Evidence of meeting #9 for Agriculture and Agri-Food in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was beef.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Claire Citeau  Executive Director, Canadian Agri-Food Trade Alliance
Dan Darling  President, Canadian Cattlemen's Association
Jim Everson  Executive Director, Soy Canada
Don McCabe  President, Ontario Federation of Agriculture
John Masswohl  Director, Government and International Relations, Canadian Cattlemen's Association

3:30 p.m.

Liberal

The Chair Liberal Pat Finnigan

I call the meeting to order.

I want to welcome our members, and also, on the sidelines, students from Havergal College. We are certainly glad to see you here this afternoon.

We have a full table of expertise on our topic today, the Trans-Pacific Partnership. We will get started on that. Our first guest is Madame Claire Citeau.

You have 10 minutes for your presentation.

3:30 p.m.

Claire Citeau Executive Director, Canadian Agri-Food Trade Alliance

Thank you, Mr. Chair.

Thank you for inviting me to speak on behalf of the Canadian Agri-Food Trade Alliance, the voice of Canadian agriculture and agri-food exporters, and to make a presentation today regarding the Trans-Pacific Partnership.

CAFTA, the Canadian Agri-Food Trade Alliance, is a coalition of national and regional organizations that have come together to seek a more open and fair international trading environment for agriculture and agrifood. Our members represent farmers, producers, processors, and exporters from the major trade dependent commodities across Canada, which include beef, pork, grains, oilseeds, sugar, pulse, soya and malt.

Together, members account for over 90% of Canada's agriculture and agrifood exports, roughly $50 billion in exports annually, and an economic activity that supports hundreds of thousands of jobs in agriculture and food manufacturing. Because Canada enjoys such proverbial conditions for food production that far exceed the need of our population, the Canadian agrifood sector is primarily export oriented.

We export over half of everything we produce. That includes half of our beef, 65% of our soybeans, 70% of our pork, 75% of our wheat, 90% of our canola, 95% of our pulses, and 40% of our processed food products. About 65% of Canada's agriculture and agrifood exports go to the TPP markets.

CAFTA strongly supports the TPP and believes it is integral to the future viability of Canada's export oriented sector. It is paramount that the TPP be ratified and implemented quickly.

CAFTA has advocated for Canada's participation in the TPP and for outcomes that provide a level playing field with our global competitors in the region and real benefits for Canada's agriculture and agrifood exports.

The TPP region represents a market of 800 million people, absorbs 65% of our exports, and includes some of our top trading partners, the U.S., Mexico, and Japan. It also includes some of our largest competitors, the U.S., Mexico, and Australia, and several signatories already do have free trade agreements with one another.

The longer that TPP ratification drags on, the longer we fall behind. Specifically, Japan is our third priority export market and a premium market that demands $4 billion per year in Canadian agrifood products. That's roughly 10% of our total agrifood exports.

TPP countries also include fast growing emerging Pacific countries such as Vietnam, Singapore, and Malaysia. Outcomes are significant for Canadian agriculture despite the U.S. and Japan continuing to maintain restricted access and tariffs for sugar products. Additional access to the U.S., Japan, Vietnam, and Malaysia appear to be the major market gains for Canadian agriculture at this point.

Under a ratified TPP, tariffs will be removed or phased out upon entering into force on a wide ranging array of products. A sample of our members projections of the opportunities seen to be provided in the TPP include: for canola, better trade security, more value for their products, expanded exports by up to $708 million per year; for pork producers, preferential access ahead of non-TPP competitors, the ability to compete in the billion dollar Japanese market where exports can climb by $300 million; Canadian beef producers expect to double or triple annual exports to Japan to nearly $300 million; and Canadian barley producers could export an additional 400,000 to 500,000 tonnes of barley in various value-added forms worth about $100 million. Furthermore, the TPP will create new opportunities, provide a secure trading environment, level the playing field in countries that have FTAs with members but not Canada, and preserve current exports, including 1.5 million tonnes of premium wheat exported to Japan; $2.3 billion of grains and special crops to Japan, Malaysia, and Singapore; $848 million of soybean exports to TPP markets, and $340 million of pulse exports. Moreover, for Canada's sugar and sugar-containing products sector, the TPP will provide welcome, though small, quota increases into the restricted U.S. sugar market. The industry is currently analyzing the opportunities in Japan, Malaysia, and Vietnam. Beyond tariffs, the TPP also sets a new framework for trade with rules to increase co-operation and transparency on non-tariff barriers related to sanitary and phytosanitary measures, biotechnology, and plant health.

