International Trade Committee on April 2nd, 2019

[The Chair, Liberal, Mark Eyking]

Good afternoon, everyone, and to any members who are visiting us, welcome to the trade committee.

Today's meeting is very important. We have discussed this before. It's about the challenging trade issues facing our canola industry. It is a very important industry. Canola is a crop that was developed in Canada and represents over 250,000 jobs, $11 billion in wages and almost $30 billion in sales.

Before I start, I want to give the committee a heads-up that things are working quite well with the whips on our very important trip to the United States that we're working on with the ways and means committee. It looks as though we might be going between the 8th and the 10th. I'm just letting the parties know they should put forward the names of your designated travellers. Right now, it's looking good and it could be a very important meeting.

Without further ado, we're going to get right into our meeting. We have a very busy one today. We're going to have to be done at 5:30 sharp because there are votes.

[Randy Hoback, Conservative, Prince Albert, SK]

No, they got cancelled.

[The Chair, Liberal, Mark Eyking]

Did they get cancelled? Okay, we're still going to 5:30.

We have two ministers here with us today. We're going to give them an hour and then have the officials whom we also see in the room.

Welcome, everybody, and thank you for making the time to be here. We have a very efficient committee. Our members always keep their questions short and the ministers keep their briefings short so we can have a good dialogue. I'm hoping to get most of the members in so they can ask their questions.

Mr. Carr, good afternoon and welcome. Do you want to start us off?

[Jim Carr, Liberal, Minister of International Trade Diversification]

Thank you, Chair and colleagues. Thanks for the invitation to appear in front of the committee.

For a long time, I've believed that parliamentary committees are really the heart of our democracy. That's where we are held accountable. That's where we have spirited debates about public policy, sometimes contrasting in their points of view and perspective. It's open to the public and it's the kind of exchange that makes our democracy as vibrant as it is.

I am pleased to be here to talk about a very important issue, particularly for me as a Manitoban, because I know how important our agricultural and agri-food industries are. I know how vital the export markets are for the well-being of western Canadians. I know that they are the wealth creators of the prairie economy—indeed of the national economy.

I also know, as all members of the committee will know too, that China is a key market for our canola exporters. One figure always sticks in my mind. If I were to ask you in what year the Richardson family did its first deal with China, what might you say? It would probably not be 1910. For over a century, we on the prairie have been selling wheat to China. For over 100 years, prairie farmers have been growing and selling the highest-quality products in the world to customers in China.

As a former CEO of the Business Council of Manitoba, I know how critical our agricultural experts are to the overall economy, not only of the prairies but to the entire country. If our farmers suffer, we all suffer. If our farmers succeed, we all share in that success.

As Minister of International Trade Diversification, we must maintain our trading relationship with China. China is Canada's second-largest trading partner and an important market for Canadian exporters. ln 2018, two-way merchandise trade between Canada and China reached $102.2 billion. Canadian total exports of agriculture, agri-food, fish and seafood to China were valued at $10.5 billion in 2018, up from $8 billion in 2017 and even more from the year before that. Total Canadian exports of canola seed, oil and meal to China in 2018 were valued at $4.3 billion, up from $3.6 billion in 2017 and $2.7 billion in 2016.

However, despite the depth and strength of our bilateral ties, as with any diplomatic relationship, ours is not without its challenges. This is as true today as it has been in the past, and as it was in 2009, the last time that China gave us a bit of grief over Canadian canola.

We were extremely disappointed in the decision by China to halt import of Canadian canola. Last week, the Prime Minister and I met with Richardson executives in Winnipeg. Minister Bibeau and I also met with both Viterra and the Canola Council of Canada last Friday in Saskatoon. Importantly, over those number of days, we have also met with our counterparts, the ministers of agriculture and ministers of trade from both Manitoba and Saskatchewan. We also met with the Premier of Saskatchewan, to show that we are working in lockstep with the industry, with producers and with our provincial counterparts.

I want to thank our provincial partners for their collaborative effort and their support on this very important file. We're all committed to resolving this issue for our growers.

Colleagues, this is not a partisan issue. I'll say to you what we told the producers and our counterparts. Our government is seized with this issue. We recognize the potential impact of China's decision, and we are working hard to restore our exports to China and mitigate the impact of their decision on our canola sector, and by extension, our economy as a whole.

Yesterday, we announced the formation of a working group, which includes the Canola Council of Canada, the Canola Growers Association, the Richardson company, Viterra, and representatives not only from the federal government but also from the governments of Alberta, Manitoba and Saskatchewan.

