International Trade Committee on April 2nd, 2019

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

I was actually going to ask that question as well, so thanks for clarifying that for me.

I note that we exported to China 4.8 million tonnes of canola seed, valued at $2.7 billion, but 1.1 million tonnes of canola oil, valued at $1.1 billion. Obviously, you can see the effect of a value-added product there.

I'm not sure if it was at the meeting this morning at the Standing Committee on Agriculture and Agri-Food that we heard that it's pretty much impossible to have phytosanitary concerns with regard to oil, because it's gone through the crusher, is a processed product and has gone, I think, through a heat treatment. It comes out and is in a sealed container. Can you confirm that?

[Fred Gorrell]

If it's a consumer-sized product.... People can look at it for other reasons, but, I mean, anything can be looked at from a food safety point of view. Even in Canada—

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

But it's harder to make the claims against an oil.

[Fred Gorrell]

Yes, I think I understand the nature of your question. I would say that a prepackaged consumer product is stable, and it's usually considered safe.

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

Do we have information information on our canola oil exports to China? In looking at the last 10 years, do you have rough numbers on how the demand has increased for our oil?

[Fred Gorrell]

We can get you the numbers, but I think the numbers that you identified, the 4.8 million tonnes relative to our seed and the $1.1 billion of oil.... That oil demand has been going up over the years, as has the demand for our seed.

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

Currently, do we have information on Canada's crushing and processing capacity? Are we maxed out right now, or do we have the ability to absorb more? I'm just looking ahead at all that canola that's sitting in bins. If this problem isn't resolved, we're going to have a lot more of this problem.

[Fred Gorrell]

We're close. Again, we'd have to get you the numbers. With all of the crushers and the various companies, we're close to running at capacity right now. One of the things the industry likes to do is to have the choice to export seed, oil and meal. They use it domestically, and they sell it to the United States as well. They established their industry and how they look at it to be able to sell all three products wherever they want.

I don't know the exact number, but I would say that we're pretty close to capacity.

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

I know that the Canola Council of Canada has certainly been advertising the fact that they've been developing biofuels—their biodiesel blend—with canola oil.

Just looking ahead—and I know we heard from the minister about diversification and so on—is it a reasonable strategy to look at Canada's processing capability and to look to maybe increasing that? If you look at the numbers, the value per tonne is a lot more. Do you think there is a worldwide market and do we have the capacity? Is it a smart strategy going forward to invest in more processing capability for oil?

[Fred Gorrell]

You've raised a very interesting point. There's country diversification, but there's also product diversification. So I think there is an opportunity to look at products and diversifying.

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

Thank you.

[The Chair, Liberal, Mark Eyking]

Mr. Dreeshen and Mr. Sopuck, you have the floor.

Go ahead, Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much. It's great to be back with my former colleagues on the trade committee. I'm also on the agriculture committee, and this morning we had an opportunity to talk with the CFIA. One of the questions that came up had to do with the fact that these inspections are also done load by load by the farmers. We know exactly what it is that's going into the system, and fortunately we have great faith that the rest of the process works as well. Unfortunately, when a person can't give 100% assurances, which no physical scientist is ever going to do, that's when the political scientists jump in. We should all be understanding just how strong the system is and how great the product is that we're trying to sell.

I'd like to ask Mr. Verheul about some of the concerns and issues that I have. Right now the U.S. and China are busy trying to work on how they are going to move agricultural products. We are sidelined from both of those—the U.S. for obvious reasons that no doubt people have talked about, and China because of this issue we have going on now. What do you think we need to do to stay involved and continue to be relevant to the discussions taking place with the U.S. vis-à-vis our agriculture products and their potential movement?

[Steve Verheul]

Despite some challenges we have with the U.S. from time to time, we have been maintaining close linkages with our counterparts in the U.S., and we have talked to them about their discussions with China as well. Clearly, the U.S. is seeking to reach an agreement with China that covers a broad range of areas, and they are trying to do that on a bilateral basis. We're following that very closely to assess any implications this might have for us, and we're also asking our various contacts on the Chinese side as well about their perspective. We're getting what I would say is a reasonably full picture of how that's working. The challenge for us is to figure out exactly how we can maximize our own benefits out of that.

[The Chair, Liberal, Mark Eyking]

It's good to have you back, Mr. Dreeshen.

Mr. Sopuck.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Verheul, given your experience in trade negotiations, and given that China is very much a top-down system of state capitalism with a culture that's very different from western cultures, how difficult is it to negotiate with the Chinese on these kinds of matters, knowing as we do that the orders from the top are obeyed instantly by the private and public sectors?

[Steve Verheul]

China is certainly a different kind of a negotiating partner from the U.S. and many others. However, we negotiate with countries all around the world, and I wouldn't say that China is the most difficult. It's all a matter of establishing the right kind of relationships. I think that while China does certainly have, as you put it, a kind of top-down type of approach to their government, you still get to a point, when you get to technical issues, where you're talking scientist to scientist. It's difficult to have instructions coming down to that level of detail. We have found that, despite what might be happening at higher political levels, we can still have a good dialogue with the Chinese, and we can find solutions that will move us forward.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Do you believe in Lord Palmerston's dictum that countries don't have friends, only interests?

[The Chair, Liberal, Mark Eyking]

That's a loaded last question. I guess we'll have to leave that as a statement, Mr. Sopuck. That wraps up some good questions and dialogue and information.

Officials, thank you for coming, and good luck. This is a multi-department challenge we have, and we're all doing this for our industry, the workers in this industry, and of course the farmers. Thank you for coming, and we hope to see you back.

Mr. Hoback, you had a comment?

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I want to read a couple of motions to get on the record for us to deal with next Thursday, and perhaps talk quickly about them now.

The first two are for Thursday. The first one is:

That the Committee call industry associations and producers to testify to discuss the impact of the Chinese withdrawal of the canola market.

My second motion would be:

That the Committee invite Chinese officials, including the Ambassador, to discuss Canada-China's relationship and canola.

The third item, which we should talk about quickly here amongst ourselves if we have time, is the following:

That the Committee send a letter asking the Speaker for an emergency debate on canola.

Perhaps we can consider doing that as a committee. It's something that is very important to farmers. We can see that time is of the essence. If that came from the committee, I think it would help the Speaker make a decision on moving that forward.

[The Chair, Liberal, Mark Eyking]

There are three motions here.

They are notices, right? Okay.

We'll leave it at that.

[Randy Hoback, Conservative, Prince Albert, SK]

The third one I'd like to deal with now, if there is unanimous consent to do that. If there isn't, there isn't.

[The Chair, Liberal, Mark Eyking]

Mr. Hoback, we'll have to leave it as is.

You can table your motions. We'll leave it at that.

Thank you, folks. It was a good meeting.

The meeting is adjourned.