We recognize that this agreement may do more for some than others, and will not eliminate all trade barriers in the region, but all of our members are united in supporting the TPP as a significant improvement on the status quo for all Canadian agriculture exporters and for our broader economy.

Overall, the TPP preserves our access to our number-one trading partner, the U.S. It secures unprecedented access to the fast-growing Asia-Pacific region. It provides an opportunity to maintain and enhance our competitive position in the region. It also provides an opportunity to obtain more value from rapidly growing markets such as Vietnam and Malaysia, and high-value markets such as Japan. It also provides an opportunity to negotiate the terms of entry of potential future TPP countries such as South Korea, Taiwan, Thailand, the Philippines, and others. Most importantly, it puts us on an equal footing with our global competitors in the region.

Canadian agriculture, as you know, cannot relive the destructive experience with South Korea, which saw a billion dollar market virtually cut in half overnight as our competitors, namely the U.S., the European Union, and Australia, had their tariffs removed, and we did not. Ultimately, if we're not part of the TPP and others are, we will lose many of these important markets. The best way to implement the TPP quickly is to ratify it quickly.

In closing, we firmly believe that the TPP provides for our members the net national benefit to Canada that merits this agreement being implemented quickly.

3:35 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Ms. Citeau.

Now we have Dan Darling, president of the Canadian Cattlemen's Association, and John Masswohl, director of government and international relations.

3:35 p.m.

Dan Darling President, Canadian Cattlemen's Association

Thank you for the invitation to appear before the committee. My family and I have a beef herd we raise on our farm in Castleton, Ontario, in Northumberland county, about halfway between Toronto and Kingston. Before talking about the Trans-Pacific Partnership specifically, I'd like to provide some context regarding the significance of the beef sector in the Canadian economy.

The 2011 the ag census identified 68,500 farms in Canada that derive more than half of their income from beef production. Over the period from 2010-2014, cattle and calves have been the second largest revenue maker for farms, after canola. Farm cash receipts from cattle and calves totalled $9.7 billion in 2014, representing 17% of the total farm cash receipts. The cattle industry contributed $18.7 billion to the Canadian GDP in 2014.

In 2011 the beef sector supported 228,811 fulltime-equivalent jobs, either directly or indirectly. Every job in the beef sector yields another 3.56 jobs elsewhere in the economy. For every $1 of income received by workers and farm owners, another $2.08 is created elsewhere.

For many years our top market access priority was the country of origin labelling dispute with the United States. I am very pleased to report this long-standing issue was resolved when the U.S. repealed the offending legislation just before Christmas.

The establishment of a new market access through trade agreements is now our top international trade priority. The two most immediate opportunities for new beef access are to Europe, through CETA, and improved access to Japan through the Trans-Pacific Partnership. Canadian beef producers are strongly supportive of the TPP.

We achieved our primary objective in TPP negotiations, which was to re-level the playing field for Canadian beef in Japan. In 2014 we exported nearly 19,000 tonnes of Canadian beef to Japan, worth $103 million. In 2015 we sold only 14,000 tonnes for $93 million. That's a 9.3% drop in value, but nearly 24% drop in tonnage. The main reason for the decline is that we are shipping at a competitive disadvantage to Australia since they already have an FTA with Japan. While Canadian beef is still subject to a 38.5% tariff in Japan, Australian beef is already down to 30.5% for chilled, and 27.5% for frozen. Unfortunately, the disadvantage is just getting started. A weaker Canadian dollar in 2015 partially mitigated the impact. This year we are greatly concerned about the combined impact of a strengthening dollar and the increased tariff disadvantage.

