Agriculture Committee on March 24th, 2015

[Jason Verkaik]

On the anti-dumping, selling for below the cost of production is obviously very detrimental to our industry, but sometimes it goes a little broader and a little wider than that.

Let's say I'm going to pick a crop of onions. In Quebec, they grow onions. In Ontario, they grow onions. In Manitoba and out east, they grow onions. There's a little difference when we're talking about British Columbia and Alberta, because of logistics. There are different challenges in that.

Let's say that if we're talking about Quebec, Ontario, and the provinces where transportation is a little easier to deal with, onions are generally harvested around the same time and sold at the same time throughout the season. Because it's an open market, if the onion price is set at $12 for 50 pounds of onions. That's the price in this province, and it's pretty general. Depending on your customers, there are fluctuations, give or take a dollar. In one province, the cost of producing that 50-pound unit of onions is between $4 or $5, depending on the season.

We can sell those onions. Let's say we have an overabundance of onions in this province right now. We want to clear it out so that we have room in our storage facilities. We had a good yield. We can't move them all here, so let's go to the Toronto food terminal, take a bunch of onions there, and sell them for $8 or $7.50. That's not selling below the cost of production, but what it does to that provincial market is that it sets a new price point and the market has to follow.

When you're talking about food processors, different chain stores, and some of them that the food terminal would sell to, you're really going to see it. As soon as that one cheap price comes in, we're going to see the whole market affected, and we will be taking $5 out of the pockets of all the farms and the packing houses with that.

I'm not talking about setting up a quota system or a price system, but sometimes it can get very close to the anti-dumping line without being dumping.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I hear you.

[The Vice-Chair, NDP, Malcolm Allen]

You're actually just slightly over, Mr. Keddy. Thank you very much.

Mr. Eyking.

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

Thank you, Chair.

Jason, thank you for coming.

As a vegetable farmer for 20 years, I know what challenges you have, whether it's growing, harvesting, or trying to market and make some money. I think it's one of the hardest things you're dealing with agriculturally, especially with the competition.

I have a couple of questions.

You talk about how dumping comes back on you. Right now, the United States has put on a bond, I guess, for people who have to ship down to the States, whether it's tomatoes or produce from Ontario or any province. There's this big bond up front now to ship our stuff down there. How is that going to impact on the commodities that are being sold, whether it's in the Montreal market or the Ontario market, if they can't sell their product or if it's not feasible to sell their product south of the border?

[Jason Verkaik]

If we're not able to sell south of the border, that would be very detrimental to what we do. On the trade relations we have, I'm going to speak as a country now. When it comes to horticulture, I'm going to give you some rough numbers, so don't hold me to them, but they'll give you the idea.

There's $12 billion in trade between Canada and the United States. Some of that stuff gets filtered through the United States when it's coming through Mexico or Chile or places like that. We export to the United States produce that's worth about $3 billion. We import produce that's worth maybe $4 billion, and then there's the other stuff that's coming from other countries and filtering through the States.

That trade relationship with the United States is vital, and it is imperative that we have access to that market. Something like how we were protected under the PACA-like trust issue was a very.... Having that reciprocity taken away from us was a real big challenge. As for posting bonds to move our product to the United States, that's tough.

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

They're saying here that you have to put up a $50,000 bond just for a $25,000 complaint, so when you're selling your tomatoes within Canada, you take your chance on dropping the price instead of shipping them south of the border. We know that's important, and it's important for the industry. I think the government realizes this and we'd like to see fast action on that.

The second thing is the dumping part. It's a tricky business. I think most farmers would agree that they want to be on a level playing field. When a farmer in Holland Marsh in Ontario or a Quebec grower have the same tools, whether it's a grant for refrigeration, both provinces have the same. Do you think the federal government has to look at this overall so that you're not putting one apple grower at a disadvantage with programs compared to another one? Do you think we have to have more it more streamlined and uniform across this country?

