International Trade Committee on June 2nd, 2008

[Shirley-Ann George]

I'm afraid I don't agree with your assessment that the Colombian agreement has stopped in the U.S. Every indication that I've been given is that some negotiations are under way and that they expect to proceed with the Colombian and the Korean agreements. It will definitely go forward; it's the timing of when, but it's probably this year.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

The fast-track authority was refused. Very clearly that's the first time the U.S. Congress has said no to fast-track legislation. We'll have to agree to disagree on that. Very clearly, though, it is in big trouble because of the labour violations.

[Sandra Marsden]

We are consulted by the Canadian government. Unfortunately, we don't always feel that our input shapes the decisions made around the agreement. That's what happened with Costa Rica: we were told not to worry and that it wouldn't be bad, but it set a very negative precedent for us that we're living with today.

Thank you.

[Daniel L. Lafrance]

As for job losses, they vary depending on the plan. When you look at Vancouver, as an example, you're talking about 160 employees, but the important thing is also the type of job. Those blue-collar jobs are fast disappearing, and there are fewer and fewer of those available. That's very important. When you look at Taber, Alberta, as an example, there are approximately 100 full-time employees, 200 seasonal employees, and all the growers attached to this production.

Also, let's not forget the reason we are keeping two plants is to keep our customers competitive in western Canada and also in eastern Canada. Our customers are there. If they have to bring sugar from eastern Canada to western Canada or from Taber to Vancouver or vice versa--from Vancouver to the prairie market--they'll have to absorb more freight. The more freight they absorb, the less competitive they'll be, and where will they go? They'll go, just as some of the companies did, to Mexico, Costa Rica, and Central American countries to produce what is now being produced in Canada. That's very important also.

[The Chair, Conservative, Lee Richardson]

That was six minutes. That was pretty good.

Go ahead, Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman. I will be sharing my time with Mr. Casson.

I have no questions; I simply have a statement.

You can go back through the committee's records on the time we were in Colombia, and there's absolutely no record that's been corroborated by any companies in Colombia of labour union activists being killed by Canadian companies or any other foreign companies. To say otherwise is misleading to the committee and misleading to our witnesses. It's as simple as that.

[Rick Casson, Conservative, Lethbridge, AB]

Thank you, and thank you very much to the committee for letting me be here today to ask some questions. Being from southern Alberta, I of course want to focus in on the homegrown sugar beet, sugar, and refining.

Sandra, I want to start with your statement that Canada has already led the way in opening its sugar market with a zero tariff on all imports of raw sugar from developing economies like Colombia and a $30-per-tonne tariff--about 8%--on refined sugar. In comparison, the U.S. and Mexico tariffs are 150%, so we've already opened our doors quite wide to the importation of both raw and refined sugar.

Mr. Lafrance, give me and the committee an idea of the scope of this industry in southern Alberta. I understand it's the only homegrown, home-refined sugar left in Canada. Is that right?

[Daniel L. Lafrance]

Yes, it is. It's the only place we now produce Canadian sugar to talk about. That gives us access to a small U.S. quota of 10,000 tonnes. As you well know, this plant is probably the one most in jeopardy right now because it is the smallest plant.

The problem we're having is that in a bad crop year--usually Vancouver has a swing capacity--could we afford to have only one plant in western Canada, that being the Taber sugar beet plant? If you have a bad crop year, what happens?

[Rick Casson, Conservative, Lethbridge, AB]

Yes. I understand that an industry has been established in Taber to use your product.

[Daniel L. Lafrance]

Yes, Flexible Solutions, which just invested millions of dollars to produce a product there, and they will be starting early next year, I believe.

[Rick Casson, Conservative, Lethbridge, AB]

It's an environmentally friendly product using sugar.

[Daniel L. Lafrance]

Very much so. That's one of the new industries that came to southern Alberta that is very key for us also, for the sugar beet plant in Taber, Alberta. For them to lose their feedstock would be horrible, after all the investment they have made.

[Rick Casson, Conservative, Lethbridge, AB]

Give me an average.... I know this year the acres are down because of the glut of sugar, but can you tell me the average number of acres produced, the number of producers, and the dollar return to those producers?

[Daniel L. Lafrance]

In a normal year we would have about 35,000 to 37,000 acres of sugar beets. That will put back into the Taber community around $30 million to $35 million in income for these growers, so it's a very important crop.

The one thing the beet growers like about this crop is that it's a resistant crop. It's a rotating crop, and they need them in rotation. What happens is they can harvest the beans and all their other crops, and the beets will always be the last crop to be harvested. That's because even if there's a small frost, the beets will be good and they will be able to be harvested, so it's very key for them.

[Rick Casson, Conservative, Lethbridge, AB]

Good.

I don't know if you supplied to the committee the Costa Rica numbers on what's happened since the Canada-Costa Rica Free Trade Agreement. Have you done that? If not, I think the committee would--

[Daniel L. Lafrance]

Just as an example, as we said, in 2004-05, when they came in, basically they probably sold about 4,000 to 5,000 tonnes in Canada. The other thing is that they marketed probably 150,000 tonnes in western Canada, so we had to match prices in many instances in order to retain our market share and retain our market.

It's not the volume at times that they are selling; it's the offers they made to our customers, and we had to match them. That's why it costs us millions of dollars in order to protect our marketplace.

[Rick Casson, Conservative, Lethbridge, AB]

Good.

Is that it?

[The Chair, Conservative, Lee Richardson]

You have another minute, if you like.

Mr. Keddy, do you have another speech?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Yes, I have another speech. How much time do I have, Mr. Chairman?

[The Chair, Conservative, Lee Richardson]

You have one minute.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

When the sugar industry was here earlier, they said they simply wanted reciprocity: whatever deal the Colombians had coming in, we expected to have it in return. What I'm hearing from you today is that reciprocity isn't exactly what we're looking for.

[Sandra Marsden]

I think that was qualified by....

Generally speaking, that's what you want in a trade agreement, but we were partners with the growers on our international trade file, and clearly they recognized the threat to their sector as well as we recognized the threat to our industry, so reciprocity is theoretical--

[Daniel L. Lafrance]

Let me be more direct: it will not work. We tried it in Costa Rica, and it does not work.

We are marketing our sugars. They are good producers of sugar, the sugar beets; we are the marketers of sugar, and we pay a fixed price to our growers. What we would have to sell to Colombia...we can't lose money on our stuff, or there's no reason to grow it.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I thought that at the time. So what about an alternative market? You say we're storing 20,000 tonnes of sugar a year. What about the ethanol market? What about another place to sell that sugar?

[Daniel L. Lafrance]

We are right now doing a study to see if we could produce ethanol from our sugar beets, or another alternative input that we would have to help our plant for 12 months a year, because sugar beets are only four to five months. We are doing a study right now.

As a feedstock for ethanol, sugar beets are very expensive, as you probably know, but we are investigating that.