—almost up.
Evidence of meeting #32 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 brunswick.
Evidence of meeting #32 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 brunswick.
12:10 p.m.
Liberal
The Chair Liberal Mark Eyking
No, it's not almost up. It's up, up, and over. We're going to move on to our last MP on this panel.
Mr. Van Kesteren, go ahead, sir.
12:10 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Thank you, Chair.
We have these folks until 12:30, so I have 20 minutes.
12:10 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I wish I did because I'd be talking to Mr. Johnston for 20 minutes. He's just given us a little piece of the story, and I'm going to give him an opportunity to talk a little more about it, but first, my introduction.
Yes, Chatham-Kent—Leamington is my riding. Wheatley—I told him about Wheatley harbour—also has Cavendish Farms there. I'm very proud to have you, fish and chips, the whole nine yards.
On the history of potatoes, Mr. Ritz talked about South America. That's really where potatoes first came from. I read one time that by the 17th century, 100 years after potatoes were introduced to Europe, they were the staple diet of Europe. Incredible. I did some calculations: 1.5 billion pounds and there are seven billion people in the world; if you were selling all your taters just to Canadians, we'd have to eat 1,500 pounds of potatoes. So it's a no-brainer. We have to export.
I get excited when I start thinking about the potential. You're obviously a very clever bunch of entrepreneurs, and you do great work. You have a fabulous formula. I know that in the greenhouse industry in my neck of the woods we talk about potential for greenhouse consumption and, again, we just scratch the surface in North America compared to Europe. If we look at the United States, with 200 million people within a 24-hour drive, there are so many potatoes. Wow. If Asia—its staple diet is still rice—finds out about potatoes.... I've done a little bit of research on potatoes, and I know just how much the potato has to offer. It has everything. I understand one time there was a person who lived an entire year just eating potatoes.
So, tell us about the potential for growth. This is exciting stuff, because I can just see this expanding exponentially.
12:10 p.m.
Director, Quality Assurance, Cavendish Farms
Thank you for the question and opportunity.
The potential for Cavendish Farms, and the Canadian french fry industry as a whole, in the Asia-Pacific region is very exciting. It's an area where we are seeing the greatest expansion and the realization of the benefits of potatoes and potato products, as you referenced, with regard to nutrition and ease of consumption and what have you. We see great interest in these marketplaces. These marketplaces demand very high-quality, very consistent product, and we're able to deliver that. Quite frankly, that has enabled us to be better at what we do and more consistent about what we do.
For Cavendish Farms, to have these tariffs up against us today just makes it very challenging. If TPP is ratified and these barriers are eliminated, it will enable us to take our long-term strategy and really put it into effect from a capital development standpoint. The growth is in this area. The North American market for and consumption of french fries is relatively flat; it's well-developed. The opportunity is in these Asian-Pacific countries. We are very excited about the opportunities and are interested in not only selling more french fries but in simply employing more Canadians. We're an east coast-based company, and we're very excited about the opportunity to further develop and employ more east coast Canadians, as well as Canadians in the Wheatley, Ontario, area and in Lethbridge, Alberta, at our facility there. The potential opportunities to produce and export more product, and just the simple trickle-down effect that has within the industry, is significant.
12:15 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
I said before that this has been an exciting trip for us. We've gone across the country, and this is just another exciting story. I can tell you about the farmers in Alberta, Saskatchewan, Manitoba, Ontario, and Quebec. Every time we go, we find another industry that has this incredible opportunity to expand, and subsequently, we find out from other panels that when that happens, it increases that industry's capacity, as well.
Can you tell us a little bit about, in Prince Edward Island and in New Brunswick—we're in New Brunswick right now—where there will be other industries that are going to benefit from your growth once that starts to explode?
12:15 p.m.
Director, Quality Assurance, Cavendish Farms
The agricultural industry in P.E.I. employs 3,700 employees. I mentioned the number of employees we have. As we continue to grow and invest in P.E.I., the economy grows with us. Farmers, when they know we are going to be there long term and grow long term, can also go to the bank and have commitments to grow long term as well. These are the benefits that really pay off and that you don't see on the front page, if you will.
