Agriculture Committee on April 2nd, 2019

[The Chair, Liberal, Pat Finnigan]

You have about a minute.

[Rick White]

I guess in the immediate term here there's the uncertainty, the risk of product in the bin. As I said earlier, cash flow is going to be the most immediate concern to farmers. It's not the only answer but it's the thing that we should do, and we should consider addressing that immediately. Increase the limit on the cash advance program, which is currently $400,000. That should be expanded—and we've asked for it before—to at least $800,000. The Premier of Saskatchewan suggests $1 million. Any of those numbers work.

We can talk about interest-free and whether or not the government would be willing to offset the cost because farmers will say that they cannot borrow their way through this. They are right, but at least it will buy them some time. Under the new program, which we just launched yesterday, starting April 1, the 2019 program is an 18-month program and that will buy some farmers some time.

There are other initiatives that we need to start taking. We have to look at other safety nets like agri-stability and agri-invest. Maybe there are things there that could be done. There are existing safety net programs in place.

But the advance payments program provides farmers with cash flow during times of marketing problems; it's what it is designed for. This time it's China. Two years ago it was railway issues. This program is there for them and they are starting to hit it hard at our office. Yesterday we issued 1,236 advances for $116 million out the door in day one of this program. This program is on fire and it needs to expand because they are going to hit the lid on it.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. White and Mr. Weir.

That will conclude this portion of the industry representation. I want to thank Mr. White, Mr. Everson, Mr. Vossen, Mr. Ruest, Mr. Jeworski and Mr. McQueen for taking the time today for this very important issue.

We shall break and come back in a couple of minutes with the government officials.

[The Chair, Liberal, Pat Finnigan]

We'll get under way with our second hour of this committee.

I'd like to welcome, from the Canadian Food Inspection Agency, Mr. Gorrell, assistant deputy minister, international affairs branch, Department of Agriculture and Agri-Food.

Welcome back to our committee.

Also from Agriculture and Agri-Food, we have Ms. Kathleen Donohue, director general, market access secretariat, international affairs branch.

Welcome, Ms. Donohue.

With that, we will start with an opening statement of up to 10 minutes.

[Fred Gorrell, Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency]

Thank you, Chairman and committee.

Good afternoon, everyone.

We appreciate the opportunity to speak to you today about recent events impacting Canadian canola seed exports to China.

The canola sector creates an estimated 250,000 jobs in the country while generating over $26 billion in economic activity. A significant part of the sector's success relies on exports, and we recognize the importance of resolving impediments to trade as quickly as possible.

Canada has been exporting canola seed to China for oil crushing since 1994. From 2014 to 2018, our exports accounted for about 92% of China's total canola imports. The value of canola seed exported to China reached $2.7 billion in 2018.

The high volume and value of exports reflects the quality and safety of our products. Canada has a robust domestic system to ensure the quality and safety of canola seed being exported overseas.

On safety, the Canadian Food Inspection Agency has an internationally respected phytosanitary inspection and certification system that protects Canadians by safeguarding our plant resources. Additionally, the CFIA supports the economy by facilitating safe trade with trading partners. For grain exports, the CFIA is responsible for export certification against foreign phytosanitary import requirements.

With respect to canola to China and other countries, the CFIA inspects canola seed shipments using appropriate procedures and analysis prior to issuing phytosanitary certificates to accompany the exports. These phytosanitary certificates provide Chinese authorities the assurance that, from a Canadian perspective, the canola seed shipments originating from Canada meet China's plant health import requirements.

On quality, the Canadian Grain Commission established and maintains standards of quality for Canadian grain to ensure a dependable commodity for domestic and export markets. We are a safe and reliable global supplier of canola.

However, differences in the technical interpretation of compliance with import requirements can arise periodically. Moreover, it is a top priority for the government to work collaboratively with our regulatory counterparts to resolve these issues on a scientific basis.

