International Trade Committee on Nov. 3rd, 2009

[Serge Cardin, Bloc, Sherbrooke, QC]

But that figure could soon rise to $6 million. At one point, someone said that if an agreement were signed quickly, the volume could increase to 1,750 tonnes in the not-too-distant future. You maintain that this would give us an advantage over the United States.

How soon would we see this $6 million increase? Let's suppose the agreement was signed tomorrow.

[John Masswohl]

Right. If we had that access tomorrow...and in fact we got that access yesterday. The minister has been to Colombia twice this year and received a commitment. That commitment was finally delivered by the Colombians yesterday. As of yesterday we have agreement on the export documents, so we can start that shipping, as you said, tomorrow.

We believe now, with that access established, in the next year we will ship roughly $6 million, and it can start as soon as somebody makes a sale.

[Serge Cardin, Bloc, Sherbrooke, QC]

These $6 million in sales to Colombia would translate into how many jobs for Canada?

[John Masswohl]

In the cattle and beef industry, there are 86,000 beef cattle producer operations in Canada. It is the largest sector of agriculture in Canada. To put that in perspective, there are roughly 32,000 to 33,000 supply managed producers. So it's very large on the cattle side.

I don't have the exact number of jobs in my head, but there are thousands of workers in plants--for example, in the Levinoff-Colbex beef plant just outside of Montreal. Thousands work collectively in Guelph, Ontario; in High River, Alberta; in Brooks, Alberta. That's largely where those exports will come from. They'll come from the federally inspected facilities.

I'm just trying to think if I have covered your questions. You mentioned the 1,750 tonnes. Each of the three categories will receive 1,750 tonnes under the free trade agreement. So the three total to 5,250 tonnes together.

The six million that I was referring to is the trade that could occur now. Once the agreement is implemented and fully phased in, we think that six million can grow to twenty million.

[Serge Cardin, Bloc, Sherbrooke, QC]

What do these sales represents in terms of Canada's overall production?

[John Masswohl]

Our total beef production? I'll just give you a rough rule of thumb. One tonne of beef is roughly four head of high-quality cattle. So if we're talking 5,000 tonnes, we're talking roughly 20,000 head of cattle. If we produce approximately five million head of cattle per year, 20,000 out of five million is about half a percent of our production.

Is that the right math?

[Serge Cardin, Bloc, Sherbrooke, QC]

So then, they represent 0.2 % of production.

That's a very low figure, from a production and exports standpoint. How is Colombia faring on the issue of human rights? Normally, we want to do business and we are not necessarily responsible for what's happening elsewhere. However, the committee's report on Colombia made it clear that the human rights situation needed to improve before Canada signed a free trade agreement with the country.

Are you concerned about the situation in Colombia? Should we have been negotiating a free trade agreement and at the same time asking for Colombia's firm commitment to improve human rights?

[John Masswohl]

To be frank with you, I'm interested in making the lives of Canadian beef producers better. I think this agreement and other trade agreements do that. It may be 1% or it may be half a percent. What access to international markets does for beef producers is it makes their animals more profitable overall. We've certainly seen this as a result of BSE and having our markets closed, where overnight we went from exporting 60% of our production to exporting nothing. And it's been six and a half years. It's been a long haul. We're still on that road. So this may be getting half a percent or getting 1% back. But we need to add up all those half percentages and get there. That's our concern in making it better for beef producers in Canada.

[Serge Cardin, Bloc, Sherbrooke, QC]

Within the context of international trade, we have both multilateral and bilateral agreements. Bilateral agreements result in a frenetic race with the United States to take advantage of a given situation. Would you or your association prefer to work within the context of a multilateral agreement to ensure that the rules are the same for everybody, or with a bilateral agreement where advantages are negotiated and some sacrifices often made? What approach does your association prefer?

[The Chair, Conservative, Lee Richardson]

Be very brief, Mr. Masswohl.

[John Masswohl]

In a perfect world, we would certainly say that multilateral has to be the primary way of reaching these agreements. Unfortunately, we're not in a perfect world. There's been difficulty in achieving that multilateral agreement, and Canada has not been part of the solution on the multilateral front. If we can get some opportunities and get some good access for beef in these bilateral agreements, we would certainly support that. But we don't give blanket support to all bilateral agreements. Some we've supported and some we have not.

[The Chair, Conservative, Lee Richardson]

Thank you.

We'll go to Mr. Julian.

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

Thanks, Mr. Chair.

Thanks very much, Mr. Masswohl, for coming before us again today.