Sure, we will benefit also, but it's the trickle-down effect throughout the economy, throughout the industry on Prince Edward Island and the other provinces we operate in. There are benefits to our growth on the mainland side also, on the New Brunswick side, from contractors and workers we have to bring over to supplement because of the amount of work we're doing.
The economic benefits of what we're doing and what we can do if this is ratified are significant and are not to be underplayed.
12:15 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you.
That ends our third panel today.
To the witnesses who came here for this panel, thank you very much. Thank you for your briefings, for doing them on time, and for the great dialogue you had with the MPs. Your information is going to be used in our draft when we put together our report.
Thank you again.
We're going to suspend for half an hour.
1 p.m.
Liberal
The Chair Liberal Mark Eyking
Sorry for the little delay, folks.
Good afternoon, everyone. We are continuing on with our TPP consultation process, and we're here in Atlantic Canada, in beautiful Saint John. We had panellists all morning and we're finishing up with our fourth panel.
Today we have Joel Gionet, with the crab fishermen. We also have Jim Quinn from the Port of Saint John. It's good to see you both.
Do the crab fishermen want to go first? Go ahead, sir.
1:05 p.m.
Joel Gionet President, Association des crabiers acadiens
Thank you, Mr. Chair.
Good afternoon, everyone. Thank you for inviting us to appear before your committee.
Each of you should have a document that I had printed in English and in French. I will make my presentation in French, and it will only take three or four minutes.
In New Brunswick, snow crab is landed by four distinct groups of fishing enterprises: first nations fishing enterprises, with 15% of the catch; new access fishing enterprises, with 12% of the catch; fishing enterprises from Prince Edward Island, with 9% of the catch; and traditional fishing enterprises, with 64% of the catch.
New Brunswick has three major associations of traditional crabbers. The Association des crabiers acadiens, of which I am president, brings together the majority of traditional crabbers in New Brunswick.
On page 2 of my document, you can see what our fishing areas are. In 2016, the second largest snow crab quota in Canada came from the southern Gulf of St. Lawrence, with about 22,000 metric tons, 90% of which came from fishing area 12.
New Brunswick landings represented 62% of the total catch allowed in that area, or approximately 14,000 metric tons. Fishing enterprises that are members of our association produced approximately 30% of those landings.
On page 3, we have a chart representing the world snow crab landings—for Canada, Russia, the United States, Greenland and Japan. Canada is the world's largest snow crab producer. American landings of snow crab have decreased significantly since 2000. Snow crab is also produced in Russia, Japan and Korea.
Page 2 provides information on the Canadian snow crab landings. Newfoundland accounts for more than half of Canada's snow crab landings. Fluctuations in the value of snow crab landings are due mainly to fluctuations in the Canada/U.S. exchange rate.
In chart 3, you will see what the Canadian crab and snow crab exports are by province and importing country. Canadian exports of snow crab mainly go to the U.S. and Japan. Those are the two main buyers of our crab. Since the decrease of American landings in 2000, most of Canada's snow crab exports have been going to the United States. Prior to 2000, a large portion of our production was exported to Japan.
New Brunswick exports more snow crab to Japan than the other Canadian provinces. A portion of the Newfoundland snow crab exports go to China. Over the past two or three years, China's interest in luxury products, including snow crab, has increased.
On page 5, you will see a chart that outlines U.S. and Japan snow crab imports. As that chart shows, Canada accounts for a very large share of U.S. snow crab imports. Japanese imports of American and Canadian snow crab have diminished significantly since 2000. Japanese imports of Russian snow crab did increase significantly between 2000 and 2009, but they have dropped off since 2010. It is difficult to be specific on this, as there is a lot of illegal fishing in Russia.
The figures we currently have may not be the most accurate, but they give some idea of what Japan buys from Russia.
For us, the Trans-Pacific Partnership and any other steps or improvements that would help our product find its way to other countries and other markets would be a positive development. In other words, the elimination of the 4% tariff on Canadian snow crab exports to Japan is an excellent measure. Moreover, since none of the other TPP countries produce snow crab, we would benefit from a lack of new competition against Canadian snow crab exports and from the potential development of new markets.
Thank you.