The good news is that we can eliminate the disadvantage by implementing TPP. As soon as the TPP is implemented, the Japanese tariff on Canadian beef will immediately match the rate for the Australian, then decrease to 9% over 15 years. We feel that with the TPP, we can double or nearly triple our exports to Japan to about $300 million. Without the TPP or a bilateral agreement with Japan, Canada will likely lose around 80% of the value of our beef exports to Japan.

For the Canadian beef exports to Japan, there is no status quo. Either we implement an agreement and reap the benefits, or we do not implement and we can say goodbye to nearly all of our existing exports to Japan.

Our only concern about TPP is that it may not be implemented. It is fair to say at this time that it is not certain what the U.S. will do, but we know that according to the implementation formula, the TPP cannot come into effect without the U.S. Therefore, we believe we should have a made-in-Canada strategy to ensure that Canadian exporters are not disadvantaged due to Japan's other FTAs with our competitors.

Although Japan represents a great deal of value for Canadian beef in the TPP, it is not the only benefit. We feel that Vietnam will be a market of growing importance for beef. We know that as countries move up the economic development ladder, their people tend to increase their consumption of beef. Currently Vietnam has a tariff of 15% to 20% on beef cuts, which will be fully eliminated under the TPP in three years. Vietnam's 10% tariff on beef offal will be eliminated in five years.

Korea has also expressed interest in joining TPP. We already have an FTA with Korea that was implemented last year, and we have had the first two of 15 tariff cuts. However, the U.S. is three years ahead of Canada and Australia's beef is one year ahead of ours. We will eventually all be at zero, but we believe that the TPP can be a tool to speed the tariff phase-out. We believe Korea's price of admission to TPP should include accelerating its tariff elimination on Canadian beef to match the rate U.S. beef receives.

Before concluding I want to compliment the negotiating team. CCA was at almost every TPP negotiation round since Canada joined in late 2012, and the negotiators really were committed to keeping us in the loop and getting our direction and feedback. It was great collaboration and the results reflect the co-operativeness of the process.

In conclusion, implementation of TPP is vital for the beef sector. The cost of not implementing it will be severe. There is no status quo.

3:45 p.m.

Liberal

The Chair Liberal Pat Finnigan

Now we'll move to Soy Canada with its executive director, Mr. Jim Everson.

3:45 p.m.

Jim Everson Executive Director, Soy Canada

Good afternoon. It's a pleasure to be here with you today to introduce Soy Canada and the soy industry's perspective on the Trans-Pacific Partnership.

It's a unique pleasure to have such a good group from Havergal College here too. We don't get an opportunity to talk to an audience like this very often, so that's a good thing for us.

I thought I'd just talk about Soy Canada and what it represents for a moment. Soy Canada is the national association representing the full soybean value chain. Our members include processor associations representing soybean farmers from across Canada, seed development companies, soybean exporters and processors.

Soy Canada facilitates industry co-operation and represents the industry on domestic and international issues affecting growth and development of the soybean sector.

The soybean sector is growing significantly in Canada, with 2015 now marking the eighth consecutive year of soybean production and growth. Between 2005 and 2015, seeded acreage of soybeans increased by 87%, to 5.1 million acres. Production levels have nearly doubled to 6.2 million metric tonnes in 2016. Farm cash receipts are $2.3 billion, and finally, since 2005, soybean exports have increased by roughly 250%, to 4.4 million metric tonnes in 2015. Canada exports about 65% of its domestic soybean production, as Ms. Citeau pointed out.

We are the world's fifth largest exporter of soybeans and the seventh largest producer.

