Agriculture Committee on Nov. 21st, 2013

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

Okay. I'm going to move to another line of questioning.

I'm very interested in this working group. I guess the key to any working group is who is on that working group and whether they all believe in the same mandate.

My question is whether there are European farmers and Canadian farmers on this working group? What is its makeup?

[Barry Senft]

I couldn't give you the detail on who populates that committee, other than that I understand there would be broad representation of the stakeholders involved.

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

It could be bureaucrats; it could be whoever from Brussels; it could be—

[Barry Senft]

I understand that it would represent all the stakeholders, but I don't believe that the numbers and who would populate it have been decided.

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

This working group could be key to whether we not only get product over there but, if you have a whole shipload of grains over there, whether somebody all of a sudden pulls the pin on it because of some big protest or whatever.

You were talking about legal tolerances for chemicals, residues, or whatnot. Shouldn't that working group have a broader mandate, not just dealing with GMOs but dealing with other agriculture practices that we or they are following, or what they might have a problem....

This is to both of you. Shouldn't that working group have a bigger mandate, so that it deals with all these other little so-called irritants that could pop up along the way?

[Barry Senft]

My understanding of it is that it would be broader than dealing with the GM issue and extend to some of the points that Gord spoke to—MRLs, LLPs, etc.

[The Chair, Conservative, Bev Shipley]

Thank you very much for your time.

I'll go now to Mr. Preston, please, for five minutes.

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

Thank you, Mr. Chair, and thank you both for being here today.

I was trying to write as fast as I could. I'm glad that I have some notes down.

Barry, you were going through how much we already export to Europe, and Gord, you said the same thing— how much by way of pulses and dry beans and whatever else. The EU is already a great customer of ours.

On tariffs, Barry, you talked about how the tariffs were coming off. I think you mentioned that 12 euros per tonne comes off immediately, and that after that the tariffs come off on an average basis over the next seven years. Is that right?

[Barry Senft]

Yes.

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

At the end of the day, it's 100-and-some euros per tonne cheaper now to send Canadian soybeans or corn or wheat to Europe. How much will this change increase your sales, if you're already selling the amount you're selling?

[Barry Senft]

Again, it puts another demand on the marketplace, and making sure that we have as many of these trade deals in place as we can gives you opportunity and from a farmer/producer perspective gives us options in the market. You never want to be too reliant on one or two customer markets; these tariffs coming off in the EU give another opportunity for our farmers to move grain into that marketplace, with some returns in their own pocket, which hasn't been the case, other than for the 38,800 tonnes that are currently in place. Under the current practice, that was filled before we even got to the end of the field.

So the whole trade agreement and the other emphasis towards other trade agreements involves diversification of markets so that farmers don't rely too much on one and, if something happens, are without an alternative.

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

You were here, I think, when we were talking to the western barley growers about how much barley is used for feed, and with an increased number of both hogs and cattle going to Europe.... I know that in Ontario this is mostly a corn issue. How much Ontario corn is going to go to the EU as meat?

[Barry Senft]

Well, we haven't done the estimate of that, but the opening of this market puts some more demand on it, either through the livestock industry or directly. As I said, for the first time ever we have exported some corn into that market. Up until this point, we have been pretty well in a corn deficit in Ontario, importing corn from the U.S. But with new trades being introduced, corn production yields are rising, and as I said, we can't be as reliant on our domestic market as we have been in the past.

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

Well, let's spread those markets around. That's a fantastic piece.

Mr. Kurbis, concerning the tariffs on pulses and the products you're talking about, you said there will be no tariffs, but on processed products there are tariffs.

What is coming off?

[Gord Kurbis]

Well, every pulse and special crop goes into Europe duty-free, except for a tariff of 37 euros per tonne that has been applied, albeit unevenly, to buckwheat. That will be immediately eliminated.

There has been a 7.7% tariff on pulse flour, a 5.1% tariff on bran and fibre, and a 12.8% tariff on protein. All of that will be immediately eliminated upon the signing of the agreement. There is a tariff of 166 euros per tonne on starch that will be phased out evenly over seven years.

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

Is that already a pretty good market for our starch and for the other items you mentioned?

[Gord Kurbis]

This, for our industry, is a medium- to longer-term opportunity. Currently we're in the business of sending over whole and splits. Increasingly, we hope to get into the business, but we're on the really early part of the growth curve.

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

If you're taking 40 euros to 120 euros a tonne off the price of some of those products, even if it's over the course of seven years, it sure makes a big marketing opportunity for our Canadian farmers, doesn't it?

[Gord Kurbis]

Yes, the higher end of those tariffs would be prohibitive, there's no doubt.

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

Sure.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Preston. You're right on time; it's amazing.

I'll now go to Madam Brosseau, please, for five minutes.

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

What I've noticed throughout the past few meetings we've had on CETA is that everybody is very hopeful and optimistic that this is a great deal for everybody. It does seem pretty amazing. But how are farmers going to actually seize this opportunity?

It seems that this whole working group on biotechnologies and GMOs will be like a big make-or-break kind of group. I really hope things work out in the end, because we mentioned that this is a very emotional subject, and when politics are involved, they can make it a little bit tougher to work together and get things done.

Can you people comment a little bit more on value-added exports? We had barley people in earlier and we talked about barley being used to feed our beef and pork, and then exporting that. What kind of value-added products would we be able to send or would interest the European Union?

[Barry Senft]

As much as it's direct, it's in the pork and the beef sectors. I mentioned that some of the other increased exports—and Gord has touched on this—are in bakery goods, spirits, and soybean oil.

Soybeans, for example, and for that matter, corn.... We always think of corn as livestock feed and ethanol, but corn is the basis of a lot of our food products, along with soybeans. They are integrated in a number of these food products. I think this agreement will open up these products to be—

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

So there is benefit for our farmers but also for more jobs and expansion for value-added here in Canada. The government talks about trade agreements being good. There is also an opportunity for more good, well-paying jobs in Canada with value-added exports to the European Union in the next few years.

[Barry Senft]

The more we can add value within Canada and move that on—