Agriculture Committee on Nov. 19th, 2013

[Martin Rice]

We have several examples where Canadian industry, because of such a great dependence on exports, has been quite adept at creating standard specifications. For example, in Japan there are a couple of cuts that really originated between Canadian suppliers and Japanese buyers. Canadians are known as being able to take care or attend to, and not afraid to change our production lines to meet these specifications. Jean-Guy has already in his text mentioned the Anuga show. We have a lot of people with European meat industry roots in our meat trade industry. Some of them will now start to develop these relationships, to begin the business of developing trade relationships between Canada and the European Union.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Let me just ask about the U.S.

Clearly, we're going to end up signing the agreement well before the U.S. does. Can you perhaps share with the committee how you see that being advantageous, this sort of window of opportunity before the U.S. puts in place their own free trade agreement with Europe?

[Martin Rice]

It's a wonderful position to be in because we're finding ourselves behind the U.S. in several other situations, notably Korea, but others as well, Latin and Central America, where they've gotten a head start on us.

I think, at the minimum, it will be three years before the U.S. has a deal with Europe. I've seen industry put positions down that they say are absolute must-achieve goals for their trade negotiators, which our experience would suggest are going to be pretty difficult to achieve.

We do have a critical head start here to develop trade relationships that will give us five years or more. It's up to us to make or break it, and that's a really welcome situation for us compared to what we've had lately.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

What I'm seeking, and perhaps you can clarify it for the committee.... When I'm having discussions with people in my riding or with farmers who might not be so excited about the CETA, they sometimes make the remark, “You're giving access to pork and beef if they can take advantage of it”. I'm kind of repeating what you've already told me, but it seems like you're very confident that your sector can, indeed, take advantage of this opportunity and, in having answered my second question, that you can certainly exploit this window before the U.S. puts in place their own agreement. Are you able to confirm that?

[The Chair, Conservative, Bev Shipley]

In 30 seconds.

[Martin Rice]

For sure, we've been limited by ridiculously high tariffs, ridiculously onerous barriers to entry. We have had some success already. There's notably one company in Quebec that did have some sales. Again, the tariff quota administration was so onerous that it just became impossible. There are precedents for it. Chile has a trade deal with Europe. It's smaller, but they do have a quota access, which is filled and which is under the same terms we can now look forward to.

[The Chair, Conservative, Bev Shipley]

Thank you very much. Right on time.

We'll now go to Mr. Eyking.

Five minutes, please.

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

Thank you, Chair, and I thank the guests for coming.

It's interesting, we're mostly talking about free trade deals here and the Canadian Restaurant and Foodservices used it as a platform to take a shot at supply management. But that's fair, that's why you're here.

I only get one five-minute question. I'm hoping that my colleagues will step up to the plate and hold you guys accountable if they're in favour of supply management. That's where my question is going to go.

I've talked to the poultry processors and the Canadian grocers association. They're in favour of supply management. They say it's because the quality stays consistent, and the size is quality, supply, and the price is stable. Without supply management they say it's only a minimal drop in a lot of those products.

I visited many states in the United States, especially the southern states, not the ones close to the border, that use the loss leaders of milk and that. Also in New Zealand—imagine, New Zealand, the land of the big milk—for cheese, yoghurt, and milk a lot of the prices are the same as they are in Canada, or a little higher. Some people think that without supply management we're all of a sudden going to have all these cheap products out of Canada. There are some studies out there on how much money you guys make on the milk. They say it's almost 50% on a glass of milk, so if it's a $2 glass of milk, you guys get $1 dollar from it. I don't know if that's true or not.

I have a couple of questions. My first one is: without supply management, because you're in favour of getting rid of it, for the sake of us destroying many of our farm families, is it that advantageous for you guys to make an extra quarter on a glass of milk?

[Garth Whyte]

Well, I should make it perfectly clear. We're not advocating getting rid of supply management.

With all due respect—

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

So you're agreeing with the Canadian grocers. Are you on the same level as them, then?

[Garth Whyte]

I'd say we're even a level above. We just finished meeting with the Canadian Dairy Commission. We've worked with the Dairy Commission. I'm presenting to the Chicken Farmers of Canada, at their invitation, next Tuesday.

You know, I used to be in favour of Nortel. I used to be in favour of Polaroid. And someone didn't stand up and state some facts. For example, the number of farmers is declining. This is dairy farmers, Statistics Canada, their number is declining. Dairy is being priced off our menu—butter, cheese.

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

But just on that, you know why it's declining. Some of the farms are getting a little bigger and becoming more efficient and bringing down the price of milk.

[Garth Whyte]

Yes, you're right. We're in violent agreement, by the way, okay?

What's happening, though, is that as a country, we have a succession problem. I am extremely worried that once we wake up and see that dairy is being priced off our menu, the number of farmers is declining, there's competition coming in through spent chicken and different things that are happening there.... A consumer survey shows that 70% were concerned. The lower-income consumers in particular, with less than $40,000 in income, are saying dairy is very difficult. If you're a single mom with three kids or a family with three kids, buying milk or buying butter.... When a kilogram of butter is more than a kilogram of meat, there's something we have to look at together. When there's little or no exporting....

First off, I'm not lactose intolerant. I use a lot of dairy, a lot of cheese, and I think we have some of the best cheese in the world. Somehow we have to find a way to have a win-win-win. A win for farmers.... By the way, our biggest trend is to eat local. If there's any group that supports eating local, buying local, it's us, and if you look at the movie Food, Inc., the chicken farmer would not be able to set up his farm here in Canada on the local side.

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

Do you know that the so-called spent fowl, the chicken that's mixed with that.... There are companies, Tyson for one, dumping the broiler chicken. They're just dumping it here, just to get into our—

[Garth Whyte]

Exactly.

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

It's a dumping mechanism. It's not a fair reality of what the price of chicken is in Florida or Arizona. It's a dumping factor that's happening.

[Garth Whyte]

I agree.

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

And you'll get this dumping because we're a smaller country.

[Garth Whyte]

We need to figure out a made-in-Canada strategy and not depend on a 50-year-old system. It's time to fix it, and I think the EU is highlighting that. More and more we're getting more access, and actually even demand, because we're standing up and saying we want to work with farmers, we want to work with the Dairy Commission.

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

Mr. Whyte, though, with all respect, with Europe, the taxpayer subsidizes the milk and the cheese and everything. The taxpayer is not subsidizing it in Canada, so you're saying if we went to a European system, we're going to have to subsidize our farmers, similar to what they do in the United States.

[Garth Whyte]

I'm not saying that. I'm not saying go to the European system.

[The Chair, Conservative, Bev Shipley]

A short answer, please.

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

I have one more quick question for Miss A&W.

[The Chair, Conservative, Bev Shipley]

You just ran out of time.

Mr. Whyte, do you want to give a quick answer?

[Garth Whyte]

We are subsidizing this by the price of our product, and the less income you make, the higher you pay.