Good morning, Mr. Chair and committee members.
My name is Leah Olson, and I'm president of Agricultural Manufacturers of Canada. I'm pleased to have with me here one of our executive board members, Geof Gray, who will help answer questions and provide insight during the Q and A session.
In addition to his role on the AMC board, Geof is president and CEO of Salford Industries, a key manufacturer in southwestern Ontario offering a full line of tillage and seeding equipment, as well as fertilizer applicators. Salford has six manufacturing plants: two in Ontario, one in Manitoba, one in Iowa, one in Russia, and one in Georgia.
Agricultural Manufacturers of Canada is a national member-driven industry association with just under 300 member organizations. Our mission is to foster and promote the growth and development of the agricultural equipment manufacturing industry in Canada. I'm pleased to be here as you study non-tariff trade barriers to the sale of agricultural products in relation to free trade agreements.
In 2016, agricultural equipment manufacturers in Canada exported more than $1.8 billion of implements to more than 150 countries. In the agricultural industry, we are known as the innovative manufacturers, as we are highly specialized, offering farmers a short number of products, hence being called short-line equipment manufacturers. All agricultural equipment manufactured in Canada, except for one facility owned and operated by Case New Holland in Saskatoon, Saskatchewan, is done by a short-line manufacturer.
Your study is an important one, and I want to share with you the critical role that agricultural equipment manufacturers have domestically but also as global leaders of farm equipment. Canadian-made agricultural equipment is among the highest quality and most sought out in the world. Just over 50% of our manufacturing members are located in rural communities of fewer than 10,000 people. Some of our members are located on the family farm or in communities in which the number of people the manufacturer employs is larger than the population of the community it is in.
Despite being in rural locations, more than 80% of our members export. We have two members who export to more than 40 countries per year, a clear demonstration of the demand for Canadian-made farm equipment.
Employing more than 12,000 people across Canada, our member companies provide high-quality and well-paying employment in all realms associated with being a quality manufacturer: finance, marketing, IT, engineering, procurement, etc. Our members are key contributors and a vital part of Canada's agriculture industry and of rural economies.
A key role the government can pursue for agricultural equipment manufacturers is to enable further innovation by providing tax rebates supporting R and D and the commercialization of our products in Canada and globally. Machinery has been at the heart of Canadian agriculture for many years. It shaped agricultural practices and in many respects created the opportunity for rapid European settlement in the late 1800s.
The agricultural equipment manufacturing industry has progressively developed as an entity separate from commercial or industrial manufacturing. Central to this evolution was the need to develop agricultural machinery capable of meeting the challenges of the Canadian climate and our harsh growing conditions. This drive for innovation enabled Canadian farm equipment manufacturers to thus be global leaders in the development and production of high-quality, durable, and innovative machinery.
Innovation is crucial if we want to address global issues such as overpopulation, limited resources, and food production. The agriculture industry will need to produce more with less, and Canadian farmers and short-liners are at the forefront of meeting this challenge. AMC's members continually develop innovative technologies and manufacture products that enable us to be leaders throughout the world. This situation puts us in a very good position to align with the government's growth agenda.
As companies that thrive on exports, our members are enthusiastic supporters of trade agreements that open up increased market opportunities outside Canada. For instance, we wholly support possible action by the federal government to pursue a free trade agreement with China. As you know, however, any trade deal is only as good as the commitment of the participating countries to honour and enforce the agreed-to measures intended to lower both tariff and non-tariff barriers. Our members have found reasonable success in countries in which tariff barriers are low, but we have concerns about certain non-tariff practices, including border security issues, red tape and burdensome customs procedures, and requirements to meet various and different standards.
As one of our members highlights, “The paperwork and different certification rules are a detriment to developing export markets. It is difficult to keep up with the standards and to meet them, especially with 'legacy' products. The biggest obstacles to overcome for us are, first, different criteria for each country and region that can be hard to keep track of, and second, documentation that is applied arbitrarily.”
The recent approval of the Canada-European Union comprehensive economic and trade agreement illustrates this well. There is some confusion, both on the Canadian and European sides, as to whether CE marking certification is required. One of the requirements for exporting to the EU continues to be that of a CE marking certification, yet at this time, there are limited Canadian organizations certified to offer the CE marking certification. For agricultural equipment, this has been a challenge that has delayed exports to the EU.
Different countries require different formats of the same document. What one country accepts may be quite different from what another country accepts. The federal government would be well positioned to support and help harmonize the standardization of documents required.
Last is a lack of protection for intellectual property, including safeguards against the copying and reproduction of Canadian equipment and innovative products.
In this context, I should mention the absolute importance to our members of the support of Export Development Canada, which is vital in taking full advantage of liberalized trade opportunities outside Canada. While a lack of EDC financing is of course not technically a trade barrier, some of our members equate it with a non-trade barrier when such support is not obtainable.
Over the past year, Agricultural Manufacturers of Canada has hosted numerous government representatives at manufacturing facilities and farm shows across Canada. Our priorities moving forward include continuing to inform the federal and provincial governments' public policy agendas. Our goal is to help solidify Canada's role as a global powerhouse of farmers and short-liners feeding the world today, tomorrow, and in another 150 years.
Thank you for the opportunity to take part in your hearings on a subject of great importance to our members, to the wider agricultural sector, and to Canada's future economy.
Thank you very much.