[Jason Verkaik]

Absolutely, and it really is important to keep people.... It's easy to compare Ontario and Quebec because we do very similar things. We're neighbours. There are no mountains between us. It really works. We're not that far away from each other. For one province to have access to something that another province doesn't, the competitive disadvantage to that other province really will show itself.

Look at minimum wage differences from one province to another. When we're dealing with 60% of our expenses as wages, that minimum wage from one province to another can really change. I understand that's not a federal thing to control, but it does set up a disadvantage.

We talk about pesticide regulations from one province to another. When they try to supersede what we have with the PMRA, the federal monitoring for pest regulations, that becomes another challenge to a province and to fair trade interprovincially.

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

Jason, I have one last question dealing with retailers and processors. They're getting bigger. Is that having an effect on, for instance, the buying patterns? For instance, for strawberries, where they bring in tractor-trailer loads of strawberries from California when Ontario's coming on, do you find it's getting more difficult with the retailers and processors because they're becoming bigger and they're more North America based?

[Jason Verkaik]

Here's one of the challenges when it comes to a bigger company. Take a company like Loblaw. They have 250-plus stores, so if you're selling them strawberries, you have to sell them enough for their 250 stores. If Ontario were bringing in strawberries and could bring in enough for these two weeks at 150 stores, how is the corporate Loblaw going to say that 150 stores can get strawberries but the other 100 stores can't? As companies get bigger, that does end up shortening our local season with those stores, because we have to meet the demand of the whole corporation.

[The Vice-Chair, NDP, Malcolm Allen]

Thank you very much.

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chair.

Thank you for coming today, Jason.

The interprovincial trade study is an interesting one. We've heard about all kinds of different issues so far.

Selling your product and making sure the efficiencies you have in getting it to market are very important to you and to the customers. Is there any particular regulation, province-to-province, that is causing your industry a particularly difficult time or is burdensome for you?

[Jason Verkaik]

I'll be honest. I can't pick one out at this time. With me being new to this job, there's a lot of information, and I can only take in so much at a time. There's a little more studying I have to do to get into the regulations. I would be happy to get back to you with an answer on that.

[LaVar Payne, Conservative, Medicine Hat, AB]

That would be great.

You did talk about subsidies. Are you aware of transportation subsidies from one province to the other? Which provinces are providing the subsidies that are creating the problems?

[Jason Verkaik]

The subsidy question has come to me from a few people who are complaining and bringing it to the attention of our organization. We are looking into that. It's not always easy to find the subsidies, because sometimes they're buried in other things. It's not a specific subsidy for transportation. There definitely has been a complaint about dumping from the Quebec market to the Toronto food terminal. There have been enough complaints to raise a red flag, and we are seriously looking into it.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay.

The other thing you touched on was the PMRA. In our international trade negotiations, we have science as a basis for determining issues between countries, particularly the basis of our products going to Europe, say, or here. Anything we're selling there has to meet certain scientific criteria. I understand that particularly in Ontario now they're talking about some issues with the neonicotinoids and that may or may not create problems for your industry or for other provinces wanting to bring vegetables and foodstuffs from other provinces to Ontario. I wonder if you have any comments on that.

[Jason Verkaik]

It is a challenge when a provincial government makes a decision that's not based.... I look at that as a federal decision to make. When a provincial government makes a decision such as the neonicotinoids one, that's not the way we should do that. The federal government should be allowed to say, “Wait a minute, you can't do that.” Because it will create....

Right now, you have all the other provinces that deal with this on high alert. Not only are other provinces on high alert, but the United States is on high alert about what has happened here, because we have the media, the public, and people in Hollywood who have become very good scientists. They're deciding for us. They're not letting science make the decision for us.

Neonicotinoids are important to our industry, as are bees. Bees are vital to our industry. I know that this is affecting the corn and soybeans more, but that will directly relate to us. If they choose to pick another chemical or product that we use to safeguard our ability to produce food and we lose one because there's some activist who says “it's doing this” without getting the scientific base behind it, oh, it's a slippery slope that we're going to be going down. We're going to lose our ability to be competitive and also feed ourselves locally.

