Agriculture Committee on Oct. 10th, 2024

[Keith Currie]

It has to be about competitiveness.

[The Vice-Chair, Conservative, John Barlow]

Thank you.

We now go to Mr. Perron for six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here. Before I forget, if it hasn't already been done, I would ask all the witnesses with specific recommendations for the committee to provide them in writing if there isn't time to mention them during the discussion.

Ms. Sauvé and Ms. Forcier, I'd like to pick up where you left off with Mr. Lehoux. There is no easy answer. At the same time, it's not acceptable to have goods coming into the country when they're grown using questionable phytosanitary products. You gave the example of bifenthrine.

You said the Canadian Food Inspection Agency should be better resourced so it can inspect as many foreign products coming into the country as it does domestic products leaving the country. Would I be correct to assume that's one of your recommendations?

[Jasmine Sauvé]

Thank you for your question, Mr. Perron.

Yes, that is something we're recommending. The last I heard, 4% of imported food products were inspected. As you said, we have to ensure that products being imported into the country are safe and secure for Canadians, and that means subjecting the phytosanitary products used in their production to reciprocity of standards. Not only is it a matter of competitiveness, but it's also a matter of health and safety.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

That's hard to apply given that the level of support available in other countries, like the U.S., is much greater. It's even worse if we consider Europe, and Mr. Northey talked about that. A host of measures exist.

Would it help if our productive and innovative farmers were better compensated for the environmental services they provide? Would that be a way to make up for the difference in production costs, at least partly?

[Jasmine Sauvé]

Absolutely.

As I said my opening remarks, producers are stewards of biodiversity, first and foremost. Putting a system in place across the board to pay farmers all over the country for environmental services would definitely be a solution.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Why is it important to you to maintain domestic production? Staunch free-trade supporters might argue that, if the Mexicans can grow strawberries more efficiently, we should import strawberries from Mexico and grow something else here. Of course, you know I don't believe that, but I'd like to hear your response.

[Jasmine Sauvé]

I come back to safety and security. We want to make sure that the foods Canadians eat are safe and secure.

Besides that, there's the economic impact of the strawberry and raspberry production sector. Strawberry and raspberry growers are scattered throughout Quebec, so they support the vitality of our regions. They also create jobs. There's a lot of talk about foreign workers, but for every foreign worker who comes to Quebec, two to four jobs are created.

Preserving domestic production is as much about food safety and security as it is about economic impact.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Very good. Thank you.

There's also a lot of talk about carbon pricing, which is said to reduce competitiveness, among other things. You said in your opening statement not only that Canada and foreign countries have to have equivalent standards, but also that the standards across the provinces need to be equivalent.

Are you worried about what's going to happen in the next few years in light of political news? What could we do to help you in that regard?

[Jasmine Sauvé]

Yes, we're concerned about that in Quebec, because Quebec's carbon pricing system is different from the carbon tax in place in the other provinces. For the competitiveness of Quebec's strawberry and raspberry sector, the standards across the provinces need to be equivalent.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

All right. Thank you.

Mr. Currie, you mentioned Bill C‑234 in your opening statement. At the beginning of the meeting, we talked about bills C‑280 and C‑282, and the trouble they're running into in the Senate. Bill C‑234 was reported back to the House with an amendment, but it still includes a grain drying exemption.

What do you want to say to the elected members of Parliament? Should we pass the bill as is or send it back to the Senate, knowing full well that it won't come back?

[Keith Currie]

That's a loaded question. Certainly Bill C-234 in its original form was something that the agriculture community applauded because of the relief it was going to give to producers, to primary production.

As has been mentioned many times in this committee, producers are price-takers, not price-setters, so any further costs added to their bottom line have to come out of their bottom line. We appreciated what Bill C-234 represented. Then, unfortunately, it was changed incredibly at the Senate and had to go back to the House.

As is, it is better than nothing. However, our preference would be to have it back in the original form it was in. If it needs to go back to the Senate, so be it. It may not last the lifetime of this government to actually get passed if it were to go back to the Senate. Timing is important around this bill, for sure.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Currie.

Thank you, Mr. Perron.

We'll go to Mr. Cannings for six minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you all for being here today.

I'm going to turn to Mr. Buy.

In your opening remarks, you talked about the complicated matter of having carbon border adjustments in agriculture.

We're here doing this study because the EU is proposing a carbon border adjustment for a number of sectors, like steel, aluminum, fertilizer, etc., but not agriculture in itself. I think the main difference, as we all appreciate, is that in those sectors, it's relatively easy to perhaps come up with a defensible adjustment for steel produced under different situations. We have EU auditors in Canada right now looking at the steel industry, for instance.

You mentioned how some products are sources of carbon and some are sinks. It almost seems like every farm would be different. I'm just wondering if you could comment on that complication and why we may well never get to a carbon border adjustment for agriculture across that sector.

