Agriculture Committee on Nov. 19th, 2013

[The Chair, Conservative, Bev Shipley]

Thank you very much.

We'll now move for five minutes to Mr. Eyking.

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

Thank you, Mr. Chair, and thanks to the guests for coming here today.

One of the things that was mentioned, I think, was increased processing capacity, whether it's dealing with our potential in Europe but also for cattlemen. If we can ship our processed beef to the United States and put a Canadian pride label on it, maybe we can sell it direct to the Costcos and Walmarts of the world. That being said, what should governments do to help facilitate or increase that capacity, whether it's hogs or beef?

[Bryan Walton]

I guess the question we start with is, what does the customer want, and how can we get to those markets and expand the markets? That's what the trade agenda of the government has been doing.

As far as what's happening with the plants, I think some of the legacy dollars that have been coming from different levels of government have been helpful in providing new technology in those plants. We have to deal with specified risk materials. In Cargill's case in High River they have a new technology there that's using that, recovering steam providing energy. Those have been necessary because of the fallout from BSE, but also I think that innovation in Canada, some of which comes from this country, is important in enabling our plants to be competitive.

In regard to the non-tariff barriers about carcass wash, whether it's lactic acid or steamed pasteurization, which has been an issue in the past in Europe, there's other technology such as ozonation that can be put into place. That's another thing that I think has some potential.

The plants can speak for themselves. We represent the feeders, but I know the Canadian Meat Council has been weighing in on this as well.

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

You would say continue the legacy funds to sort of increase that efficiency or better practices.

[Bryan Walton]

I think to make sure the plants are modern and can be competitive in the world we have today. Again, that's an issue for the packing plants, not for the people.

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

What about the pork industry?

[Darcy Fitzgerald]

I think through the funding that we've received in the past, and hopefully we'll see in the future from the federal government that has gone to the Canada Pork International, we have been very successful in most of the marketplaces we've tried. We also have a very good relationship with the federal government opening up access to those markets and dealing with our buyers and customers there. As well, the work the government has done in Canada with those governments has been very beneficial to us.

I would say that our traders, processors, and brokers really have benefited from that, and through Canada Pork International I think we're finding those marketplaces and the industry is moving into locations that are best for us. But one of the issues that always comes up is.... Each individual government can do what it likes, and if we look at the COOL situation it's not the industry, it's not the consumer, it's not the buyer in the United States that's causing the problem for us but, rather, it's United States government policies.

Likewise, that might be true if we looked at Russia as well, or having the lack of a trade agreement in South Korea. The funding that the federal government has provided to us in the past through Canada Pork International has been extremely helpful. I think our reporting back to Agriculture Canada has shown that, too.

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

I was with some of the pork producers in Saskatchewan last week and they were telling me about some of the opportunities, especially in hams where you get a low price for hams in North America while in some of the southern European countries like Italy or Spain, there's a higher price especially for what they call dry hams. So that might offset some of it: you might get more out of the carcass overall.

To go back to the trade agreements and COOL, this committee—and this is for all the witnesses—is going to be travelling to Washington in a couple of weeks to deal mainly with the COOL issue. We're hoping that we can get some success there. When I was in Alberta last week it was brought to me by a lot of cattlemen that there are certain senators or congressmen we should be talking to down there who have plants in their area.

Can you give us some directive on who we should be seeing and what our message should be when we go to Washington?

[The Chair, Conservative, Bev Shipley]

Could we have a short response, please?

[Bryan Walton]

You should talk to the House leaders. We know that some of those northern states.... I believe Dakota is one that's turned around. There are seven to nine meat plants in jeopardy in the United States. Those are jobs. So it's impacting us Canadians for sure, but there will be jobs at risk in the United States.

I gave the example of Tyson. It's concerned that it's not going to have the raw material—meaning Canadian cattle—for those plants. Twenty-five percent of the cattle at Pasco, for instance, have traditionally been Canadian.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

Maybe somebody else can answer the other question.

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

Thank you, witnesses, for coming.

This is an important agreement we have in front of us and certainly we've heard from the cattlemen and pork producers over the past couple of weeks that they're very positive about this program.

I know that Minister Ritz has done a lot of work already to try to get rid of COOL and that he's had meetings with congressmen and senators in the U.S., so my question is this: presuming they get rid of the COOL labelling, would we have enough capacity to continue to meet the demands in the U.S. and also in Europe?

[Bryan Walton]

With regard to production capacity, I would say yes. When it comes to the capacity for the packers, as you know, at those big plants they can double-shift and they often do. So that's 5,000 a day in Brooks, in High River, and to a lesser extent in Guelph. That would be a question for them, but we believe it's there. You'll have the new plant in Balzac probably in June, plus another in Lacombe, plus maybe one in Qu'Appelle Valley. I guess this really introduces the options we're looking for and some aggressivity on the part of the packers to look at those markets now that there's commercial viability.