You know that the Colombia trade deal is problematic, to say the least. Parliament has not even voted to bring it to committee. It is a profoundly divisive agreement. I know that you're aware of the human rights violations--the killings of labour activists, human rights advocates, aboriginal people, and Colombians of African origin. There are huge problems with this agreement, and because of that, Parliament hasn't voted to bring it forward.

I was down in Washington last week talking to ranking Democrats, and there's very strong opposition among Democrats to the U.S.-Colombia trade deal.

I'd like to get away from the mess that is this agreement, which I've no doubt most Canadians would oppose, and get to what we can do, in a very real sense, to build beef industry exports.

As you mentioned, we're looking at a little bit less than 1% and $6 million to start. If we look at our overall support for the beef industry, it's fair to say that the government support has been pretty pathetic. Mr. Ted Haney said before this committee in April:

Speaking from the beef perspective for a moment, there's about $10 million a year available for international promotion of our products worldwide, including the United States. We know that our number one competitor out of North America is funded with approximately $40 million in direct funding.

That's four times as much. He also said at that time that the difference “is that this is it for us: $10 million. In the U.S., they have concessions on rental rates of international offices, shared resources that are available out of the agriculture trade offices”.

None of the collateral supports exist for Canadian industry really at all. Our level of support is much less. Mr. Haney mentioned Australia. The meat and livestock industry in Australia has a budget in excess of $100 million. We've done a really lousy job. I'm not pointing anyone out, but the current government has simply not provided the funding to the beef industry to stimulate the exports.

You mentioned, the last time you came before us, the Beef Information Centre. I'd be interested in knowing what the total amount of funding is for the Beef Information Centre. You mentioned that it was the market development arm of the CCA.

I'd like you to talk about the multiplier effect. If we're talking about $6 million.... I don't deny that this is money in a tough market. But if this government was actually willing to support the beef industry, what's the multiplier effect of providing support equivalent to what we see other countries provide their beef industries? In other words, if you put in $1, and that has a multiplier effect of $2, then for $10 million we could actually increase our beef export market far more significantly than this very problematic deal.

Could you comment on the total resources available for beef marketing and the multiplier effect you found? When there is an investment by the government to provide support for beef exports, how much in equivalent additional sales does that provide?

[John Masswohl]

I'll probably disappoint you in that I didn't bring any of those numbers with me, but I would say that in the bigger picture of beef marketing, it's so important to have the marketing efforts and to be in the markets. Of course, you have to have the access. If you have a barrier or a prohibition, it doesn't matter how much marketing you do, you can't get through that barrier.

We've created the two organizations you've mentioned: the Canada Beef Export Federation, which has responsibility for marketing outside of Canada and the U.S., and the Beef Information Centre, which does the marketing in Canada and in the United States. They both have an international function.

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

Could you give us some idea of the resources available for both of those marketing arms?

[John Masswohl]

I'm afraid that any number I give you is going to be wrong.

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

Approximately?

[John Masswohl]

The funding for the Beef Information Centre is in the millions of dollars.

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

Is it $2 million, $5 million?

[John Masswohl]

Probably the Beef Information Centre—and they're probably going to kick me for saying this—is somewhere around $5 million to $10 million.

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

That would be for the United States and Canada?

[John Masswohl]

That's right. A large percentage of that funding comes from what we call the check-off. The check-off is different in each province. In Alberta, for every animal marketed, $3 is collected and paid to the industry. We've been trying to create a national check-off. This way every province would be setting aside one of those dollars for the national check-off. Once we achieve that mandatory $1 in every province, then we'll also be able to collect a dollar on beef imports coming into Canada. That's an objective we've been working towards.

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

There is no funding, then, from the federal government?

[John Masswohl]

There definitely is. And there is a leveraging opportunity. I'm not positive what the ratio is, but for every dollar that we put up through the industry check-off there is some funding at the federal level. There is also funding from each of the provinces. I think what you were getting at is our ability to leverage those dollars and turn them into actual marketing efforts. We have a pretty good track record on that. We can take those dollars and match them with ours. We also have partnership programs with the beef companies, the companies that turn the cattle into beef and beef into other products, the companies that operate food service restaurants. They also do some matching funding with us. So we're able to take a federal dollar and multiply it a number of times over. I wish I could give you that number.

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

Could you give us some idea of what the stimulation of sales would be? If we're looking at $5 million to $10 million, what do you think? Let's say $10 million—I think that's a little high, given the other facts we have—but let's pretend that's the number. What do you think the Beef Information Centre has been able to stimulate in sales?