Agriculture Committee on Feb. 21st, 2017

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Speaking of beef producers, he mentioned that, previously, someone was responsible for the beef file but that, now, no one internally was in charge of it directly.

Has there been a reorganization of the office as to the allocation of these files, or is it simply that no one is dealing with the beef file in particular?

[Frédéric Seppey]

I think I understand the nature of your question.

The work is done in teams at the Department of Agriculture and Agri-Food and at the Canadian Food Inspection Agency. We have sector specialists, and I can assure you that we have specialists who are very knowledgeable about the beef industry and who work almost exclusively on beef issues in our department. We also have specialists for each country.

However, when we talk about something like reopening a foreign market to beef, we're going to call on the expertise of someone who knows the industry, namely, a beef analyst. We will also have to work with colleagues from the Canadian Food Inspection Agency who are the specialists in the health requirements of the country in question. They will be able to tell us, for instance, whether they need an export certificate, a veterinary certificate or something else.

In order to manage these 300 or so market access priorities—the number varies from day to day—it is important to proceed in an orderly fashion and follow a system that sets the right priorities.

We use what we call a one-stop shop. The one-stop shop allows us to receive all requests based on a service standard and to follow up, rather than having ad hoc interactions with particular individuals. In our experience, when this is done on an ad hoc basis, monitoring and problem solving are done in a less rigorous way.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

We also often hear that Canada is very quick to adopt measures to allow exporters from other countries to move their products here to Canada, but that other countries are slower when it means adopting our measures.

Does the Market Access Secretariat talk to the Canadian Food Inspection Agency? I imagine it is the agency that makes those approvals. Is there a means of communication between the two?

It seems to me that we are playing cards and have all our cards on the table, and we are quick to approve their actions, but other countries take much longer to provide such approvals. As a result, we no longer have bargaining power.

[Paul Mayers]

Indeed, yes, absolutely. In fact, staff from the Canadian Food Inspection Agency are embedded directly in the market access secretariat to ensure highly effective coordination of files, in terms of both export and import interests.

Often in our conversations with another jurisdiction, both export and import interests are part of our discussions. As I noted earlier, our principle with respect to a commitment to a science base is a foundation for us. Industry partners here in Canada from time to time will view that commitment as enabling an import context while we're resolving export issues, while what we hear from exporting countries is that Canada takes much too long to consider things. One can understand those perceptions, because each is looking at it from a different perspective.

What I can assure you is that we operate on the basis of that principle. It's extremely difficult to promote a principle of science-based, rules-based, predictable trade if you don't live it yourself.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I have to admit that I've only spoken to...I haven't spoken to the exporters from our side; I've only spoken to our exporters. I'm sure that the conversation would be somewhat different.

Mr. Chair, is my time up? I think it is.

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Monsieur Drouin.

Now, Madam Jolibois, you have six minutes.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Thank you very much.

Can we elaborate on the market access secretariat, the staff, and the staff abroad in various sectors? Could you break it down?

[Frédéric Seppey]

The market secretariat is not structured by sectors but more by expertise in terms of specific markets.

We have a number of staff, as Mr. Mayers was pointing out. CFIA staff are embedded in the market secretariat, and they may cover several markets, but the resources are really standing ready to work on the highest priorities at any time. Addressing a number of market access issues, whether on beef or canola in China, for example, would call on the same type of skills.

Again, the market secretariat is playing coordination and integration functions and would then draw on resources and collaborate with people in CFIA, for example. Then, if it's a canola issue, it would work with experts on oilseed issues. If it's on beef, they will work with experts on beef. In the market secretariat per se, the resources are focused in terms of specific markets.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

I understand that. Does Canada, our country, have enough financial and human resources in these areas?

[Frédéric Seppey]

We could always use more resources, but I would say that we have.... The resources that we have are not set at our level but at a higher level. What we are trying to do is maximize the resources that we have by being as efficient as possible in terms of being coordinated closely with the industry, because there are a certain number of things that the industry can do.

By dividing the work with the industry or provincial and territorial partners, which are also playing a key role, we are trying to lever the maximum effort and efficiency in terms of addressing market access issues. The prioritization is very key in that regard as well.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Thank you, Madam Jolibois.

Now we'll now move on to Mr. Pierre Breton.

You have six minutes.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Mr. Chair.

Several studies have been done since 2005. They conclude that it would be better to resort to customs duties than to non-tariff barriers, which are numerous. Earlier, someone said that there are 287 or 288 tariff barriers and 16 classifications.

