Thank you very much, Mr. Chairman. I will read my text in French, and I will take questions in both languages.
First of all, on behalf of the the Dairy Farmers of Canada (DFC), I am pleased to be with you here this morning. Thank you for your interest in our concerns. I am accompanied by Yves Leduc, the director of our policy and international trade team. He is here to provide additional information to your questions if necessary.
I will give you a short version of our presentation. The complete version is available to you. You may refer to it if you wish.
I would like to draw your attention to the updated figures on the impact of Canada's dairy industry. Our new figures are provided in the complete version. The industry contributes $19.9 billion to the GDP and sustains 221,000 jobs across the country, up from 215,000 jobs. This indicates significant growth in the dairy industry in Canada. That is something worth noting.
Let me be clear upfront, DFC has never opposed Canada's trade strategy. Our position is simple: the dairy sector should not have to pay the price for our nation's trade agreements. Contrary to what some may believe, Canada is not closed to dairy imports. In 2014 and 2015, we imported approximately 900 million dollars annually in dairy products. Total imports are estimated at over 10% of our market.
The minister referred earlier to the long-term situation. Farmers are perhaps indeed concerned that part of our market might slip away. The future of the industry depends on a strong market. This 10% is more than the U.S. and New Zealand, and does not include the 2% under CETA, or the additional 4% of access that will be granted as a result of the TPP.
Preventing tariff circumvention is very important for preventing imports. We would like to remind you that worldwide, with the exception of a few countries that continue to overproduce and flood the market, the production of the dairy sector remains focused on serving domestic needs. Only 9% of the total world milk production is traded on the world markets. The government's role is to ensure that the third pillar of supply management, border controls, is effective. In order to adjust national production, we need to know the level of imports.
I would like to say a few words about the duties relief program. It was designed, as my colleagues have said, for manufacturing sectors, not agriculture. It allows up to four years for re-export, which of course does not apply to fresh products. This directly impacts our production planning, which disrupts the management of our system. There is a glaring lack of transparency in this system, as compared to the import for re-export program, or IRP, which was created for supply-managed products.
The exclusion of dairy, poultry, and egg products from the duties relief program is the simplest solution. This has been under review for years, and a decision was announced on October 5, 2015. Unfortunately, this was never implemented due to the change of government. We understand that the proposed solution is supported by the current administration and is simply awaiting approval.
When it comes to the issue of diafiltered milk, at this point, I'm truly at a loss for words. Between 2011 and the election in 2015, Dairy Farmers of Canada had 59 communications with the previous government on diafiltered milk. After the election, we re-started the process with the current government. Over the past year, we have had numerous and ongoing meetings with the staff of various ministers' offices, as well as consultations and meetings with partners and MPs.
On February 2, 2016, we had a lobby day where we discussed diafiltered milk and various other topics with over 150 MPs. On March 9, 2016, we presented and answered questions on diafiltered milk for two hours before the Standing Committee on Agriculture and Agri-Food.
On April 21, there was a full opposition day in the House of Commons, devoted entirely to diafiltered milk. We consulted with the government both before and after 3,000 farmers came to a rally on the Hill on June 2.
We have heard numerous questions and answers about diafiltered milk from all parties during question period in the last session. I don't know what more I can tell you about this at this point. We will answer your questions if you have any.
In conclusion, I can tell you that we have seen numerous examples of creative tariff circumventions such as the pizza kits, butter, oil and sugar blend, salt or sugar added to cream to avoid tariffs, and food preparation allegations.
These illegal actions have cost our farmers millions of dollars in losses, and it took years to get a resolution on these files from the government. All government departments and agencies must play a proactive role to ensure proper classification, proper inspection, and proper and transparent advance rulings.
In putting pressure on our Canadian government recently, all our international trading partners are seeking is complete access to our Canadian market. Some people, like me, still believe in the right of a country to food sovereignty, and to enforce its own domestic regulations.
In Canada, we have a sustainable dairy sector, without government subsidies. Other countries are envious of the stability of our system, particularly at a time when the global dairy market is hurting worse than it has in years.
We can't blame other countries for being scared of a thriving Canadian dairy sector, but they cannot blame our government for wanting to protect Canada's food sovereignty. All we are asking is for the government to play its role, while respecting our existing international trade commitments.
As you heard earlier, the government can also support the dairy industry through investments in innovation and research. What was not mentioned is investment in infrastructure in order to improve processing and drying capacity, thereby strengthening our dairy industry.
The government can play a role and our sector will continue producing the high-quality milk that Canadians prefer. Canada and Canadians benefit from a strong dairy industry.
Thank you, Mr. Chair.
