International Trade Committee on Feb. 15th, 2011

[Dr. Michael Geist]

I think you're right. Especially in the copyright area, a change in technology represents a real challenge, but I think there are a couple of ways that you deal with that. One is that there is a continual revisiting of these issues, and Bill C-32, which your government has introduced, contains a requirement that we take a look at the law every five years. I think that's a good approach--recognizing that.

Now, the particular issue around digital locks that we're talking about involves treaties negotiated in the 1990s that attempted to be forward-looking. While we can debate whether they truly were forward-looking, the standards they set are the standards that have been adopted still today—even recently, in many other countries, among some of our other trading partners. I'm not saying we don't need to move forward with those rules; I'm saying that the kind of general outline they provide is one that's designed to stay current. I think we need to retain those flexibilities in the law.

I'd also just quickly note that we shouldn't underestimate the ability of copyright law, in its basic principles, to deal with some of these issues. I'll give you an example. The current bill provides a specific provision to deal with what are called enabler sites, sites that are designed to deal with clear pirate websites. Everybody says, well, of course we need to be able to deal with that.

Last year, three weeks before the bill was introduced, 26 record labels secretly filed a massive lawsuit against the largest known alleged pirate site in Canada, a site called isoHunt. They used existing Canadian copyright law. They're looking for millions of dollars in damages, they're looking for a full shutdown of the site, and they're using the law today.

The lawsuit suggests that all these claims that they are powerless and that we need reforms mistake a little bit where we really stand, because in fact there is the ability to use, in many instances, basic copyright principles that have been in place for decades to deal with some of these issues. It's in a sense old wine in new bottles, but it can still effectively apply.

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

I appreciate that analogy, and thank you for that.

I guess my other two questions will go to Mr. Doyle.

I appreciate Mr. Guimond's interjection on behalf of the dairy industry. He tends to have a bias, I will tell you, but it's a bias that I agree with, so it's not a bad thing.

However, I don't think it's as simple as saying that there can be no negotiations. I think we have done a very good job—and I appreciate your praise for it—as a government defending Canadian dairy and Canadian supply management. I think the concept that farmers deserve to be paid with a margin of profit involved for the product they produce and that we move away, quite frankly, from some of that cheap food policy that is subsidized by the rest of the world isn't a bad concept. It is as simple as that.

I don't think we say that enough, and we need to say it to Canadians. If you read the paper, you will read time and time again that we're paying too much for dairy. What they don't say is that Canadians are paying for cost of production. There's nothing wrong with that, and if you can't pay for cost of production, you can't afford to be in business. No other business could operate without getting cost of production.

On the geographical indicators, because the geographical indicators will be a substantial challenge, have you talked to our trade negotiators about the discussion that should be going on concerning them? You mentioned two that are important, parmesan and feta. Both of them are well-known products, world cheeses that you can buy in Australia, New Zealand, or Canada, the United States—anywhere in the world. I'm not sure that we can't find some accommodation with the EU on those types of geographical indicators. It might be—this is speculation—as simple as saying “Canadian feta”, because certainly in Europe you can have Greek feta and Italian feta, and made in other....

Would you be willing at least to have that discussion? We might have to add to the name, but it's not as simple as saying that we can't use it.

[Richard Doyle]

I don't think the industry has actually looked at this particular proposal. I'd be quite happy to raise that issue, if that's a compromise. There has been discussion internationally among the industry—I was in New Zealand last November—and people are trying to see, within the context of the WTO, because again I'm stressing the link, about setting some conditions on how you could do it to satisfy the Europeans, but mostly looking forward, looking to new geographical indications rather than to some of these very traditional ones that have been in use around the world for many years. That could be another option as well.

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

My chairman is telling me I don't have time to talk about potatoes.

[The Chair, Conservative, Lee Richardson]

Although we'd love to hear you talk.

Mr. Andrews, welcome to the committee.

[Scott Andrews, Liberal, Avalon, NL]

Thank you.

Mr. Keddy, I'll pick up on the potatoes for you, my friend.

Mr. Clow, I have just one question. I want to elaborate a little bit more on the tariffs going into the EU and coming out of the EU. These are two-part questions.

Could you give us a little overview on the agrifood industry, as to how much is coming in from the EU right now? And are they competing with you in that matter? Have you identified any markets in the EU? Are you shipping potatoes, even with the tariffs as they are today, into the EU? Have you identified any markets in the EU that you could potentially expand your business to?

[Ron Clow]

As I mentioned, going to Europe the tariff is 14.4%, so where that tariff is in place, we're not selling today; it's prohibitive. Coming this way, it's 4%, and if you go to your local grocery store you'll see some Belgian products. Holland and Belgium are the largest exporters in Europe. We compete head to head with them, and with the Caribbean islands and Puerto Rico down in that area. In the food service business, which is where you service the restaurants in North America, we're not competing head to head with Europe, but in retail we are, and you can find some Belgian products if you go to your grocery store today.

We feel, and we're doing a lot of work on this, that because of shipping by ocean—it's the cheapest method of shipping and it literally is, on a percent basis, about the same as trucking product to Chicago—we have lower energy and lower labour costs, and our land costs are lower, and we feel that we can be competitive in the traditional European market. It may not be retail business that we'd go after; it would be food service business—supplying large restaurants, supplying chains. It's a big market that we'd love to be able to play in.