Domestic use, processing, and export of Canadian soybeans contribute over $5.6 billion to Canada's annual GDP and are linked to 54,000 direct and indirect full-time equivalent jobs. We are a growing segment of the agriculture industry with more expansion forecast in the coming years and more reliance on export markets. This is why international trade is critical to our industry.

The TPP represents a huge opportunity for Canada. We know that TPP countries represent nearly 800-million potential customers, account for 40% of the world's GDP, and for 65% of Canada's agriculture and food trade.

What does it mean for soybeans? The total value of soybean exports to TPP countries reached very close to $1 billion in 2015. The Asia-Pacific region encompasses a large segment of key soybean export markets, with roughly 40% of our total Canadian soybean exports going to TPP countries.

Soybean trade with this region of the world is significant. The TPP provides a platform for our industry to access these growing markets and build on existing trade relationships with major soybean importers. All members of the soybean value chain—producers, processors, exporters, and related affiliations—directly or indirectly stand to benefit from TPP. The agreement provides a more secure and equal trade environment free from tariffs and administrative quotas on all soybeans and soybean products.

Canada's participation agreement ensures that other oilseed exporting nations do not have preferential access to TPP markets. Our industry will be better positioned to compete against other major soybean-producing nations, a major advantage for Canada when combined with the increasing demand throughout the Pacific Rim for high-quality soybeans.

The TPP also includes important provisions relating to biotechnology. As you know, innovation through the application of biotechnology to seed development has provided tremendous benefits to crop production. It is also a free contributor to trade disruption. The application of zero-tolerance regulatory frameworks and increasingly acute testing technologies in a world of increasing deployment of biotechnology is a recipe for trade challenges. Recognizing this, policy-makers are looking for ways to better coordinate regulation internationally.

The TPP establishes a working group to facilitate co-operation and information exchange on biotechnology issues among the members, including low-level presence of GM materials and regulation of new plant breeding technologies. It also establishes a process for collectively managing cases of low-level presence should they occur.

Low-level presence refers to the very low, unintentional presence of genetically modified materials found in commodity shipments internationally that have been deemed safe by a full safety assessment . It is a very topical issue in the international grain trade a a result of the growing acreage and number of agricultural products being assisted by biotechnology methods.

Canada has taken a leadership position in developing new regulatory approaches to managing LLP, and the inclusion of commitments to co-operation in TPP is really welcome. These are positive steps toward reducing disruption to trade in the grains and oilseeds industry and establishing predictable trading rules for TPP members.

The TPP is a modern and comprehensive agreement, and an important milestone in reforming international agricultural trade. Canada is a trading nation, and our grains and oilseeds sector is heavily reliant on international markets. In many commodities, while access to export markets is very important, we do not have the size and export might of competitive nations. Soybeans are an illustration of this. Despite the rapid growth of our sector, Canada represents only 2% to 3% of production internationally. Our industry competes with the U.S., which produces about 39% of the world's soybeans, and Brazil, at 37%. They are responsible for the vast majority of the world trade, which gives them considerable leverage in commercial negotiations.

In order to compete, Canada relies on predictable, rule-based trade. We need a predictable environment where all participants play by the same rules. The TPP and other trade agreements seek to establish these rules and support existing trade rules, such as the existing WTO agreements.

In conclusion, I thank the agriculture committee for this opportunity. We support the implementation of TPP, and we urge the committee to recommend its ratification at the earliest opportunity.

3:50 p.m.

Liberal

The Chair Liberal Pat Finnigan

Now from the Ontario Federation of Agriculture, we have Don McCabe.

3:50 p.m.

Don McCabe President, Ontario Federation of Agriculture

Good afternoon. I appreciate the opportunity to again bring forward the voice of the Ontario Federation of Agriculture to this table.

The Ontario Federation of Agriculture is a member of the Canadian Federation of Agriculture, and our messages, of course, are aligned on this matter of the Trans-Pacific Partnership agreement and what steps are ahead.

First of all, I'll introduce who the OFA includes, to put the remarks in context. The Ontario Federation of Agriculture represents 36,000 farm families across the province of Ontario. We do not do commodity-specific work; we are a general farm organization. We move across commodities on certain subject matters.

