Evidence of meeting #151 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 cusma.
A video is available from Parliament.
Liberal
The Chair Liberal Mark Eyking
There was a back-scratcher on one of his dairy farms where the cows would go in and get their backs scratched.
We went to an egg farm. It was very modern with bigger pens for the chickens.
You have quite the riding there, sir.
Welcome to the committee. You have the floor for five minutes.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Thank you very much, Mr. Chair.
I am not a full member of this committee. I am here today for people from sector 10 such as the Souligny family, the Bourdon family and the Laviolette family, who are major egg producers in my riding.
Mr. Pelissero, thank you for standing up for egg farmers in Canada.
Over the past 10 years, it's been a stressful time for farmers in the supply management sector. We would be misleading Canadians if we didn't say this.
The first question I want to ask you is about the market outlook for egg farmers in Canada. Does it look good right now in terms of the growth sector in Canada?
Chair, Egg Farmers of Canada
Our market outlook is strong. We've seen phenomenal growth in egg consumption. We have more Canadians eating more eggs than ever before, but that doesn't offset what we've given away in the trade agreement.
Farmers are investing more, which means buying more supplies, buying more items at your local hardware store and employing more people. In fact, there are about 17,600 jobs across Canada that are supported by egg farming in Canada, which contributes $1.3 billion annually to our GDP. Our growth outlook is good, and our average egg farmer is getting much younger, not grey-haired like me, but looking more like you.
Liberal
Chair, Egg Farmers of Canada
The average age is getting below 40, so it's great for the next generations that come back to the farm.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
In your opening statement, you talked about the importance of managing the TRQs.
Ms. Bundrock, you've also touched on the importance of eggs going to processors versus eggs going to table. I've heard this from one of your former chairman, Mr. Laurent Souligny. He said that whatever comes in, just make sure it goes towards processing, and that will help them tremendously.
Can you explain why that's important?
Chair, Egg Farmers of Canada
Well, I think the first reason is that it is a shell egg, and that goes to one of the panel's questions earlier regarding Canadians seeing that “Product of U.S.A.” label on a box of eggs. If it's for processed products, such as in a breakfast sandwich sold by a retailer, that doesn't highlight it as much, whereas if it's directly on the shelf to the consumer, they're seeing it and saying, “Oh my gosh, I really didn't want that American egg, but I still want eggs.”
Maybe, Ms. Bundrock, you could expand a little bit more on the TRQ aspect of that side.
Director, International Trade Policy, Egg Farmers of Canada
The processing market in Canada has been growing phenomenally, and so there is definitely a need for eggs for processing. It only makes sense that any additional eggs we're required to import would be directed to processing. That was taken into consideration in both the CPTPP and the CUSMA. Both agreements have wording that I would describe as not as strong as what's in the current NAFTA, because there are actual percentages associated with it. Therefore, there are de facto caps. Both the CUSMA and CPTPP have wording that says the eggs should be directed in priority, or similar language, to processing.
Our concern really is that, when the agreements are implemented, that actually be what happens in practice. We don't feel that the interim allocation for CPTPP for eggs is as strong as it could be—even though currently no CPTPP members can export eggs although we expect it will happen—and therefore, we're taking part in the government consultation on all TRQs. What we would like to see is some really strong language so that the spirit of the agreements, which says that the eggs should be directed in priority to processing, is actually what happens when the agreements are implemented.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
That's great. Thanks.
Other than the TRQ and managing that TRQ properly, what other mitigation strategies are the egg farmers looking at to ensure that you have growth and you mitigate the impact from some of the trade agreements?
Chair, Egg Farmers of Canada
We're looking at continually investing in the industry. We've had phenomenal growth, but that won't offset, as I said, what's given away, because we know what's given away under a trade agreement is given away forever. As we continue to move in that manner, we have young farmers who are investing. When we look at trade agreements, there always seems to be something on the horizon, so there is that leeriness with regard to how much we should invest, whether we should invest it now, or when we should invest.
Having the trade agreements ratified and coming into effect kind of puts where we are to rest, and I think having that will give confidence to the next generations of farmers out there to invest. Similar to the situation of my neighbour here with the vintners and the winemakers, agriculture is waiting to see what happens, because a considerable amount of money is being invested by family farms. I think having trade agreements sealed and saying, “Okay we're done” and now we're defending supply management and not just supporting it, we'll have a different answer.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
Thank you, Mr. Drouin.
We're going to move over to the Conservatives.
Mr. Hoback, you have the floor for five minutes.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair. Thank you, witnesses, for being here this morning.
I'm going to start by saying that the Conservatives are going to support this deal. We've already indicated that. We worked with the Liberals all the way through this and we've had our ups and downs, but we still have lots of concerns. We're still hearing a lot from industries within Canada about concerns that are coming up.
