Agriculture Committee on Dec. 5th, 2013

[The Chair, Conservative, Bev Shipley]

You have 30 seconds, so it would be a really short question.

[LaVar Payne, Conservative, Medicine Hat, AB]

I'll just say that hopefully this is going to turn out to be really good for the sugar beet farmers, because I'm in their corner, so to speak.

I want to thank you very much for coming.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Payne, well done.

Now we'll go to Mr. Eyking.

You have five minutes, please.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

Thank you to our guests for coming today.

My first question is about the ethanol and biotechnology part. At first, I was kind of thinking of exporting, and then we're importing, so I couldn't get that equation figured out. But in your answer, you were saying that we export a lot to the United States, and when we're short on it in the summertime, that's why we have to import it. That being said, there are little blips when we have to import it.

You talked about how you don't know how the investments that are going to be made in the industry are going to be able to increase the capacity that you could potentially have with Europe, right? So at the end of the day, are you quite satisfied with Canada's biotechnology strategy?

[W. Scott Thurlow]

As I said in my remarks, we don't have a biotechnology strategy per se. We have a renewable fuel strategy, of which we are strong supporters. We have been asking for some kind of a thought leadership piece from the federal government in this regard. We'd like to see it happen sooner rather than later, mostly because the Europeans have one and have heavily invested in it, and the Americans have a white paper that came from President Obama. This is something we should be developing here in Canada as well.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you.

My next question goes to the sugar people. Our committee has just returned from the United States, and we were right in the middle of their big farm bill. You guys are well aware of that. You've already talked about some tariffs on sugar going to the United States, but there's also a big subsidy, I take it, because they're talking about billions of dollars, so I have a couple of simple questions.

First, is the sugar in the United States mostly from sugar cane? Is that where they get their sugar?

[Sandra Marsden]

Yes, mostly. Actually, sugar beet would dominate, but they have both.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So the sugar beet dominates?

[Sandra Marsden]

Yes. Their whole price support program has principally fostered the growth of the sugar beet industry in the U.S.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I'm assuming that if our industry is not subsidized, and they have the subsidy plus tariffs, how can you compete here...? I would think that the farms have the same technology and equipment. With our dollar the same, how can we compete with those guys down in the States?

[Sandra Marsden]

How can we compete here in Canada or in their market?

[Mark Eyking, Liberal, Sydney—Victoria, NS]

How can we compete with the Americans?

[Sandra Marsden]

We actually have anti-dumping duties against U.S. sugar, which give temporary relief from unfair exports into Canada. Prior to 1995, surplus sugar imports were coming into Canada from the U.S. priced unfairly in a very big way. We have gone to the International Trade Tribunal to address that, so in Canada that has helped us.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So that keeps your sugar from coming in?

[Sandra Marsden]

That's the unfairly priced sugar. Some still does come in, but we don't need to get into the complexities of that.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Your exports would be in finished products probably.

[Sandra Marsden]

Most of the exports from Canada would be in confectionery, bakery, and so on. There are quotas for some of our sugar-containing products. We're very competitive, because our price is based on the world price and because we have had to compete with these giants for so many years. So if borders were open—our border is open—around the world, we think our industry would do very well on both the beet side and the cane side.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That's the American situation and how they're rolling, but let's look at Europe. I'm assuming they use sugar beets, too. Would Europe be buying much sugar cane or brown sugar or whatever out of the Caribbean, or do they get their sugar from the sugar beets within the European Union?

[Sandra Marsden]

They have a very high price support, which reflects that tariff, so it's well over $1,000 a tonne.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That subsidy is going to, of course, stay there?

[Sandra Marsden]

It's going to stay there. The tariff wall is going to stay there. They also bring in raw sugar for refining and export. We also have anti-dumping duties and countervailing duties against the European Union for the same reason, because they are a threat to our market.

They are removing their domestic quotas in 2017, so there's going to be a bit of a bloodbath, in our view, because they will no longer be restricted as to how much they can sell in their domestic market, and they will no longer be restricted, in their view, as to how much they can export. Right now they have a WTO limit, but the view of the European Commission is that they can exceed that.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So with their wall coming down and ours coming down, you're going to see kind of a battle?

[Sandra Marsden]

Well, their wall isn't really coming down. Canada's beet sugar can't compete with 16 million tonnes. It will have some access, but we need to maintain those protective duties for that unfair trade, but that's a separate matter for the Canadian tribunal.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

What are you looking at in percentages in 10 years' time, with regard to your increase in sugar production in Canada with the European Union agreement?

[Sandra Marsden]

For the sugar-containing products, we've estimated $100 million in additional access. We haven't estimated the value for beet sugar, because that's really a commercial measure that's benefiting just one company in Canada. That will be for them to evaluate.