Good afternoon, Mr. Chair and the honourable members of the committee. Thank you for inviting me to speak today on the topic of non-tariff trade barriers. My name is Tia Loftsgard. I'm the executive director of the Canada Organic Trade Association.
I'm joined today by my colleague, Wallace Hamm, general manager of Pro-Cert, which is one of the largest Canadian organic certification bodies. Following my presentation, he will present on areas where immediate action is needed to address some self-imposed barriers to trade that we are experiencing as an organic industry.
The Canada Organic Trade Association is a national membership-based organization. COTA is the voice of organic trade in Canada. We work on market access issues via international trade missions, and we have been involved with the federal government on the assessment of foreign organic standards and organic equivalency agreements.
Our membership represents the entire organic value chain, including farmers, manufacturers, importers, exporters, distributors, and provincial organizations. We also lead on industry and consumer awareness initiatives, as well as organic data collection for the organic value chain round table and the organic sector.
Currently our organic industry is worth $80 billion U.S. worldwide, and it is estimated to grow between 16% and 25% by 2020. Canada is the fifth-largest organic market in the world, with $4.7 billion in sales, and we are well regarded as a global export leader in several organic commodities around the world.
Organic is a unique subsector of our Canadian agriculture and trade, as it's limited to traceable organic supply chains and is subject to regulations, standards, third-party inspections, and maximum residue level inspections beyond its conventional counterpart. We are the most heavily regulated sector in Canadian agriculture, and likely as a result, the most trusted.
With more than 22 million Canadians buying organic food weekly, and with 5% of global food sales being organic, Canada's organic sector should position itself to continue to meet these global demands and position itself as a world leader in agriculture. However, the sector on its own cannot achieve this stature when it is continually having to fund its own standards, inspections, and certifications, and to assume all the business risks on its own.
In its current state, the new safe food for Canadians regulations have many threats to our sector, which we will feed into the ongoing consultation process. There is no level playing field for crop insurance coverage, there are no incentives to transition to organic—as many of our trading partners offer—and maintaining the Canadian organic standards review process is going to cost our sector over a million dollars by 2020. This is a cost that the industry has to bear in Canada, yet it is funded entirely by governments in the United States and in the EU.
Organic trade is subject to many business risks related to trade due to our limited supply options, the unknown risks of any changes to NAFTA—as these are two of our largest organic trading partners—and additional testing required on maximum residue levels on Canadian organic products entering foreign markets, particularly because there is no tolerance within the organic sector.
These non-tariff trade barriers are holding back the growth of our sector and the ability to capitalize on the opportunities that exist. At a minimum, the Canadian organic sector should be able to keep pace with its major trading partners and eliminate the non-tariff regulatory barriers that exist.
Secondly, the government collects a vast amount of information and data on agricultural production and import and export trade flows, but it rarely segments out data effectively on the organic sector. The lack of sound data limits the ability to assess market opportunity or the loss of market opportunity for Canadian producers, manufacturers, and businesses. As harmonized sales codes are used to negotiate trade agreements, maintain trade statistics, and identify goods and shipments that pose a risk to the health, safety, and security of Canada, the organic sector is very limited in its ability to track trends, evaluate trade flows, and have concrete data.
We believe a lack of organic data is a risk for the government and for the sector, and it prevents both parties from making informed business decisions, trade agreements, and program-related decisions regarding this sector, which lives within the agricultural envelope. It's noteworthy to mention that 2011 was the last year that census data was collected on the organic sector expansively.
Trade agreements such as NAFTA and CETA are very important trade agreements for the entire agricultural sector. The organic sector is subject to additional trade agreements, such as organic equivalency acts.
Canada has negotiated organic equivalency agreements with 90% of our major trading partners. This includes the United States, the European Union, Switzerland, Costa Rica, and Japan. Agreements with Mexico and South Korea are currently being negotiated. The organic industry's success relies on the Canadian government making sound decisions in relation to these organic equivalency trade agreements and understanding the ramifications of these on Canadian organic trade.
We recommend the following: create a targeted list of 100 new import and export HS codes in order to better understand trade flows in the country; improve the level of detail in the questions about organics in the census of agriculture and other national annual agricultural surveys; improve consultation with the organic industry on the ramifications of foreign organic equivalency agreements; and develop, in partnership with the organic industry, a national organic data-collection strategy that includes production, organic yield, sales, and pricing data for key organic commodities.
Now I'd like to hand over the presentation to my colleague, who will provide additional details and examples of how the non-tariff trade barriers are affecting our sector.