Agriculture Committee on Nov. 5th, 2013

[John Masswohl]

It is curious that the negative impact of COOL—of $640 million per year to the beef sector and about $500 million to the pork sector—is roughly around the same numbers that we're talking about in the benefit from the CETA. There is potentially that. There's a bit of a time lag because, as we've talked about, we still don't know yet when the CETA will kick in, whereas with COOL we've been hitting it now.

This has been one of our messages in terms of diversification and why it's important to have trade and open up all these markets. Even the small ones are important to get, because if you do have a barrier in one market, at least you have other outlets.

Really, the impact of COOL has been on live cattle exports. For Europe, we're going to ship beef. We're not going to send live cattle. But if we have trouble getting that full value of those live cattle in the U.S. market, we keep them here in Canada, we process them, the job is here, the beef goes over, and the value is added. It should work out to the benefit....

[Randy Hoback, Conservative, Prince Albert, SK]

In the last couple of years, I know that Minister Ritz has been all over the globe, selling tongue, livers, and kidneys, and all the fun stuff. Just out of curiosity, do you have any idea of how many trade deals, smaller or minor bilateral deals, we've done in the last two or three years, John? I know that you've been on a lot of those trips.

[John Masswohl]

There are the free trade agreements and then there are the market openings that have been very important in trying to get back all those markets that closed because of BSE. We've still got a few more things out there, but every time we get one more of those back—I don't have the number off the top of my head—but certainly we like to see them coming, it's that hit parade.

[Randy Hoback, Conservative, Prince Albert, SK]

Can I get you to submit that number to the clerk if you have a chance? Because I think that would be something to show in our report that would be good for sure.

Talking to my farmers I guess one of the other things is the calf price coming off the grass for this fall compared to previous years, just the price you're getting per pound. You guys are smiling. They're making good money and that's before the CETA kicks in. I think they're looking at the CETA and they're saying this is going to be much better.

One thing I do remember is last week the pork producers had their meeting, I think, if I can quote. I can't remember who the MC was, his name escapes me, but he made the comment about how there's a light at the end of the tunnel and it's not a train. I think that's something I heard quite consistently across Saskatchewan. I'm hoping some hog barns will be opening again back in Saskatchewan. How do you see the pork sector taking advantage of this deal, James? Do you see that?

[James Laws]

Absolutely. We have some pork facilities in Quebec that were exporting to Europe already, but with the increased price of the Canadian dollar it just wasn't worth their while. When we see this deal kick in and the tariffs eliminated, they're saying that absolutely they'll be back in that market. Others are very keen. They're looking at it right now and want to know more information, when it will come into effect, and they want to be ready when that deal starts. As John mentioned previously, of course they are encouraging us to advocate for a phase-in that's as short as possible so we can take advantage of the full amount.

[Randy Hoback, Conservative, Prince Albert, SK]

It's kind of curious; in the role of ParlAmericas, talking to a few of the ambassadors from Central and South America, they are very concerned what this deal may do to them because of the preferential market access. I'm sure the U.S. must be very concerned too. Any impact...or maybe give us some overview on how this positions Canada versus other countries.

[James Laws]

Again, it does give us an opportunity to get ahead of the Americans in this particular situation, even with the current challenges we have for the market into Russia. We are still supplying the Russian market—it's difficult at times—but the Americans are not. Again, with them having the advantage of Korea, we need to diversify away from the United States and get as many markets open as possible.

[Randy Hoback, Conservative, Prince Albert, SK]

Kathleen, on the green side of things, oats $119 a tonne, wheat up to $190 a tonne, that's almost $190 per acre tariff on an acre of wheat that's been going into Europe. What are your guys saying as far as capacity to deliver the product to that market? What do we need to do for an infrastructure? I know you touched briefly on the Port of Montreal. Are we going to have to be looking at more rail infrastructure, more ports, more container loading? Do Churchill and Thunder Bay need to be expanded? Have you guys talked about that and the implications?

[Kathleen Sullivan]

We haven't specifically around this deal, but as you know transportation is a long-standing issue for producers and exporters in Canada when it comes to agri-food products. When we as an industry grow, it's a good thing, but we always have to get our products somewhere and we have to have the infrastructure in place. So whether it's rail infrastructure, a trucking infrastructure...particularly when it comes to the EU the ports are going to be very important. That's not just restricted to the EU, don't forget, and I know you don't, but we are negotiating a deal with Japan right now, we're negotiating the Trans-Pacific Partnership and in the case of those countries and regions the product is going to go out the other side of the country.

It is essential that we not only maintain the infrastructure we have but that we're always looking ahead. If Canada is going to be a trading nation, then it can't just be reliant on producers and processors, we've got to have the infrastructure for transportation within the country to get to the processors and we've got to have the infrastructure to get the product off our shores.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Hoback.

Mr. Lizon, please, you have five minutes.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Thank you very much, Mr. Chair, and thank you to all our guests for coming.

I'm not a regular on the committee, I'm filling in for my colleague today. I do not represent a rural riding, I represent Mississauga East—Cooksville. The riding of Mississauga was full of farmland and farms maybe 20-some years ago. It's not now, it's an urban riding.

I would like to continue along the same line, planning for rural challenges. Before I do that, first I will ask a question, I don't want to disappoint Mr. Masswohl.

Maybe you could explain the basics to us, how the product weight and the carcass weight work.

[John Masswohl]

I was wondering if we'd get there. You've just used up all your time.

[Some hon. members]

Oh, oh!