The CFIA and our officials are working diligently with the Chinese to refute the reasons for halting Canadian imports.

While those efforts continue, we are seeking other markets for Canadian canola. I have been working the phones to grow our canola exports in other markets. I've connected with, and will continue speaking to my counterparts in other countries worldwide to expand our canola exports.

Our government is committed, as you know, to diversifying trade and opening new markets for Canadian exporters. The newly implemented CPTPP and CETA agreements are creating significant export opportunities for Canadians, with the CPTPP alone expected to result in $780 million in new canola exports.

Canada now has 14 trade agreements covering 1.5 billion consumers in our free trade zone, and access to nearly $50 trillion in combined GDP.

Colleagues, we are the only G7 nation to have a free trade relationship with all of the other six, which positions Canada to be an international leader and investment hub.

Our government works diligently to help more Canadians export more goods to more places, creating more jobs and more wealth from coast to coast to coast.

Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you, Minister.

We also have with us the Minister of Agriculture and Agri-Food.

Minister Bibeau, thank you for coming and being with us, and welcome to the trade committee. You have the floor.

[Marie-Claude Bibeau, Liberal, Minister of Agriculture and Agri-Food]

Thank you, Mr. Chair.

I thank all the members of the committee for your focus on this very important issue and for calling us here today to address your questions.

There is nothing more Canadian than canola.

It is a symbol of Canada's scientific achievement and agricultural innovation. The success of Canadian canola is a source of great pride.

Canola is a stable rotation crop for many farmers and contributes almost $27 billion a year to the Canadian economy, a contribution that has tripled over the last 10 years. Our producers create a top-quality product and the science and inspection system that supports our exports is world class.

Our government knows that strong markets for our high-quality Canadian canola mean more money in the pockets of our farmers and good middle-class jobs for Canadians.

As you know, China suspended the licences of two Canadian canola seed exporters. It is also subjecting all Canadian canola seed to more stringent inspection. We want to reaffirm our support for producers and make clear that we are doing everything we can to resolve this issue, in conjunction with our partners and industry stakeholders.

As mentioned by the Prime Minister last week, Canada is prepared to send a high-level technical delegation to China.

I have recently sent a letter to my Chinese counterpart requesting to send a delegation led by the president of the Canadian Food Inspection Agency, along with her team of plant health experts and the support of technical experts from the prairie provinces.

In the meantime, experts from both countries continue to share information, and the talks are ongoing. Just 10 days after my appointment as Minister of Agriculture and Agri-Food, I travelled to Alberta, Manitoba and British Columbia. Here, in Ottawa, and out west, I have already met with dozens of industry representatives, producers and processors.

Last Friday, with Minister Carr, we were in Saskatchewan to meet with our provincial counterparts and agricultural leaders.

Strong collaboration and ongoing dialogue between industry and governments is vitally important. That is why we have set up a working group that includes the Canola Council, the Canola Growers Association, Richardson, Viterra, and representatives of the federal government and the Alberta, Manitoba and Saskatchewan governments.

The working group will ensure a coordinated and collaborative approach towards resolving this canola market access issue in China. The group will also explore alternative markets for both the short and long term.

On top of that, we know that Canada's canola farmers have concerns about seeding, storage, prices and cash flow. We understand that.

We are continuing to explore the full suite of existing risk management tools and support mechanisms to help the industry and farmers as much as possible.

Mr. Chair, Canada has a world-class canola industry. Our government will continue to work together with partners and stakeholders to find a science-based solution to the current issues the industry is facing.

We will continue to stand firmly behind farmers.

[The Chair, Liberal, Mark Eyking]

Thank you, Minister.

It looks as though we're going to have time for two full rounds, which is good. I know our motion dealt mainly with Richardson's situation, but I think I'll accept any questions dealing with canola and canola trade.

Without further ado, we're going to start right off with the Conservatives.

Mr. Hoback, you have the floor.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair. Chair, I just want to get on the record that I'm disappointed that we didn't give the ministers an hour each as we had committed to doing before, but it is what it is, and I'll take what I get. I can count over here and I understand who controls the committee.

Having said that, Mr. Carr, I appreciate your comments about being non-partisan. I agree with that. I think if you look at Canadian farmers right now, that's the last thing they want. They actually want to see that you have a good handle on the situation and that you have a game plan going forward. That's what my questions are going to be structured towards.

Have you had a chance to talk to the Chinese ambassador about this issue? Has the Prime Minister talked to him? Have you talked to him?

