Agriculture Committee on Nov. 17th, 2016

[Jim Everson]

From an agricultural policy framework point of view, it's a relatively new area. It wasn't a big part of the Growing Forward 2 set of programs, as I see it.

I think we as a nation are going to be contributing to the global effort on climate change. It's going to require change on the part of many industries, including agriculture, since the farming community is a big user of carbon. Those programs can help the farming community adjust to the changes that are going to be necessary to meet the standards we as a country are agreeing to internationally.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Breton.

Thank you, Mr. Emerson.

Ms. Brosseau, you have six minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses who are here today for contributing to our study on the future of the Growing Forward program—I don't know what it will be called, but it will have a name. It is very important that we improve the content of that program.

During the election campaign and afterwards, the producers I represent shared some of their concerns concerning the supply management program, and so on. The two presentations we've heard raised some very similar points.

Ms. Citeau, you spoke at length about the Canada-European Union Comprehensive Economic and Trade Agreement. I represent an area where there are a lot of dairy producers under supply management. Those producers are incurring losses because of this agreement. As for the pork producers, they see some light at the end of the tunnel and are somewhat optimistic about this agreement, because it will be possible to export certain products such as pork and ham. However, those producers are going to have to do several things to be able to have access to those markets.

As for the beef sector, there are several bones of contention concerning the washing of carcasses. Have you calculated how much it will cost producers and processors to have access to markets under this agreement between Canada and Europe? Has a study been done? Has this been quantified?

[Claire Citeau]

The evaluation we have concerns what the European market could provide to the beef and pork sectors, as well as other sectors, under the agreement between Canada and Europe. At the time when the agreement was finalized, the amounts were $600 million for the beef sector and $400 million for the pork sector, if, of course, the conditions allow exporters to have real and viable access.

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

Modifications are going to have to be made to some processing plants. To facilitate access to markets, the way in which certain animals are raised will also have to be changed.

Do you think we need to offer assistance to producers to allow them to change their practices so that they can have access to these markets?

[Claire Citeau]

I think our members are in a better position than I am to answer that question. Since one of them is going to be speaking soon, it would be preferable to put the question to him directly.

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

In your presentation, you insisted on the importance of having the necessary resources. You spoke about those involved in the negotiations, such as Agriculture and Agri-Food Canada and Global Affairs Canada, as well as the date when the commercial agreements will come into effect.

In your opinion, we do not have the necessary financial resources, nor are sufficient people working in these areas. It is going to be difficult to quantify this. We have to know what the real needs of these departments are, and ensure that the necessary funds are there for the work to be well done.

[Claire Citeau]

Yes, that is very true.

It is important that we have enough resources and negotiators. There is already a very solid team. We are also discussing working on new agreements with China, the ASEAN region and India. It will indeed be important for these resources to be available when these agreements are negotiated.

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

Mr. Everson, I would love to have been with you in China. I was supposed to go, but family comes first. I backed out on that trip, but I've only heard good things.

I know Canada exports a lot of soy; 70% is exported. I think we export the most to China. Would you be able to share with the committee how things went on that trip in Beijing and Shanghai, and maybe talk about some of the issues that you noticed, and some of things that need to be worked on and could be done through this new agricultural policy framework?

[Jim Everson]

Thank you very much.

About 25% of what we export in soybeans goes to China. It's a really important market for us. We're indebted to the government and the minister for leading this mission to China. It's an important market to go to, and being there with the minister and the delegation is helpful in getting meetings that we need and so on.

China is such an important market for many agriculture commodities, and yet it is such a different place culturally. It is different from a business practices point of view and in the structure of industry, the structure of their trade agreements, and their approach to issues such as sanitary and phytosanitary standards. Because of the importance of the market, it's a place where I think we need to be able to focus dedicated resources. We have good staff at the embassy in Beijing, but a large number of agriculture commodity groups in beef, grains, oilseeds, and vegetables are all attempting to get issues resolved in China.

[The Chair, Liberal, Pat Finnigan]

Thank you.

