Agriculture Committee on Nov. 19th, 2013

[The Chair, Conservative, Bev Shipley]

Thank you very much.

We'll now go to Mr. Preston.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Thank you very much, Chair.

Thank you all for coming today. It's great to have you here, but I thank both of your industries for what you've been able to do in Canada during a time when a recession that wasn't made here in Canada hit us. The rural pork industries that you represent and the restaurant industries in many rural communities in Canada were the only economy that was really happening—the local businesses that run the restaurants, and the local businesspeople who are farmers. Thank you for what you did for Canada during a time when manufacturing abandoned us a little bit.

I loved what you said about how trade is good. You may not have used those words, but I'm going to. I tend to start every questioning of anyone from the pork industry with my thought that bacon is aromatherapy. There is no day where you wake up and smell bacon cooking in the house that you're not going to have a good day for the rest of the day. And I can say that as a restaurateur, sometimes I had to go to work to get my aromatherapy, but it was great.

Mr. Whyte and Ms. Senecal, thank you too for the approach you're taking at the negotiations with the members of the supply management, for how the restaurant industry is standing up and stating its facts but is moving with negotiation and good comment rather than just absolute opposition.

I represent both farmers and restaurateurs. I'm a restaurateur myself. I understand there's a middle ground, and we can get there.

Going back to the pork producers, you mentioned that here in Canada we eat every rib we can produce and then even import some. So we import a lot of ribs. Yet I understand that with this deal, ham may become a much better product for us to be selling in the United States.

Could you tell me the price per pound on imported ribs versus the price per pound on exported ham, and what the difference might be?

[Jean-Guy Vincent]

I could not tell you what the price difference is. We eat a lot of ribs here and we import some. A lot of restaurants serve them. On the other hand, they eat ham in Europe and we have ham to export. That is why the agreement is favourable.

As for the prices, Martin can probably answer your question better.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Our earlier witnesses talked about meeting the 81,000 tonnes worth of new exports to Europe. I sure believe in competition, so when we do so, that's a huge addition in the number of hogs that would have to be produced, slaughtered, packaged, and sent to Europe. I think they mentioned eight million more hogs. How many more jobs is that in the pork industry?

[Jean-Guy Vincent]

It is important to understand that Canadian production has declined in the last five or six years. But world demand is increasing and will continue to do so. So we need the pork industry, both producers and processors.

We have to make sure that we keep our processing jobs. Canada is very diversified when it comes to meat-packing. Capacity is suffering because production has decreased. A new, secure, stable market and solid agreements will allow us to stabilize our production sector. Otherwise, we cannot provide the product and we cannot continue. In that sense, I feel that this agreement has promise for the future.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Beyond being more stable, if we're having to do more, we're going to have to have people doing those jobs to bring our capacity back. Perhaps the plant capacity is there but the people working in them would .... In talking last week with the Canadian food producers, they hadn't even yet started to talk about how many jobs it means. We keep talking in tonnes rather than in jobs. I'm trying to get us all talking about jobs.

All of a sudden one day a month ago, Canada had 500 million new customers for itself. Five hundred million new customers: I've got to tell you as a business person, I get excited when I hear numbers like that. If all of a sudden one of my restaurants pulled up beside 500 million new customers, I could expect to keep a couple of them. Canada now has that as a bonus. It's there.

[The Chair, Conservative, Bev Shipley]

I think you're out of time.

So we'll go through the drive-thru.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

But it's so exciting.

[The Chair, Conservative, Bev Shipley]

I know.

With that, and those were great comments, I'm going to give Mr. Caron his five minutes.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Mr. Whyte, first, I would like to make it clear that supply management is not a system of subsidies. The United States subsidizes its dairy producers and Europe does too. Canada does not.

The goal of the system is to help to stabilize prices for producers. That is not the same thing. I am in a good position to know this because the economy of my riding depends on agriculture, mainly dairy production, to the tune of 12%.

I believe that a lot of the myths surrounding supply management can be attributed to commentators who come largely from cities. They do not think about the rural producers who depend on supply management for the survival of their family farms. We are not talking about production levels that are going to cause prices to rise, but levels that are going to even out the supply, making local production more efficient.

I know your position on the matter. You have already made it clear to the committee. Last year, representatives from your group and from the Canadian Association of Agri-Retailers appeared before the Standing Committee on Finance. They wanted to open up the debate on the issue. It is clear, after your campaigns and your involvement last year, that you are not in favour of supply management and, if it were abolished, you would not lift a finger in opposition.

