Evidence of meeting #30 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 industry.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Fred Gorrell  Assistant Deputy Minister, Market and Industry Services Branch, Department of Agriculture and Agri-Food
Alexander Lawton  Director, Trade Compliance, Canada Border Services Agency
Robin Horel  President and Chief Executive Officer, Canadian Poultry and Egg Processors Council
Yves Ruel  Manager of Trade and Policy, Chicken Farmers of Canada
Caroline Emond  Executive Director, Dairy Farmers of Canada

11:40 a.m.

Voices

Oh, oh!

11:40 a.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Me too.

11:40 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

I might add that you were somewhat generous to me when you were there, and I appreciate it.

To respond to a few of the things you had to say, I think you would agree that research is vitally important. You mentioned research. We had $70 million in the last budget that was...and things come on fairly quickly, which indicates that it's so vitally important that we have the finances in place. I'm sure you dealt with it too. There's never enough money. What we want to do is make sure that the researchers have as much of the money and equipment they vitally need in order to create—

11:40 a.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

That's where the clusters are so effective, because you have all these other partners that have money as well. It's not just yours.

11:40 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Excuse me, Mr. Ritz?

11:40 a.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

I said that's why the clusters are so very important, because everyone, not just you, will bring their dollars to the table. You end up with a 7:1 or so leverage, which is very important to make use of.

September 20th, 2016 / 11:40 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

You are somewhat helpful, Mr. Ritz. I appreciate it.

11:40 a.m.

Voices

Oh, oh!

11:40 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

That's why I indicate that it's so vitally important that we listen to everybody, including you. That's what we will do as a government. We listen to everybody, and we want to make sure we have all that before we jump to a conclusion.

You mentioned the spent fowl and the certification program. Quite honestly, you were there, and I think you have an idea as to how quickly these things can be done. As we have indicated, we will make sure that we put a complete supply management system in place that's long term. I can tell you too....

You want a response, but I know you have another question.

11:40 a.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

On the spent fowl issue and diafiltered milk, you're not starting at zero. A tremendous amount of work was done over the last couple of years leading up to the election call and the TPP final negotiations, which put everything on hold. If you check with departments that are around there, they're not starting at zero either.

You're 70 yards down a 100-yard dash, so I would expect that it would not be difficult to put a timeline in place saying where you expect to be by next spring.

11:40 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Thank you very much, Mr. Ritz. I think you would agree that for me to put a timeline on any of this stuff, and then you have to get there because of the timeline, would be completely wrong. I think you understand...I know you understand full well the situation that the supply management system is in today. They are in great difficulty and have been for a number of years.

What we want to do, as I've indicated many times, is not jump to some conclusion right away. We want to make sure we put a system in place that is long term and sustainable. I can assure you that we will. We will deal with the United States, and we will deal with the farmers, and we will deal with the manufacturers and make sure we have a proper system in place. I think in the end you'll be very pleased to see a long-term, sustainable supply management system in this country, which I know you support.

11:45 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, Mr. MacAulay and Mr. Ritz.

We are going to move over to the Liberals now. Mr. Fonseca, you have five minutes. Go ahead, sir.

11:45 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Minister, thank you for your role as a minister, but also as a farmer. I always say, if you ate today, thank a farmer. We have great value in the food system in our country and the supply chain of food. It is something that is wanted all over the world. I think we have a tremendous opportunity in terms of diversifying our markets and growing the sector, because people understand that Canada has healthy and safe food. My question will speak a little to keeping the integrity of our system.

When I look at the spent fowl, I see that in 2016 we imported 109% of the U.S.'s entire spent fowl. This comes from Chicken Farmers of Canada. Can you tell me whether this has been increasing over the past decade, to the point where it has reached 109%? Have we always measured it?

11:45 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

Thank you very much for your question.

You are right; it has been a problem. Over the last number of years, it has increased dramatically, but this year, to this point in this year, it has been decreasing. We have worked with CBSA to make sure the issue is addressed. I think the people involved understand that something is going to happen. The chicken farmers in Canada understand that something is taking place and will expand. There are a number of things that have to happen in order to put the supply management system in place. The border is one of them, and that is one we are dealing with.

