International Trade Committee on Aug. 3rd, 2016

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

Okay, thank you.

[The Chair, Liberal, Mark Eyking]

We could come back to you later, if you want.

[Frédéric Seppey]

Yes, I can come back.

[The Chair, Liberal, Mark Eyking]

Madam Ludwig, if you want to ask another question, we'll make sure there's time for him to respond to your first one.

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

Okay. Thank you.

My next question as well is for Mr. Seppey.

You mentioned an interdepartmental working group, working in close collaboration as necessary, and I agree with that 100%. Are you able to elaborate on any of the discussions that have taken place in terms of the stakeholders in the specific industries, including their opportunities and requests to be more competitive and innovative, and any interests or needs of theirs to make greater use of technology?

[Frédéric Seppey]

If I can seek a clarification, you're talking about both poultry and dairy?

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

Yes.

[Frédéric Seppey]

In the recent months our efforts have been focused on dairy because, as per the announcement made on May 2 by Minister Freeland and Minister MacAulay, the primary reason for these consultations was to look at how the government can assist the sector to adapt to the result of the Canada-European Union agreement. I would add that over the years we have had a very close working relationship with the Dairy Farmers of Canada, as well as the provincial dairy farmers organizations, as well as dairy processors. I mentions this because, as I pointed out, there are a number of challenges.

Among the ideas that were provided in the context of this program is for them to find a home for their milk. Indeed, it's one of the preoccupations of farmers across the country—and it's true, because we heard this in New Brunswick and the rest of Atlantic Canada. There's a mutual dependency relationship between dairy farmers and dairy processors. Therefore, finding ways to improve the effectiveness of the whole value chain—to improve our processing capacity, and improve the efficiency at the farm so that the production can really respond to the dairy processing industry's ongoing need to develop even more innovative products—is among the ideas that have been floated to us.

On the poultry side, we also have the issue of spent fowl and concerns about the duty relief program, as well as classification of various products. We have ongoing discussions with them, as well as with the egg sector. They are also preoccupied with innovation, but their focus has been more on ensuring the effectiveness of the operation of the import control system.

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

I would also like to compliment all of you and your departments for the work you have done. Clearly, this is not a new issue. It's been ongoing for at least the last 10 years, and a lot of work has been done within the last year on it. We know about the other industries. What about the food processors? How will the implementations affect and be balanced with food processors?

[Frédéric Seppey]

You're referring to programs like the duty relief program?

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

Right.

[Frédéric Seppey]

These programs, as I think my colleagues explained, from a food processing perspective, are very important because we have a capacity to process products in Canada. It's a very important sector. In fact, in terms of jobs, it's one of the main contributors to the labour market in the manufacturing sector. In that regard, having access to competitively priced input in order to be present in the international market is very important. In fact, all countries generally have programs similar to the duty relief program or the import for re-export program, IREP, managed by Global Affairs Canada. The attachment of the food processing sector to these programs is very strong. I think that if they are used within their means, i.e., to import competitively priced input for re-export and not just for use as input in the domestic market, I think you will find the producers to be supportive of these programs. But they are very important, from a food processing sector perspective.

[The Chair, Liberal, Mark Eyking]

Thank you, sir. The time is over here.

We're going to move to the second round. For the Liberals, we have Mr. Fonseca.

Congratulations on the European Cup there, with your favourite team.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Viva Portugal! Golô!

We all want to score a big goal here. It's great to have everybody here. I hope you're enjoying the summer, and got a chance to watch the Euro Cup, and now we're going to watch the Olympics and cheer on Canada. It's great to have you as a team here, because I believe the only way we're going to be successful is with a multi-pronged strategy, a coordinated strategy, amongst the various ministries. I wanted to ask you a little bit about that.

This has been going on, as we've heard, for over a decade. How do you work together on an ongoing basis? Is there an inter-ministerial group or an enforcement group? How do you get together? Is it weekly? Monthly? Quarterly? How do you share results, etc.? Can someone inform the committee on how that all takes place?

[Frédéric Seppey]

Yes, and thank you for the question.

I should mention that beyond those who are at the table, we have colleagues at Global Affairs Canada as well who are closely involved. Madame Funtek, who is at the back of the room, is our specialist responsible for import controls at Global Affairs Canada. We have a group that is meeting at different levels: at the working level; at the level of executives, like us; and if necessary, the level of assistant deputy ministers and deputy ministers.

As well, if there's a need for a conversation to take place at the ministerial level, an ad hoc meeting can be held in that regard. But most of the work is taking place at the working level, and there are also certain meetings involving stakeholders or industry representatives, so we can best understand their concerns and they can best understand what the technical challenges are. I would say that we work in good intelligence. On issues like the duties relief program, for example, it's important to consider—and I think Mr. Beyea made that point previously—that we have to look at the interests of the producers; but there are also other users, such as the processing sector, the further processors that would have a perspective in that regard.

We are maintaining a close engagement with all those who are potentially affected by any potential changes that are considered by the government.

I will end by saying that, for a number of years, we have also had a joint industry-government group called the Border Measures Working Group—dairy, poultry, and egg—that is meeting with representatives of all the departments represented here today and is regularly taking stock of what the issues are at the border and what issues related to trade need to addressed. We have a very productive dialogue in that regard.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

On that border group that we're hearing about, how do you benchmark yourself or measure your progress? Again, this has been going on for well over a decade. We understand that the revenue loss due to diafiltered milk was about $100 million in 2015. Is that correct?

[Frédéric Seppey]

I can't comment. I'm—

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

That's the number I had. I'm not sure if that is correct.

[Frédéric Seppey]

Yes, it may be an industry estimate.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

What do you measure? Usually, what gets measured gets done. What are you measuring? How are you measuring your progress? How are you measuring enforcement? How are you measuring that we are making progress in terms of tackling this issue?

[Frédéric Seppey]

That's a very good question and a very difficult one to answer, because we are talking about policies here. I think, seen from the industry perspective, the check mark is when the issue gets resolved, and that's why we're keeping our goal in resolving the issue.

That said, as government officials, our duty is to ensure that whatever policy proposal is brought forward to our political masters or to our respective ministers and then to cabinet, it respects our international trade obligations, respects good regulatory practices within regulatory law, serves policy objectives, and is fair vis-à-vis all the sectors of the agriculture and agrifood economy.

We are really keeping our focus on trying to resolve the issue to the maximum extent possible, to the satisfaction of those who are expressing concerns, by taking into account these other considerations.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Can you tell me what the numbers are for enforcement and for fines over the last number of years? Who has been fined and how do you do enforcement?

[The Chair, Liberal, Mark Eyking]

Please give quick answers.

[Alexander Lawton]

If I can just get some clarity, in terms of which program? Are we looking at diafiltered milk, spent fowl?

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Yes, take the diafiltered milk.