Further on fair market access, to keep Canadian fresh produce competitive here at home, we need to continue to have the support of anti-dumping rules, through the maintenance of ministerial exemptions.
Fruits and vegetables are perishable crops that are stored under costly, highly managed conditions from harvest until utilized. In the case of many crops—apples, potatoes, and root crops—growers and packers manage the available supply through the winter, spring, and summer to provide high-quality produce until the next crop is harvested. The predictability of the market ensures that, for example, Canadian potato producers provide a consistent, high-quality supply of fresh potatoes to consumers and the processing industry.
The orderly import and interprovincial trade of potatoes is facilitated either in the free import of potatoes meeting the requirements of the fresh fruit and vegetable regulations of the Canada Agricultural Products Act or through the ministerial exemption provision of these regulations.
Ministerial exemptions provide exemption from some requirements of the regulations; for example, container size and grade standards. Without the ME provisions, produce such as apples and potatoes could not be moved in bulk shipments or totes, and could not be moved in ungraded form.
At the same time, ministerial exemptions eliminate the potential dumping of large quantities of potatoes in Canada or in a province, which could result from unrestricted bulk shipments of potatoes. In the absence of this orderly marketing, Canadian producers would continue to incur the high costs and high risks associated with the storage of potatoes, yet be exposed to the unpredictable bulk shipments into their province, and accompanying economic uncertainty.
Similarly, the requirement for a ministerial exemption for grade exemptions limits the dumping of low-quality produce into the Canadian market. Such dumping could severely impact the market price for high-quality Canadian products.
As we head toward the NAFTA consultations, this is front of mind for most of our growers, who view it as essential that ministerial exemptions under the fresh fruit and vegetable regulations be maintained and not lost through NAFTA renegotiations.
I'll now turn to the cost of competition to Canadian growers.
Because Canadian growers adhere to strict food quality standards and labour laws, as well as environmental standards such as carbon pricing, their costs of production are often much higher than those of growers in other countries. Due to these production costs, other countries are often able to enter our market at lower prices, forcing growers to absorb the costs on increasingly lower margins.
While our sector promotes competition and free trade, we value the opportunity to provide fresh, safe produce to Canadians, without having to depend on imports, especially during the summer months. The Government of Canada may need to assist Canadian growers, through regulating imports to ensure foreign product meets Canada's high standards, including labour, environment, and of course, the quality and safety of the product.
In conclusion, the fresh produce sector wants to be more competitive and enter new markets. However, there are significant non-tariff trade barriers that stand in the way of our sector and deter Canadian growers from exporting their products. Strengthening the regulatory system and providing the appropriate policy support within Canada, while harmonizing regulations with trading partners, will contribute to creating the necessary conditions for success.
For Canadian exports, it's very important to have the embassies in our trading countries establish good working relationships, which can help encourage new market opportunities for Canadian growers. Key to exporters' confidence in the new markets will be ensuring that a fully developed dispute resolution mechanism is in place in the countries Canada is negotiating with. The work in Canada of the Fruit and Vegetable Dispute Resolution Corporation on slow pay and no pay could be used as a model.
Additionally, especially with our largest trading partner, we need resolution of the Perishable Agricultural Commodities Act. That's a United States act. It's called the PACA trust. The Canadian Horticultural Council has been trying for decades to get a reciprocal system in Canada for Americans, so we can use it here too, between provinces and between buyers.