On the issue of the TPP, the CFA has been garnering a message from all of its membership from across Canada—that includes various commodity groups and various general farm organizations from across the country—to round out the points for the future.

Among the key messages that came in for us on the issue of the Trans-Pacific Partnership, number one is that we require real and meaningful market access opportunities for our export-oriented sectors—red meats, grains, and oilseeds—because not too many farmers out there are single-entity farmers growing just one thing and one thing only. It's done in a system, and the issue is that we need to be able to find a wide balance of opportunity here.

The second point is to ensure that access gained by trade agreements is not eroded by non-tariff tariff barriers. We've heard from some of the witnesses here already concerning issues of being entitled to work in areas of biotech. I happened to be in Paris, France for the discussions there. The issues around sustainability and some of the manoeuvres that may be undertaken, I can see arising in other sectors of the globe; I do not see the TPP as being exempt from them. We need to be aware of people wishing to manoeuvre around agreements.

The third point is to fully mitigate any potential losses the supply management sectors face as a result of CETA and TPP. I believe this room would be very knowledgeable on that particular matter.

A further point is that with supply management, the issues of leaks and current import controls should be managed to ensure that supply management retains its three pillars of support.

Finally, the fifth point is that, if Canada watches this process proceed and Japan ratifies the TPP, Canada must do so as well. The point has already been made here that Japan is the third-largest market. We're also hearing that in some cases Japan is starting to send out program support to certain parts of its agricultural community possibly to erode some of the same areas that we thought might be the reason for entering into this agreement. If Japan goes for this, Japan is too large a market for Canada to ignore, and we must ratify it with them.

Moving forward and looking at this from an Ontario perspective, the reality for Ontario is that we're roughly 25% of the entire agriculture sector in terms of impact on GDP. I wish to point out that Toronto is actually the home of the second-largest concentration of North American food processing. Some will say that it's Chicago, but I don't live in the U.S. and I'm not Trump, so it's Toronto at number two. California is number one—and for how much longer, with it's water issues.... Los Angeles is number one.

The issue I'm trying to raise here is that we need to be able to get export goods out, whether it is the initial raw product or it is further processed, manufactured, or whatever, because the issue for a farmer today is that it's not just food products that we do. We are such a rich and diverse nation in terms of resources that we are participating in all markets. Even the issue of having agricultural goods in cars is a reality of today's world.

The bottom line is that the TPP must be looked at in the interests of allowing agriculture from this country to expand and reach its potential. We have a premier in the province of Ontario who has asked the Ontario farmers to bring 120,000 new jobs into the system by 2020. TPP could assist in making that a reality.

At the end of the day, this is a very important agreement with broad ramifications. Let's make sure we're addressing and closing loopholes as we move ahead.

In closing, if Japan ratifies it, Canada has to take the same steps.

Thank you. I look forward to your questions.

April 18th, 2016 / 3:55 p.m.

Liberal

The Chair Liberal Pat Finnigan

That concludes the introduction. We shall now move to the questions. The first round will be six minutes each.

We will start with Mr. Shipley.

3:55 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

I want to welcome those from Havergal College from downtown Toronto. When I talked to these students, they hadn't experienced much of agriculture given their location, so I welcome the young people. This is a great opportunity, folks, to help them understand the significant role agriculture plays in Canada, not only because we eat its produce, but also because we're an export nation. When we're an exporting nation, and so something like the TPP, the Trans-Pacific Partnership with its 12 countries, is very significant to the agriculture industry.

I might also tell our urbanized friends that they help promote the use our products every day by consuming them. When we consume them, we produce for domestic use, and that's within our country, within our provinces, and within our cities. Also, as we've heard from all our presenters, Canada is an exporting nation internationally.

