Evidence of meeting #142 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was china.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Siddika Mithani  President, Canadian Food Inspection Agency
Fred Gorrell  Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency
Steve Verheul  Assistant Deputy Minister, Trade Policy and Negotiations and Chief Trade Negotiator of the Canada-United States-Mexico Agreement, Department of Foreign Affairs, Trade and Development
Kathleen Donohue  Director General, Market Access Secretariat, International Affairs Branch, Department of Agriculture and Agri-Food

5 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Okay. Thank you.

My next question is for you, Mr. Gorrell. When we look at Canada and China and the exports, what percentage of canola actually comes, of imports that China imports from Canada...what percentage of their total canola?

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

Could you try that again?

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Yes. Of all the canola exported by Canada, what percentage goes to China?

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

Forty per cent of our canola exports, the total canola exports from Canada, go to China.

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

So 40% of—

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

Forty per cent of total Canadian canola seed exports go to China.

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Okay.

Looking at that scenario, what would be the substitute markets for Canadian high-quality canola if China is not importing ours?

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

That's a good question.

Because it's 40% of the total exports—it's our single-largest export market right now—the next three markets for canola seed don't even total up to the 40% for China.

Ministers Carr and Bibeau have had conversations with the exporters that were also mentioned—Richardson, Viterra, as well as others—and they have talked to the provinces. There is no single market that would take that much canola at one time, but on the diversification and strategy, they do look at what other markets might be able to take incrementally. It would take time; it wouldn't be something you could do immediately, just because of the size of China.

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

On that, which country would be our greatest competitor for canola?

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

The good thing is that we're the world's largest exporter of canola and there is no one really close to us. Australia does export. You might find some coming out of the Black Sea now—Ukraine, Belarus.

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Would there be enough in Australia and the Black Sea to feed the Chinese market?

5:05 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency

Fred Gorrell

I think it would be highly unlikely, especially at our level of quality.

5:05 p.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Thank you.

5:05 p.m.

Liberal

The Chair Liberal Mark Eyking

We're going to the Conservatives.

Mr. Barlow, you have the floor for four minutes.

5:05 p.m.

Conservative

John Barlow Conservative Foothills, AB

Thank you very much, Mr. Chair.

I want to clarify something on Mr. Fonseca's question about previous mistakes. This came from the Chinese foreign ministry spokesperson, Geng Shuang, when asked specifically about Ms. Meng. His complete comment was:

As for China-Canada relations, we hope that the Canadian side could work with us to promote the sound and steady development of bilateral relations. The Canadian side should take some concrete measures to correct its previous mistakes.

It wasn't about the science side; it was about the political, foreign affairs side. I just wanted to read that into the record in relation to his question on that.

Picking up on what Ms. Ludwig was saying—and I know, Mr. Forsyth and Mr. Verheul, you might be the best to answer this—we heard from the trade minister that he will be looking for new markets to try to divert the canola seed that was going to go to China.

My understanding is that there isn't crushing capacity anywhere else in the world that could possibly displace what was going to be exported and processed in China. Is that correct, or are there opportunities for other markets to take what would be close to several million tonnes of canola seed?

5:05 p.m.

Assistant Deputy Minister, Trade Policy and Negotiations and Chief Trade Negotiator of the Canada-United States-Mexico Agreement, Department of Foreign Affairs, Trade and Development

Steve Verheul

Well, since we have lost access for at least two companies on—hopefully—a temporary basis, that does put a big hit into our canola exports.

We are certainly looking at other markets and will be trying to do the best we can in those. We have strong markets in Japan and Mexico and various other countries around the world, but it's quite true that they're not of the same size as the Chinese market.

We have been talking to the industry about diversifying exports that would have been destined for China, but I don't think we can say that's going to be a solution to this issue, which is why we're actively trying to resolve the issue with China and putting as many resources as we can into that effort.

5:05 p.m.

Conservative

John Barlow Conservative Foothills, AB

Yes, and I appreciate that. I think our best solution is to repair the relationship with China, with whatever means that takes. I appreciate that we're looking at a multi-pronged approach—scientific and, hopefully, political as well.

I did ask the question of the ministers, but they weren't really able to answer. We've certainly heard from our stakeholders that existing contracts with China are being honoured in commodities other than canola seed. But we've certainly heard a lot, and it has been in the media as well, so there may be some misinformation being put out there, and I'm guessing it's mainly from Chinese importers, from the companies. They have said they are no longer going to be signing new contracts for other commodities. I know flaxseed has been mentioned, as well as barley and wheat.

Is this true or is that misinformation? Is there a move by these Chinese exporters to no longer sign new contracts with Canadian producers, or have they have threatened that any shipments that come to China will be heavily scrutinized, which is a pretty stern warning of what will happen if we try to send commodities over there?

Is this a lot of misinformation, or are these things that we need to be wary of?

5:10 p.m.

Liberal

The Chair Liberal Mark Eyking

A short answer would be good.

5:10 p.m.

Conservative

John Barlow Conservative Foothills, AB

Sorry. Thanks, Mr. Chair.

5:10 p.m.

Liberal

The Chair Liberal Mark Eyking

No, it's all right.

Go ahead.

5:10 p.m.

Assistant Deputy Minister, Trade Policy and Negotiations and Chief Trade Negotiator of the Canada-United States-Mexico Agreement, Department of Foreign Affairs, Trade and Development

Steve Verheul

We certainly do have some information. I think it's clear that China has been more closely scrutinizing canola exports from any source. We have certainly heard the same kinds of rumours you have heard. We have not had any kind of formal notification or indication from the Chinese government that they were intending to take action against any other commodity.

5:10 p.m.

Conservative

John Barlow Conservative Foothills, AB

Thank you.

5:10 p.m.

Liberal

The Chair Liberal Mark Eyking

Going back to the Liberals, Mr. Sheehan, go ahead.

5:10 p.m.

Liberal

Terry Sheehan Liberal Sault Ste. Marie, ON

Canada exports $2.7 billion in canola to China, but we also export $1.3 billion to Japan and almost $700 million to Mexico. Have Japan or Mexico raised any issues with canola from Canada?

5:10 p.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food, Canadian Food Inspection Agency