Agriculture Committee on March 9th, 2016

[The Chair, Liberal, Pat Finnigan]

Ms. Brosseau, the floor is yours for six minutes.

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

Thank you, Mr. Chair.

I want to thank Ms. Emond and the other witnesses for their presentations today. I would have liked to have a bit more time to discuss with you, but we had some responsibilities in the Chamber of the House of Commons.

This is a very important issue. Unless I am mistaken, milk proteins and issues related to diafiltered milk have been under discussion for a few years. We have tried to move this file forward during the oral question period by putting questions to the former government.

We have a new government now. As Mr. Breton was saying, everyone recognizes the fact that human beings are involved here. An average-sized farm is losing about $1,000 per week. The situation is dire. We are talking about human beings and families.

Ms. Emond, you said in your presentation that you have had about 60 meetings with the CFIA and with the Conservative government's representatives. You must have also had meetings with the representatives of the new government. Can you tell us why you think no solutions have been put forward and nothing concrete has been proposed to you? You have suggested several solutions. Could you explain why 60 meetings have been held with no results? Can you tell us more about that?

[Caroline Emond]

Thank you for the question.

If I knew the answer, the issue would surely be resolved by now.

I think we have to find solutions that can satisfy everyone. We talked to you earlier about a fairly simple approach to implement existing rules, including the cheese composition standards. We simply need someone to decide to apply them. The agency responsible for that may not currently have the ability to do so. Is it a matter of resources or of political direction? One thing is certain: we know who could take care of this.

The Canadian Dairy Commission currently has a mandate to conduct audits and verifications. It has the resources and the expertise to perform that kind of work. It is prepared to do it and is available. This could be resolved quickly.

I think that part of the answer also has to do with the fact that trade negotiations have been held. As you know, the Trans-Pacific Partnership negotiations have led to certain things being put on hold.

Given the intention to resolve the problem we are experiencing, we hope we will manage to find a solution quickly. Unfortunately, delays and inaction have resulted in situations that never should have happened now looking like the norm. It is difficult to find the will to change them because of a concern to modify a situation that never should have existed. There is an urgent need for action.

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

I remember when the agreement in principle between Canada and Europe was announced during Thanksgiving weekend. I remember that everyone said we had hit a wall, especially when it came to the dairy industry, for which the agreement led to huge losses. We managed to have a unanimous motion adopted in the House of Commons. We are not sure what the compensations will be following the agreement between Canada and Europe. I assume everyone agrees that the responsibility for enforcing composition standards should be given to the Canadian Dairy Commission.

Mr. Bourbeau, Quebec lost about 250 dairy farms last year. Everyone in the House of Commons recognizes the importance of protecting supply management in our trade agreements and the importance of acting immediately.

We are hearing fine words, but the Canadian government has to stand firm and not throw in the towel. We have to resolve these issues as soon as possible. Can you tell us about the importance of taking action and, perhaps one more time, adopting appropriate measures? I assume that ministers are listening to us and that a report will be submitted.

This is still a complicated situation. It does not only concern the Minister of Agriculture and Agri-Food. Four or five ministers are actually involved in this issue. Unless I am mistaken, it is up to the Minister of Health to develop a vision that could bring everyone together. We have to resolve these issues and not only the problem involving milk proteins. We also have to deal with matters pertaining to poultry, cull cows, and so on.

[Alain Bourbeau]

Thank you for your question.

You are are doing a really good job of pointing out the issues of consistency, which should exist in the carrying out of a public policy.

In terms of border control, at least four departments are concerned by effectiveness. When I was answering Mr. Gourde's question earlier, I said that there was surely a lack of collaboration between various departments. The Department of Finance is concerned by the payment of tariffs, while the Department of Public Safety is responsible for border control through the Canada Border Services Agency. There is also the Department of Agriculture Agri-Food because this has to do with agricultural policy, as well as the Department of Foreign Affairs because we have trade agreements and have made commitments to our partners. Our trade partners also have agricultural policies and specific requirements.

We often hear that Canada is the only country with a supply management system. That's true, but the U.S. is the only country in the world to have a farm bill, and the European Union is the only entity with a common agricultural policy.

As for your concern, I would say it is vital to create a consistent instrument within government—in other words, among the various departments responsible for the effectiveness of that public policy.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Bourbeau and Ms. Brosseau.

Mr. Longfield, you have six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Chair, I'll be splitting my time with Mr. Drouin, if that's okay.

That's fantastic work, and thank you so much for getting all of this together. You've done this before, but it's good to get the current state of what you're thinking.

You mentioned four ministers and there's a fifth if you include innovation. In one of the presentations, you mentioned the state of some of the processors as being in need of upgrading. Do we have the capacity to produce our own MPCs? Do we have the capacity to go technology to technology, or is there a gap that we need to address?

Our government is working on an all-of-government approach to problems. We don't want to miss out on any opportunities if we need to include other ministers as well.

[Peter Gould]

That's a great question. We focused a lot on one part of the solution, and it's a very important part of the solution, but the answer is in your question. No, we don't have the technology today, and that is part of the problem as I was referring to.

It creates a level playing field and you get the government to address some of the things that it can [Technical difficulty—Editor] for the investment.

I won't make any inappropriate comments here, but our technology is old. We do produce some MPCs and we do produce some MPIs, but in relatively small quantities. That was the comment I made.

To have that ability, you need the right conditions for the investment, but it's still going to take time. We talked about a major ingredient plant where you get all the innovation, you get the job, and you get the new technology, but it takes time.

