Evidence of meeting #45 for International Trade in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Michael Geist  Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual
Richard Doyle  Executive Director, Dairy Farmers of Canada
Ron Clow  General Manager, Cavendish Farms

9:55 a.m.

Conservative

Bradley Trost Conservative Saskatoon—Humboldt, SK

I guess, then, to follow up, if the question is ultimately one of price in both industries, on what issues do you see your European competitors being advantaged relative to you? I'm particularly interested in whether you see any subsidies in the European agriculture system, etc., that concern you, so that, again, if tariffs were reduced, you might be put at a disadvantage due to government subsidies. Are there any issues in that respect that concern either of you gentlemen?

9:55 a.m.

General Manager, Cavendish Farms

Ron Clow

Yes, it's always a concern. I'm not sure that you can always get to what that subsidy is or what form it takes, but it's always a concern. That's all I can say on it.

9:55 a.m.

Executive Director, Dairy Farmers of Canada

Richard Doyle

As I said, the Europeans keep claiming they have reduced their export subsidies, they have reduced their blue box subsidies, and aggregate measures of support as we measure it under the WTO. The reality is that the level of expenditures under the CAP, the community agricultural policy, from the commission has increased in agriculture, and it continues to increase. Therefore, their transfer of funding from states to the producers continues to be there.

They deregulated the price, establishing floors instead of targets, as they used to, and they let huge fluctuations happen. Dairy is particularly sensitive because it's one of the most volatile markets worldwide in terms of trade. You see huge volatility. In recent times we've seen a 150% increase in six months and a 50% decrease in six months. With that kind of volatility, you require even more protection.

There is no comparison in terms of cost. It is not an issue of the market itself. My view would be that the consumers in Europe pay just as much as we do.

9:55 a.m.

Conservative

Bradley Trost Conservative Saskatoon—Humboldt, SK

So whatever we can do in other ways to get subsidies down would be good.

I'll give the rest of my time to Mr. Holder.

Thank you.

9:55 a.m.

Conservative

Ed Holder Conservative London West, ON

Thank you.

In the spirit that I've never met a starch I didn't like, I would like to direct this question to Mr. Clow, if I could, please. You talked about the tariff—13.4% on potatoes, frozen potatoes and vegetables, and the like. I'm going to ask you a couple of things, and I'll ask you for a brief response, if that's possible.

You indicated we don't export any potatoes outside of Canada to the EU, so question number one is, do we export potatoes outside of the EU—anywhere outside? Do we have any export market? Secondly, how big is that market? More specifically to the European Union, how big is that market for you?

On the fact that there are no GMO products in potatoes, I've heard you say you'd like us to address that at some point. If it's not too long an answer, could I ask you to give us some sense of that? Obviously I think that puts us in a positive marketing opportunity as it relates to CETA, but what's your sense of that as well? Could you respond to those points?

9:55 a.m.

General Manager, Cavendish Farms

Ron Clow

In terms of export markets, we're about a billion-pound business. If you don't count the United States, just outside of the United States about 10% to 15% is export. A lot of that is opportunistic because you can have droughts in parts of the world. So some export years are better than others.

We export to Asia. Most of the potato processors are located in Washington State, Oregon, and Idaho. In terms of competing in Asia, they're already sitting on the west coast. We see us sitting with two nice plants in the east coast being an opportunity to go the other way.

We have a large export business outside of the United States, but the European Union is not one of them.

9:55 a.m.

Conservative

Ed Holder Conservative London West, ON

What's the potential of that market?

9:55 a.m.

General Manager, Cavendish Farms

Ron Clow

It's about an eight-billion-pound market. It's about the same size of a market as the United States. If we sent 100 million pounds there, it wouldn't be a blip on the radar. It's huge. It's as big as exporting to the United States. It's a huge opportunity. Being in the Maritimes, I think it's a great opportunity for Atlantic Canada, and for us in particular.

In terms of GMOs, this is more a personal opinion; I'm not representing Cavendish on this answer. I just feel that GMOs can solve a lot of issues. Whether it's late blight issues—no one wants to deal with blight—or any other kind of pests, if you don't have to spray your crop every ten days by using a GMO potato, I think that's a benefit to society and agriculture, and to consumers.

It would be nice if that door got opened again in the future.

10 a.m.

Conservative

Ed Holder Conservative London West, ON

Thank you.

Thank you, Chair.

10 a.m.

Conservative

The Chair Conservative Lee Richardson

Thank you. That was good timing.

Monsieur Bellavance.

10 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Thank you, Mr. Chairman.

We've heard it and we know it: the House of Commons is unanimous on the issue of protecting supply management. I'm happy about that. However, in the case of the agreement with the European Union, as my colleagues mentioned a few moments ago, we could have hoped and wished that the government would do a better job of defending supply management. By putting supply management on the bargaining table, we're setting a dangerous precedent for future bilateral and multilateral negotiations. Earlier Peter referred to a domino effect. I believe we've just set a precedent. In future, Canada will probably always have an obligation to put supply management on the table, whereas we don't even know whether the European Union would have rejected any negotiations if that issue had not been put on the table.