On the TPP, every one of you has talked about the need to move it. My understanding is that when we negotiated the Trans-Pacific Partnership, or CETA, or any of the other parts of the 51 trade agreements we have signed of late, this was done in some confidentiality. We've been accused of doing them in secret. Maybe you can correct me, but my understanding is that all of you were totally engaged during the discussions of the partnership. Is that a fair statement for all of you? I'm going to take the nods as a yes.

The criticism implies that you would negotiate this in public. We all know that isn't ever done, nor should it be done. What it does is allow us to move forward. Each of you has talked about the urgency of getting it done. You also said that it won't get done unless the United States signs off on it.

What is the advantage of having Canada step forward and get it done? As we talk to all the groups that come in, we will find that the stakeholders have all been engaged in this across the country. When we talk to the international trade group, we'll find that the stakeholders have all been engaged. What is the disadvantage of our moving forward, and stepping out, and getting this thing ratified?

Mr. Darling, this is for you, and then I'll talk to Ms. Citeau.

4 p.m.

President, Canadian Cattlemen's Association

Dan Darling

I'm not sure there is a disadvantage in signing the deal. In fact, in conversations with our U.S. cattlemen counterparts and whatnot, it is widely believed that Canada has shown its willingness to sign the deal. Going ahead with it would drive the U.S. into signing the deal too. We all know that's what we need to have happen.

4 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

Ms. Citeau, is that sort of the same—

4 p.m.

Executive Director, Canadian Agri-Food Trade Alliance

Claire Citeau

I believe so. It is important to send strong signals to our trading partners that we want to be at the table.

4 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

It's always good to have Mr. McCabe from my riding, the vice-president of the Ontario Federation of Agriculture, here. Thank you so much for coming, Don.

4 p.m.

President, Ontario Federation of Agriculture

Don McCabe

I'm no longer vice-president, Don. I'm just the president.

On the issue of consultation that you raised earlier, I thank the government for the opportunity for the CFA to be at the locations of the negotiations. Of course, the negotiations were behind doors, but folks did come out to have a chat and to keep folks abreast of where the situations were at.

You've already heard from the participants here of the need to move ahead, and I stand on my earlier point that if Japan goes, Canada must.

4 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

I'm going to run out of time here, but in terms of the amount of markets, whether it's in soybeans, etc., you cover a wide range of commodity organizations.

But in beef, I'm going to target you, Mr. Darling. If those markets were to open, would you be able to meet the market demands? I know that Canadian beef is a high priority around the world because of its quality and standard. Do you think you are going to be able to grow the industry to meet that?

4 p.m.

President, Canadian Cattlemen's Association

Dan Darling

Oh, absolutely. We believe that we'll be able to do that.

The important thing to remember about the Japanese market, as well as some of these other European markets, is that when we gain access, we're not looking at sending the whole carcass. We're looking at disassembling the product here, which employs a lot of people, and sending specific high-value pieces to Japan. We like to use tongue, for example, which here is a product that's devalued or even sent to the renderer but is a very high-value product in Japan, for possibly as much as $18 a pound. For us, it's part of the whole puzzle.

Absolutely, moving forward, if we gain the access that we hope to, it will certainly mean that we'll have to grow the herd. We're fully prepared to do that.

4 p.m.

Conservative

Bev Shipley Conservative Lambton—Kent—Middlesex, ON

Mr. Everson.

4 p.m.

Executive Director, Soy Canada

Jim Everson

I'll add to that. In some ways, I think of these trade agreements as the beginning of looking at a market. These are long long-term agreements. When you set a tariff at zero and it's the first time that it's there and it's bound at zero forever, that's the start of companies then looking at that market as an opportunity to invest in Canada, say, in value-added.

To use Japan as an example, we have tariff-free access for soybeans to Japan, but the products of soybeans, such as soybean oil, are blocked from entering Japan because of high tariffs.

4:05 p.m.

Liberal

The Chair Liberal Pat Finnigan

We shall move to the next person.

Mr. Longfield.

4:05 p.m.

Liberal

Lloyd Longfield Liberal Guelph, ON

I'll be extending some Mr. Shipley's comments. I think we're thinking some of the same things.

