International Trade Committee on April 2nd, 2019

[The Chair, Liberal, Mark Eyking]

Thank you, Minister. The time is up, and I suggest that members of Parliament leave the ministers enough time to be able to answer the questions. Then if the ministers can their answers short, we can have good dialogue without cutting anybody off.

We're going to move over to the Liberals, and we have Madam Ludwig. You've got the floor.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you all for being here today.

Minister Carr, looking at the situation we've been in for decades with our reliance on the United States as our primary export partner, when we're looking at China and canola, what has been done since we formed government to diversify trade and find new markets for our canola products?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

We've signed trade agreements. We signed a trade agreement with the European Union, and that means we now have 500 million customers in Canada's free trade zone. We have agreed to NAFTA 2, for lack of a better acronym. Very importantly for canola in particular, we have signed and ratified the CPTPP.

Importantly, we were among the first six nations to ratify it. That made record speed through the House of Commons and the Senate, and I want to pause for a moment to thank my Conservative colleagues, in particular Ed Fast, who did a lot of work on this file. Because of the co-operation of the opposition and the Senate, we were able to ratify the CPTPP before the end of the year, which meant we have had two tariff reductions, one at the end of December 2018 and one at the beginning of 2019. This means our producers have been first to take advantage of this market. We now know that in the month of January alone, our exports to CPTPP countries grew by 17% year over year.

That is the kind of diversification of markets that matters. We now sell canola to 50 countries internationally, and we continue to redouble our efforts to make sure that countries other than China are reminded of the high quality of our canola and to deepen our trading relationship with them.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

You also mentioned in your testimony, Minister Carr, that in 2009 there was a challenge between Canada and China regarding canola. What did governments learn from that experience then that we could apply today?

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I think what we learned is that when we can engage the Chinese on common ground—and the common ground is science, even though we have to say, colleagues, that scientists can disagree on evidence too, because it's not pure, but it's a very good start.... The way to work through an issue when Canada says we have inspected a crop and the Chinese say they disagree with the result is to compare results and work through it. That's what trading partners do for each other.

This is the finest canola in the world. There are markets in 50 countries for this canola. China is one of our most important markets. We want to safeguard that market, and the best way to do that is to engage them. We seek to engage them.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Do I have more time? Yes. That's great.

I compliment both of you for your work with our provincial counterparts. Like Mr. Hoback, I think that's an excellent example of non-partisanship. Could you explain to us how that process has worked, and how it's going to move forward?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

The first thing I did was to call the three ministers of the prairie provinces, I think the Wednesday, the day right after this situation started, to make a first connection and to assure them that I was following the situation closely and that I wanted to make sure that we collaborated well for the benefit of our producers and exporters.

Then I had the chance to meet with Minister Eichler of Manitoba and then with our counterpart in Saskatchewan as well. We had a couple of discussions. We're all on the same page. We understand that we have to stand up for the fact that we have very high quality canola. We have a world-class inspection system, and we have to stand by it. This is the best way to protect our exports in the agricultural sector on a sustainable and long-term basis.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Great. Thank you.

[The Chair, Liberal, Mark Eyking]

Thank you, Madam Ludwig. That wraps up your time. We're going to go to Mr. MacGregor for the NDP.

Go ahead, sir. You have five minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Chair. I'm glad to be here.

Thank you very much, Minister Carr and Minister Bibeau, for appearing today. I very much agree with you that this is a world-class product that we've made and we should be very proud of it. I very much agree with the Team Canada approach that you talked about in your opening statement.

I am a member of the Standing Committee on Agriculture. Last year we did a trip across Canada. We've heard grumbling from farmers about the CFIA's onerous standards, but at the same time they realize that those standards are what makes us rise above...and that when you see the maple leaf on agricultural products, you know they're backed by world-class standards. We've retested our products and we've never had phytosanitary concerns with canola, so we know those science-based claims do not hold much water.

Assuming that this problem is in fact a political problem and, just hypothetically speaking, is linked to Huawei and other problems we're having in our bilateral relationship, and looking at China's fairly spotty track record for respecting WTO rules, how do we ensure that if we resolve this particular crisis, Minister Carr, we'll have the tools in place going forward to ensure that it doesn't happen again? What will the Government of Canada come to the table with so that our agricultural producers in another year or two years or five years down the road are not going to be put in the exact same position? We know that our farmers are very concerned right now.

[Jim Carr, Liberal, Winnipeg South Centre, MB]

We first want to engage with Chinese officials, and we want to engage with them at the scientific level. Second, we want to make sure there is support available for producers from the Government of Canada if that becomes necessary. Third, we think trade diversification is part of the road ahead. We know it's not something that can happen overnight, but I want to say something more. I want to say that we will travel anywhere at any time if we believe that the trip will lead to a resolution of this issue.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

But specifically, if they're going to raise phytosanitary concerns in the future—and you've already acknowledged what an important market it is—I'm just wondering in what way we can appeal to some kind of an international rules-based convention so that when the aggrieved party finds a phytosanitary concern.... How do we resolve it quickly? Let's assume the worst, which is that this doesn't get resolved quickly and drags on for months and possibly a year.