This brings me to today's discussion, the official notices of non-compliance from China for exports of Canadian canola seeds. I would like to take a moment to provide some background information to the committee.

ln January of this year, China notified Canada that it had intercepted pests of quarantine concern in a shipment of canola seed from Canada. Canadian companies were placed on a warning list to be under more stringent inspection by China. ln response, the CFIA undertook a thorough analysis to address the notices of non-compliance, while each affected company was informed by Agriculture and Agri-Food Canada of the notifications and the warning list.

Regarding actions taken by the Canadian Food Inspection Agency after receipt of the notices of non-compliance, the CFIA verified the pre-certification inspection, sampling and testing and certification procedures to ensure they were conducted as expected. We reanalyzed samples retained from shipments. We reviewed pest export data on previous canola shipments to China as well as overall pest survey data from 2015 to 2018 for canola and other grain export shipments to all markets to assess the potential pest presence. We reviewed the pest health risk assessment unit's assessment on each pest reported by China as well as other available scientific literature and compiled a list of follow-up questions for China.

Then, on March 1, 2019, as a result of the reported additional interceptions of pests from two Canadian shipments of canola seeds, China suspended the registration of one company, which is required for the company to export seeds to China. Also on March 1, 2019, Canada provided a letter of response to China's notice of non-compliance and requested additional information on their detection of certain pests of quarantine concern so that Canada could follow up. Canada also requested a scientific dialogue between the plant health experts in both countries.

On March 7, 2019, China issued an additional warning notice indicating that all Canadian canola seed shipments to China would be subject to more stringent inspections. At that time of export, the CFIA inspected the canola seed shipments using appropriate science-based procedures and analysis and was confident that the certified shipments met the foreign import requirements.

As I mentioned earlier, differences in the technical interpretation of compliance with import requirements arise periodically.

Canada and China have been able to resolve such impasses in the past through sustained dialogue.

To assess the validity of China's assertions, the CFIA followed up on March 13 with a letter on the status of the request for further technical information and collaboration from China. This letter also requested a technical meeting as soon as possible.

On March 15, China responded by providing some additional information and indicated their willingness to engage with the CFIA on a technical call. That call took place on March 18. It was a technical discussion between plant health experts from both countries to discuss the findings.

Following the call, on March 20, the CFIA submitted a letter outlining the next steps of technical engagement.

Then, on March 26, as a result of three additional notices of non-compliance, Customs China suspended canola seed shipments from a second company.

CFIA and Customs China plant health experts held a second teleconference call on March 26 to continue the dialogue in support of resolving this issue on a scientific basis

We stand by our robust inspection system, and our ability to continue to be a supplier of high-quality canola to China.

We rely on science.

The CFIA has requested information on the following: the frequency of pest detection and the number of weed seeds detected in samples; specimen samples of the weed seed and isolates of the bacterial disease pathogen; lab diagnostic procedures; the determination of the distribution of pests within China; and the technical justification for the notifications and measures taken.

The CFIA has reanalyzed our samples, taken at the time of pre-export, and has obtained the same negative results we obtained at the time of pre-export certification.

Agriculture Canada, CFIA, and Global Affairs representatives at the Canadian embassy in Beijing are actively engaging with Chinese authorities to make progress, as well.

That brings us to where we are. In addition to the letters and the two technical calls, the president of the CFIA has written to her Customs China counterpart requesting a technical face-to-face meeting as soon as possible in order to find a science-based solution. Canadian officials are fully engaged with their Chinese counterparts to try to restore access for the suspended companies as quickly as possible and to resume the predictability of trade in canola seed.

As early as today, a CFIA official met his Chinese counterpart on the margins of the International Plant Protection Convention in Rome—these are the two people who had the technical calls—to follow up on the technical discussions. We are in regular, in many cases daily, communication with our industry stakeholders and provincial counterparts, and we continue to keep them informed of any additional information.

Yesterday, on April 1, the Government of Canada announced a working group that will include the Canola Council, the Canola Growers Association, representatives from Agriculture Canada, the Canadian Food Inspection Agency, and Global Affairs, as well as representatives from the governments of Alberta, Manitoba and Saskatchewan.

We strongly support the Canadian canola farmers and want to resolve this issue on a priority basis.

Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Gorrell.

Now we'll go to our question round.

