Thank you, Mr. Chair.
My name is Pierre Lampron, and I'm the president of the Dairy Farmers of Canada. I'm joined by David Wiens, vice-president of the board of directors and president of the Dairy Farmers of Manitoba. On behalf of all Canadian dairy farmers, we appreciate the opportunity to present our pre-budget submission for 2020.
The Dairy Farmers of Canada estimates that the market access granted under the WTO agreements; the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA; the Comprehensive and Progressive Trans-Pacific Partnership Agreement, or CPTPP; and the Canada-United States-Mexico Agreement, or CUSMA, represent a loss equivalent to 18% of the country's dairy production. The annual loss of revenues for farmers could amount to $450 million.
The concessions will have a dramatic impact on on-farm investments by dairy farmers and may lead to job losses, with ripple effects in communities across the country. The impact isn't just limited to dairy farmers. It will also have an effect on farm workers and many other associated industries. All rural Canada will pay the price for these repeated concessions.
The Prime Minister repeatedly committed to full and fair compensation to the dairy sector for the cumulative impacts of international agreements. On August 16, 2019, his government announced a $2 billion compensation envelope to mitigate the impact of CETA and CPTPP. It should be noted that this compensation doesn't cover losses caused by CUSMA. Of the $2 billion announced, $250 million was previously allocated under the dairy farm investment program, and the remaining $1.75 billion will be distributed over an eight-year period. Payments began in fall 2019 with a one-year direct payment program, for a total of $345 million. The remaining $1.4 billion compensation envelope is expected to be distributed, as promised, over a seven-year period, starting in 2020.
Canadian dairy farmers are all affected by recent trade agreements and are in the best position to know their needs. We're asking to receive the remainder of the compensation in the form of direct payments. This method of payment is consistent with the recommendations of the working group established after the signature of CUSMA and with the government's commitment to listen to farmers when determining the terms of payment.
The government must understand that the concession amounted to taking a wheel off a tractor. For the tractor to work, the wheel must be replaced. This means compensation through direct payments. Then, if we want the tractor to move forward, we need to put fuel in it. This involves implementing government programs to develop the industry. The tractor may have wheels, but if it doesn't have fuel, it won't move forward.
The Canadian government has stated repeatedly that it wants a dynamic and strong dairy sector that generates growth, creates jobs and promotes investment. If it wants this to happen, it must provide compensation to restore confidence in the sector. It will provide the stability that dairy farmers need to move forward. As a result, dairy farmers recommend the following.
First, they recommend that the Canadian government continue to give dairy farmers, in the form of direct payments, the remaining seven years of compensation to mitigate the impacts of CETA and CPTPP, and that the total amount be included in the main estimates for 2020.
Second, they recommend that the Canadian government fulfill its commitment to provide full and fair compensation to dairy farmers to mitigate the impacts of CUSMA, in keeping with the recommendations made by the producers' working group established by the government following the announcement of the trade agreement.