International Trade Committee on May 1st, 2013

[Gord Kurbis]

Let me answer by way of noting what the pulse industry is asking, along with other Canadian and international grain industries, as well as other agriculture sectors within the Trans-Pacific Partnership.

We're asking for an SPS rapid committee, which is the equivalent of a small claims court, rather than going to the Supreme Court when you have an SPS trade disruption. We're asking for a low-level presence policy adoption. And we're asking for the MRL short-term and long-term solutions, which I articulated earlier.

The TPP, in our view, holds great promise in bringing about improvements in each of these three areas because it is a multi-lateral forum and there's a lot of exporter presence. We couldn't have predicted that the TPP would turn into that. We can't predict where the TPP will go, whether there could be delays or some other reason that we don't get what we want out of it. I suppose the Pacific Alliance represents something like an option value, to pursue similar harmonization in those areas just in case something happens to these other negotiations.

That's just from the narrow perspective of our own industry. There may well be other industries for which it's a big win.

[Wayne Easter, Liberal, Malpeque, PE]

You're talking about the TPP here.

Where do you see the benefit in the Pacific Alliance? Are we going to have a wonderful chat? Are we going to send bureaucrats to wherever? I mean, this thing isn't going to establish rules, that I can see.

[Gord Kurbis]

It would have to increase in scope for it to have a material benefit for us.

[Wayne Easter, Liberal, Malpeque, PE]

Theresa, do you want to add anything to that?

[Theresa McClenaghan]

Everything I could find out about it right now is very high level, so my comments are equally high level.

I think where there is potential benefit is in the fact that in environmental technologies Canada has a lot of opportunity to do innovation. Specifically, as I mentioned, the Latin American bank was noting the pressures around energy and water, for example. Even without establishing additional rules, just the additional exchange and opportunities to pursue good solutions for low-income residents that would apply both here at home and there would be interesting things to pursue, as well as some of the academic exchange that could be pursued there also.

[Wayne Easter, Liberal, Malpeque, PE]

Okay. Thank you.

On the zero tolerance issues, you proposed basically finding some minimum standards for residues on products. I think the group presented a three-point solution. I don't recall all the points, but we'll certainly have them in the evidence.

One of the biggest issues the agriculture sector is facing now on trade is our production methods versus those of other countries. Where the level is zero tolerance, we can be out of the market in a minute and have a hell of lot of bad publicity, which doesn't do us any good.

I would suggest that's a proposal that goes well beyond the Pacific Alliance study. When we, as a committee, are doing our discussions on our report, we should perhaps consider writing a letter to the minister suggesting that those three points be considered in our discussions with all the countries that currently have zero tolerance. I see that as one of their major concerns. That's just a suggestion. I really appreciate receiving those three points.

To the pulse industry as well, if we join the Pacific Alliance, what do you see are the opportunities coming out of it, in terms of processing in Canada if possible? In some of the industries you don't process a lot of your products.

Do you see other opportunities within Canada, beyond the raw trade of products, where we can create some economy within Canada?

[Nick Sekulic]

Certainly I think of the crops we export to these countries, a good portion would be not shipped farmer dressed, meaning not shipped bulk. They would have been processed in Canada, somewhere likely near where they were produced, on the Prairies. Certainly there'd be cleaning and in some cases splitting of the crops. Certainly as an industry, we'd love at some point to expand the consumption of these pulse crops beyond whole pulses to include fractions of pulses in, say, cereal-pulse flours, which could add extra nutritional value.

There's huge opportunity globally for our pulse industry to satisfy a lot of the food security issues that are now creeping into the public's mind. Right now, pulse protein is only 5% of the global protein intake. We have an objective in the not-too-distant future to double that as a food security strategy. In this part of the world where the population is growing, where there are going to be food security issues, expanding trade of whole foods or fractions of these whole crops we grow is a tremendous opportunity. We are not the world's largest producer of pulse crops or the world's largest exporter, but there's tremendous opportunity.

I just returned from the World Pulses Convention. There is a lot of interest in pulses as a food security solution everywhere, including all these countries that had delegates at that convention.

[The Chair, Conservative, Rob Merrifield]

Very good. Thank you very much for that.

We'll now move to Mr. Shipley for seven minutes. We may have a little time.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair.