But there is no evidence to suggest that, if supply management were abolished, it would have any impact at all on the price of dairy products. Zero.

We saw what happened in New Zealand after supply management was abolished: the price of milk increased. Notice how most merchants, restaurateurs and people living close to the border systematically refer to American prices. The unsubsidized price of a pound of butter or a litre of milk—a pint, in the United States—is similar to ours. So do not come here and tell me that supply management means that consumers pay way too much. They actually do pay a lot more than in the United States, but that would not be the case if we were able to play with the United States on a level playing field.

If we abolished supply management and allowed many more players to enter the field, it is abundantly clear that the dairy products coming into the country would not automatically be from Europe. And according to the details in the agreement, we might have to deal with unsubsidized products. Clearly, the opening would come from the United States, meaning that the game would no longer be fair, even on our own field.

Could you tell me honestly what you think of supply management? How can we make sure that producers are not harmed, that the system is improved and that, at the end of the day, both producers and their customers come out ahead?

[Garth Whyte]

This is an emotional issue. It's very emotional. When you hear that we worked out a deal with the Canadian Dairy Commission on pizza cheese, for example, this is the same system, but you're finding anomalies in the system, where for frozen pizza—which advertises “like delivery”—they were buying the same cheese for 30% less because they were under some tariff rule such that they could get it cheaper than for fresh pizza. That was not fair, so we're trying to fix that.

There's another issue that I think the committee has to think about. The eighth-largest processor in the dairy processing area is Saputo, but they've grown outside of Canada, not inside Canada.

There are a lot of stresses that are happening in the system. There are pizza kits coming in now; even our members are finding a way around the system and trying to get dairy elsewhere. We need a made-in-Canada solution to help the dairy farmers.

It is not in our interests. I'm concerned. If we get rid of supply management, or if it collapses, we're in trouble. I'll say that. I'm publicly saying that. We need surety of supply and we need quality. We think it's the best quality in the world. We see this as an opportunity. So there has to be a way that we can.... I don't have all the answers. You may find that hard to believe—

[Voices]

Oh, oh!

[Garth Whyte]

—but I don't have them all. But I know that we should not be afraid to say that the system that was done 50 years ago—even when you talk to the colleagues you want to talk to about it—is very complex. The formula is very complex. When you want to change quota where there's a growing province and then Alberta says, “Okay, we're out of the chicken negotiations now because we can't get supply”, we have issues that are happening. We, as an observer, get to see these cracks.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

You are talking about cheese for pizza. But there again, most of it is American cheese, which is already subsidized.

[Garth Whyte]

Canadian mozzarella cheese.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

There is also talk of being able to import American products that already contain subsidized dairy products.

When people question supply management, I would like them also to talk about a level playing field. People who question supply management never mention that American products specifically are subsidized. You never hear a thing about that. We have to start by discussing the situation elsewhere in the world, such as in Europe or the United States.

We have eliminated our subsidies in the hope that the United States and Europe would do the same. But that did not happen. We have made ourselves vulnerable and supply management is the only thing still protecting us.

[The Chair, Conservative, Bev Shipley]

Thank you for your comments, Mr. Caron. You are well over time.

[Garth Whyte]

May I say one thing?

[The Chair, Conservative, Bev Shipley]

Actually, maybe you can say it when Mr. Zimmer is talking.

[Garth Whyte]

Give me a question.

[The Chair, Conservative, Bev Shipley]

The timing is working out really well here.

Mr. Zimmer.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you again for coming to committee.

Again, I want to speak to Susan. My family has appreciated the A&W for many years. I still remember the old cardboard root beer that you could buy. It was flat, but it was good.

[Some voices]

Oh, oh!

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

No, that's a compliment.

I have a couple of questions for you. How much Canadian beef and pork are purchased by A&W every year? Do you have a tonnage amount?

[Susan Senecal]

I don't have a tonnage amount, but I know we do purchase very large amounts. We buy lots of pork bellies for our Teen Burgers. We've certainly been very big supporters of the Canadian agricultural industry. We're in constant dialogue with all of the producers.

As Garth said earlier, our preference is always to buy locally from Canada when we can, because it simplifies things. As well, we appreciate and are proud of being a Canadian company with Canadian relationships in the agricultural industry.