[Jim Carr, Liberal, Winnipeg South Centre, MB]

I appreciate the question because it drives at the heart of an anxiety that many nations around the world are feeling at this moment in the rules-based trading order, which is that the World Trade Organization needs to be reformed, and it needs to be reformed soon, because the Americans have not appointed appellate court judges and the whole dispute settlement mechanism of the WTO is at risk.

Canada has led an international initiative to reform the WTO that includes the EU and nations from every continent. It's not easy. I like to say that if you invite 164 of your neighbours to your backyard on a July night, give them a barbecue and have a conversation about where the cell tower should go, are you going to get consensus among the 164? Probably not, regardless of how good your burgers are.

To reform the WTO, you need consensus among 164 nations, so where do you start? You start with those who agree with us that liberalized trade and a rules-based trading order are in the interests of the world, as they have been since the Second World War. We are very aggressive in bringing together that group. It happened first in Ottawa. We had a second meeting in Europe in January. We meet again in Paris in May, and we meet again in Japan in June.

We believe that there is momentum growing for the reform of these rules that are so important. We're not naive. We know that if it's going to work, ultimately the Chinese and the Americans are going to have to support it.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Do I have time for a quick question, Chair?

[The Chair, Liberal, Mark Eyking]

You have half a minute, but go ahead.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Minister Bibeau, let me say as a member of the Standing Committee on Agriculture that I hope we can have you appear. The last time we had a minister there was at the end of November.

Today at the committee we heard from the canola growers, who said that there are about 10 million tonnes of canola in bins and a lot more on track going to export. Given the lack of storage space and the fact that farmers are about to plant their crop going forward and this is going to lead to a crunch, how soon are we going to see the details of what the Government of Canada is prepared to do to help our farmers? When will we start to see the details roll out?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I've travelled there and I've had the chance to meet with some farmers in many different round tables, so I understand the issue. I understand that this time of the season is particularly difficult for them because they have to make decisions.

We have a lot of programs already in place to support them. They have access right away, today, to the advance payments program. For example, they can get an advance of $400,000 including $100,000 free of interest, and actually, it was the start of the new year yesterday, and we have already received 1,200—not we, but Canada—

[The Chair, Liberal, Mark Eyking]

Sorry, Minister, I didn't want to cut you off but we're quite a bit over time there. Maybe you can pick up on your thoughts with another question.

We're going to go over to the Liberals now.

Mr. Fonseca, you've got the floor.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Chair.

Chair, you will remember that as a committee we were able to travel from coast to coast to coast as we were doing our consultations on the CPTPP. We know that canola is such an important industry to our country. It is a Canadian-made product. It was founded here. I know we're hearing from many of the prairie provinces where it is a predominant crop, but we heard about it from B.C. and all the way to the Atlantic and in my province of Ontario.

Minister Bibeau, my first question is for you. The Chinese have added further restrictions, and we question the science of their decisions. Why are we sticking so closely to the science-based approach?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I strongly believe it's the best way to find a lasting solution actually, because the Chinese are telling us that the issue is that they have found some kind of pest or irregularities in our shipments, and we have taken—as we normally do, or always do—samples and analyzed them before shipments left Canada, and then we did it again. We returned to our samples and we haven't found anything.

As Minister Carr just said, sometimes scientists don't agree, so they have to sit together and compare notes and see what methodologies they have used and everything. We really have to stand by this very robust system that we have because I think it's the best insurance for us, for our various agricultural products in various markets, that our system is reliable and that we are selling very high quality product. This is why it is so important to really go to the end of this questioning, to protect our Canadian brand and have our system recognized.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Following up on the testing, Minister, the nature of these tests and how we do them here, and then how they're conducted in China, when they look for these pests, would the tests be similar? How are they done there? How do we do those tests here? This might be a technical question.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I'll let the president of the CFIA answer your question since it's more technical.

[Dr. Siddika Mithani, President, Canadian Food Inspection Agency]

Sometimes the methodologies are very different. For example, the sampling methodology may be different or the testing methodology may be different, and therefore, it's critical for us to have those technical discussions face to face, to talk about these methodologies and differences and also to look at what their level of acceptable risk is around the pests.

It's not just the methodology, but a much bigger discussion around level of acceptability of risk and what it means to each country in the context of canola.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Ms. Mithani.

Ministers, you had an opportunity to meet with your provincial counterparts as well as the stakeholders. Looking at a strategy to get us to where we want to be, can you say how well aligned we are, in terms of what the stakeholders have said and then what the government is doing?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

I would say that we are very well aligned. We all agree that we have to protect our brand and protect our system as well. This is why we have created the working group as well. We think it's very important to keep working in a collaborative manner and to share information on a regular basis, to find the best way to proceed depending on how the situation evolves.

I think we're really working together, and if I may take a few seconds just to complete my answer, I was about to say that the Canadian Canola Growers Association and other organizations that are managing the APP, the advance payments program, have already received more than 1,200 applications; AgriStability is also there; and with the working group we will be looking at the different ways we could improve the support we already have in place.