[John Masswohl]

Basically, what it comes down to is there are different ways of measuring the weight of the shipment. For product weight, if you ship a tonne, it counts as a tonne against the quota, but for the carcass weight, a conversion factor is applied. If you ship a tonne of boneless beef, the conversion factor is about 1.3. They count it as 1.3 tonnes even though you shipped one tonne. If it's bone-in, depending on what the percentage of the weight by bones is, it's a lower conversion factor.

Generally we do a 1.3 conversion.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Thank you very much.

Now with regard to planning and challenges, some have already mentioned the labour shortage. How will we address that? It's great when you open new markets and you have new opportunities, but do we have a plan for how to get people to work and how to expand production on the farms and at the processing plants?

Kathleen, you mentioned canola oil. Not too long ago I was making an inquiry on behalf of a European company that was looking for a supplier of canola or rapeseed oil for biofuel, and the answer I got was, “Sorry, we can't deliver. We are at capacity.”

In what areas are we at capacity, and what are the challenges you see that we have to plan for?

[Kathleen Sullivan]

Maybe I'll address that first, and John and Jim probably want to talk about the labour issues.

One of the great things about this deal is that it seems as though trade deals move really slowly, but that does give us time to plan. We would expect that a deal concluded today will probably take two years to get through the legislatures, and that does give the industries time to start thinking about shipments to the EU and what kind of capacity they need. If you start to see deals closed in the Asian market as well, then you start to get the critical mass necessary for these plants to come on board.

I know in the canola-crushing industry there have been a lot of plant openings in the last few years, and I think they're still working to add more. I think the most important thing about the CETA is that industries have a chance now to start thinking about what kind of capacity they're going to need in two years and start putting in place the infrastructure they need to take advantage of this deal. It's not just that. You heard that John and his colleagues went over to Europe to visit countries. We also have to start going to Europe, because we want to sell products to those people. Having a trade deal is wonderful, but these are customers and we have to do all the customer service that you would do in any other industry. We have to travel to Europe and start to build the markets and the customer base over there as well.

I think the good thing about the CETA is there is time for these industries. They have a clear understanding of what's in the deal and they know it's worth their while to start building the infrastructure. They can start planning.

[John Masswohl]

Shortages of farm labour are a real problem across the country. There's a difference between seasonal workers and permanent workers. The Canadian Agricultural Human Resource Council has estimated that we're short about 50,000 full-time, year-round agricultural workers in Canada as well as a number of seasonal workers.

I know there are areas of the country that have chronic unemployment as well. The area I'm from, which is Malcolm Allen's riding—Thorold, Welland, that sort of thing—is one of those areas that traditionally have very high unemployment. But I just don't see 50,000 people leaving a place like Welland, and two of them going to one little place in Alberta, two of them going to another little place in Saskatchewan, and showing up every day and moving...so it's a problem. We have shortages and we have oversupply, but they're just not in the right places and they're not the people with the right skills necessarily, because a lot of the unemployed people tend to be in the cities.

Agriculture work, I tell you, is not easy work. It's very difficult work, and I just don't see that we're getting those people.

So part of the answer for us is really having a strong foreign worker program. There has been a lot of talk in the last year about the temporary foreign worker program, which maybe is a misnomer because we don't have only temporary jobs. We have some permanent jobs, so we need to find ways to bring people in for these jobs, and also to create a pathway for them to become either permanent residents or citizens and fill those jobs permanently.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Lizon.

We actually have enough time to do four three-minute rounds, and we would do them as we did the first rounds. We'd start with the NDP, go to the Conservatives, give the Liberal another chance, and then go back to the Conservatives. That should take us to the time we should be adjourning.

Mr. Atamanenko, you have three minutes.

Oh, I'm sorry. Madame Raynault, go ahead for three minutes.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

Ms. Sullivan, in your document, you say: "The CETA has established mechanisms to promote cooperation and discussion on regulatory issues and non-tariff barriers that impede trade."

Could you please tell me what those mechanisms are?

[Kathleen Sullivan]

There are a number of mechanisms that have been put in place for the CETA to address the non-tariff barriers, so in the text of the treaty itself, there will be language around the governments cooperating together. The two governments will in fact set up committees that will work together on a regular basis with an agenda of issues that they'll work through.

We also tried to use the negotiations themselves as leverage to solve problems that we're facing today. In that case, we received commitments from the European Commission to continue working on, for example, some of the issues that Jim raised earlier in his testimony around differences in how processing plants work on both sides. There are some of the things I refer to in the treatment of biotech traits. There are a number of mechanisms. What's really important, though, is that we actually see resolution of those issues before these deals are ratified. If we don't see those issues resolved, then really the value of the deal starts to evaporate.

[The Chair, Conservative, Bev Shipley]

Okay, you have another minute.

[Francine Raynault, NDP, Joliette, QC]

Mr. Laws, you spoke before about compensating dairy farmers. You know that there are a lot of dairy farmers in Quebec. Will they be compensated if they suffer losses?

[James Laws]

We don't know the answer to that question. I mentioned it because it concerns compensation that the government could give to the dairy industry. Should there be complications or a negative impact for those three companies with trademarks that would be lost, they would also hope to receive compensation similar to what the dairy industry gets.

[Francine Raynault, NDP, Joliette, QC]

Thank you.

I'm finished, Mr. Chair.

[The Chair, Conservative, Bev Shipley]

You have 20 seconds, so it requires a short answer.

Go ahead, please.