Mr. Chair, honourable members, good afternoon.
Thank you for the opportunity to come here today to discuss some of the non-tariff trade barriers that are affecting members of the Canadian Horticultural Council.
CHC is an Ottawa-based, voluntary, not-for-profit, national association that represents fresh fruit and vegetable growers across Canada who are involved in the production of over 120 different types of crops on over 27,500 farms, with farm cash receipts of $5.5 billion in 2015. Since 1922, in collaboration with members and the government, CHC has advocated on issues with long-lasting impacts on Canada's horticultural sector, promoting healthy, safe, and sustainable food, and ensuring the continued success of our industry.
Global competitiveness is a high priority for CHC members, and we welcome all opportunities for collaboration with the Government of Canada to prioritize agriculture as a key sector for the Canadian economy and to meet the goal of increasing agrifood exports to $75 billion by 2025. While we look forward to growing new markets through free trade agreements, there are a number of non-tariff trade barriers that should be considered when negotiating Canada's free trade agreements.
Canada's maximum residue limits, or MRLs, are set by Health Canada through the Pest Management Regulatory Agency. Health Canada sets science-based MRLs to ensure that the food Canadians eat is safe. The MRLs for each pesticide-crop combination are set at levels well below the amount that could pose a health concern.
When Canada and another trading country do not agree on these MRLs, it means the risk assessments conducted in each country differ in the amount of pesticide determined to be acceptable to remain on certain produce when it enters the market. This poses a huge technical barrier for imports and exports.
For example, Nova Scotia used to export apples to the EU, but the province stopped doing so when the EU dropped its MRL for diphenylamine—a common storage treatment for apples—to 0.01 ppm. In Canada, the maximum residue limit for this product is set at 5 ppm. In the U.S. it's 10 ppm.
Without harmonized MRLs, the risk is often too high for growers to venture into new markets. A producer in full compliance of the Canadian pesticide product label uses can have their crop rejected by the destination country due to residue violation resulting from an MRL set below the Canadian level.
Last week, CHC sent in a submission on the possible free trade agreement with China. Many of our members voiced their concern with the lack of harmonization regarding residue levels, which creates a substantial barrier for those in the horticultural sector. There have been efforts by international organizations such as the WTO and Codex to develop a world standard, but so far there is none recognized by all countries. The majority of countries are setting their own tolerance levels, and the result is inconsistent MRL standards among trading partners.
The priority to enhance trade in agricultural commodities may not be entirely successful without the work of PMRA to create MRLs for new registrations and see that they are harmonized around the world. The roles played by PMRA at Codex are essential. However, PMRA has been forced to back away from this work at this critical juncture due to severe budget restraints. Canadian horticultural producers support adequate funding of the PMRA, so they are able to continue not only to do their registration and re-evaluation work well and on time, but also to provide their expertise to further Canadian involvement in science internationally, including in harmonization of MRLs.
Trade negotiators should continue to lobby for science-based MRLs to be harmonized between trading countries to ease this technical barrier.
With regard to phytosanitary import requirements, particularly with fresh produce, it is important for our products to cross our trading partners' borders quickly, without delays, to ensure they arrive in the foreign market with the same high quality as when they leave Canada.
Phytosanitary import requirements can become significant deterrents to market access for fresh Canadian produce, as other countries may impose restrictions that are not always supported by a science-based assessment of risk. Some of these include unreasonable laboratory testing requirements, costly pre-clearance inspections, lack of acceptance of CFIA-accredited laboratory tests, and inconsistent and non-transparent regulations, such as phytosanitary requirements that change without fair notice.
In CHC's recent member consultation regarding a potential China free trade agreement, strict and inconsistent phytosanitary restrictions were one of the biggest barriers for our growers entering the Chinese market.
To reduce this trade barrier, we support the inclusion of enhanced and technically justified phytosanitary requirements that are harmonized between countries. This would strengthen the need for importing countries to conduct science-based risk assessments and allow fair market access opportunities based on valid phytosanitary conditions.
I'll now turn to hazard-based in-or-out regulatory decisions.
Building on our advocacy for a science-based approach, an additional non-tariff barrier is when governments take fundamentally different approaches to make regulatory decisions. This is the case currently with the EU, and it has the potential to become a trade barrier with other countries as well.
For example, Canada looks at actual cases and uses a science-based approach to see how to mitigate risk while continuing to use a crop protection product. In contrast, the EU makes decisions based on the simple existence of a hazard, without researching to find a solution to the risk. An example is the EU arbitrary limit for the detection of any pesticide in drinking water of 0.1 micrograms per litre, which is not based on risk. This is a different approach and comes at a cost to Canadian growers who may wish to remain in that market and have to adhere to foreign regulatory decisions.
CHC would encourage an approach whereby trade negotiations include that phytosanitary risk mitigation, based on science, is recognized in the registration of crop protection products.