[LaVar Payne, Conservative, Medicine Hat, AB]

I don't think the federal government has a role. If the province decides to do that, that's up to the province in terms of setting their own regulations, but I agree that it is a problem.

In Alberta we have all kinds of bees, and I believe Alberta is using the nics as well and we haven't had any problems. I think a scientific base is really important to making sure of what is actually happening with the bee population.

[Jason Verkaik]

Yes, it needs to—

[The Vice-Chair, NDP, Malcolm Allen]

Thank you very much, Mr. Verkaik. The time is up. Maybe you'll be able to incorporate that answer into another comment or question from someone else.

Madam Raynault.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

Mr. Verkaik, you talked a lot about how some provinces have subsidies for transportation that are buried in other subsidies. You also brought up the lack of labour. Given that farmers aren't too fond of red tape, workers' arrival can be delayed.

Has your association done any research on the impact on interprovincial trade? Were there any losses from the dumping of tomatoes or other fruits in your province or in another province?

[Jason Verkaik]

There are no direct studies that I am aware of at this time. The information we usually get comes in real time. It's hard to study something that's not consistent. If there's a shortage of one product or another, nobody is going to be complaining because a price is high. That's going to be in demand in the United States and Canada or wherever it goes.

If there's a very good crop year and we have fewer exports because the Americans have had a very good crop year, that's when the issues start to come up. We never know when it's going to happen. It happens at a moment's notice, depending on the year. It could be something that happens for three weeks or two months and that could depress a market.

But to do a five-year study or a three-year study...? It's really going to be hard to pinpoint what happens, because for a lot of that time things are happening in real time.

[Francine Raynault, NDP, Joliette, QC]

Very well.

Does international trade affect domestic trade, as far as your members are concerned?

[Jason Verkaik]

Definitely it would. If I'm speaking for Quebec and Ontario, we need to export 35% to 40% of what we grow to New York, Boston, Chicago, and down into Florida on the eastern seaboard. It's having that trade to the United States and that freedom to export that take away the excess from the provinces. That allows a better balanced trade within the provinces because we're not fighting amongst each other in trying to move the same amount. We can't force people to eat more tomatoes, onions, and carrots, but we do have other access abroad that strengthens interprovincial trade.

[Francine Raynault, NDP, Joliette, QC]

What would you say are the main challenges with domestic trade? What are the issues your association has to deal with?

[Jason Verkaik]

I think the main challenge for whatever commodity—we represent over 150 different crops with our organization—when it comes to selling is having an oversupply. There can be an oversupply for many different reasons. It can be a bumper crop year. It can be a bumper crop year in Canada and in the United States.

I can give you an example. I'll go back to onions. The reason that I stick with onions is that it's one of the crops I grow, so I'm familiar with it. Because of the sanctions right now on Russia, the European onions, the onions from Holland, let's say, that would have gone into Russia can't go there. What the Dutch will do is subsidize transportation and move some of their onions to the Caribbean islands and some to the South Pacific.

Washington State is a large grower of onions in the United States, and if the Dutch access some of their markets in the Pacific by going out that way, then Washington State can't move their onions that way because of the transportation subsidies on the Dutch onions. Then the Washington onions get put on trains and go over to New York, and New York is a very important market for Ontario and Quebec onions. So the Washington onions come over, and even though we are in closer proximity, the Americans are very good at buying American first, and they would bring over those Washington onions.

Then we don't have the access to that 35% or 40% of the export market we need. Those onions now stay within the province. Now we have to fight, and the price keeps dropping because the farmers are scared that they won't be able to move those onions and they'll start rotting. They say, “Well, we had better take a cheap price rather than have to pay to dump them.”

You can see how trade is important and how the global intricacies of how it all works can really affect us, right back to the province.