific partnership.
We know the elephant on the table, and from my understanding it's supply management. At least that's one of the barriers, I'm told. Do you agree with that? If you agree that is a barrier, how do you think it should be dealt with?
4:55 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
I don't think you should believe everything you read in the media.
Two weeks ago, we spent a couple of days meeting with all of the TPP embassies here in Ottawa. If you talk to New Zealand, they will absolutely tell you that Canada's supply management policies will stop them from accepting us in the TPP.
With the U.S., it's a little bit more complicated. From what we can gather, every other country is prepared to support us, and certainly not oppose our membership. The issue with the United States—and that's where I would be particularly concerned right now—is just that they're frankly not paying attention to us. I don't think it comes down to any particular protectionist policy we have in Canada. The U.S. has its own protectionist policies, and they certainly have them in abundance on agriculture—their own dairy sector, and their sugar policy as well.
We have a lot of work to do with the Americans. I don't think that Canada's supply management policy is the specific problem or the only problem.
I'm not a negotiator. I'll tell you my perspective on what has worked in the Canada-EU CETA. For the first time in negotiating a trade deal, Canada made no exclusions to its negotiating mandate. You have no idea how much that has helped us in the context of Canada-EU. It sends a signal to the rest of the world that we are serious about talking about trade. At the end of the day, every country has sensitivities. It's up to our negotiators to defend those sensitivities, or narrow the gaps in them, or find ways to make the deal work.
Providing a comprehensive negotiating mandate doesn't mean we're trading off every sector in Canada, but it helps us because it sends a signal at the beginning that we're prepared to trade.
4:55 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Okay, thank you.
Do either of you have any understanding of innovation and commercialization in gaining market access before I pursue that? I tried with the last witnesses and neither of them did, and I wasted time asking the question.
Do either of you...?
4:55 p.m.
Vice-President, Government and Commercial Relations, Viterra
We're certainly involved with research and innovation as a company.
4:55 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
All right. Let me ask you this.
A number of witnesses have said that part of market access is definitely trade agreements. I don't disagree.
The other part is creating products that are wanted and needed by the market, not just in Canada but around the world. To do that, you need innovation; you need expenditure on innovation and commercialization. Our business expenditure on research and development is down to 1% of GDP. It was closer to 2% in 2006. The average in OECD countries is 1.6% of GDP.
Do you agree with the notion that others before the committee have stated—that we need to be focused now on that as well, supporting commercialization and innovation in a more robust way?
4:55 p.m.
Vice-President, Government and Commercial Relations, Viterra
I would say definitely yes, it's important to focus on the research and innovation.
I mentioned earlier that I sit as co-chair with Fred Gorrell on the grains round table. In fact, we have one of the working groups specifically on research. That's dealing more in the aspect of how do we draw in additional research dollars.
We can't always rely upon government to always come to the table and provide those dollars. Working with farmers—using end-point royalties, for example—how do we as an industry bring in those dollars that can be directed towards research, whether it's through the universities or through public programs?
It does vary by sector, for example, on canola. To your question about whether or not we listen to the end user and what type of feedback we get from them, canola's a very good example. Accessing the U.S. market, we've developed, for example, nexera canola that is used primarily in the frying market. It's a healthy oil that was developed through innovation and research. It is a high success story with Dow AgroSciences. That's been private money.
Certainly on cereals we've seen more public money.
We are wrestling with that right now. The Saskatchewan government just held a summit last week, and a number of the federal officials were there. How do we revitalize our cereals industry? How do we revitalize our research on wheat and durum and barley? That's what we have to do next. What types of funding models can we develop to attract the dollars and then target them for innovation and research?
5 p.m.
Conservative
5 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
Thank you, witnesses, for being here today.
I'm actually going to go into two areas. I want to talk a bit about the Market Access Secretariat, but before we go into that, I just want to talk about sensitive products.
Ms. Sullivan, when we talk about sensitive products, it seems like 5% is the number that gets thrown on the table. With 5% being that number, how would that impact our beef and our grains producers, for example, if it stayed at that number? What should that number be for those types of producers?
5 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
Do you mean in the context of the WTO?
5 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
I think that right now the number they're looking at is 4%, with the possibility of buying 2% more.
I'll be frank with you. At this point in time, if we could get the WTO deal—the text from 2008—through, we'd be thrilled. We'd be thrilled to get something done on the WTO and then regroup and start to figure out what's next.
No matter how you cut it, I think the WTO has fallen short of everybody's expectations. Even the most recent WTO text from 2008 fell short of everybody's expectations in terms of what was possible in that round of multilateral negotiations. At this point, our view is that we're making progress: let's make progress and move forward.
I think we also accept that probably the text that was on the table in 2008 is a moot point right now. Most likely, countries aren't going to go back to the table for a year, if not more. At that point, we're probably looking at starting—
5 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
So you're fine with the 4% that's being recommended at the WTO?
5 p.m.
Executive Director, Canadian Agri-Food Trade Alliance
On the 4% and the ability to buy 2% more, yes, we were quite happy with that. We were quite happy with all aspects of the deal. It is a balance.
5 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay. That's interesting.
To go back to the Market Access Secretariat, Mr. Wansbutter, maybe you can help me, because I know you've worked through that. I know that we've had some issues come up, whether it's sclerotinia in the canola being shipped to the U.S. or, for example, the blackleg issue that we had going into China.
In working with the Market Access Secretariat—and I want to be constructive here—are there things that you think we could do to make it even better, as far as how we structure it is concerned, when we look forward, and how it interacts with the industry and the CFIA? Are there things you like right now that you think we should keep in the Market Access Secretariat, things where you might say that's the way to do it and it's professional and done really well? Is there any advice you would give us in that scenario?