1:10 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir. They are very impressive numbers. I'm from Cape Breton Island and I know crab is very important to all the fishers I represent. You put it in the context of the world and Atlantic Canada, but over half a billion dollars' worth of sales is very important to the Atlantic economy. Thanks for your presentation.
We're going to move to Mr. Quinn from Port Saint John.
1:10 p.m.
Jim Quinn President and Chief Executive Officer, Port Saint John
Good afternoon. Thank you for the invitation to appear before this honoured committee. I'll speak a little about who we are at Port Saint John, where we see benefits from the trade agreement, and go from there.
As you may know, Port Saint John is one of 18 Canada port authorities. We have our own legislation known as the Canada Marine Act. You are in the city that is the home of the third-largest port by volume in Canada. We're the home of Canada's largest oil refinery, and the largest deepwater oil port. We also host Canada's only marine LNG terminal. There is no mistake about it; we are very much an energy corridor for Canada.
We have a diversified cargo base that includes growing sectors in the areas of cruise; bulk commodities; a marine renewable energy base, such as tidal power and others; and of course, one of Canada's fastest growing container businesses. This growing container business has led the governments of Canada and New Brunswick to invest with the port on a $205-million project to modernize our westside terminals. This project is now under way.
All of this activity has caught the attention of the global shipping world and has led to the introduction of DP World, the fourth-largest terminal operator in the world, to form a partnership with Port Saint John to operate our terminals beginning in January 2017. This partnership includes its private sector investments in the tens of millions of dollars for modernized equipment, including cranes, the first two of which will be arriving in the port in October 2016. All of these factors speak to the importance of Port Saint John as a major trade gateway for Canada.
We believe that removing and reducing tariffs on a wide range of goods can only help build increased trade on a multinational basis. New Brunswick is one of the largest trading regions per capita in Canada today. While the U.S. is our largest trading partner, we do trade with the world, including countries involved in the TPP. By reducing trade barriers on a multinational basis with countries we now trade with, it allows for stronger opportunities for our provincial shippers and receivers.
As I mentioned, we have a growing footprint, involving a large, diverse cargo base. The TPP would help that footprint to have even a larger significance for other shippers and receivers beyond the borders of New Brunswick that trade through our port today, and who will trade through our port in the future. This should lead to stronger bottom lines for all involved in the supply chain.
What does this mean? One should be able to conclude that stronger bottom lines resulting from higher demand should lead to increasing production and financial viability, which would assist with stronger job opportunities. This in turn would help to grow our tax base, providing governments with increased revenues to carry out essential services in health, education, and infrastructure, to name just a few.
Some of the key benefits that we see from TPP in terms of the effect on ports are increases in the transfer of customs procedures between countries. That is a very good step. It would provide an opportunity to accelerate the principles introduced through the Canada-U.S. beyond the borders initiative. Getting the rules right, and agreeing on a system based on mutual interests of security for those goods being transported between countries, be it from a physical security point of view, an environmental security point of view, or a health security perspective, can avoid unnecessary delays getting goods in and out of the marketplace.
These objectives only underscore the value of ports as an essential transition point, and are the backbone to a national and regional economy. Studies have shown that up to 90% of products that North Americans use in their day-to-day lives have been moved by water at one point or another before arriving in the hands of the consumer.
I am very pleased that you're here today and have chosen our port city for your hearings. There is no doubt about Port Saint John's strategic location to Canada's trade. We have an advanced uncongested highway system feeding into more heavily populated marketplaces in North America. We are one of the few ports that provides options to shippers and receivers with respect to rail services, as we connect to several class I railways. We are a gateway to the world, and move billions of dollars of value for our country through this port.
I thank you for the opportunity, and look forward to your questions.
1:15 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
We're going to move now to Paul Gaunce, from the Dairy Farmers of New Brunswick.
You have a very impressive dairy industry here. I drove from Moncton down to Saint John yesterday, and I saw some beautiful dairy farms along the way. I commend you on the good-looking farms and all the milk you produce.
Go ahead, sir. You have the floor for five minutes.
September 26th, 2016 / 1:15 p.m.
Paul Gaunce Chairman, Dairy Farmers of New Brunswick
I waved at you when you drove by my farm. I live in Passekeag. The four lane took 20 acres off the side of me, actually.