Whatever the case may be, we're stuck with this, as a result of which the European negotiator, Mr. Cellini, has said that what Europe is particularly interested in, among other things, is increased access to cheese and poultry markets. That would not have been the case if supply management hadn't even been discussed in the context of the agreement we're negotiating.

We have to remain watchful; that's our role; it's also yours, Mr. Doyle, and it's also that of all the people who want to protect supply management. We already import 8% of our cheeses from around the world. And two-thirds of that figure comes from Europe.

What is the impact of the increase in market share for these cheeses? First, is there room to admit them? What is the impact on our cheeses? There will clearly be one. Have you, the Dairy Farmers of Canada, put a figure on that impact?

10 a.m.

Executive Director, Dairy Farmers of Canada

Richard Doyle

I don't have the figures to hand, but we put a figure on that impact at the outset, when we conducted the comparative economic studies. I should have brought them. Unfortunately, I can't give them to you. I'll be pleased to send them to you later.

I somewhat share your opinion; that is to say it is clear to us that the traditional method of starting bilateral discussions where certain sectors are first excluded would have been much more desirable. We very much regret that; that's obvious.

The negotiations are currently very transparent. We know exactly what Europe's sensitive points are, and Europe has a very clear idea of ours. Let Europe say, through the media, that it wants access to our cheese market and let Canada do virtually the same thing in Europe to assert its position; that's part of the game.

The Dairy Farmers of Canada isn't really entering into that kind of debate. We prefer to have good talks with the negotiators, to determine whether the positions put on the table reflect Canada's ambitions and ours, as an industry, that is to say that supply management must not be negotiated. The media world troubles me much less than if I learned one day that access to the milk or cheese market had been put on the table or offered by Canada. In that case, I would be very concerned, as Mr. Julian said. It would trouble me a great deal to know that Canada is trying to negotiate by opening up the cheese market, for example.

10 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

They were talking about agriculture at the start of the negotiations. I'm the agriculture critic. So I'm monitoring that more closely than the average person. Whatever the case may be, that perhaps wasn't the topic that was discussed the most, the major issue. However, in the course of the negotiations, it seems as though there are a lot of irritants, discussions on that. In the agreement, as a whole, do you believe that agriculture is increasingly losing ground?

10 a.m.

Executive Director, Dairy Farmers of Canada

Richard Doyle

That may be the subject that's being discussed the most. On the procurement issue, there are also some very important issues for Europe. Canada is clearly much more demanding than Europe in this negotiation. In other words, its market is much larger. It has interests in Canada, but we want access, as Mr. Clow said, to a market that is 10 to 12 times larger than ours.

In those circumstances, there are risks. So we have to be very watchful, as you yourself say. Currently, however, I would rely on the negotiators. They've done a good job, I believe, and I hope they will continue along those lines. We'll see the results in the end.

10:05 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Chairman, do I have any time left?

10:05 a.m.

Conservative

The Chair Conservative Lee Richardson

Your time is pretty close to up, but go ahead for one minute.

10:05 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Doyle, we know that the Europeans have their own sensitive products as well. Do you believe that might be part of the final negotiations? They already have quite high customs tariffs on beef, pork and even for fruits and vegetables. You know the European producers federations. Are they flexible on the possibility of opening their markets to our products?

10:05 a.m.

Executive Director, Dairy Farmers of Canada

Richard Doyle

The Europeans have their sensitive products too. Pork and beef are obviously sectors where very little access is granted to Canada or any other country.

I believe that one of the bases of any agreement—and Mr. Clow discussed this earlier—is that there will be a harmonization of tariffs, regardless of the access issue. Access has been discussed on the basis of tariff quotas. Let's say that we don't touch tariff quotas where there are any; there is indeed a kind of liberalization that can be done. In fact, the situation is the same for cheese: our tariffs are about 14% to 20% when we export as opposed to 4% when we import. So to say that we're going to take all that to zero isn't an argument we're advancing, even at the industry level. We did that in the context of NAFTA. What's important for us is that we don't touch the tariff quotas as such.

10:05 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Thank you very much.

10:05 a.m.

Conservative

The Chair Conservative Lee Richardson

Thank you.

That does take us past our time for discussion of that issue this morning. I want to thank our witnesses again for appearing.

Mr. Doyle, please give our regards to Mr. Laforge. I regret that he was unable to get through the inclement weather to be with us today.

Mr. Geist, again, thank you for coming.

Mr. Clow, I appreciate your being here.

We are going to suspend for just a minute. We have committee business to discuss that will be in camera. I'll give you two minutes to bid our witnesses farewell and to re-engage with the in camera session.

[Proceedings continue in camera]