Thank you.
As was mentioned, I'm with the National Farmers Union. I'm the regional coordinator for the Maritimes and a national board member.
Doug Campbell was supposed to be here with me. Doug's a dairy farmer from the western part of the province. He's likely delayed. It's not often we have traffic jams in P.E.I., but I ran into one myself this morning getting here. There was an accident on the Hillsborough Bridge and they were saying there were a few others around, too. Hopefully, he'll be along shortly.
The National Farmers Union opposes the Trans-Pacific Partnership agreement and recommends it not be ratified by Canada. Our comments will focus on the damage the TPP would do to Canadian supply management systems, particularly for dairy; the harm its procurement rules would do to local food system development; its lack of benefit to other aspects of agriculture; and the unacceptable restriction on sovereignty of democratically elected governments that would result from TPP investor-state dispute settlement mechanisms.
Turning to the TPP and supply management, supply management rests on three pillars: production disciplines, import controls, and cost of production pricing. All three are interlocked, so that weakening one pillar weakens the whole system.
In the first five years of the TPP agreement, the other 11 TPP countries would gain tariff-free access to 3.5% of the current Canadian dairy market, 2.3% for eggs, 2.1% for chicken, and percentages for turkey and broiler hatch chickens also. In subsequent years, there's also provision where tariff-free access to these markets would increase.
The governments of TPP members United States, New Zealand, and Australia have embraced an export-oriented approach to dairy which has resulted in extensive losses for their farmers as world milk prices fell drastically. Instead of disciplining their members to match demand, these countries aim to sell more milk to pry open Canadian markets. However, this will not solve their problem.
Selling more at prices below the cost of production would simply increase the volume of losses, deepen debts, and push farmers out of business. For European farmers now, I think their price is half the price realized by Canadian farmers, so the pressure is on internationally.
Canada's TPP side letter with Australia says:
Canada confirms that Australian dairy products, including those imported under HS Chapter 3504 such as milk protein concentrates, can be utilised in dairy processing in Canada to the fullest extent possible, including in cheesemaking.
Milk protein concentrate imports are highly controversial and are used by processors to replace domestically produced milk. The TPP agreement would require 80% of the fluid milk imports to be processed in Canada.
Canada's side letter with the United States commits both countries to immediately be assessed the equivalency of each other's pasteurized fluid milk safety regulations, with assessment to be done by the end of 2017. Determination of equivalency would open the door to U.S.-produced fluid milk being processed in Canada, even though U.S. regulations allow doubling the somatic cell count, a key indicator of quality and herd health, and of course we don't have BST in our milk here either.
The text of the TPP together with those two side letters would deny Canadian farmers full access to our domestic dairy market and transfer a significant portion to non-Canadian producers. Canadian dairy consumption is growing slowly because changing tastes and aging demographics have resulted in reduced per capita consumption of dairy products. TPP market concessions add on to those given away previously through the World Trade Organization and ratifying the CETA. Each deal chips away at Canadian farmers' share of our domestic market by increasing the amount of tariff-free imports allowed.
The brunt of this market loss in our supply-managed sectors will be felt by young people who aspire to become dairy, egg, chicken, and turkey farmers. Without the market to support new entrants, they will be denied the opportunity. Some retirement-age farmers may be willing to take a payout in compensation for TPP-related losses. The National Farmers Union rejects that option because of injustice to future generations of farmers.
The TPP local procurement rules mean governments and public agencies could not implement programs to purchase local products as a way to support the vitality of local agriculture. If ratified, the TPP, like CETA, would prevent governments from putting local content requirements into procurement contracts. It would require all governments to use a tendering system to give corporations in TPP countries an equal chance to supply these goods and services. If foreign companies are the successful bidders, the jobs, profits, and multiplier effects from filling those contracts would occur outside of Canada.