Evidence of meeting #35 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 lobster.

On the agenda

MPs speaking

Also speaking

Keith Colwell  Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia
Terry Farrell  Member of the Legislative Assembly for Cumberland North, Government of Nova Scotia
Chris van den Heuvel  President, Nova Scotia Federation of Agriculture
Victor Oulton  Director, Nova Scotia Federation of Agriculture
Ian Arthur  Chief Commercial Officer, Halifax International Airport Authority
Jon David F. Stanfield  President, North America, Stanfield's Limited
Osborne Burke  General Manager, Victoria Co-operative Fisheries Ltd.
Finn Poschmann  President and Chief Executive Officer, Atlantic Provinces Economic Council
Janet Eaton  Representative, Common Frontiers Canada
Alex Furlong  Regional Director, Atlantic Region, Canadian Labour Congress
David Hoffman  Co-Chief Executive Officer, Oxford Frozen Foods Ltd.
Lana Payne  Atlantic Regional Director, Unifor
Peter Rideout  Executive Director, Wild Blueberry Producers Association of Nova Scotia
Cordell Cole  As an Individual
Tom Griffiths  As an Individual
Darlene Mcivor  As an Individual
Susan Hirshberg  As an Individual
Michael Bradfield  As an Individual
Brian Bennett  As an Individual
Shauna Wilcox  As an Individual
James Pollock  As an Individual
Angela Giles  As an Individual
Karl Risser  As an Individual
Timothy Carrie  As an Individual
David Ladouceur  As an Individual
Martha Asseer  As an Individual
Martin Bussieres  As an Individual
Christopher Majka  As an Individual
John Culjak  As an Individual

7:55 a.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

My next question is about owner-operator fleets.

Melanie Sonnenberg from the Grand Manan Fishermen's Association, who I'm sure you're familiar with, told us about her concerns over the threat to the owner-operator model. There are a lot of people either offshore or from other jurisdictions operating boats within the local area. As Mr. Farrell said, in the seafood industry and particularly in blueberries, any jobs in the local communities are absolutely critical in rural areas.

That would be one of Melanie's big concerns. Any changes to the owner-operator model are a threat to the local operators and local people who would be hired within those regions. Otherwise the jobs are from outside, and potentially the fish are going outside as well.

Are there any changes that you would like to see within the owner-operator model? Is Nova Scotia comfortable with the model that is there right now?

7:55 a.m.

Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia

Keith Colwell

I think the owner-operator model is one of the key elements in the fishing industry in eastern Canada. It has to be preserved, but it also has to have a use-it-or-lose-it tag on it as well. A lot of the owner-operators sit at home and sell their quotas. That's not the idea of the owner-operator fleet. We also have to have the large companies doing the offshore fishing and the other part of it.

It is a whole realm of things that go together. We need to add value. We need to do more processing in each one of our provinces. I think that we should not be competing with each other on certain products.

7:55 a.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Absolutely.

7:55 a.m.

Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia

Keith Colwell

If New Brunswick is better at processing something because they have more supply than we do, they should be the province that does most of that, but not all of it. I think we want to see more processed locally and more value added locally.

If you use Iceland as an example, the lowest-value product of a codfish in Iceland is the fillet. That's the highest-value product here. The codfish here typically is worth $45 for one codfish.

7:55 a.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

How prepared is Nova Scotia in particular for innovation and adaptation within the seafood sector or agriculture sector? You sound as though you're doing well. What can we do as a government, in terms of services, to help further support that?

7:55 a.m.

Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia

Keith Colwell

The one thing that we need to put in place—and this applies to both sectors, but more immediately so to the fisheries industry—is automation in our processing facilities. We have to have automation. We can't get enough employees, but we need highly skilled people in an automated environment.

We have, for instance, one shrimp processing facility in Nova Scotia. There are very few employees, but they're very highly paid. That company is one example, and we have many, as New Brunswick and the rest of Atlantic Canada—

8 a.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Excuse me. Sorry. Can I just ask one quick question, Mr. Farrell?

Are you doing any value work within the blueberries, or are you exporting raw blueberries primarily?

8 a.m.

Member of the Legislative Assembly for Cumberland North, Government of Nova Scotia

Terry Farrell

Can you repeat that, please?

8 a.m.

Liberal

Karen Ludwig Liberal New Brunswick Southwest, NB

Is there any value-added processing that you're doing right now with the blueberries, other than than shipping out or exporting raw blueberries in their purest form?

8 a.m.

Member of the Legislative Assembly for Cumberland North, Government of Nova Scotia

Terry Farrell

Absolutely. Oxford Frozen Foods, I believe, is the largest processor and freezer of wild blueberries anywhere, if I'm not mistaken.

