Evidence of meeting #16 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.

On the agenda

MPs speaking

Also speaking

Kevin Boon  General Manager, British Columbia Cattlemen's Association
Paul Newman  President, Vancouver Head Office, Canada Wood Group
Ric Slaco  Vice-President and Chief Forester, Interfor
Yuen Pau Woo  President and Chief Executive Officer, Asia Pacific Foundation of Canada
Stan Van Keulen  Board Member, British Columbia Dairy Association
Clerk of the Committee  Mr. Paul Cardegna
Rhonda Driediger  Chair, British Columbia Agriculture Council
Debbie Etsell  Executive Director, B.C. Blueberry Council
Ray Nickel  Representative, British Columbia Agriculture Council
Karimah Es Sabar  President and Chief Executive Officer, Centre for Drug Research and Development
Steve Anderson  Founder and Executive Director, OpenMedia.ca
John Calvert  Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Karim Kassam  Vice-President, Business and Corporate Development, Ballard Power Systems Inc.
Robin Silvester  President and Chief Executive Officer, Port Metro Vancouver
John Winter  President and Chief Executive Officer, British Columbia Chamber of Commerce
Jon Garson  Vice-President, Policy Development Branch, British Columbia Chamber of Commerce

9:30 a.m.

NDP

Jean Crowder NDP Nanaimo—Cowichan, BC

But that's outside of the TPP—

9:30 a.m.

President, Vancouver Head Office, Canada Wood Group

Paul Newman

Yes. I'm not aware of any sort of projections.

9:30 a.m.

Vice-President and Chief Forester, Interfor

Ric Slaco

There's no specific analysis. As I said, it's incredibly important to have modern trade agreements with trading nations. That in itself will be a benefit to us, whether it's a job next week, next year, or even 10 years from now.

9:30 a.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

Mr. Hoback.

9:30 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Chair,

Thank you, gentlemen, for being here this morning.

I come from the great riding of Prince Albert. We have lots of beef and forestry products, for sure. When my grandpa came to Canada, it's one of the things he did. He worked in the bush up in Big River and cut logs. My family also farms, so I'm attached to both sectors in my cultural history in Canada.

One thing I find really interesting is that the NDP keep trying to say that there are no jobs created from TPP, which we all know is absolutely false. They like to say that there's no benefit to doing a trade deal because there isn't a trade deal that they've ever liked. Don't be astonished by your questions from the NDP, because that's just who they are.

Mr. Boon, maybe I'll start with you. If you weren't involved in TPP, if you were on the outside looking in, what would that do to your sector, and how would it impact Canadian farmers across the Prairies and right across Canada?

9:30 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

We're in a bit of a unique position because of the effects of BSE right now. What we've really seen since BSE was discovered in 2003 is the use of that as a trade barrier. In joining in a partnership with TPP, a lot of these barriers have been more prevalent in the Pacific Rim and the Asian rim, where they'll allow some limited access. But they put such stipulations in place that it's hard for us to conform with our product. The TPP partnership is going to allow us to equalize some of that and put us on more of an equal playing field with some of our competitors. It's not just gaining access, but it's also putting us on a more equal playing field with those that also supply.

9:30 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Wouldn't it be fair to say then that Minister Ritz has been out and about and very active over the last three years opening up those markets that BSE closed? It's called BSE, but in this case it was being used as a non-tariff trade barrier.

Now, with TPP you have a multilateral agreement. Instead of him going to every country one at a time, you have a multilateral agreement, plus the nature of a multilateral agreement is enforcement on a multilateral agreement, the ability to make sure it's enforced. That was the benefit to the cattle producers, for sure.

9:30 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

Definitely a benefit in that aspect, and I have to take my hat off to Minister Ritz and Minister Fast for the work they've done on trade. One of the things, especially with our different industries, is that we're a global market. We're a global community now. We can't necessarily just think of within Canada. The more we have at the table, coming up with an equal agreement or a comparative agreement, it's going to make it much easier for us to do business on a broader base. I talked about the value of that cut-out. Being able to get a premium for tongues and livers that we don't use is where it's at. Even within the Pacific, there are different requirements, so it really helps our value-added and our processing.

9:30 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Yes, that's what I was just going to say: your utilization of different products for different parts of the world. CETA, for example, uses certain cuts, and then TPP will use other cuts. That means that the processing has to happen here in Canada in order to break shipment there. Again, it's another benefit back into the Canadian economy. That is jobs for Canadians.

9:30 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

Very much so. I've always felt one of the biggest mistakes we made following BSE was to open our own borders to live cattle leaving the country because we took away our processing opportunities. The more we keep at home, the more jobs we create and the more opportunity we have to add that value here at home.

The other really important part of the CETA deal that a lot of people don't equate is the fact that under the requirements for Europe, we have to produce feed that has no added hormones. China has been very adamant that they do not want any ractopamine. To not get too technical, the ractopamine is the carrier for a lot of the added hormones.