[Jim Everson]

It's a place where it's very difficult to understand how decisions are made. That would be my answer.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Everson.

Thank you, Ms. Brosseau.

Now we have Ms. Lockhart for six minutes.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you.

A lot of our witnesses have talked about the great growth that they've seen over the last several years in the export area. To what do you attribute the growth that you've seen in exports? Is it related to the existing agricultural policy framework? Are there things in there that have contributed to the growth of our exports?

[Jim Everson]

I would say two things. I'd say that international demand for some of our products is really growing, so that's driving the market, but I would also say that innovation is growing as well.

Taking the example of our food-grade export market, our niche in the market is quality. Other countries have volume. Canada has consistently high quality. That has benefited—there's no doubt about it—from the public research money that's been going into the development of varieties. It has helped our export companies in their relationships with buyers. They can target what they require in the way of product composition. The product they need for tofu is different from what they need for soy milk, which is different from what they need for natto. We're very good at tailoring these products to export markets and maintaining high quality.

At the Canadian Grain Commission, we have a quality assurance program called the Canadian identity preserved recognition system. It is unique in the world in terms of guaranteeing quality internationally, and our competitors can't really compete with it.

That's not an APF program, but it is a Government of Canada initiative. It's been very supportive of our markets.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Madame Citeau, do you have something to add to that?

[Claire Citeau]

I would just add international demand and having access to markets.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Okay. With regard to international demand, in what geographic area are we seeing most growth?

[Jim Everson]

That would be Asia, for the most part. What's very exciting about the work that we're doing with CAFTA and the TPP and so on is that so many Asian countries are interested in joining with the TPP. Now there are several that are involved, other countries like South Korea, Indonesia, etc. You know the list better than I do. If we can bring those kinds of trade disciplines to the current TPP membership and then add those other....

In South Korea, for example, while we have a free trade agreement, there are also still significant quotas that restrict the amount that we can sell there. If South Korea came into that TPP environment, it would have to amend those quotas over time, and Canada would have a real opportunity to compete in that market.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

In the soy industry, is there a need for investment in processing infrastructure at this point? What is our capacity now? Is that somewhere we should be looking?

[Jim Everson]

We are very hopeful that there can be some investment in western Canada in processing.

There are three significantly sized processing facilities in eastern Canada. Two are in Ontario, and one is near Trois-Rivières, Quebec. That's really good. They are doing well. Their crush is up this year from previous years, and it's a value-added process. Instead of marketing the seed, you're marketing meal and oil, which have a higher value. It's part of this initiative around value added—more processing is good.

This is the story in western Canada. In Manitoba we have nearly 2 million acres of soybeans grown now. I think everybody in the industry looks at that and thinks that it's a pretty large amount and that it's the base for constructing a processing facility in western Canada, something we don't currently have. There is a natural market in the livestock industry there for the meal.

In terms of the need for investment, I think probably that type of investment is going to come from one of the large processing companies and not from public assistance. In terms of attracting foreign direct investment, there may be an opportunity there.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

You mentioned the west. I represent Fundy Royal in New Brunswick, so I would be remiss if I didn't ask about the potential in Atlantic Canada, based on the fact that we have port facilities there and access to India, for one.

[Jim Everson]

I don't have acreage in mind right now for soybeans in Atlantic Canada, but they are grown in all the Atlantic Canada provinces. There is real opportunity in going to ports that are close by. In Ontario, that's the story of the competitive advantage. You can truck almost all the soybeans in Ontario and Quebec directly to a port in Montreal or Hamilton, so it's very quick access. The same is true in Atlantic Canada.

I think the challenge in Atlantic Canada has been finding varieties that are suitable to the climate and the soil. Finding answers to that is a priority in terms of our research. Again, the public research outlets are working on that. The research and innovation support that the APF provides is doing exactly that. It's getting varieties that work in different conditions in Canada.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you very much.

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Lockhart.

Now we have Mr. Longfield for six minutes.