Agriculture Committee on June 1st, 2017

[Lloyd Longfield, Liberal, Guelph, ON]

What are the bigger markets?

One of my relatives who used to be on your board was in South Africa last week. He's working on some trade deals in South Africa. He's travelling all over the world. His business is out of Seaforth, Ontario, and has really done well in the last five to six years in exporting.

Where can we help support exporting for your businesses?

[Geof Gray]

The biggest ag market right now is protected, and it's Brazil. Everybody wants to get into Brazil, but that is protected so thoroughly.

[Lloyd Longfield, Liberal, Guelph, ON]

In terms of the supercluster strategy, agriculture being a key supercluster, you're key within that supercluster, and export is our opportunity. The non-tariff trade barriers in the key markets are the ones that we really want to zero in on. If Brazil has those....

If separately you could provide our committee with some of the key areas with the key impediments, it may be that we could include them in our study.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Longfield, and thank you, Mr. Gray.

Ms. Brosseau now has the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank the witnesses for their presentations today and their participation in this study on non-tariff trade barriers.

I'm sure you're aware that the Standing Senate Committee on Agriculture and Forestry did a study, and they released a report last month, “Market Access: Giving Canadian Farms and Processors the World”. They made a recommendation asking the government to consider establishing a national committee with a mandate to monitor non-tariff trade barriers faced by the Canadian agriculture and agrifood sector in the international markets. Monitoring would facilitate negotiations toward the elimination of non-tariff trade barriers.

When we negotiate a trade deal, this is something that should be dealt with from the beginning to ensure that once it's signed and we start implementing we don't have to go back and try to fight and resolve these problems. I know there are quite a few problems still ongoing with CETA.

I was wondering if I could get your comments around the suggestion made by the Senate committee. I would start with Hans and then go to Leah or Mr. Gray.

[Hans Kristensen]

Thank you for the question.

Absolutely, I think that the more resources and effort that the Canadian government puts into identifying and then dealing with non-tariff trade barriers, the better off we are. One of the things in the pork industry that we would love to see is a better-funded and better-staffed Canadian Food Inspection Agency. We value ourselves and I'm very proud of our industry. We can compete with anybody in the world. We just need open borders and regulatory access that's equal, but when non-tariff trade barriers come up, it's impossible to identify them all ahead of time. Sometimes they're created as we access the market. To have a standing committee that's on the lookout and addressing that as its number one priority would be hugely beneficial. Also, to have further resources invested into the Canadian Food Inspection Agency, which is the body we need to certify that we're meeting those export requirements, for us would be hugely beneficial.

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

Madam Olson or Mr. Gray, would you agree with the comment, the recommendation?

[Leah Olson]

Yes, absolutely. I think it's very important when our members are exporting. They're primarily small to medium-sized, so we're still a bit underappreciated, which is why we're happy to be here today. We're an aspect of manufacturing that is very niche, so when it comes to trade, we tend to go to the highest standards possible because we export to so many different countries, $1.8 billion to over 150 countries. That's a real point of pride for us, and those manufacturers are primarily in Saskatchewan, Manitoba, and Ontario.

When we look at where the trade opportunities are, as Geof identified, Latin America is a huge opportunity for us, but for a variety of reasons, it's just not able to materialize. We're not able to take fuller advantage of the markets there and the market opportunities, in part because of a lack of financing that is not available there. We agree absolutely that the non-tariff trade barriers should be addressed up front.

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

Yes, Mr. Stordy.

[Gary Stordy, Public Relations Manager, Canadian Pork Council]

I want to add something.

One of the merits of NAFTA has been that it has brought governments together, both Canada and the U.S. Usually, there are areas where things get contentious and there are disagreements. However, moving forward and while trade agreements are helpful and positive and whatnot, it's efforts to try to maintain that working relationship where new trade agreements have been signed or existing ones.... There has been the Regulatory Cooperation Council established in the past. That model can evolve to a regulatory co-operation committee or whatnot, but the premise of that concept has merit moving forward, not only between Canada and the U.S., but perhaps Canada and the EU or other key markets. What that does is it encourages and, frankly, forces the industry to consider what its priorities are—I should add, what realistic priorities they have—and also government officials in the departments to bring some attention to that.

At a time when, frankly, whether it's CFIA or other agencies, they have no shortage of demands or expectations to deliver something from industry, as well as governments, the mechanism of having a structured discussion beforehand within the country among stakeholders and then encouraging that with other countries is something that should be facilitated moving forward.

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

That's perfect. Thank you.

I really appreciate your recommendations, because when we move forward as a committee in working on the report and our recommendations, I think it is really important to underline the importance of CFIA getting that adequate funding that they need. I've been on the committee since 2012, and it's something that I've brought up throughout many years. I'm hoping that maybe eventually they will get what they need.

