Thank you very much. My name is Ron Maynard. I am a dairy farmer from Prince Edward Island, and I'm the secretary of the Dairy Farmers of Prince Edward Island.
The Dairy Farmers of Prince Edward Island is pleased to appear in front of the committee. It is important to emphasize that the Canadian dairy sector makes a huge contribution to the Canadian economy. It contributes $19.9 billion to the GDP and $3.8 billion in taxes every year. It sustains 221,000 permanent full-time jobs. Dairy is either the top or the second in seven of the 10 agricultural provinces. It is second in Prince Edward Island only to potatoes.
Furthermore, unlike other jurisdictions where farmers' income is heavily subsidized, Canadian dairy farmers receive no direct subsidies and derive their income from the marketplace, a marketplace that would be further diminished by access granted in both the CETA and the TPP agreements.
According to initial government estimates, the sum of access granted was at 3.25%. After running some figures, we think it will probably be closer to 4%. The milk displacement of this agreement will never be produced in Canada and will result in perpetual loss of revenue of as much as $246 million to our farmers and the Canadian economy.
Furthermore, these numbers do not take into account the impact of the CETA. To secure the CETA deal, Canada offered as much as 2% access to the Canadian dairy market as was granted to the European Union. The access granted in this agreement will allow the EU to ship an additional 16,000 tonnes of cheese, an additional 17,000 tonnes of industrial cheese to Canada. The expropriation of the Canadian cheese market granted under CETA amounts to a loss of revenue to dairy farmers to as much as $116 million in sales going into cheese processing annually in perpetuity.
Unfortunately, the combined effect of CETA and TPP will seriously impact Canadian dairy farmers' bottom line year after year. This loss cannot be substituted through exports. As a matter of fact, only 9% of dairy production is traded in the world. Dairy is mostly produced domestically and for local needs.
While we are working on strategies to take advantage of some export opportunities, they remain limited as a result of the WTO panel in 2002, which essentially concluded that export sales at below domestic prices constitute an export subsidy.