Agriculture Committee on April 11th, 2016

[Frédéric Seppey]

We do that regularly. Truth be told, such a study is being conducted as part of the TPP work, under the direction of Global Affairs Canada's chief economist. It's a review of the entire agreement, including market access issues affecting agricultural and agri-food products. The study is underway, and Agriculture and Agri-Food Canada economists are actively involved and lending their expertise. Once the study is complete, the findings will be released.

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

The fact remains, then, that the Canadian government doesn't undertake studies in the way that New Zealand's government does, does it?

[Frédéric Seppey]

No. But, as I told you, the government is doing one as part of the TPP work, and it's being led by Global Affairs Canada.

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

Will the findings be made public?

[Frédéric Seppey]

As I understand it, that is the plan.

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

Very well.

Is there a deadline?

[Frédéric Seppey]

The study is under way. As I'm sure you can appreciate, it's an extremely complex agreement, especially when you consider all the tariff-related issues. So I don't have that information, but we could get back to the committee with it.

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

I have another question.

I know there are some sensitive issues involving supply-managed sectors. I've spoken to beef representatives a number of times, and they have told me that barriers currently prevent them from taking advantage of Canada's comprehensive economic and trade agreement with Europe.

Are there any barriers in the TPP agreement that could prevent industries from benefiting under the deal?

[Frédéric Seppey]

You are no doubt referring to the provisions in the Canada-EU agreement pertaining to the EU's very stringent sanitary requirements. All countries always pay special attention to that aspect because it could give rise to some very real and significant repercussions, as far as market access is concerned. As far as the TPP goes, however, because of the makeup of the signatory countries, we are very optimistic that negotiated market access openings will be subject to fewer barriers, as compared with the Canada-EU trade deal.

That said, I'd like to mention something else about the EU deal. Under the leadership of the Canadian Food Inspection Agency and our chief veterinary officer, together with officials from other departments and Canada's diplomats, we have not stopped looking for ways to overcome those barriers, which can indeed exist. Should those same barriers emerge under the TPP agreement, as far as the Asian member countries go, we will do the same thing.

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

The hormones—

[The Chair, Liberal, Pat Finnigan]

You are out of time. Thank you, Ms. Brosseau.

Alaina, for six minutes.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

I represent Fundy Royal in New Brunswick, a large dairy producing area as well as horticulture.

One of the concerns I've heard from people in my riding with these trade agreements is that often we open up the opportunity for access to new markets, but are we prepared to take advantage of the export opportunities?

How will Canadian companies compare competitively with individual companies or countries? Among the 12 that are involved in the TPP, how competitive are we to these new markets that will be available to us?

[Frédéric Seppey]

Our agriculture and agrifood sector is quite competitive in many sectors. We are innovative. We are already export-oriented in many commodities.

In that regard, in countries where there is a growing middle class and fast growing economy—I'm thinking of Vietnam, for example, a country of at least 80 million customers, and I have not seen the latest demographic figures—you can see that their purchasing power is significant and over a wide range of commodities.

If you will forgive me, I'll take an example from New Brunswick, perhaps not from your part but from the northern part. For maple syrup producers, this is a niche market. It's a growing market and in almost all the markets of the TPP, it would have immediate duty-free treatment across the region for our maple syrup products. That is significant.

The other element I would like to bring to your attention is that it's not only a question of being competitive with other producers in the TPP area, but perhaps more importantly, it is how the TPP improves our capacity to be competitive vis-à-vis non-TPP countries.

I'll use pork as an example. Denmark, a member of the European Union, is one of the most cost-competitive producers of pork and pork products in the world. Because of the TPP, we will have a condition of access into Japan that is quite different than what Denmark has right now through the World Trade Organization. That's the only arrangement they have with Japan.

Therefore, such arrangements allow our pork and pork product producers to enhance their competitive position vis-à-vis their Danish competitors.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

I think that is an important point and it was my next question actually.

With regard to imports, one of the things Canadians are always focused on is food safety, knowing where their food comes from and that sort of thing. TPP has a lot of emerging countries involved.

Are there concerns about food safety regarding imports? What are your feelings on that?

[Frédéric Seppey]

The TPP is a trade agreement and deals, therefore, with market access. It includes a number of rules that include sanitary and phytosanitary measures. These rules are there to ensure that countries follow science, evidence-based policies and practices when it comes to taking the measures that they deem necessary to ensure food, animal, and plant safety.