[John Cannis, Liberal, Scarborough Centre, ON]

But in order for you to be competitive, you're saying, that 14.4% has to be adjusted.

[Ron Clow]

What we're asking for is that the 14.4% go to zero on day one. I know a lot of the tariffs may go out over three years or five years, but on frozen potato products, once the agreement is ratified and if it is signed off, we'd like it to go to zero on day one.

[John Cannis, Liberal, Scarborough Centre, ON]

I assume that they would ask for the same—

[Ron Clow]

I agree.

[John Cannis, Liberal, Scarborough Centre, ON]

—it's a reciprocal agreement—and that, I think, is what you meant when you said we want to protect the 940 jobs.

[Ron Clow]

That's correct.

[John Cannis, Liberal, Scarborough Centre, ON]

If anything, you would want to create more work.

Wonderful. I think that's fair.

Mr. Doyle, you said, if I may quote, we contribute “more than positively” to the Canadian market.

Can we compete, and how can we compete, if CETA is ratified? You contribute to the Canadian market positively. Let's just take it a step further. We address the GI issue. As you suggested, it's not to be opened up. That's wonderful, but it's highly unlikely it's going to happen. How will you be able to compete positively, should this CETA agreement go through?

[Richard Doyle]

If it goes through and you protect their industry, we won't compete because we can't compete.

Right now we have over 20,000 tonnes of cheese imported. We're in the same situation, with different tariffs, even on the access, where we see differences similar to those you see in potatoes. We have access to Europe for 4,000 tonnes of old Cheddar in the U.K. We export, I believe, in the latest figure I have seen, about 2,000 tonnes; we don't even fill our quota in the U.K. We used to sell this in Harrods or we used to be the Queen's purveyor. The cheese was absolutely fantastic; it's a very special cheese.

Unfortunately, the market was destroyed, if you will. Now we're competing in a commodity market for cheddar in the U.K. The price has been completely slashed. The farmers will not recover their costs in trying to maintain that market. And as I said before, the farmers in the U.K. receive huge amounts of...you call it “green” within the trade agreement, but they still nonetheless receive a financial contribution by the government, which makes it absolutely impossible for an industry that does not rely on any government funding to be there and compete. If you just compete on price, you're not going to be profitable.

[John Cannis, Liberal, Scarborough Centre, ON]

I'm glad you said that so we can get that on record.

I want to go back, if I may, to when you said that we've developed a whole industry in terms of the GIs, etc., and now, over the years, over the generations of immigrants, those traditional markets were developed.... I know that when we were in Rome that came up as well in terms of some of the products.

Do you see the potential whereby some of these industries developed in Canada could come to some agreement? That was kind of discussed in negotiations, where those two companies, vis-à-vis the Canadian company and, let's say, the Italian company, or the Greek feta company, could work with this agreement. Maybe they could blend in some kind of an agreement and say, “Look, for the benefit of this big picture called CETA, can we find a compromise?”

Can you see something like that? What would your comments be on that--or anybody's comments on that?

[Richard Doyle]

My experience with parmigiano reggiano is that they're playing a hard bargain. They tried to register it as a trademark. We opposed it, so they could not register parmigiano reggiano, even though it's not used in Canada; we produce parmesan. The problem is that they interpret their name, parmigiano reggiano, in any language, as where there is parmesan. So anybody who uses words even close to it, in any language...they actually want to prohibit it. There's no way you can start from there.

I think what was suggested was to have “Canadian” before it, if that's a compromise for specific cheeses; I could see that maybe it could be contemplated. But I don't think you'll do it through an industry agreement. I think you'll do it through regulatory agreement, and hopefully you'll do it through the WTO, because that's where it should be dealt with. Otherwise Canada will be put in a different situation from some of the other countries, like the U.S. and the EU, Oceania, and so on.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

Thank you.

Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair. I'll be splitting my time with Mr. Holder.

I'm just listening to some of the comments about tariffs and things of that nature. We know that some products are considerably more price sensitive than others. If you can do product differentiation, you're not as sensitive to tariffs. So there are often issues other than tariffs that are at play.

Specifically to Mr. Doyle and to Mr. Clow, other than tariffs—and we support your position on trying to get your frozen vegetables into Europe—what do you see as the most significant regulatory issues that concern you in this treaty, either from a defensive posture, more like Mr. Doyle's, or from an offensive posture of looking to export, from Mr. Clow's perspective?

I'll start with Mr. Clow.

[Ron Clow]

To be honest, our biggest obstacle is the tariff. We don't see any of the regulatory non-trade issues being insurmountable.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So for you it's purely a question of the dollars and cents—

[Ron Clow]

It really is, yes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Doyle.

[Richard Doyle]

I'm thinking very much the same: the tariffs. Now that we've converted most of the import measures and control measures in the tariffication system, it remains the tariffs. The GI is the one that we have particular concerns about because we know they're pushing really hard. We have a particular concern with negotiating on a bilateral basis versus a multilateral basis.

For some of the other issues, such as the regulatory issues on labelling, or some of the food safety issues or quality issues, we pretty much have equivalency with the Europeans, so it's not as big an issue in this country.