[Lloyd Longfield, Liberal, Guelph, ON]

I was very fortunate to tour a processing plant in my riding last week, and I saw the innovations they were working on. There were some things around membrane filtration and some of the larger capital problems that need to be solved as well to become technology. We don't want to miss out on opportunities when we look at innovation funds.

I also sit on the industry committee and I may be crossing two committees here, but that's the all-of-government approach.

Thank you for the answer on that. We'd like to see with all of the processors if there's an opportunity for our government to work on projects that will help them be more competitive, because at the end of the day, we have to be more competitive.

Over to Mr. Drouin, if that's okay.

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

Thank you, Mr. Longfield.

With regard to Mr. Gould's presentation, I read here that you said in 2008 the government wanted to establish new tariffs for MPIs, but they didn't do it under NAFTA countries. Do you know the rationale for that?

[Peter Gould]

To be clear, they did create tariffs and a TRQ, but part of the NAFTA is no new tariffs, so they didn't apply to the United States and Mexico. The United States is a big source of imported product.

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

They couldn't do it because of NAFTA rules. I'm asking these questions because I want to make sure the strategy with which we choose to move forward is the right one, so we're not back here in four or eight years. If we are trying to block the MPIs at the border, can we do that under NAFTA rules?

[Peter Gould]

I'm not going to answer that question. I will make the comment, though, that the WTO has a set of rules, as does CETA, NAFTA, the TPP. Under the WTO there are provisions that allow a country to introduce a new tariff code. Under the regional agreements—NAFTA, CETA, TPP, when they come into force—there are no such provisions, so you're absolutely right.

Caroline wants to make a comment as well.

[Caroline Emond]

I just want to make clear here that we're not trying to stop imports. There are rules in place. All we're asking for is enforcement of those rules. We produce great Canadian milk here. We talk about innovation, but as Dominique mentioned earlier, they can use that milk.

It's not a question of trying to stop anything at the border; we just want to make sure that we can enforce our domestic rules right now. Don't make this a trade war. It's not one. We have to be very clear on that.

[Alain Bourbeau]

Filtration technology has existed for 30 years, so it's not new technology. It's just an issue of investment in these technologies.

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

Yes, and clearly [Technical difficulty—Editor] more than tripled, more than quadrupled.

Mr. Gould, the ingredient strategy that DFO is currently implementing, I'm not sure, is it supported by DFC? Is that the common area across Canada that supports that ingredient strategy? Do you believe that the amount of milk protein imports would decrease if we moved forward with the ingredient strategy?

[Peter Gould]

Let me make one comment to begin with. There's a lot in common between what's being done in Ontario and nationally. We're not exactly the same, but everybody is headed for the same outcome.

Just to reinforce Caroline's point, if we get the investment in technology, if we price the product competitively, we create the opportunity. This is not an attempt to replace or displace imports in any way. It's just to bring Canada into the 21st century and create a platform whereby we can compete.

[The Chair, Liberal, Pat Finnigan]

Thank you. I guess we're out of time.

Thank you, Mr. Drouin.

Now, Ms. Lockhart, you have six minutes.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you very much for being here. I really appreciate it.

I'm from the riding of Fundy Royal in New Brunswick. I live in Sussex, which is a dairy town, the dairy centre of the Maritimes, we call it. I've had an opportunity to talk to many farmers throughout the summer as well as into this parliamentary session. One of the things that we talk about a lot is connecting the consumers with the food product and how to have them understand some of the issues in the industry.

Have any studies been done on the diafiltered products, or do you know about the impact on the quality of the products we're producing? What impact does it have?

[Dominique Benoit]

Thank you for the question. There's no difference. It's simple.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Okay. That's a quick answer.

Also, I'm wondering, when we're talking about this and about production—and I appreciate the talk around innovation and that sort of thing—are you telling me that there's technology in the U.S. that is making it...? Why do they have this product to export into Canada?

[Dominique Benoit]

Well, as I said in my presentation, and I commented on it, the only reason this is happening is that it's a way to bring in cheaper protein. That's the only reason.

We are a processor in the United States. We make cheese in the United States. There's no reason, no rationale for us in the U.S. to make cheese using UF85, using diafiltered milk. There's no rationale for it. There's no economic incentive for it. There's no reason for it. The only reason Canadian processors are importing UF diafiltered milk is that it's a cheaper ingredient because it circumvents the tariff and we can use it without restriction in production. That's the only reason.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Very good. Thank you very much.

Francis.

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

Thanks.

Peter, you were talking about the ingredients strategy for Ontario.

Mr. Bourbeau, do you have the same opinion on the issue?

[Alain Bourbeau]

I've been looking forward to answering you.

Across Canada, there is a concern regarding a class of ingredients. To tease my colleague Peter, I would say that their impatience caused them to pull the trigger faster than the others.

Before becoming what is referred to as an Ontario strategy, from the beginning or for a few years, this project was nourished and supported by all Canadian provinces. We shouldn't be talking about an Ontario strategy, but a Canadian strategy that took off more quickly in Ontario because that province has a slightly different program. We basically all agree on the same thing. All the provinces, including Quebec, are working very hard on that. Like Dominique, I recognize the effort of our processors who are getting involved like never before in the past 25 years to find a solution together.

I want to reiterate that rules should be clarified so that they would be the same for everyone. If we want to save our dairy policy, the government must take action.