Madam Olson, in your presentation, you said that the Export Development Corporation does not necessarily have the funding that's necessary. I was wondering if I could get your comments quickly on that, and also, Chair, if I have time—

[The Chair, Liberal, Pat Finnigan]

You have 35 seconds.

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

On COOL, the committee was in Washington recently and had some great meetings. I was in Washington once with members from different parties who were defending Canada when we were fighting COOL. I was wondering if you have some comments around the importance of making sure that this does not get into the renegotiation or onto the table at all.

Please talk about COOL and, Madam Olson, funding of Export Development Canada.

[The Chair, Liberal, Pat Finnigan]

Very quickly.

[Voices]

Oh, oh!

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

I'm sorry. Thank you.

[Leah Olson]

I think EDC is well funded, and my apologies if it sounded as though I said they weren't. It's about where they choose to go. They're not being in certain markets and then pulling out.... For example, there is no Canadian credit agency in Russia, and right now there is a substantial amount of Canadian agricultural equipment there, but we can no longer be selling into it. There's a variety of reasons, but EDC is also not widely in Latin America.

[The Chair, Liberal, Pat Finnigan]

Thank you.

Ms. Lockhart, you have six minutes.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you.

The nice thing about this committee is that we often have very similar interests. I too travelled to Washington. We met with several congressmen as well as industry. Specifically, we've talked to the beef industry about COOL, but I want to ask what the impact of COOL was and is from the pork producers' perspective.

[Hans Kristensen]

COOL is the classic and perfect example of a non-tariff trade barrier. It is a regulatory requirement imposed upon us in the United States. It serves absolutely no discernible purpose in regard to enhanced food safety or product awareness, and it is there, in my opinion, specifically to reduce access to that market.

Country-of-origin labelling is like our softwood lumber dispute with the United States. For those of us in the pork industry, it's the issue that just won't go away. We keep coming back to it and we keep dealing with it.

As a pork producer who has exported and has raised hogs in the United States, I'll say that it affects us directly. What happens is that it makes it so difficult for the processor to handle our product. They have to change their line. They have to identify it, and they have to segregate the product. Also, depending upon the volume of the supply that you're giving to that plant, it just becomes too expensive for them.

This requirement is not driven by the processor, and it's not driven by the retailer or the wholesaler. This is a lobby position designed to be protectionist. It's the kind of thing that we really don't want to see coming back around. If our trade negotiating committee could somehow put that to bed in NAFTA talks, I would be extremely grateful on behalf of the industry. It is very expensive, and it's very detrimental to us in terms of accessing markets.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Very good. Thank you.

I was encouraged by our meetings with the industry in the U.S. because they talked about regulation as well, and about being able to focus on that during NAFTA negotiations. They also use the same language that you did, Mr. Stordy, about maintaining the relationships we have. I'm encouraged by that. It's great to know that on our side of the border we're thinking the same way going forward.

You mentioned Europe, Mr. Kristensen, and the potential of that market, as well as the regulations. How do you see the regulations in Europe comparing to Japan's? You mentioned that Japan has very high-level regulations as well. How do the two compare? Are there any best practices that should help us through that?

[Hans Kristensen]

The situation we have right now with Europe is we're very excited and happy to see that market opening up. The level of pork that we produce, the quality of the product, the level of our food safety standards, our traceability programs and everything will meet EU standards. Because of Japan, we are in a position to access that market and we can meet those requirements.

One of the issues we have with the EU, or one that we mentioned, is the health mark label. That's a rather unique challenge, because in that case, it's not actually the regulation that's a problem, in our opinion—I'll say my opinion because I don't want to get into too much trouble with my counterparts in the industry. In my opinion, the issue there actually stems from the CFIA's interpretation of that regulation. The regulation for the health mark label to be applied to all product, fresh and chilled product going to the EU, requires that the label be attached. The problem we face in our industry is when we're doing shipments of export, that can come from two or three different plants and it can be sent to another plant for freezing, to control product, or it can be a product from different sources coming in. The question is, where is the label applied and to which plant? In our interpretation, the regulation is that it's in end use. Once the product is done and assembled, then we do the whole shipment, label it, and send it out. If we try to back that up too far up the chain, it becomes almost logistically impossible to do.

My understanding is that the EU is actually not opposed to our labelling that product at point of shipment. We're down to a CFIA interpretation of a rule, so that's one we'd really like to see addressed. We've been talking about it for two years. It's something that we would really love to see addressed in preparation for getting better access to that market.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Okay.

To touch on labelling, and this might apply to some of our other witnesses later a little more, you mentioned the number of departments that are involved along the way—Health Canada, CFIA. Do you see a cohesive plan for any changes in labelling that may or may not impact your industry?

[Gary Stordy]

I apologize. Labelling in what sense, country-of-origin labelling or just—

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Even broader than that. Do the initiatives that are being undertaken by Health Canada on food labelling have an impact on your...?