International Trade Committee on May 12th, 2016

[Mark Huston]

I think it's the globalization of the economies. We've gone from being able to produce domestic product for our domestic marketplace to being able to supply a lot of international marketplaces, which helps level out some of those low periods you might have in your own economy. By spreading those economic impacts out over multiple economies, you end up being able to balance the boat a bit better. I think that's what we've seen. We've also seen some challenges with some other production areas, and that's increased the prices we've been able to receive.

I think the challenge we have is how to keep a broad area where we can ship our products to, so we're not as affected by trade disruptions in certain marketplaces. The more opportunities we have to participate with other countries, I think the better off we are.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

We're speaking specifically about the product itself or the end product—but, of course, there's much more to it.

When Mr. Hoback and I were travelling down here, he was telling me about the former company that he worked for and the advances in the machinery and the innovation that has taken place.

I had a long discussion with a seed grower, and I think you—

[The Chair, Liberal, Mark Eyking]

Excuse me. You have a half a minute left.

[Dave Van Kesteren, Conservative, Chatham-Kent—Leamington, ON]

Very quickly, what have you seen in those areas of industry that have given us new opportunities?

[Mark Huston]

It's the investment. The more successful agriculture is, the more investment you see into the industry. The more opportunity you have in an export marketplace, the more investment we can drive back into that, so you can build on each other as you move up.

For us, it's about growing the whole pie as opposed to our share of the pie. We want to see our partners do well. We want to see our seed companies and the companies we deal with do well, so we can all do well as Canadians.

[The Chair, Liberal, Mark Eyking]

We're going over to the Liberals now.

Ms. Ludwig, you're up.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

For the Grain Farmers of Ontario, you noted that your current tonnage is about 6.2 metric tonnes, and that 40% of that is shipped to TPP nations. What currently is the tariff that's being charged on this?

[Mark Huston]

It varies. Most of the them are fairly minimal. I don't have those numbers off the top of my head, I'm sorry.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

How much of your soybeans are consumed domestically?

[Mark Huston]

Most of the domestic consumption would be of processed soybeans. You'd process the vegetable oil, and some of that would go into industrial processes. The majority would go into livestock feed. We're seeing about 65% being exported, so the remaining 35% is consumed domestically.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Do you see greater potential within the industry in Canada to sell it domestically?

[Mark Huston]

I think we have challenges domestically in being able to grow the industry. Our hope is that we are going to be able to kind of grow that pot as well, because the more we can add value here in Canada, I think the further ahead we are.

One of the challenges we had historically is that we are exporting a raw commodity. When we look to what we want to do in the future, the more processing we can develop here in the country, I think the more we're going to benefit from it. You're able to capture more of that value in some of the manufacturing jobs.

Are we there yet? I think we have challenges moving forward in order to get that investment here. We have the demand in export nations currently for the products we're producing, and some of those are higher value products than we would normally supply the domestic marketplace with.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Looking at your geographic location here in southern Ontario, certainly your access to the U.S. market is just—throw a rock over, and it'll hit it.

Does that come into play in comparison to the cost of shipping east-west?

[Mark Huston]

I depends on the regions.

Here in Ontario a lot of our product would go north-south. A lot of it actually goes to the Far East. Japan, from an Ontario perspective, is one of our bigger marketplaces for high-value commodity soybeans. The quality aspects the Japanese are looking for are ones we can match up with quite well, and we can do a better job than just about anybody else in the world.

We do have some logistical challenges in reaching some of the eastern marketplaces, but the quality aspects that we are able to do here can overcome some of those logistic challenges.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Mr. Lundbland, have you consulted with your membership specifically on TPP to gather their support or lack of support for it?

[Troy Lundblad]

I think in general what we're hearing from our members is that several decades of trade agreements have only exacerbated any quality and wiped out large swaths of the manufacturing sector, including the steel industry. They just do not see the benefits of the global trade regime as it currently stands.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Would you have a study or any research to support that so we could put that into our report?

[Troy Lundblad]

I'm certain we've done surveys over the years for sure, so I can forward that.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

We've heard from most panels that there is support of trade, which you mentioned as well. Is there is a specific trade agreement that you can cite that you support or your membership supports?

[Troy Lundblad]

I think one that was beginning to come close, but now I'm doubtful is.... One we were hopeful about is CETA. CETA looked like it could become the gold standard for trade agreements going forward. There are quite a few things we would like to see changed in CETA.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

What would be some of the examples of what you would like to see?

[Troy Lundblad]

First, we'd like to see the elimination of the ISDS provision. We'd like to see the ILO standards on labour rights enshrined in the agreement rather than having a mere reference to them. We'd also like to see a thorough review of the merits and effectiveness of investor and labour provisions within five years of ratification of CETA. We would want CETA to have a positive list of service commitments and no ratchet or stand-still clauses, so that public services could be protected in the agreement. Finally, we would want local governments to be able to maintain the right to have activist economic policies, labour policies, and environmental policies in terms of procurement and also in terms of regulation. We'd like to see that enshrined in CETA as well. Those five things really aren't in that deal as it stands.

[The Chair, Liberal, Mark Eyking]

Thank you very much. That wraps up your time.

We're now going over to the NDP for five minutes.

Ms. Ramsey, go ahead.

[Tracey Ramsey, NDP, Essex, ON]

Thank you, Mr. Huston, for your presentation. It's been clearly represented here that your sector would benefit. We've heard across the western provinces from many farmers, and we recognize the importance of your wanting access into those markets. What you said really struck me. You said that you wished that we all do well, that Canadians all do well.

We have Ms. Mehra saying that pharmaceutical costs will increase drastically under the TPP, which would impact all Canadians—your family, your communities, everyone—in such a significant way. We hear from many Canadians that they can't afford their medication as it is, and they are making horrible health decisions because they're unable to put money on the table for those pharmaceuticals. I appreciate that your sector would thrive, but we're trying to balance this with whom it be detrimental for and hurt.

To Ms. Mehra, pharmacare is something that we have wanted to pursue for many years and we see it as the second pillar of our medicare system in Canada. It's outrageous that we have the second-highest cost. Would we be able to implement a pharmacare program if we were under ISDS provisions?

[Natalie Mehra]

I think it would become much more difficult to do so because of the curtailed ability of the federal government to set regulations. Even pricing would be impacted. Outside of those provisions, the other TPP countries would have a say in our regulatory regime, in general. All parts of regulation and the creation of a potential new pharmacare program would be impacted by this deal.

Interestingly, in our experience in farm communities, we've spent the last nine years trying to save small rural hospitals and their emergency departments. We've been very active in my colleague's community here, trying to save the emergency department in the local hospital. In those communities, farmers often do not have third-party health insurance and do not have extended health benefits, so drug costs are already an enormous burden on families. Increasing drug costs would be a significant burden on those families as well.