Good morning.
My name is Greg Sears. I am a farmer from Sexsmith, Alberta, and chair of the Alberta Canola Producers Commission.
ACPC works to increase the long-term profitability of our 14,000 members by investing levies in research, market development, and extension programming. ACPC also advocates on behalf of its members in the area of government policy to ensure that the needs of agriculture, and specifically the canola industry, are met.
For farmers like me, canola is the number one source of income from our operations. In 2014, the sale of canola generated $2.5 billion or 22% of the farm cash receipts in this province. By establishing fair, long-term, and predictable trading environments, agreements such as the TPP are critical to our long-term success.
Farmers grow and sell canola seed, but we're just one part of the Canadian canola value chain that includes everyone from input suppliers to those who process and package this premium vegetable oil product for customers around the world. Canola provides a prime example of how talented Canadians compete and prosper in the world marketplace.
The Asia-Pacific region plays a critical role for Alberta farmers. Vancouver and Prince Rupert are the closest ports, and Asia is the primary destination for much of our canola. As the economies in Asia continue to expand and disposable income grows, demand for our healthier oil and meal is expected to increase.
Under the TPP, the five-year phase-out of oil tariffs on Japan and Vietnam will create new opportunities. Once the TPP is fully implemented, Canadian canola exports could grow by up to $780 million per year, or by roughly one million tonnes of additional canola oil and meal exports.
As a result of the current tariff structures in Japan, Alberta sold $357 million of canola seed but only $4 million of canola oil in 2015. Once again, Canadians have been called on to supply the primary commodity, but other countries have captured the benefits of the value-added activities.
Keeping canola processing at home creates a greater economic benefit for Alberta, for both farmers and those employed in the downstream sectors. Alberta is home to a strong processing industry with facilities that provide delivery options for farmers and support for the communities in which they operate while generating high-quality jobs for Canadians. Furthermore, a strong domestic canola value chain supports growth of our sector and ensures that canola remains a viable cropping option for our producers.
It's important to develop new markets, but it's also important to retain our current ones. The TPP ensures that canola producers remain on a level playing field in our top markets. Failing to ratify this agreement places Canadian canola producers at a significant risk as the United States and Australia would enjoy trade concessions not available to Canada.
The oilseed and vegetable oil trades are highly competitive, and any tariff differences deter users from buying Canadian canola. We see this threat already under an existing free trade agreement between Australia and Japan. Japan applies a lesser tariff on Australian canola than on Canadian canola. As the tariff is gradually phased out and the market has time to adjust, Canada's trade disadvantage will continue to grow. The TPP will end this disadvantage and again place Canadian producers on a level playing field in the marketplace.
The story of canola is one of innovation and farming practices born of Canada's leading edge research and development capabilities. For various agronomic, economic, and sustainability reasons, canola farmers overwhelmingly choose to use the products of modern plant-breeding techniques.
As important as tariff reductions are the provisions the TPP contains to address numerous non-tariff trade barriers. Inconsistent and unpredictable approvals for innovations in crop-protection products and biotechnology continue to cause challenges for Canadian agriculture.