I'll use the example of fabricated steel. They're looking at tariffs coming on August 1, until USTR will decide, and then we'll see what that looks like. We still have no resolution on softwood lumber; that was not addressed in NAFTA. We still have buy American provisions sitting there in the background, which are going to have implications for our industries.
How do you guys square that? I know you want stability and bankability, but in the same breath, are you really getting that in this deal?
I'll start off with you, Brian, and then go to Mathew.
Vice-President, Policy, International and Fiscal, Business Council of Canada
Thank you.
There's no doubt that our overarching recommendation to government was to do no harm, which they were successful in doing, but we also had a long list of offensive priorities that we were hoping to have addressed, including buy American, clearly, and labour mobility, which was mentioned earlier.
While we protected our existing labour mobility provisions in NAFTA, we were kind of hoping to go beyond that, so there are definitely areas that we could have improved upon. The reality is we were dealing with a U.S. partner that wasn't really interested in taking a more ambitious approach to North American trade, and it was all about pulling back preferences, so I have some sympathy with the fact that it wasn't necessarily possible with this administration. There's no doubt there are areas that can be improved, and that's why we hope we can still work away at things like the competitiveness chapter and regulatory co-operation, because they are not going away.
Senior Vice-President, Policy and Government Relations, Canadian Manufacturers & Exporters
Maybe I'll just mention, on the buy American government procurement, that was, I think, the biggest missed opportunity in this—and not to be critical. Frankly, the offer from the United States was to eliminate all of it and be backwards from even the WTO commitments that are there, so we secured access that was better than the WTO commitments.
It is disappointing that the U.S. wouldn't look to fully modernize in the way I think Canada wanted to. Certainly, that was on.... If you'll remember back two years ago, I think, when the minister laid out Canada's six recommendations, or six priorities or principles for negotiations, procurement was one of the top six, which we were very pleased to see. Given what the U.S. was asking for, keeping it exactly what it was, that was pretty good.
Now what's really important, and certainly we're working with provincial governments in this way, is to look at a state and provincial level. A lot of the really harmful activities that are going on in buy America are being done at local levels now, which this deal wasn't going to deal with anyway, unfortunately. We're working with several provinces now trying to get some of those dealt with at a local level. It's bad. It's bad for business, and bad for taxpayers overall. We want to see the free movement of those goods.
Conservative
Randy Hoback Conservative Prince Albert, SK
What concerns me, like fabricated steel, the government's been preaching about how it got rid of the tariffs and everybody thinks they're all gone, but what they've really been telling us is that these guys have been trying to meet with this government to address this. They've been down in the U.S. a substantial number of times, and there's no response. Nobody's mentioning it, and nobody's highlighting it. Everybody's closing their eyes, plugging their ears, saying, “We'll get through this and then we'll deal with that later.”
I also have to deal with the fact of the tweets. I almost think EDC needs to offer insurance for tweets because of the unpredictability and instability those create. How do you take that out of the marketplace? Maybe that's an option they should look at.
Dan, you talked about the vintners and the excise tax. How many more times do you have to say that? This is something we heard right before the budget came into implementation, and we've heard it year after year. It's nice to see B.C. making movement on the grocery stores, because that was a big issue. I think we would have lost at WTO, so it needed to move forward on that.
What else do you think we need to do to get this government to understand? Maybe a new government will actually understand that better. What else can be done there? Is there compensation coming if you should lose that WTO case because it didn't react accordingly?
President and Chief Executive Officer, Canadian Vintners Association
Yes, it's a major preoccupation for us. As I said, we worked really hard with our government, and with the opposition, and with negotiators to get through CUSMA. We protected a lot of measures in CUSMA, as we did in CETA. Everything is at risk right now. Fortunately, we know exactly what they want. When budget 2017 came out, the Europeans said, “That is a major problem for us.” The Americans said, “It's a major problem for us.”
Conservative
Randy Hoback Conservative Prince Albert, SK
Okay. I'm going to stop you right there just so I can ask Roger one question.
Liberal
The Chair Liberal Mark Eyking
Mr. Hoback, you have 15 or 20 seconds, so it will have to be quick, quick, quick.
Conservative
Randy Hoback Conservative Prince Albert, SK
I have 20 seconds.
Roger, what did they offer you for compensation, in light of the fact that you are one of the losers in this deal? You are giving up market access that you normally have. What is there for the losers, the people who are not getting or maybe are more a victim of a deal like this?
Chair, Egg Farmers of Canada
We're waiting for the announcement from the minister regarding the CPTPP. I guess we'll have working groups as we move forward on that new agreement, CUSMA. We'll just have to—
Conservative
Conservative
Liberal
The Chair Liberal Mark Eyking
Okay, we're going to move over to Mr. Sheehan.
You have the floor, sir.