International Trade Committee on April 9th, 2019

[Brad Hanmer]

That's a great question, Randy.

The impacts are minimized. Unfortunately, probably about 10% of my production is left unpriced. We saw some of the chatter that was going on, and we did a mass sell-off of a lot of our canola, so we're fortunately pretty covered on that. But if we flip a switch into a new crop—you can see the chart I have up on the board—without average yields, we have a disaster. We have lost the profit from our crop-growing canola due to trade impacts.

As well, I run a crop input retail business, and I get to see that there is a lot of pain out there, Randy. I echo the comments of my fellow farmers: There are often a lot of decisions being made really quickly, really fast, about what we can grow. Again, if I may talk about my home province of Saskatchewan, there isn't one crop that isn't negatively impacted by some sort of trade dispute that is costing our profitability.

There are not a lot of alternatives. What I would say to this committee is that we have one option here, and that is better trade relations. We are an exporting nation. Without trade, we have nothing, and any further degradation in our international reputation could be serious and dire.

[Randy Hoback, Conservative, Prince Albert, SK]

In light of that—we've talked about the science-based approach, and they're checking that box—you're saying that we need to have more action at the ministerial level then. Is that not what you're saying? You want to see ministerial visits to China, maybe to Italy, maybe to Saudi Arabia, maybe to India again, to actually start to rebuild those markets. Is that fair to say?

[Brad Hanmer]

That would be fair to say, but you know, Mr. Hoback, my expertise is not international trade. My expertise is production, agriculture and business. What I will say is that without our government leading us through an export-based economy, we don't have a business. We need to have exports. We need to have trade lines so that we can export our crops and we can export our oil. We're hurting in western Canada, and I think this committee needs to know the urgency and the severity of what's happening.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

When we heard from JRI and others like them, they were basically saying that it's also impacting other crops. You touched on it just loosely. Could you give us just a quick oversight of what the situation with canola does to the wheat market and to the other markets? Then I will want to share my time with Mr. Sopuck

[Brad Hanmer]

That's a great question. So that I have the question framed right, when canola falls, it puts economic pressure on the whole system. That's on not only our acres but moving into the companies like Richardson and Viterra. So now we have to find other avenues, and it becomes that much more important to have an economic return on every other crop commodity. When your biggest crop represents about 50% of the acres and it falls off, that has negative impacts on every other crop we can grow.

That is the situation. I'm not sure if this committee understands. This is about far more than canola.

[Randy Hoback, Conservative, Prince Albert, SK]

So we would have a similar chart in wheat or in barley—

[Brad Hanmer]

Absolutely. In fact, if I may, Randy, here is what our percentage of pea exports to China is right now. Why is there such a spike? It's because we're out of the Indian market. What happens if China decides that peas are the next crop to fall? Do you want to see our vulnerability in flaxseed? There's our vulnerability in flaxseed. If you look at total flaxseed exports to all destinations, if we lose China, we've lost those too.

Our number one thing, the reason I took a red-eye flight and flew through two time zones to get here, was to tell this committee that we have an urgent issue in international trade and we need to solve it fast.

[The Chair, Liberal, Mark Eyking]

Mr. Sopuck, you have one minute, so go ahead. Randy kind of robbed you there.

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

To Mr. Gerrard, who happens to be a constituent of mine, welcome.

Could you talk about the stress that this is placing on you and your family from a very personal standpoint? When you're speaking with your neighbours, what kind of stress are they feeling?

[William Gerrard]

I think there's concern out there. Just being able to market a crop is obviously vital, as Brad was saying. We need to be able to move the crop to market. If the price is a little bit lower for a short period of time, most people can deal with that. But if this doesn't get resolved fairly quickly, then we have a bigger problem, in that it starts to impact cash flow longer term, profitability longer term, and then you start to see other things crumble around farms like lending, crops, machinery—other industries that rely on farmers.

I think that's really all I would say on that.

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

Thank you.

[The Chair, Liberal, Mark Eyking]

We're going to the Liberals now.

Mr. Hébert, you have the floor.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

Thank you, Mr. Chair.

[The Chair, Liberal, Mark Eyking]

I'm going to hold the clock for one minute.

Can somebody help our guests get wired up there?

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

That's what I was going to suggest.

Thank you, Mr. Chair.

I would like to thank the witnesses for coming to clarify their situation for us.

Since I'm from Quebec, I'll use the language of Molière. My riding, Lac-Saint-Jean, produces one-third of the canola in Quebec. I'd like to take this opportunity to tell my friends of Her Majesty's Loyal Opposition that it is easier to give advice when you're in the passenger seat than it is when you have the wheel in your hands.

Another major crisis hit Canada from 2009 to 2016. You'll also remember that in 2014, the canola market experienced a very significant decline. The Liberal government that came to power in 2015 resolved the crisis fairly quickly. In 2016, we were able to overcome this crisis. Minister Bibeau, immediately after taking office, created a working group where several people from the sector met to try to solve the problem and initiate positive discussions to find solutions. We know how important science is in this conflict over the international canola trade between us and China.

Mr. Gerrard, with your wife and your family, you are in production. When are canola producers paid for the sale of what they produce?

[William Gerrard]

The translation may be a little iffy on that one.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

Okay.

Once you have produced your canola, when are you paid for its sale?

[William Gerrard]

We're paid whenever we actually sell the crop. Sometimes we could deliver it in September, but we may not price right away. We may price later. Whenever we price that off the futures market, as Brad was showing, the futures price changes. Whenever we price it based on that market, that's when we're actually paid in most cases.

If we choose to hold on to our crops.... In terms of what we produced last year from the fall of 2018, we still have some of that crop in the bins, but 90% of it is gone. Probably 85% or 80% of it is priced. It's basically just a function of when the farmer chooses to deliver and price his grain.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

What are your immediate needs? How could the problem be solved?

[William Gerrard]

Personally, I wouldn't say that I have serious, immediate needs that must be be resolved, as far as cash flow is concerned. The biggest thing I worry about is profitability down the road. We need crops that are profitable to produce, and we need somebody to buy them. That's really what I worry about primarily.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

When the canola crisis hit in the last month, China decided to suspend imports of canola. China's ministry of foreign affairs hoped that Canada could work with China to encourage the positive and continued strengthening of their ties. It also stressed that Canada should take concrete steps to correct past mistakes.

My question is for Mr. Hammer.

Has the Chinese government specified which mistakes should be corrected? If there have been mistakes, what concrete measures could we take?

[Brad Hanmer]

Sorry, the interpretation kind of faded out. What was the question?

[The Chair, Liberal, Mark Eyking]

You have less than a minute left, so it will have to be a short answer.

You can go ahead, Mr. Hébert. We missed the question.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

Okay.

When China decided to cease canola imports, it was allegedly based on mistakes that had apparently been made.

If there were indeed mistakes, what are they and how should they be corrected?

[Brad Hanmer]

The question is if there were mistakes made. Again, my expertise is not in international trade, but I do know that there was a time when a conflict arose with China that was not based on science and has now created the fallout where families like us—the three up here—are paying the consequences of whatever is happening in the political field. That is not my expertise to understand. The mistakes that were made are for you guys in Parliament to figure out.

There have been mistakes made along the way. I'm sure we have all seen that previously, but we've never seen such a deliberate assault on our economy as has lasered in on canola, because it has hit us right where it hurts.

This is not based on science. We are going to check the box on science. This is not a science-based trade issue.