Ms. Bibeau, have you had a chance to talk to him?

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

No, I haven't talked to the Chinese ambassador. All of our discussions were science-based and led by the Canadian—

[Randy Hoback, Conservative, Prince Albert, SK]

But even still, if you want a letter of invitation to China, if you want to speed up the visa process, just a common courtesy call to the ambassador, I think, on something like this would be appropriate. Would it not?

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

I've already sent a letter to my counterpart in China to ask for such a delegation. We've had quite a number of discussions between our representatives at the embassy and their counterparts in China. We had two significant scientific technical discussions between our officials at CFIA and their counterparts from China.

[Randy Hoback, Conservative, Prince Albert, SK]

I understand that they are meeting.

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

My letter asks, and actually the letter of the president of CFIA also asks, for a delegation.

[Randy Hoback, Conservative, Prince Albert, SK]

Unfortunately, I only have five minutes. I don't mean to be rude, but there's urgency. Planting will be happening in John's riding in probably the next two weeks. On May 1, guys will be seeding. That's why I was really stressing to the committee when we first requested the emergency meeting roughly three weeks ago that we needed to move more quickly and faster to get as much information in front of them...so they could make the best decisions.

I understand now the reason for the technical delegation. I'm disappointed that it's not already there and being done. To me, that should have been done two or three weeks ago and it should already have been crossed off the list of reality. I think we've done everything in Canada that we can do.

I think, Mr. Carr, you were in the media saying that CFIA has taken another look at the samples, and there's absolutely nothing wrong. We already know that the end result after all of this will be that there's nothing wrong with our canola. It's a safe product. There's actually something other than that. It's a political statement.

You still have to check that box, and I get that. In the same breath, however, you have to be planning for alternatives. The reality is that if you've checked that box and we have said that, yes, this canola is safe, and we have not changed our processes, and this is actually a political issue, what are you prepared to do?

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

We have to get to the end of this—

[Randy Hoback, Conservative, Prince Albert, SK]

But I'm assuming you can do both at the same time. You can prepare for that as you do the other ones, right?

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

We are doing that. This is what we are doing. We have been engaging with the stakeholders, with industry, and with farmers since the beginning, since the day after I entered this position. We are really working together in a collaborative manner, and I can tell you that the stakeholders understand and support and agree with the approach we have been taking since the beginning. We are ready to go forward, and this why we have also created this working group.

[Randy Hoback, Conservative, Prince Albert, SK]

I think you have these farmers saying, okay, we want to know that when our crop comes off in the fall, you will actually have completed something, and you will actually have laid out something tangible so the Chinese understand there are consequences to their playing politics with food. It's hurting their reputation but it's also hurting our livelihoods.

What types of items have you put on that list? When you talk to your friends in the Chinese government you say, you know, there are going to be consequences if this is not an actual CFIA issue, and if it comes back and the reality is that this is a political issue, which is what everybody is speculating about, then these will be the consequences. Have you looked at that list and at what that list would look like?

It's similar to what we did with the country of origin labelling with the U.S., when we said, okay, here are the counter tariffs. We were very strategic, and we had a very unique goal to accomplish with those lists.

I know, Mr. Verheul, you worked on creating some of those lists.

Have you done that yet?

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

The Chinese don't say it's a political issue; the Chinese say it's scientific.

[Randy Hoback, Conservative, Prince Albert, SK]

Of course. They say that all the time.

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

They say it's a scientific issue. They say they have evidence that this crop contains impurities, pests. We've inspected it twice, and they've shown us no evidence. The way we're going to resolve this and the way that works best for everybody is to have a meeting with Chinese officials and to have the scientists have a good go at what's in these samples. If there's a problem, we will work towards solving the problem. If there isn't, then we should move on. This is not the first time, as you know—

[Randy Hoback, Conservative, Prince Albert, SK]

What does “move on” mean? You say there isn't, because I don't think there is. Most people are saying there isn't an issue.

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

We have resolved—

[Randy Hoback, Conservative, Prince Albert, SK]

We have to check that box, yes, but what are you going to move on to? What are you going to do?

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

We have resolved issues with the Chinese before, a number of times over the last decade or so. Scientists have agreed that a resolution is possible.

We are waiting, and we have been waiting for a while now, for Chinese officials to show us they have evidence that contradicts ours. That is what many with whom we've had this conversation and who have history with the Chinese—producers, associations, provincial governments, ministers—say is the right way to proceed on this issue now.