Mr. Berthold, you have six minutes.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Mr. Chair.

Thank you very much for being here, Mr. Gorrell and Ms. Donohue.

First, I would like a clarification. You mentioned that the president of the Canadian Food Inspection Agency sent a letter to her counterpart in China to ask for a high-level meeting. Do you know if the Minister of Agriculture and Agri-Food made the same request at the political level?

[Fred Gorrell]

There has been a request from the president, and there has been a letter from Minister Bibeau to her counterpart, introducing herself, underscoring the importance of the issue, and supporting the request of the president to arrange a meeting. So both the minister and the president of the Canadian Food Inspection Agency have written their counterparts.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

You have had differences of interpretation with China in the past. Earlier you said some interpretation issues were resolved through sustained dialogue.

Do you consider that there is currently a sustained dialogue with China?

[Fred Gorrell]

That is a good question, thank you.

As I said in my opening comments, sustained efforts with China are always needed. We have been involved with China with canola, and you heard from the speakers this morning about how long we've been trading with them. I think I outlined very clearly our interpretation of our exports to China. They have indicated what they have found. We have had the technical conversations, and I think the only real next step is to be

face to face, in order to have a conversation on the technical aspects.

[The Chair, Liberal, Pat Finnigan]

There was no translation of that.

[Randy Hoback, Conservative, Prince Albert, SK]

I didn't get the last comments.

[Fred Gorrell]

I'm sorry.

We need to have a meeting face to face, after everything, in order to really clarify the interpretation. I think you had the question.... Our interpretation I very clearly outlined—

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Yes. Okay.

I have a last question before I turn it over to my colleagues.

Are you confident, 100% sure, about the result of your own tests on the quality of the canola in Canada?

[Fred Gorrell]

That's un autre good question. Yes is the short answer. The thing is that science is never 100% sure. You know how we can detect things at a million and billion parts per thing. But in everything I've outlined of what we've done, and we've done it again, I have strong confidence in what we're doing. That would be a conversation I would like to have with them face to face.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you.

Mr. Chair, just before we continue, I would like to table a motion with the committee concerning this study.

The motion is the following:

That the committee continue to hear from witnesses on the study of the official notices of non-compliance from China for exports of Canadian canola seeds; that the next meeting be held as soon as possible; that witnesses at this meeting be farmers and producers directly impacted by the consequences of China's decision to cease buying Canadian canola; and that the committee report its findings to the House.

[The Chair, Liberal, Pat Finnigan]

We had 15 minutes after the meeting to decide where we were going with this study, if we wanted more or whatever, but we can do your motion now, if you wish.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I wish.

[The Chair, Liberal, Pat Finnigan]

Mr. Berthold, do you want to speak about it?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Yes, Mr. Chair.

As I mentioned, there was a request to create an emergency committee last week. We asked that the Minister of Agriculture and Agri-Food, the Minister of International Trade Diversification and the Minister of Foreign Affairs appear here before the Standing Committee on Agriculture and Agri-Food.

Unfortunately, this could not happen at today's meeting, during which we normally would have heard from those ministers, given the seriousness of the crisis and the high level of engagement we need. As Mr. Gorrell mentioned, we need these face-to-face encounters, both at the scientific level and the political one.

That is why we are today requesting the presence of these ministers, so that they may speak to this agricultural issue before the Standing Committee on Agriculture and Agri-Food.

I know that my colleague from International Trade will have the opportunity later to hear the Minister of Agriculture and the Minister of International Trade Diversification. We have already had the opportunity to hear them at press conferences. Unfortunately, it seems totally impossible to get these people to appear here before us at the Standing Committee on Agriculture and Agri-Food to discuss an important agricultural issue.

Once again, I deplore this, I denounce it, and I feel that the debate should take place here. We are going to talk about quality and the consequences for farmers. We are going to talk about the consequences for the entire Canadian agricultural sector, and I simply don't understand, Mr. Chair...

I believe we are being called to vote.

[The Chair, Liberal, Pat Finnigan]

It's the 15-minute bell.

The meeting is adjourned.