1:20 p.m.
Chairman, Dairy Farmers of New Brunswick
Well, it was swamp; it wasn't bad. It could have been worse.
Thank you very much for the invitation. I just got it at four o'clock on Friday afternoon because you had a cancellation, but I'm really glad to be here. I know you people have probably heard from the Dairy Farmers of Canada before, and maybe from other provinces as well, so you're not going to hear a lot that's new from me, maybe more of a provincial perspective, and maybe a personal one.
The TPP deal, when you put it into numbers and compare it to New Brunswick, probably wipes out about half the milk production in the maritime provinces—that market access—milk that Canada will never be able to make. The Dairy Farmers of Canada's number is that it's $246 million out of the Canadian economy. How do we get that money back? It's a trade deal, right? With a trade deal, you're supposed to break even or win, hopefully win.
We are also going to be allowed access to those markets. That's great. They have a huge population. I think sometimes in trade deals people look at Canada and see the huge land mass we have and figure there's a big market they can capture, because we're just as big or bigger than the United States land-wise. But they forget that we have 35 million people. It's not a huge market.
So how do we gain access to those other countries and make money? With WTO agreements we're limited on exports. With the price of milk today in the world, it's not lucrative for producers to make milk for that, because we'll all go out of business. So we have to get export expertise in the markets that make us money. Look at the fine-cheese market in Europe. If we had one-tenth of that, with 450 million people, that would be huge. We would have a hard time in Canada making that amount of milk.
It's an exciting time for me to see if we can get into those types of markets. I have no doubt in my mind—and I hope most of you have had a chance to sample some of the fine cheeses we make in this country—that we can compete with any place in the world with the quality of dairy products that we make here. Three of our largest processors process 80% to 90% of our milk. They're all global players. They know the export market well, where there are opportunities. I don't doubt that they would be able to find good export opportunities in the other countries in the trade deals that we've signed in the last couple of years.
Some of our concerns are about the compensation package that was promised. I know the government is doing its due diligence, but it hasn't announced yet whether it is going to follow through with that or not. It would certainly help mitigate the loss of income to producers. It would also help us find more ways to be competitive and efficient with research and technology on farms today.
It's difficult for me to assess how this trade deal will wash out. As I said, when we look at this trade deal.... Yes, we lost, but I'd like to take a bigger picture of things. Ten years from now, if we show economic growth and this country does well from this trade deal, the dairy industry should benefit, because all of those people who had that economic growth are going to buy more dairy products.
We did a survey in the last few years with Canadian consumers, and 91% of them wanted Canadian milk. There's a reason for that. We use all the things that we have at our disposal to make sure that our milk is the highest quality, safest, and most sustainable milk that's made in the world, and we have the paperwork to prove it.
Thank you very much.
1:20 p.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
I don't know if any of you folks have seen this video that my wife showed me one day. It's called From Sussex and I Know It. It's about these young fellows in a dairy barn. They've got the rubber boots on. It's a really cool video. I don't know if you were in that video or not, Paul, or maybe your son was, but it was—
1:20 p.m.
Chairman, Dairy Farmers of New Brunswick
No. That was David Brown's and Mark Webster's sons. Actually, both those young fellows have moved to Toronto, and they have a record deal right now.
1:20 p.m.
Liberal
The Chair Liberal Mark Eyking
We're going to move now to the dialogue with the MPs.
We will start off with the Conservatives. Mr. Van Kesteren, you have the floor.
1:20 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Thank you to our final panellists. It has been a very interesting day.
I wasn't raised on a farm. We were talking about this earlier. My wife was raised on a dairy farm, and we've experimented in farming a little bit as a family now. We have 100 acres and a few cows, so I consider myself an amateur farmer, but every time we have these hearings, I learn more.
Mr. Gaunce, what is the average herd size of a dairy farm here in New Brunswick?
1:20 p.m.
Chairman, Dairy Farmers of New Brunswick
In New Brunswick we have 198 farms now. The average herd size—I'll base it on kilograms of butter fat—is around 75 kilograms of butter fat. If you take a rough average, it takes 75 cows to make that 75 kilograms and then usually you'll double it because you'll have young stock.