8 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you very much.

If you want to make a few closing comments, then go ahead, Mr. Colwell.

8 a.m.

Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia

Keith Colwell

Thank you very much for inviting us here today. It is very important that we work more closely with the federal government to improve our exports, which create a lot of jobs, and to make sure we have food security in the provinces and in the country. I appreciate the work the previous government did with Nova Scotia and what the present governments are doing with Nova Scotia in helping Nova Scotia achieve its goals.

Last year was the first year that we saw a growth in our population and the numbers of employed people go up. That's a very positive sign. I've already talked about automation in our fish processing operations as an area in which we need to move more quickly. There's lot of fish that's shipped because we can't process it. We can add that value. Not only do the owner-operators add tremendous value to the community, but so do all the other harvesters. We also need to process that product here and add value. We have some people who are very successful and we're doing more and more of it, but we really need help from the federal government to help finance innovation in that area.

Thank you.

8 a.m.

Liberal

The Chair Liberal Mark Eyking

I thank you again for coming and I wish you good luck with your next trip to Asia. I think that's where we were planning on going in the following year.

I'll suspend for five minutes so that the next panel of witnesses can come forward and get ready to go.

8 a.m.

Liberal

The Chair Liberal Mark Eyking

Good morning, folks, and welcome to the House of Commons Standing Committee for International Trade.

As you know, our main focus is on the TPP and Asia. Our committee has been fairly busy over the last year. We're dealing with softwood lumber and still tidying up the European trade agreement. We always have ongoing issues, especially with the U.S., our biggest trading partner. We have softwood lumber and agriculture issues, and we're still in a process of—I don't know whether to call it negotiating or fighting over it.

The TPP is a big deal. It's 40% of the world's GDP and 800 million consumers. It's a deal that will affect every Canadian one way or another, whether you're buying a product or selling it. We have quite a busy and active study that we're doing here.

We went to every province; this is the last province. We've also had video conferences with the territories and, of course, we are reaching out to all stakeholders. There have been a couple of hundred witnesses, and we also have had individuals. In my 15 years, I've never seen so much interest from average Canadians. We already have over 20,000 emails.

We're going to continue this process until the end of October, and then we're going to work for a few months to put our study together and then present it to the House of Commons.

As you know, we're keeping a close eye on the United States. The election is in full swing. You don't usually see the presidential candidates talking as much about trade in the debates as they are in this one, so we have to keep an eye on that as well.

My name is Mark Eyking, and we have MPs on our committee from right across Canada. Some of them aren't here—they had to stay in Ottawa—but we have Ms. Ramsey and Mr. Van Kesteren from southern Ontario, Mr. Ritz from Saskatchewan, Ms. Ludwig from New Brunswick, Madame Lapointe from Quebec, and Mr. Dhaliwal from B.C.

We had a great night last night enjoying Nova Scotia hospitality and food, and I'm sure you guys represent a lot of it. We ate seafood and we ate agriculture products, and we're going to go out to the Stanfield airport.

Stanfield's is my brand of underwear. What can I tell you? Too much information, too much information, I know. Sorry about that, Ms. Ramsey.

Without further ado, we're going to start out with my favourite organization, the Nova Scotia Federation of Agriculture, which I've been a member of for many years.

Mr. van den Heuvel, you have five minutes.

September 29th, 2016 / 8 a.m.

Chris van den Heuvel President, Nova Scotia Federation of Agriculture

Thank you very much, Mr. Chair. It's certainly great to see a good Cape Breton face sitting across from me today.

Thank you very much to the entire committee for having us here. We appreciate your time and efforts.

I'm going to get into a brief introduction, and then I'll turn it over to Victor Oulton, who is our CFA director for the Federation of Agriculture.

My name is Chris van den Heuvel. I am the president of the Nova Scotia Federation of Agriculture and a dairy farmer down in Cape Breton.

Nova Scotia has a strong and diverse agricultural industry. Not only is the industry diverse, but many of the individual farms are diversified as well. The agricultural industry in Nova Scotia is made up of farms that supply the domestic markets with dairy, poultry, and horticultural crops, and those that rely on export markets, such as blueberries, mink, beef, potatoes, and Christmas trees. The province also has many commodities, such as apples and carrots, that supply both the domestic and export markets.

The Nova Scotia Federation of Agriculture commends the federal government for doing its best to maintain a balanced position across the various agricultural sectors in the CETA and TPP trade agreements. However, in order for farmers to fully access the opened markets, support programs need to be put in place so our farmers can meet their market demands. On the other hand, producers of commodities that are facing more access by foreigners into the Canadian market, especially the supply-managed commodities, need to be compensated for future losses.