[LaVar Payne, Conservative, Medicine Hat, AB]

So would you see further investment in packing plants?

[Bryan Walton]

It's already happening.

[LaVar Payne, Conservative, Medicine Hat, AB]

It's happening, but especially with the opening of the markets, I guess that's....

[André Roy]

If I could add something, there must be some investment in some plants if they want to export to the EU, but regarding capacity for the eastern part of Canada—Ontario and Quebec—there is more space. We used to have 30% higher production in the east. All of those animals were killed and there was still space available.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Fitzgerald, I wanted to ask you about the pork industry.

Are there hormones being used and does that impact anything at all in terms of shipping to Europe?

[Darcy Fitzgerald]

No, sir. At this point, no hormones are used in the pork industry. It's unfortunate that in the retail case, we see the labelling “no hormones”, but it's only to let the customer know there are no hormones. If we read the small print, it says that all pork in Canada is produced without hormones.

Hormones are not an issue for us. There is another issue facing the Americans right now, but not us. We've just removed ractopamine from our system. That might have been one hurdle in the past that would have kept us from shipping into the EU, but we no longer have that problem.

We do have four plants in Canada that are EU certified: one in Lethbridge, Alberta, and three in eastern Canada, so they would be able to ship products. In the last few days I've spoken to other processing facilities, and as time moves along and they see the opportunity, they may as well shift and try to receive that certification. So I think they're all very positive about their opportunities.

[LaVar Payne, Conservative, Medicine Hat, AB]

Do you see any further investment in packing plants? Certainly for the industry, we've seen it already shrink. Do you see some expansion there as well?

[Darcy Fitzgerald]

Absolutely, I would. Again, as I said, those plants that have the EU certification would be the first that would be able to make those shipments and movements. Again, our product has so many parts sold into so many different countries that one plant taking up some volume in the new markets sometimes allows another plant to put more volume into an existing market where it might have been competing. So the balance does work out, and it is very positive for all of them.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you.

[The Chair, Conservative, Bev Shipley]

Thanks very much.

I will go to Mr. Atamanenko. Five minutes, please.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thanks very much to all of you for being here.

I've been thinking about this agreement ever since we knew it was coming. We're here to look at the effects of the CETA, both positive and negative, on the agricultural sector, and we appreciate you folks being here to give us your feedback.

Also, it is more than just a trade agreement. If we look, for example, at what senior trade researcher Scott Sinclair of the Canadian Centre for Policy Alternatives has said, he has said:

It is a constitutional-style document that affects patent protection for drugs, foreign investor rights, local government purchasing, public interest regulation and many other matters that are normally decided by elected legislatures after public debate.

We've been told this by the government. It's a comprehensive agreement, and obviously we will have to balance the pros and the cons.

We know also that our dairy farmers, as a result of this, are going to take a hit, and the government—rightly so—has stepped in and said it would help them. We know that the cost of delaying the introduction of cheaper generics will be between $800 million and $1.65 billion, and once again the government has said it will offset the costs. So the taxpayer's dollar is going to help where they don't need help now.

As not only a representative of your association but a Canadian, there is one thing we have seen under NAFTA that is expanding into this agreement and others. It is something called investor-state rights, and the fact that there is the ability for foreign investors to sue our federal government because companies feel they are unjustly treated. Up until now, under NAFTA chapter 11, over $160 million of federal government money has been paid out to fight these cases. Both the European Parliament and the official sustainability impact assessment have questioned the need to include investor-state dispute settlements in the CETA. Some countries are looking at options. South Africa, India, Korea, Brazil, Australia, Venezuela, Bolivia, and Ecuador have decided to pull out—in other words, not include investor-state rights in any trade agreement.

As a Canadian and as a representative of your industry, what are your thoughts on this? Personally, in my opinion, it's not right for a foreign company to be able to sue our government because it may feel unjustly treated.

[Bryan Walton]

Our focus is on beef, and the “C” in CETA is for comprehensive, so it goes much beyond beef. One of the think tanks I go to is The Economist and once in a while we get mentioned in this magazine. There were two references to the CETA, and in both situations one defined Canada as a leader in this agreement, not only because of what it does for our access to Europe and how it positions us by going into the Trans-Pacific Partnership. We are a trading nation. From the standpoint of beef, we produce more than we consume. We realize that when 80% of our exports go to one market, that creates some situational problems, as we saw with BSE and as we're now seeing with COOL. So from my standpoint, and just speaking for cattle producers, it's a good agreement.