Agriculture Committee on Feb. 21st, 2017

[The Chair, Liberal, Pat Finnigan]

Thank you.

We go now to Mr. Gourde for six minutes.

Mr. Gourde, you have the floor for six minutes.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Chair.

The free-trade agreement with Europe will be in force on an interim basis in a few weeks. Is that correct?

[Frédéric Seppey]

Meaning that we have to wait until the Canadian legislative process is completed. The bill is currently before the Senate. Some regulatory changes will be required after that. However, the intention is for the agreement to be in place on an interim basis as soon as possible, probably in the spring.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

If it is on an interim basis, then the terms of the agreement are in effect.

As for the 17,700 tonnes of European cheese entering Canada, has a process been initiated for Canadian importers? Has that decision already been made?

We have no idea who will have the right to import these cheeses.

[Frédéric Seppey]

There is a quota of 16,000 tonnes for all cheeses and another for the 1,700 tonnes of so-called industrial cheeses. The decision on the allocation of quotas is the exclusive prerogative of the Minister of International Trade. To provide information on this decision, consultations were held with industry stakeholders over the past summer. Many submissions have been filed.

It's still under consideration. The Minister of International Trade will have to make a decision on this.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

So the process began last summer with the call for tenders.

[Frédéric Seppey]

Indeed. An extensive consultation process has taken place.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Are we talking about consultations or tenders?

They are two completely different things.

[Frédéric Seppey]

I'm talking about consultations. A call was published on the Internet. The Department of Agriculture and Agri-Food communicates regularly with all stakeholders in the dairy industry, be they involved in production, processing or retailing. Global Affairs Canada and the Department of Agriculture and Agri-Food ensured that as many stakeholders as possible could submit their views.

Bilateral meetings were held, and documents were submitted by the speakers, who were able to express their views and preferences regarding the allocation of the quota.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I knew that these people had been consulted, but I have never heard that calls for tenders had been made on these quotas.

[Frédéric Seppey]

I'm sorry, I have to clarify some details about how the tariff quota is allocated.

It is not a call for tenders in the context of a public contract. It is really about expressing points of view. There are only minor administrative costs. An import permit is granted without it involving any special charges. It isn't necessary to determine who is the lowest or highest bidder. I used the word “submissions,” but I wanted to talk about a document that was used to express points of view. I am sorry about that.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Those who are chosen will therefore get a percentage of the tonnes of cheese available.

Will they obtain these long-term import quotas or will it be reassessed after a certain period of time?

[Frédéric Seppey]

Under current tariff quotas, there are no uniform rules that determine whether these quotas are long-term or whether they will be reassessed periodically. The detailed arrangements for the allocation of these two tariff quotas will make it possible to determine this. It's one of the things that the Minister of International Trade must consider when making his final decision.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Does the Minister of International Trade take into consideration the fact that some companies will be able to export cheese more easily if they obtain import quotas?

If you buy cheese in Europe for resale, you can take advantage of a lever. However, if you are just an exporter, you can't get the same benefits. For example, if you already produce cheese in Canada and buy 2,000 tonnes of cheese in Europe, you can sell it more easily than if you are just an exporter and don't offer anything in return.

[Frédéric Seppey]

Generally, one of the policies that is applied in the allocation of tariff quotas is the ability to use the quota wisely. Being active in the field of cheese distribution is a criterion that is likely to be very important when allocating the tariff quota.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you.

[The Chair, Liberal, Pat Finnigan]

Did you want to share some time? There's about one minute left.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Sure. I'll just ask a quick one. Well, I don't know about that, but....

You talked about Canada's exposure to non-tariff trade barriers or measures. When we implement them, is it mainly because they don't meet our scientific regulations or criteria? If we have scientific criteria that are higher than those of the country that is exporting to us, how does that work? Is that seen as a non-tariff trade measure?

[Paul Mayers]

Certainly any regulatory requirement in the sanitary or phytosanitary space impacting an import is a non-tariff measure; however, it doesn't constitute a barrier unless the exporting country can't meet it. It's an unjustified barrier if we can't defend its legitimacy in protecting a Canadian interest in terms of human health and safety or the protection of our agricultural environment.

We protect ourselves in that regard through our commitment to being science-based and risk-based. We carry out risk assessments to determine the appropriate level of a measure, and that serves, in our view, to protect.... What we're doing is applying a legitimate restriction in order to achieve a legitimate protective outcome.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Mayers, and thank you, Mr. Shipley.

Mr. Longfield, you have up to six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair.

The conversation continues.

I'm interested in the relationship between the provinces and the federal government in terms of regulatory frameworks. I touched on that earlier. I said that we have a bit of a patchwork of regulations across Canada that can sometimes be more bothersome than the regulations dealing with other countries.

Forty per cent of Canada's cattle and beef has to be exported, and 90% of our canola needs to be exported. Cargill, in Guelph, just put in place a $3.5 million expansion, with the help of some funding from the province. We're doing what we can in terms of setting a base for development.

This might be more of a marketing question than a non-tariff trade barrier question. How are we working with the provinces to overcome the barriers that currently exist?

[Paul Mayers]

Perhaps I could start with the regulatory dimensions of that.

Because there is shared jurisdiction in Canada in the agricultural context, it is the case that in some situations there isn't a perfect alignment between provincial requirements between provinces or between provincial requirements and the federal system. As a result, we have a number of different approaches.

Products moving interprovincially are subject to the federal requirements. We are working very closely with our provincial counterparts in terms of collaborating on regulation.

There is a strong interest in deepening regulatory co-operation and maximizing regulatory alignment, but we equally recognize that the regulatory frameworks have grown up independently, so you do have differences. Those differences can result, as my colleague noted, in a provincially regulated slaughter plant operating in Gatineau being unable to ship its products to Ottawa or from Timiskaming to Temiskaming. That situation arises.

It is an issue that the Canadian Food Inspection Agency and Quebec are exploring right now, in terms of pursuing a pilot to strengthen the alignment. It is not to say that one system is weaker or stronger, but they're different. Addressing those differences to reduce the restriction on the movement of products is a very strong interest on both sides.

[Lloyd Longfield, Liberal, Guelph, ON]

Great.

Could I just dive into that a little bit deeper? One of the restrictions we have, or one of the areas that affects our competitiveness, is the sheer size of Canada and the transportation network. Often our transportation programs are highlighted as giving preferential treatment to Canadian farms and businesses.

Where are we in terms of, let's say, rail agreements or trucking agreements in terms of dealing with other countries?

[Frédéric Seppey]

With respect to other countries or within Canada?

[Lloyd Longfield, Liberal, Guelph, ON]

I'm thinking that other countries could say we're giving subsidies on the rails or we're doing things in terms of providing highway systems that give us preferential treatment.