In that context, the TPP would not impose any obligations on Canada to diverge from its current set of policies that are based on science and evidence, but would ensure the highest level of food safety, or animal and plant health in place. The TPP doesn't affect that standard. It requires us to follow science, evidence-based policies, which is, in any event, how our regulatory system works.

[The Chair, Liberal, Pat Finnigan]

We'll start the next round.

Mr. Drouin, you may go ahead.

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

Thank you, Mr. Chair.

I'd like to thank Mr. Seppey and Mr. Landreville for joining us today.

I'm from an agricultural riding, Glengarry—Prescott—Russell, not too far from here. I think it is home to just about every type of farming sector. In fact, I'm still learning about them all, including some that really operate in niche markets.

I'd like to pick up on Mr. Gourde's question about the compensation package for dairy farmers. We have many dairy farmers in my riding.

I am wondering whether your department had any involvement prior to the TPP announcement on October 4, 2015. Were you involved in the talks that resulted in the $2.4-billion in compensation or overall package of $4.3 billion?

[Frédéric Seppey]

Thank you. That's a very interesting question.

The department has a team of agricultural economists, who are well versed in agroeconomics. The amounts released at the time reflected the department's best possible estimate of the impact on supply-managed sector revenues, over a number of years and based on certain criteria.

So the short answer is yes. Those numbers stem from the analysis of the economists at the department of agriculture.

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

Thank you.

My next question ties in to what Ms. Brosseau said earlier about the technical details of free trade agreements. I'm not sure whether you or Global Affairs Canada officials should answer it.

Do the departments examine all the technical considerations involved in the signing of a free trade agreement? Obviously, I'm referring to the problem around slaughterhouses and the sanitary requirements. It is still difficult to obtain certification, here in Canada, to be able to export products to countries in Europe.

Is any analysis done to ascertain the processes in place in other countries?

[Frédéric Seppey]

Absolutely. It involves interdepartmental cooperation. The answer to your question actually has two parts.

First, during the talks, the agricultural component was largely negotiated by Mr. Landreville, members of our team, and myself. Keep in mind that we work closely with experts as regards veterinary and animal health considerations, and with the Canadian Food Inspection Agency when food safety is concerned. That's the case not just when it comes to setting proper rules under the chapter dealing with sanitary and phytosanitary measures, but also when it comes to negotiating market access terms that will circumvent any technical barriers that might arise.

We did that during the negotiating process. Taking into account Canada's market access objectives, the negotiating team is able to consider technical barriers of that nature.

Second, like your fellow member, you would like to know what we are doing to ensure that opportunities open up once the negotiations have taken place.

Experts who study the benefits of market development, or EU or Asian market experts, determine how they can help our exporters on the ground. In the case of other countries, much of that work is undertaken by the trade commissioner service at Agriculture and Agri-Food Canada or Global Affairs Canada. The work involves determining what the regulatory requirements are and explaining them to our exporters, who can then adjust their production methods accordingly to ensure they meet the technical requirements in other countries.

We do that during the negotiating process and as part of, what I would call, the after-sales service stage. Once we've negotiated a free trade agreement, we need to see to it that the export opportunities actually materialize.

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

So the sanitary targets are set out in the free trade agreement, but not necessarily the methods for achieving those targets. Let's consider a situation where Canada's practices differ from Europe's or Japan's, say, but the target remains the same. Basically, if it takes six months to certify a slaughterhouse process but it ends up taking a year and a half to move forward, it could lead to an economic disadvantage. How can countries work that out between them? Is that done?

[Frédéric Seppey]

Thank you. I'm glad you asked that follow-up question, because it gives me an opportunity to make things clear.

The TPP does not set out the specific technical details but, rather, the overarching principles based on science and fact. Countries often negotiate import conditions bilaterally, between regulatory experts. One of the things they try to do is reduce the differences you described, but that interaction happens between regulatory bodies. It's not mandatory, then, under the free trade agreement.

Finally, industry representatives, who are often the first to learn about those differences and to feel the impact, work closely with government to flag these kinds of problems to Canadian regulators or our department officials. The idea is to improve Canada's regulatory efficiency or take whatever action is needed to promote and protect Canada's interests abroad.

They are different tools, but we endeavour to do all that in a coherent manner and in close collaboration with industry.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Seppey and Mr. Drouin.

We now have Mr. Chris Warkentin for six minutes.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Thank you very much. I certainly appreciate the update.

I just want to double-check: Did you finish your questions?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I hadn't started.