Evidence of meeting #112 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was organic.
A recording is available from Parliament.
Liberal
The Chair Liberal Kody Blois
Thank you very much for your presentation, Ms. Bergeron.
Mr. Barlow, you have the floor for six minutes.
Conservative
John Barlow Conservative Foothills, AB
Thank you very much, Mr. Chair.
I'm going to start with the Canadian Cattle Association. You mentioned your concerns of a CBAM being a non-tariff trade barrier. I share your concerns in that we have already seen the impact of these non-tariff trade barriers, like hormones and carcass washing, and certainly we see the impact that has had on Canadian beef and pork exports into the EU.
My colleagues want to say this will be a benefit to Canadian agriculture because our benchmarks are so much better than in the EU, which is true. However, the EU is still finding a number of ways to block our products from getting into the EU.
I look at those issues and, now, the new deforestation policy that the EU is trying to implement. From your perspective, do you see this as yet another non-tariff trade barrier that the EU is putting on not just Canada but probably other jurisdictions?
Jennifer Babcock Senior Director, Government Relations and Public Affairs, Canadian Cattle Association
Yes, we absolutely see this as a potential non-tariff trade barrier, and it's not just between Canada and Europe. A few weeks ago, we were at the WTO's Public Forum, and sustainability and trade were the focus of that forum. There were multiple concerns, and member states raised multiple concerns on border carbon adjustments and how they will be seen as a barrier to trade around the world.
At a time when we are also having the discussion of global food security, we need to be able to have more export opportunities and not be putting up barriers. From our perspective of Canadian beef, we have our trusted trading partners, and we need to ensure that we're not doing anything to negatively impact those relationships.
Conservative
John Barlow Conservative Foothills, AB
I think that's an excellent point. We always hear around this table talk about food security, but it's not just about Canadian food security. It's global food security. If other countries, including the EU, don't understand that they have to rely on Canadian imports to feed their populations, and if they continue to do these types of policies, that is going to have a massive impact on food security globally.
Perhaps, Mr. Petelle, you could comment on that as well in terms of this being a potential non-tariff trade barrier. You've already talked about the costs that your members face when it comes to the carbon tax, higher input costs and fertilizer costs. This could, again, make us additionally uncompetitive and limit our access to those markets.
President and Chief Executive Officer, CropLife Canada
Yes, we have a robust system to approve products. If a region like Europe decides to remove tools from their own farmers' tool box for quite often political reasons—I'll say it—why should Canadian farmers then suddenly lose access to those same tools to combat the very real pest pressures that they have here, to grow sustainably, to be able to rotate their chemistry and to do the right things agronomically? That's what we're facing. If we go down this path of reciprocity on crop protection, you will end up with just a handful of products approved globally that farmers can use and then all the problems that brings.
I often say that, when Europeans travel in Canada, they don't bring their own bag lunch. They eat our food confidently, and we do the same when we travel there. We have to be realistic in the standards that we're imposing and accept that there are different approaches in different regions.
Conservative
John Barlow Conservative Foothills, AB
Thank you, Mr. Petelle.
Perhaps to Mr. Walker and maybe to the group, the pivot to this will be our ability to talk about what Canadian agriculture can do. There's a current bill, Bill C-59, that we call the greenwashing bill. I think it was aimed at the energy sector, wrongly aimed, but clearly agriculture would fall under this. This would impede your ability to even talk about what we're doing as Canadian agriculture to then access these other markets through a CBAM. It seems quite nonsensical if we are talking about the impact on Canada of having a CBAM, but we're not allowed to talk about it as a result of this greenwashing bill.
Mr. Walker, can you comment on the implications of that?
I have seen many of these stakeholders now wiping their websites clean of their incredible achievements because they're worried about liability.
Vice-President, Markets and Trade, Cereals Canada
Thank you for the question Mr. Chair.
Bill C-59 received royal assent this summer. It did contain greenwashing provisions amending the Competition Act.
We know that Canadian agriculture is sustainable. We know that we sequester more carbon than our international competitors. We know that we use fertilizer, water and pesticides efficiently and that we're low carbon. What these amendments do—absent of clarification from government on the intended purpose—is prevent us from sharing our sustainability story, which is, unfortunately, also caught up in the possible development of a CBA. The absence of clarity on an international standard in a CBA could absolutely prevent this initiative from moving forward due to recent amendments to the Competition Act.
Conservative
John Barlow Conservative Foothills, AB
Mr. Petelle or Ms. Babcock, do you want to answer at all on the impacts that Bill C-59 is having?
President and Chief Executive Officer, CropLife Canada
We've shared this same sentiment in our submission to the government on that, basically saying that there are serious concerns about unintended consequences. I think you've outlined them well.
Senior Director, Government Relations and Public Affairs, Canadian Cattle Association
I will just quickly add that we also submitted on that. We are very concerned about ensuring that we keep our science-based standards in Canada and that we do not follow trends that may be political in other countries. With Bill C-59, that was one concern of ours and knowing what the international standards are that we have to follow within this. We've put in our consultation, and there are a lot of lawyers who are now involved in this, as a lot of folks are concerned.
Liberal
Liberal
Heath MacDonald Liberal Malpeque, PE
Thank you to all the witnesses for being here today.
We won't talk about lawyers anymore.