I'd like to hear your opinion on that. This data comes from studies that have been done by experts. There are always two sides to the coin, but it would be interesting to hear what each of you has to say about these studies and the conclusions reported in them.

[Frédéric Seppey]

A number of studies are increasingly trying to assess these aspects. Given that non-tariff barriers or measures are less transparent than tariff measures, it is much more difficult to quantify their economic effects.

I would like to make two brief comments in response to your question.

With regard to tariff measures, under the rules of the World Trade Organization, all countries have a limit on the tariffs they can apply. They are obliged, under their schedule of commitments, not to impose tariffs above the negotiated threshold. Therefore, a country like Canada does not really have the flexibility to raise its tariffs unilaterally, except in very specific cases, but they are very limited. The same is true for other countries. They can't raise their tariffs very easily.

Second, if a country has a tariff protection measure in the form of a tariff, that is very clear. However, non-tariff barriers are more difficult to quantify. Not all measures are on equal footing with regard to their effects on trade. As I mentioned in my opening remarks, several of these measures are legitimate, but our American colleagues may differ on the legitimacy of a Canadian measure. If there is disagreement, the matter will be referred to an arbitration tribunal of the World Trade Organization.

Increasingly, measures that restrict trade are not tariff measures because, with successive rounds of negotiations, tariffs have gone down. Now, more and more, the barriers are non-tariff. We talked this morning about the tools we have at our fingertips to defend our interests. Bilateral discussions or regulatory cooperation are the tools we have to try to overcome these obstacles.

[Pierre Breton, Liberal, Shefford, QC]

Mr. Mayers, do you have something to add to that?

[Paul Mayers]

No.

[Pierre Breton, Liberal, Shefford, QC]

That was the only question I wanted to ask, Mr. Chair.

[The Chair, Liberal, Pat Finnigan]

Go ahead, Ms. Lockhart.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you.

In your testimony you mentioned interfacing with provincial governments with respect to trade. We've talked a bit about interprovincial trade, and I'm wondering if you could give us some commentary on other trade measures that are impacting growth in the industry.

[Frédéric Seppey]

Many observers of the industry will say that if we are able to negotiate free trade agreements with foreign countries, we should be able to have a single economic space in Canada. This is why more than 20 years ago the agreement on internal trade was negotiated. In recent years there have been joint efforts, actually at the call of provincial premiers, to have a significant revamping of the agreement on internal trade. The effort is now known as the Canadian free trade agreement.

Negotiations are very advanced in that regard. It has the ambitious goal to significantly increase the mobility of goods, services, and people across the country. Actually, the agriculture and fisheries committee of the Senate did a study on interprovincial trade and heard from many witnesses.

The witnesses who appeared often referred to measures with respect to the movement of alcoholic beverages across provincial borders, differences in terms of standards for certain types of products, such as dairy, which is one area, or differences in meat, for example. There, as my colleague Mr. Mayers was mentioning, while the movement across provincial borders is federal, you often have smaller slaughterhouses that are regulated under their provincial regime because they sell within the province. However, in an area like Ottawa-Gatineau, where you have small slaughterhouses or meat processing plants on both sides of the border, if there's an interest in selling just across the river, legally you have to be a federally inspected plant to do that, and the requirements of CFIA are different from those of MAPAQ in Quebec or the OMAFRA in Ontario.

These are examples of measures that provinces and the Canadian government are trying to work out under the Canadian free trade agreement.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Sure.

I brought this up because I was reading about it in an article that's somewhat dated, which said that interprovincial agricultural trade from 1992 to 1998 was larger than was agricultural trade with the United States. Is that still the case? At that time it was averaging $17 billion Canadian per year, versus $14 billion Canadian to the U.S. Is that still the case?

[Frédéric Seppey]

I'm afraid I don't have the current economic facts, but this figure doesn't surprise me, and I presume it's still the case.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

So there haven't been any significant changes?

[Frédéric Seppey]

This indicator does not necessarily imply the state of the barriers that could exist. I mentioned a number of issues that exist in terms of interprovincial trade, but for commodities like fruit and vegetables or processed food products, you don't have these impediments. For many products, we don't have interprovincial barriers. There are a number of areas in which, because there's more regulatory oversight, there may be more barriers.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Okay. Thank you very much.

Thank you, Mr. Chair.