If somebody from Canada Border Services would like to expand, I would be more than appreciative.

11:45 a.m.

Alexander Lawton Director, Trade Compliance, Canada Border Services Agency

Between 2012 and 2014, a series of 25 compliance verifications were conducted on importers of spent fowl. Concurrently with that, in this period, imports of spent fowl fell by approximately 22%, which speaks to the deterrent role of compliance verifications. Even though none of those were resultant, we did see a decrease in imports. More recently, a series of eight compliance verifications were initiated earlier this year and are still in progress. Based on the results of those, potential national verification priority will be created, with broad verifications of other importers across the country.

11:45 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Can you tell me what the goal would be? If we weeded out the fraudulent actors in this, what percentage of spent fowl from the U.S. would be coming across our border?

11:45 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

There is no question that there have been some results at the border. There have been a number of people charged at the border, but again, I will let my colleague answer that.

11:45 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

What is the penalty if someone is caught?

11:45 a.m.

Director, Trade Compliance, Canada Border Services Agency

Alexander Lawton

It really depends on the nature of the non-compliance. In general, it is a tariff classification issue, and there is no evidence that it was wilful. Duties are assessed, and interest and penalties are issued. This is with spent fowl specifically. With the duties relief program there are obviously other remedies as well.

11:45 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Do you feel that those penalties would be enough to curtail this and stop it from happening?

11:45 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

No, we have to do more. We have started. The fact is, working with the chicken farmers and other people across the country, there is more to do, and we understand there is more to do, but we had to make a small start. If you wish to expand, go ahead. I just want to indicate that this is a start. It is certainly not a finish. The Chicken Farmers of Canada wouldn't.... Everybody understands we have more to do, including the government.

11:50 a.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

It sounds like a multipronged approach: the certification, the inspection, the enforcement, and looking at the DNA. I guess everybody is waiting to see whether this DNA test will work, what the cost is, and how quickly it could be administered. Is that what we are working on right now?

11:50 a.m.

Liberal

Lawrence MacAulay Liberal Cardigan, PE

It is fair to say that we have to have a mechanism at the border that can track and see whether it is or it isn't, whichever way. That is one of the possibilities. Certification is another possibility. We have to make sure we put the proper system in place, because spent fowl is allowed into this country. It is used in nuggets, soups, and that type of thing. It has to be allowed, but the problem that you are concerned about, that I am concerned about, and of course that the chicken farmers of Canada are fully concerned about is fowl that is not spent fowl coming into this country and taking away their market. That is not fair, and we have to stop it.

11:50 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, Mr. MacAulay.

Sorry, Mr. Fonseca, your time is up.

We probably have time for one more question from an MP, with three minutes left. We have the Conservatives up.

Go ahead, Dave.

11:50 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON

Well, thank you, Chair. You say three minutes, so we have to get moving fast.

Welcome, Minister. Regardless of our party lines, I think we all agree you're a wonderful chap, and it's always good to have you here.

Mr. Fonseca, that line “If you ate, you can thank a farmer”, we know that, but I think we can extend that. I have a little farm, and I see some of the machinery we have. It's getting pretty amazing as well. We had better thank a manufacturer, but that manufacturer knows that tractor wouldn't run without the oil, so we had better thank the people in the oil industry, too.

Here's what I want to talk to you about: I want to talk to you about pipelines. Of all things, why would we talk about them? We talk about them because in this country we have an oil industry that's going down the tubes. I suggest to you, sir, that if that happens, it is going to affect the farm gate in an incredibly negative manner.

I want to know, and I want to get a commitment from you as the Minister of Agriculture, with the important and the powerful portfolio that you hold, that you will take the government to task and say that we need to get these pipelines built. I'll finish with one final point. The fact that we have low oil prices today is a curse because there isn't the investment being made. Once the glut is gone, we will see the oil price spike like we did in 2008.

Would you care to comment on that and make a commitment to this committee and to these MPs that you will fight for pipelines?