Agriculture Committee on Dec. 2nd, 2014

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

Now we're going to get some real work done here, Chair. Thank you.

Thanks for coming.

I have a couple of quick questions. One is on bison. I think you were mentioning the potential for selling bison in Europe. Could we have a couple of quick answers? Is this a new product? Is this something we have to market over there and do some taste runs on? I think it has big potential. Can we produce enough of that product in Canada to meet the demand? I think it would be a win-win for us over in Europe.

[Ron Davidson, Director, Canadian Agri-Food Trade Alliance]

We have been exporting bison to Europe since about 1990. We have exported both live bison and meat. It's been going in as bovine meat, so you don't see it separated out when you look at statistics, because bison is a bovine animal, so we've been entering Europe under the bovine designation.

It's a high-quality product. It's been going into Europe directly out of Canadian plants. We have more than one plant in Canada that is harvesting bison, and also we understand perhaps some of it is going circuitously through the United States. We have now, for the first time, a carved-out specialty quota of 3,000 tonnes for that bison. The industry that produces the bison is quite confident that we will build up our herd and take advantage of that high-quality, high-value product.

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

I have two more quick questions. One is for Matt.

Given the transportation issues over the last year and the sunsetting transportation bill we have here, does the federal government need to have something more long term that protects the grain farmers and have something more consistent for transportation of grain in order for us to capitalize on that new trade we're going to have in Europe?

[Matt Sawyer]

We absolutely need transparency and accountability on all sides. What we saw last year, as I mentioned before, was a complete train wreck. Unless we have service-level agreements in place and there's accountability in the process, we're going to run into this circle again. We have an opportunity, with the Canadian Transportation Agency review coming up in 2015, to make a real difference. I am looking forward to participating in that, and hopefully that will result in some decent change.

We need change if we're going to capitalize on these markets, because last year we did lose reputation as a reliable supplier of our product. When we look at the millions of dollars we are going to gain here.... Last year Dr. Richard Gray had a high estimate, but we're looking at anywhere from $2.7 billion up to $8 billion. I've heard that fiasco cost us, as producers, about $2.7 billion to $3 billion in this country.

Thank you.

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

Mr. Laws, you mentioned a whole web of potential roadblocks in section 37, article 7. Do we need to have trade lawyers on deck all the time when we're dealing with many of these issues going into Europe? Is it going to cost the farmers or whoever is selling the stuff? Are we going to have to have a lot of people on the ground there dealing with the so-called web of roadblocks or non-tariff barriers that we could be faced with?

[James Laws]

Certainly, it does point to where you can't comment on a deal until you see the text. We had been very fortunate that we were consulted along the way.

On that particular section on the quota administration, in Europe currently there is trading of quotas, speculation, so that doesn't help our current quota fill rate. That was a big concern to us. We were a bit shocked when we found out that the Europeans were somewhat intransigent and wanted to maintain some type of tariff system. We were pleased though when we read the details in that tariff administration; we were able to influence to get them to lower the deposits they require on products. Before the deposit on pork was far higher than that on beef. We managed to get them to flip that around to reflect the value of the product and the ability of the quota to roll over into another time.

Do we need lawyers? We certainly need to look at the text and make sure we agree with what it's saying.

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

Okay, thank you.

[James Laws]

We were worried about that section and the geographic indicators; we hadn't see the text. Now we've seen the text we're less worried.

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

Thank you.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

Now we'll go to Mr. Payne for five minutes, please.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair, and thank you to our witnesses for coming and enduring the discussion we had.

Speaking of bison, the former member of Parliament for Medicine Hat, Bob Porter, is in my riding and, guess what he has?

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

Buffalo.

[LaVar Payne, Conservative, Medicine Hat, AB]

Bison. All right, how good is that? Obviously, that'll put a smile on Bob's face, and the next time I see him I'll mention that to him.

I was interested in a couple of things.

First of all, Matt, you talked about your own farm. Obviously, you're buying land and you've been family farming for 100 years, raising barley, wheat, canola, and cattle. You did talk about what the impact would be for a farmer.

Could I get your feeling on what would happen for you in the benefits for your own farm?

[Matt Sawyer]

I think the benefits for our own farm would be the profitability side, of course. The price of grains would go up, and any time you have extra demand...you know supply and demand. I know that the livestock sector has suffered over the last few years, in pork and beef. Eighty per cent of the barley that's produced in Alberta goes into the feed industry, and sometimes that gets overlooked. It's not a romantic way to talk. It's always nice to say that your barley was accepted for malt quality, but we can't forget that our key customers are the livestock producers, who consume over 80%. Having more access for our livestock into the EU market is key for us.

We talk about the value-added side. There's nothing better for value added for a grain producer than to put your grain into an animal.

[LaVar Payne, Conservative, Medicine Hat, AB]

You did talk about beer, beef, and whisky. I can tell you that I've had the opportunity to sample all of those at one point.

Mr. Laws, what is that going to mean for the Canadian food processors, specifically in the CETA? Also maybe you could talk about pork. I'm also interested in how you see that changing and adding jobs for Canadians.

[James Laws]

Certainly we're very hopeful that these technical discussions that are going on right now between Canada and the Europeans do result in more closely linked meat equivalency protocols. Currently, for instance, the Europeans don't want the use of wooden pallets in the facility. We're hopeful that will change. They require a specific separation in the plant. We're hopeful that will change and that we can show them, look, we supply dozens of countries around the world that accept our system as it currently stands.

The Europeans just approved lactic acid, for instance, last year, so that's good. That helps control E. coli. They're currently reviewing their restriction on recycled hot water, which you would think they would immediately approve given the environmental and energy concerns. But once we resolve those issues and we can increase, we have estimated that we could have upwards of $1 billion of additional exports to Europe in beef, pork, horse, and bison.

Having said that, the Europeans, though, will also get duty-free access to Canada. You've seen these products in the store, the Dr. Oetker pizzas that are coming from Germany. They're currently faced with a 14.5% tariff right now. That tariff will be totally eliminated. At the same time, there'll be opportunity for Canadian food processors to export their finished goods to the European Union as well, duty-free.

Tthe opportunities will be there. It will be up to Canada to take advantage of that. Really, having access to 500 million of the world's richest citizens is quite promising.

[LaVar Payne, Conservative, Medicine Hat, AB]

Ms. Citeau, you talked about tariffs and non-tariff barriers. I'm wondering if you could expand on those issues and how CAFTA sees them as benefiting Canadian producers.

[The Chair, Conservative, Bev Shipley]

A short answer, please.

[Claire Citeau]

Usually tariffs are the number one issue within free trade agreements. This agreement addresses not only regulatory cooperation; we've heard the examples of customs administration, technical barriers to trade, and sanitary and phytosanitary issues. These include the recognition of equivalence in the production, processing, and inspection systems. You've heard examples of this in the meat sector, and for the canola, oilseeds, and some of the grain sectors as well. The creation of an agriculture working group, for example, will be dedicated to the exchange of information, with an effort on transparency and the timely approval of new traits, as well as cooperation on low-level presence.

These mechanisms are planned, and this is very new. This is what is so new for CETA.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Payne.

Now we'll go to Madam Brosseau for five minutes, please.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

I have just a few housekeeping questions, through you to the clerk.

Will there be a budget for this study?

[The Chair, Conservative, Bev Shipley]

We actually have a budget coming forward at the end of the meeting.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

It's not on the ordre du jour.

[The Chair, Conservative, Bev Shipley]

It isn't?

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

No.