To the students in the room today, you'll see that this is a group project. A lot of government is a group project, where we try to get opposing opinions and try to get the best ideas forward. That's really what this exercise is about. It's more than an exercise. It is very important to our country, when you talk about the size of agriculture and the numbers of jobs and families that depend on agriculture.

From my years around different boardroom tables, I'd say that we've seen and heard the positives, but we haven't heard the negatives. We haven't yet heard what the risks are. With the 51 trade agreements we've had in recent years, our balance of trade has gone from a positive $51-billion surplus to a $12-billion loss. Our balance of trade hasn't been favourably affected by the trade agreements, so there is a risk to trade agreements. There's an opportunity, but there's also a risk.

When you talk about the soy markets in other countries being that much bigger than ours, can we compete when we open ourselves up to the larger markets, or will we be net importer of products from other countries?

This is maybe a general question back to that. I'm looking at Mr. Everson and thinking of the soy market. What would be our competitive advantage if we were to open up that market and eliminate tariffs? You could see that get us onto the playing field, but in which direction does the ball go? Does the ball come in our favour or does the ball go in favour of the other people?

4:05 p.m.

Executive Director, Soy Canada

Jim Everson

Our industry would say that the ball goes in our favour. You're right about the threat of trade agreements, and one of the threats is that if we're not there and the other countries go ahead and sign trade agreements—for example, with Japan.... There's a good example of the Australian–Japan trade agreement whittling away tariffs for a competitor there, so that would be one risk.

As you know, our calling card internationally is quality. In the food-grade market, Canada produces the highest quality soybeans, so we can compete against those, and we compete very handily in Japan against the United States, for example, with high-quality soybeans. Another one is food safety. Canada is well known for having a reputation for a high-quality regulatory agency and for high standards of food safety, which in Asia in these times is pretty critical. They've had circumstances there where they doubt the food quality of some of the nations they import from.

We think that if there's a level playing field, and rules and dispute mechanisms where we can go back as a smaller exporter to ask for redress on an unfair issue, that's critical and to our advantage in a rules-based trade system.

4:05 p.m.

Liberal

Lloyd Longfield Liberal Guelph, ON

This is where we could cross into another committee's work, as the international trade committee could be looking at things like dispute mechanisms. I'm tempted to go into that, but I wanted to stick to the value-added. I thank you for bringing it forward because it is one of the critical issues on trade deals: how you resolve disputes.

The premier has said that we need more value-added in Ontario, as Mr. McCabe mentioned. Do you see this deal creating value-added opportunities for Canada, or would low-cost countries such as China take tomatoes from Ontario and make them into ketchup, and then ship ketchup back to us as value-added? Would this change that situation in any way?

4:05 p.m.

President, Ontario Federation of Agriculture

Don McCabe

It can and it could and it mustn't. Therefore, the reality is this: I go back to one tweet from Orillia a while ago that pointed out French's versus Heinz ketchup and embarrassed Loblaws with a tomato to the eye. The reality becomes the issue of ensuring that Canada remains in a position of innovation, and that innovation is able to prosper because we have invested in research in front of it. We are a country of vast resources that can reach other markets, if the doors are open. If we want to compete at the lowest price of everything, we will not be able to sustain our economy in the circumstance that workers currently enjoy. We always have to be looking for the highest value-added to move it out the door and get it there. The issue then is ensuring that you are reaching those markets with high value to ensure that you've got a customer for life.

4:10 p.m.

Liberal

Lloyd Longfield Liberal Guelph, ON

With my final minute, I want to turn to my friends from the beef industry. Thinking of the herd, how can we react if we had an opportunity? Sometimes getting a big order can be a liability if you can't react and respond to it. What kind of time frame would it take if we had to double our shipments to other countries? How fast would the industry be able to react? I know we have some production room at Cargill in Guelph. We have a beef research centre that needs some investment. Could you speak to where we're at and how fast we could react?