I want to thank my colleague, first of all, for helping us understand the advantages that Canada has had in our trade agreements, not only in terms of our commercial trade, but also in our service trade. We on this side do understand why we're having these talks about the Pacific Alliance. Clearly, it is part of a global picture in terms of reaching and being able to be a hub into the Pacific Asian countries around the world, for example. It is, in fact, an agreement that would bring a bloc of four countries—with us it would be five—to harmonize many of the things you were just talking about. I'll go to that with either Gord or Nick.

Understanding the crop protection minimum residue levels and getting minimum standards to be acceptable are challenges that we in Canada are dealing with in trade agreements. You talked about almost $4 billion of product being at risk because of an MRL gap. That is a huge issue to get over. How do we establish that? Canada has to be careful not to be the one that sets the rules, but if everybody else sets them differently, then you've automatically put yourself in a position.

Have you as an organization had discussions with commodity groups around the world in terms of establishing an international standard outside of Codex? Can you talk to us a little about where that is, or if it has even started? Have you had any of those discussions?

[Gord Kurbis]

I'll be very brief.

Coming out of NAFTA, there was an agreement to work together and share regulatory resources among Canada, Mexico, and the U.S. in order to develop a common approach to setting MRLs. That was so successful that it expanded in a way into what we now call OECD country joint global reviews. The joint global reviews are the model for the future in which PMRA from Health Canada would collaborate with its counterparts in other OECD countries and, as I've mentioned, increasingly with South American countries, such as Brazil, to come up with a common approach.

I think that is the international reference point that represents the solution we would like other countries to increasingly participate in or accept the outcome from, especially as Codex brings us longer and longer delays that increase the trade at risk here.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

You mentioned that we could actually get a short-term or temporary MRL. I'm assuming that you're talking about one just within the Pacific Alliance.

[Gord Kurbis]

Yes, I mean in this context.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Can you give us some suggestion of how that might be approached in a better way? Have you had any discussions on this subject?

[Gord Kurbis]

Let me give you an example from the Canada-Panama FTA that was just signed. The FTA was not germane to how Panama deals with MRLs, but they have an MRL deferral path that essentially says that their MRL is going to be the Codex MRL, but if Codex doesn't have an MRL in place, it's going to be the U.S. MRL, but if neither Codex nor the U.S. has an MRL in place, then they are going to defer to the EU MRL.

There are many precedents in sovereign countries for the interim solution we're asking for, namely, some form of mutual recognition of MRLs. You can take the MRL off a shelf from the regulatory system of a country you trust and accept it as your own on an interim basis until there is some improved degree of regulatory harmonization. There are examples of this out there.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Do you have a sense that there may be a resistance by some only in order to create a non-tariff trade barrier?

[Nick Sekulic]

Most certainly.

[Gord Kurbis]

Yes, certainly.

There are cases, for example in the EU breach which we referred to, that wouldn't have been entirely protectionist measures. That one was regulators going through the mechanical process of saying, “Here's the number we have in the books, and here is the test result.” That one had a zero threshold, or close to it.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I hope we resolve this. It has to be a main part of the discussion.

Ms. McClenaghan, you're absolutely right. When companies, particularly Canadian companies, go into other countries, we want to make sure we're not dropping a standard that the other country has already, just to take advantage of profits.

We had the mining people in a little while ago. They weren't necessarily the miners, but they were the ones who provide all the equipment. They gave an interesting account that shows the significance. Some 3,000 firms across Canada are offering mining-specific products or services. They're in hundreds of countries.

Canada is recognized, as I think my colleague said, for our expertise not only in technology, but actually in how we run; we do have a conscience, when we go into these countries.

What I'm wondering is, when we look at a standard, is it a Canadian standard that needs to be established? Or, when we move into other countries, are there international standards there that actually serve as a benchmark to start from, which are then phased up to meet some other higher standard as we work through a project?

Many of these countries will not have even that, if there is an international standard.

Is there one? Should there be one?

[Theresa McClenaghan]

In the case of mining, I don't know for sure whether there is one internationally that could be pointed to.

What has happened is that in the past, there has been case-by-case sparring, and that has led to specific approvals, in the Canadian history for sure, for a specific mine.

Mining is regulated provincially. In Ontario we now have new standards under Ontario's Mining Act. The environmental community still wants those improved.

For example, in the Ontario context, the environmental community would still say that those need to be further improved, that they are better than they were 100 years ago, but that they are not where they want them to be ultimately.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Now, a blast from the past, we have the very talented Ève Péclet.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Rob Merrifield]

The floor is yours. You have two and a half minutes.

[A member]

Good afternoon, madam.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Don't take my time.

[Some hon. members]

Oh, oh!