International Trade Committee on Oct. 27th, 2009

[Greg Simpson]

What would happen is that Canadian farmers would be disadvantaged by 15%. In the case of lentils, that would be $135 per metric tonne. It is my conclusion that the buyers in South America—and we've spoken to them many times—would shift their demand from Canada to the United States simply because of price. A disparity of $135 is a significant disadvantage for Canada. We can't just go back to growers and drop the price that amount to compete. I suspect that over time we would lose that market share to the United States.

We also have to consider a weakening U.S. dollar. That gives them an advantage in accessing international markets. I'm not sure if that's been part of the modus operandi as they print trillions of U.S. dollars, but right now it has made U.S. goods more competitive internationally.

[Ed Holder, Conservative, London West, ON]

I guess the opposite question is, to what extent? From the standpoint of the lentil industry, what would the impact be if we eliminated the trade barriers? You seem to be a supporter of freer trade.

[Greg Simpson]

Yes, we want to have freer trade. Right now the special crop sector has around $80 million in annual sales. So if we reduced that by 15%, we'd be seeing somewhere around $16 million in lost revenue to Canada. That's a fairly significant number.

[Ed Holder, Conservative, London West, ON]

Chair, it would be helpful to have their presentations in advance. I appreciate the presentations as made.

[The Chair, Conservative, Lee Richardson]

That was not the fault of the presenters, our agenda being what it was.

[Ed Holder, Conservative, London West, ON]

That's why I referred it to you, sir.

Thank you both.

[The Chair, Conservative, Lee Richardson]

If we could have been assured of getting the bill before the House in a reasonable time, we would have been able to schedule sooner. That was rather an ironic question from Mr. Allen, I thought.

However, we're going to move now to Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

On Mr. Holder's point, Sandra, I think people on the agriculture committee would appreciate that information as well. If there are ways that we can pressure in terms of the Americans, we need to do it.

Mr. Simpson, I think I understand this, but just so I'm clear, what you're saying on the 15% disadvantage is that if the Americans sign a trade agreement before we do, we'll face a 15% tariff wall plus the high Canadian dollar, which they would not.

[Greg Simpson]

That's correct.

[Wayne Easter, Liberal, Malpeque, PE]

I can tell you our experience in Ecuador. When they signed the deal there, we lost a $78 million wheat market. It was a secure wheat market for Canada and we lost it overnight. So I just want to be clear on that.

I want to come back to the USDA, Sandra. I don't understand. You're saying it's difficult, that even if their industry wants to import because they have shortages, they can't. What specifically is the problem there?

Americans claim they're free traders, but they're nothing of the sort. They're one of the most protectionist countries in the world. Even on supply management, which folks sometimes like to attack us on for being protectionist, the American dairy industry is more protectionist than ours is and we have supply management.

So what are the rules of the game there that are causing the problems?

[Sandra Marsden]

I don't know whether you want to know all the details, but essentially the USDA announces a quota increase of a fairly large volume—say, 150,000 tonnes. There are a few boatloads of semi-refined sugar waiting, from Mexico or Brazil. It's imported by the sugar refiner. Essentially, it's a means to keep the domestic market price higher for the refiners.

Of course, the users would have to buy that sugar at a higher price at a later date. So they wouldn't get it when they needed it, and then they would be locked into buying it at a later date.

[Wayne Easter, Liberal, Malpeque, PE]

Where's the problem, though? Is the problem in U.S. trade law, or is the problem in the refiners protecting their own interests so they can make more profit?

If they can bring in raw sugar, create some jobs in the United States, and keep us out of the market with a high-quality product, they are creating some domestic jobs and still allowing sugar to come in.

[Sandra Marsden]

They already do that. So this is a situation where they have a need beyond that, that they don't even have refining capacity to process that sugar in time. The problem is also legal interpretation, so the United States Trade Representative needs to work a little harder at finding a mechanism to bring in that refined sugar in an orderly fashion that doesn't disrupt their market yet provides users with quality sugar in a reasonable amount of time.

We're well situated to supply that through trucks and railcars. We can't bring in boatloads and dump it in.

That's what we're working on, and certainly I appreciate the suggestion of also going to the agriculture committee, because I think we can put a little more pressure, from a Canadian perspective, to find those.

It is in the interests of the U.S. user industry as well as our export--

[Wayne Easter, Liberal, Malpeque, PE]

It always amazes me how the Americans never restrict Alberta crude. They restrict everything else.

I have no further questions, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

Just be good at what you do.

[Wayne Easter, Liberal, Malpeque, PE]

An absolutely high-quality product.

[The Chair, Conservative, Lee Richardson]

Mr. Cannan.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair, and thank you very much to our guests this afternoon.

I really appreciate, Sandra, your perspective from the sugar industry. We've had, on many occasions, presentations from various representatives and broadcasts. Our colleague has been here as well, speaking and standing up for the industry. We know there are many challenges as we move forward.

One of the questions I have is specifically from our discussions when Minister Emerson was the trade minister. We had asked for some consultation process to take place with your industry. Can you maybe elaborate? Were you satisfied with that, and what kind of consultation took place?

[Sandra Marsden]

Which agreement do you mean?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I mean this particular agreement.

[Sandra Marsden]

You are asking how long this discussion has been going on in relation to this particular agreement. I would say that I have a good relationship with the agriculture negotiator. On the trade side, in terms of the international trade department, it would be less open and transparent, perhaps, but we certainly have a good working relationship from the agriculture negotiator point of view.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Is there some movement at all from initial discussions?

[Sandra Marsden]

Yes. I don't know whether I should chat about specifics here, but certainly--

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Just in general, is there some amicable give and take in that respect?

[Sandra Marsden]

Yes.