From my perspective and from this committee's, what we're doing here today is trying to delve into preparation for what could happen. I mean, it's hypothetical at this point in time. We know that there are relevant issues around what the EU is doing and, when Donald Trump was last president, what he did right away for steel and aluminum, so we have to be prepared.
We know there's a greenhouse gas inventory and assessment program in the U.S. that they're utilizing right now. There are gaps in modelling and data collection, obviously, but I sit here and say that our farmers across this country, in all the different sectors, are likely on the leading-edge compared with most farmers around the world. To me, I say, let's find out and figure out whether this could be of benefit to us.
We know that in the U.S. right now they're measuring GHG emissions. We heard, when some of us were in the U.S., that they were starting that—and that was from congressmen. Some of these people were sitting around that table—and, believe me, they're pissed off at the EU for doing what it's doing—but that doesn't mean that we can sit back on our heels and wait for it to happen. I think right now is the time to dig in and come together—industries and governments at every level—to try to prepare for it in case it does happen, because I think it could be an advantage for us.
The other side of this is that there's a lot of talk about carbon credits and how that could eventually help farmers, bottom line, on their income balance sheet per se. I think there are challenges, obviously, and the discussion is about fair trade and reciprocity, but I think also that we need to prepare everybody for this and to all be working on the same page.
In 2022 the CCA—and I'll go to you guys first—the Canadian Cattle Association issued a release following meetings with its U.S.-Mexican counterparts regarding CUSMA. There was specific mention of working together on global challenges and non-tariff barriers faced by some jurisdictions. I'm just wondering whether carbon border adjustment mechanisms were part of those discussions.
Senior Director, Government Relations and Public Affairs, Canadian Cattle Association
No, they were not. However, the main focus of those non-tariff barriers was addressed at Europe....
Liberal
Senior Director, Government Relations and Public Affairs, Canadian Cattle Association
At our trinational meetings we looked at what the barriers are that we all face similarly in North America, and several of the regulations and policies that were coming forward from Europe are impacting us all, with deforestation regulations being one of them.
Liberal
Heath MacDonald Liberal Malpeque, PE
The other angle, perhaps, the reciprocity—and I think Mr. Walker mentioned it—was relevant to.... The EU is basically stating that, if they're going to do this—and they're talking steel and aluminum now and cement, that's fine—they're going to give back to their industries and sectors the tariff revenue that is generated at the border on their imports, which again will put us on a level playing field for what's going to transpire if they ever get to the agriculture sector.
Mr. Walker, you mentioned in your preamble, relevant to that.... Can you just expand what your thoughts are on it?
Vice-President, Markets and Trade, Cereals Canada
I did ponder putting some sort of assessment of that in my remarks. It's quite challenging given that, as an export-oriented industry that exports over 70% of our products, there's a patchwork of countries that have a price on carbon and there are a significant number that don't. It's unclear from our industry's perspective whether or not this would, in fact, make them whole and be revenue-neutral.
The costs are myriad and quite opaque at this time, unfortunately. I'm sorry, but I don't have a better answer for you.
Liberal
Heath MacDonald Liberal Malpeque, PE
In reality, we're measuring soil carbon right now, and it's similar to soil fertility. Carbon storage.... When you go into Deloitte Touche and you start reading about carbon credits, they're actually starting to measure agriculture inputs in regard to what we can pay back to the farmer for carbon credits, so the measurements are starting to build.
Someone talked about universities earlier today, that they're starting to test all this. I don't think we should run from it. I think we should prepare for it, and I think we're in a very good position in Canada to do that. I think that putting our heads in the sand, hoping that these don't become trade barriers, and so on and so forth...and it becomes political because it will become political. It will become geopolitical if there's going to be an advantage to an industry.
I'm talking about geopolitical right now because I'm saying that we can get in front of this and have success with it if it happens, hypothetically, but we need to be prepared.
Mr. Petelle, you were going to say something.
President and Chief Executive Officer, CropLife Canada
There have been a lot of non-tariff barriers that were cloaked in doing the right thing. Our caution is not necessarily specifically to carbon border adjustments, but we've seen many examples where, under the guise of protecting the environment or doing something for their people, they impose these non-tariff barriers. That has a significant impact on an exporting country like Canada.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you, Mr. Chair.
I'd like to thank the witnesses for being with us today.
I'll start with Ms. Babcock and Mr. Chaffe.
You spoke of about non-tariff barriers. We all know about Europe. It's quite shocking that you still don't have access to that market, to which you should have access, especially if we consider the quality of the products we make here. I think we all agree that these are high‑quality products.
If we want to trade with foreign states, we have to talk about establishing reciprocal standards. Earlier, I gave the example of the impact of carrots from Mexico on Canadian produce growers, but I could say the same thing about you and your access to the European market. It's unfair that we are refused access, because we offer a high‑quality product. Perhaps those discussions should take place at the WTO.
At the moment, we have no access to the European market. Products from Mexico, for example, shouldn't start entering Canada and compete with what your sector produces. I'm not sure we would want that. We could eventually expand trade with Mercosur, but I'm not sure that the conditions for breeding and slaughtering are the same in Brazil and those countries.
It's all well and good to say that we want to promote free trade so that there are no barriers, but we have to talk about it, because it is putting us at a disadvantage right now. If we don't start this discussion, we won't be able to solve the problem.
What do you think of all that?