Thank you very much, Mr. Chair.
There had been an issue with my headset earlier. I've changed it. I trust that you can hear me okay.
I welcome the opportunity to appear before this committee.
My remarks will focus on the impact of the Remission Order on Ukrainian goods, specifically with respect to the duty-free and quota-free importation of supply-managed goods into Canada.
But before I start, let me share a few quick facts on Canada’s supply-managed sectors.
Supply management is the production and marketing system under which dairy, eggs, hatching eggs, chicken, and turkey are produced in Canada.
Through the three pillars of the supply management system—planned domestic production, administered pricing, and import control—Canadian producers are ensured a reasonable return for their labour and investments, while consumers receive a continuous and reliable supply of products.
The supply-managed sectors are important within Canada’s agricultural sector. They generated $13 billion in farm-gate sales in 2021 and created over 100,000 direct jobs in Canada in production and processing activities.
In addition, dairy and poultry processing activities contributed $24.8 billion to Canada's manufacturing shipments, equivalent to 19.5% of Canada’s total manufactured shipments of food and beverage products in 2021.
The actions taken by Russia have had a significant effect on Ukraine's economy, including its ability to export goods to other countries. That's why the government decided to temporarily waive tariffs and trade remedy duties on imports originating from Ukraine, including for supply-managed products. The measure came into effect on June 9 and will expire after one year. This means that supply-managed products from Ukraine are eligible to enter Canada duty free and quota free until June of next year.
As I highlighted before, supply management is based on planned domestic production, administered pricing and controlled imports. Domestic requirements are established taking into account anticipated imports. Unpredicted imports may impact production planning, which is a pillar of the Canadian supply management system. We understand the consequences of this measure may be a source of concern for supply-managed sectors.
Due to a lack of a finalized official meat inspection certificate, Ukraine has not exported any poultry products to Canada in the past. Since the implementation of the remission order, imports of supply-managed goods have been limited to one shipment of ice cream. There were no Canadian imports of dairy products from Ukraine in the past five years. Given the low volume of supply-managed products that have been imported from Ukraine into Canada to date, and considering the various logistical challenges facing Ukraine, it's difficult to estimate the potential volume of imports during the term of the remission order. However, the Government of Canada monitors the situation closely and will continue to engage with industry on potential or observed impacts throughout the duration of the remission order.
In conclusion, it will be important for the government to continue to work collaboratively with the industry to ensure that the potential impact and challenges associated with the remission order are identified in a timely manner and understood. In that regard, AAFC will continue to engage directly with dairy, poultry and egg sector representatives to help address their concerns.
Thank you.