So by raising the beef for that European market, we create a product that is acceptable to China as well, and so the two of them blend very well. All this to say, if Europe is taking 35% or 40% of our carcass, and we still have 60% or 70% left to utilize, and all of a sudden we have another player that comes in and is taking 30% or 40% out of that, we're able to get a premium price for that in a way that we don't have to segregate on our line so much, so we can keep our costs down. It actually allows us to maybe produce a little more cheaply for our own domestic product as well. We're able to spread out that cost for processing.

One of the big advantages to opening these up is to be able to expand that capacity for not only production but for processing as well.

9:35 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Mr. Newman, of course in 2008, the forestry sector...2007...coming from Prince Albert, we had our pulp mill closed. We've basically seen the whole forestry sector just collapse. To be honest with you now it's coming back. We have seen some of the sawmills opening up. The pulp mill is scheduled to open up in another 18 months hopefully, again, if we can find labour and the appropriate trades, which is another topic we'll talk about on another day. But one of the things I think created the problem is our dependence on one market for all the product we were making.

Of course, with the CETA and TPP you're going to have access to a wider range of consumers, 500 million in Europe alone, and then I'm not sure how many millions would be in Asia. That's the number that Mr. Holder could probably tell me off the top of his head.

What does that mean to the sector? Will that not give it a base level that's high enough that you could have consistent production throughout a wide range of different types of anomalies that may be country-specific?

9:35 a.m.

President, Vancouver Head Office, Canada Wood Group

Paul Newman

Yes, absolutely. We were hammered in the downturn in 2006-07, where we were over-leveraged in the U.S. market. Fortunately, there had been some work done starting in the late 1990s and early 2000s to buy companies—by groups like Canada Wood—to try to get our specifications and get our products recognized in some of these new Asian markets. That helped greatly.

As Mr. Slaco said, this is where we really see trade agreements as being critical to our future because I don't think the industry's going to want to get into a dependency situation like we had.

9:35 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

So it's fair to say, then, if we weren't at the table, for example, on TPP, your industry would be at a huge disadvantage compared to other countries you compete with in the global market.

9:35 a.m.

President, Vancouver Head Office, Canada Wood Group

Paul Newman

Yes. I think we would be looking at the opportunities that our negotiators could leverage. But also if we weren't in the game and were being left out in terms of non-tariff barrier agreements and so on, it could badly impact us, I think.

9:35 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

But that's basic macroeconomics. You don't need to see the fine details of the deal to understand that. Correct?

9:35 a.m.

Conservative

The Chair Conservative Rob Merrifield

Okay, that's it now.

Our analyst has just told me there are 792 million people in TPP. There you go.

Mr. Pacetti, the floor is yours.

February 4th, 2014 / 9:35 a.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Thank you, Mr. Chair.

Thank you to the witnesses for coming here and appearing before us.

I guess my first question would be for you, Mr. Boon. My understanding is that when we sign free trade agreements it's normally about duties and tariffs, but you mentioned it will put your industry on equal footing with some of your competitors, more on a regulation and conformity type of basis.

Can you comment on that? Is that going to be part of the negotiations? Have you had any input regarding that? That's going to be important.

9:35 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

Yes, it is. Through our Ottawa office of the Canadian Cattlemen's Association, John Masswohl has been very engaged in the process with our Canadian government in putting forward the facts. We also have what we call our Five Nations Beef Alliance, where we ourselves are partnered with the U.S., Mexico, New Zealand, and Australia. Those are some of our major competitors.

Where our disadvantages come are in what was put down in the regulations and what we have to adhere to since BSE. So we have to do some extra steps that put us definitely at a cost disadvantage. It's why it's so important we use a science-based approach to this, so it's understood that yes, we might have some restrictions that the others don't have as we phase in, but we have the ability to get to that level.

9:40 a.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Sorry to interrupt, but it has nothing to do with duties and tariffs. It's mainly about conformity of regulations and making sure that's all the same.

9:40 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

Exactly.

9:40 a.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Even if you didn't sign the TPP would that make a difference?

9:40 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

Yes, it does.

The TPP, while we had signed an agreement and we worked with them together, has very much become a trade barrier, especially when we work with China and Japan at this point. They've utilized a lot of it to restrict us in a manner whereby it's just not economical for us to try. In that it comes down to whether or not we're allowed access with product with bone-in or bone-out, and what we have to remove for specified risk material, stuff like that. We're not saying that we want it eliminated so that we don't have to do it. It's just that those regulations should follow the same.

9:40 a.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

I only have five minutes so I just want to get a question to Mr. Newman. Who is your main competitor in the group of TPP?

9:40 a.m.

General Manager, British Columbia Cattlemen's Association

Kevin Boon

In Asia, in TPP, it would be Australia and New Zealand, and a lot of that is geography and proximity to the market.

9:40 a.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Okay, thank you.

Mr. Newman, you mentioned something about the sector not benefiting from trade just towards the end. I didn't catch that because I don't have a copy of your brief, but you said something about if you sign the TPP there will be some sectors that are not going to benefit from the TPP, and you don't want to be penalized. Is that what I understood?