[Serge Buy]

It's not just the agriculture; it's the agri-food. When we're talking about a border carbon adjustment, it's the agri-food sector that is looked at, from processing plants to everything else. You're correct. The system is so complicated and so different, depending on the production and depending on the type of set-up, that it would be really difficult to gauge which production is better than the other and how we are going to set it up.

Further than that, because Canada would really be setting this up for imports, how are we going to measure it? That's the other issue. How are we going to look at what's happening in other countries? My colleagues here from the Association des producteurs de fraises et de framboises du Québec said it very well. On phytosanitary measures, we're challenged even to look at what's coming in today. Now we're going to be auditing what's going to happen in other countries on farm production. I think that's a little bit utopian.

Unless there are clear international standards that are negotiated in a multilateral forum, as Mr. Currie said, I think we're not there.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to turn to Mr. Northey now.

You talked about various differences in what's going on in the EU, and that's kind of, I guess, one of the centres of our attention because they're really driving this conversation. You mentioned the hazard-based assessments versus risk-based assessments. Can you maybe explain that to those of us who are not familiar with that terminology?

[Greg Northey]

Absolutely. In Canada, we take a risk-based approach in how we assess crop protection products. It takes into account both the exposure and essentially how to manage that exposure. There'll be rules around how the product can be used that mitigate the risk of that product. That's an internationally accepted standard. It's what countries use around the world.

The EU does it differently; it just takes the hazard. It doesn't take into account, essentially, the ability to mitigate that hazard. When you take that kind of approach, it is naturally more risk-averse in how you would approach the regulation of these products. It's an outlier in the system, because the reality is that something can be risky, but you manage that risk. We do it all the time in our daily lives. However, the EU doesn't take that approach. What happens is that, when they are regulating their crop protection products or deciding what their farmers have available to them, they do it in a way where products can be removed much more easily. Then, like I said, the impact is that they decide that Canada can't use that product anymore either and they are not going to allow that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

You also mentioned the WTO. It has served us well in many ways, but we're having difficulties with it. I sit on the international trade committee, and we're having difficulties with it when it comes to softwood lumber, for instance, because the Americans are not playing ball with the WTO. They're not filling places on panels.

Is that a problem in the agricultural sector as well, especially if we're dealing with the EU?

[Greg Northey]

With regard to the WTO, there's no dispute resolution process anymore. As you said, the U.S. has pulled away from that, so it's not really functioning. With the EU making its choices, particularly on something like this deforestation element that it's going to bring, as well as its approach to crop protection products, the WTO is a channel to dispute that, and I would suspect that there will be efforts to do that.

However, the reality is that the dispute resolution process is broken. You can put it to the WTO and raise it at the agricultural committee, but the WTO's ability to resolve it is just not there.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Cannings.

Now we'll turn to Ms. Rood for five minutes, please.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

Thank you, witnesses, for being here.

Mr. Currie, I have several questions, but I'll go back to what my colleague across the way was talking about: competitiveness within Canadian agriculture, especially for farmers who rely on exports. Could these CBAMs disrupt international agricultural trade? What impact would they have on the competitiveness of our Canadian agriculture products in global markets?

[Keith Currie]

The short answer would be yes. It certainly could impact our trading with the EU or other countries. I think what is needed is reciprocity, and it has to be enforced in trade agreements. As you just heard Mr. Northey say, there are no teeth in the current dispute resolution mechanism at the WTO. It would be incumbent upon our government, should these BCAs come into existence, to enforce the trade agreements with other countries or apply reciprocity measures if needed.

It really needs to be part of our multilateral agreements across several jurisdictions that have clear methodologies when we're talking about measuring on-farm carbon. That is at the crux of this: to ensure that we are being put on a level playing field for this. However, yes, it could have, potentially, some very challenging issues with regard to our export markets, for sure.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

We've heard a common theme here from several of the witnesses today and on other days when we talk about how the carbon tax is hurting the profitability of our industry, our farmers and our farm families, and it's hurting the sustainability of the industry. I'm just wondering what additional.... Knowing that we already have to pay carbon tax and are paying higher prices for everything—fuel, fertilizer, all of the inputs that farmers have—do you have an idea of what the additional cost burden for farmers would be estimated at?

[Scott Ross, Executive Director, Canadian Federation of Agriculture]

Just to clarify, are you asking about the added cost pressures that would result from a BCA being implemented?

It's challenging because it's still such a high-level concept at this point. The challenge is in understanding the details and complexities that Mr. Currie and others referenced earlier in their remarks. Part of what ultimately makes this so challenging is the lack of international norms and disciplines for structuring what that would look like. In many respects, we would be approaching it somewhat blind, and I think that is the challenge.

At the end of the day, the most concerning element of this, were Canada to implement it, as Mr. Currie said, is that farmers would start seeing added costs on inputs across the board, and that would certainly drive up the cost. It's hard to say at this time what that would look like in practice, though.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Do you have any idea how this would affect, let's say, smaller farms versus the larger agribusinesses?