When it comes to international market access, the main priority of the Nova Scotia Federation of Agriculture is to ensure that there are support systems in place for the farmers and commodities that are facing changes to market access. One area of change is for the supply-managed commodities. TPP has allowed market access for all supply-managed commodities of between 2% and 3.25%. When I have spoken with the other commodity associations, each has painted a picture of what their respective reductions in quota will look like. For example, Turkey Farmers of Canada has said that if turkey enters Canada as all-breast meat, which is the expectation, the impact will be equal to the entire yearly production of Nova Scotia and New Brunswick combined. That is a huge loss.

The supply-managed industries need to be compensated for these losses that they will face when trade agreements are ratified. The farmers in these commodities have invested in quotas in order to be able to produce their respective commodities, and these farm businesses rely on the security of the supply management system and base their business plans on it.

Farmers producing under supply-management systems must be compensated not only for their loss in quota, which they have purchased, but also for future losses as a result of imports. Though it can be calculated, since maximum import percentages are known, it will take time for these commodities to adjust to the difference in their production levels. The federal government must come through to fully mitigate the hurt to these sectors that are negatively impacted by these deals.

Collaboration, as Minister Colwell alluded to earlier, is key and very important when it comes to determining what programs will be effective and how they should be implemented. We recommend that any mitigation programs be put in place in consultation with the commodity organizations that will be affected by the trade negotiations.

Now I'll give it over to Victor for a few words.

8:15 a.m.

Victor Oulton Director, Nova Scotia Federation of Agriculture

Aside from the supply-managed commodities, other domestic commodities face inadequate treatment in comparison to similar products being imported.

Horticulture products that are produced in Canada for the domestic market are subject to CFIA testing to ensure that chemicals not approved by PMRA are not present in the product. However, it is our understanding from the horticulture producers that imports do not face the same rigour of testing. Many of the countries that Canada imports produce from have access to pesticides that PMRA doesn't allow in Canada. This creates a competitive advantage for the imported goods over the domestic products.

Let me be clear: I'm not saying that Canada should allow access to these other pesticides. There are good scientific, justified reasons that we do not use these pesticides. However, a minimum standard for imported goods that is at least as high as the standard for domestic products needs to be in place to protect and support horticulture producers in this country.

NSFA also has priorities as related to the export market. The TPP and CETA trade agreements open doors to the export market for many commodities produced in Canada. While access to these markets will benefit the rural economy in our province, farmers will only benefit if the appropriate programs are in place.

The AgriMarketing program is an example of a current program that will benefit these commodities that are interested in the export market. The program is designed to build and promote Canada's availability to expand domestic and export markets. Considering the significant export potential of the trade agreements that have come into place since the fund was established, the AgriMarketing program needs to be renewed, and ideally increased, to access these markets to their full potential.

An example of how this program has worked even prior to the trade agreements can be found in the wild blueberry sector. The AgriMarketing program and its predecessor program helped the commodity grow and expand into other programs. Without this program, the industry would not have the access to the markets they have today. Also, the wild blueberry farmers and processors see a return on investment on their levies, since AgriMarketing requires matching funds.

The program has also allowed for promotional campaigns in various export markets, including Korea, China, Japan, Germany, and France.

8:20 a.m.

Liberal

The Chair Liberal Mark Eyking

Can you guys just wrap up there, please?

8:20 a.m.

President, Nova Scotia Federation of Agriculture

Chris van den Heuvel

In summary, programs to support farmers facing market access need to be in place. Any program in place should not cancel out any other programs. For example, if a farm produces both a supply-managed commodity and an export commodity, it should be compensated for losses in one while being able to access any available products for market development in another. The worst thing that can be done is to essentially punish a farmer because they mitigated their own risk by diversifying their farm business.

We thank you very much for the opportunity to bring our remarks to you today. We'll be glad to answer any questions if you have any.

8:20 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you.

We're going to move over to Stanfield Airport, which is my second home, I think. Every week I go through it and I have to commend the work you guys have done on the parking lots and the new gates. It's a pretty busy spot. I'll never forget the time George Bush came and visited and appreciated all the work that happened at Stanfield Airport after 9/11. It was quite a feat you guys pulled off.

Go ahead, sir. You have the floor.

8:20 a.m.

Ian Arthur Chief Commercial Officer, Halifax International Airport Authority

Thank you very much, and thank you for having the Halifax International Airport Authority attend this trade committee.

Good morning. My name is Ian Arthur. I am the chief commercial officer at the Halifax International Airport Authority. I'm here today on behalf of the airport authority's president and CEO, Joyce Carter, and our chair of the board, Wadih Fares.

The airport authority is responsible for the management and development of Halifax Stanfield International Airport, one of Atlantic Canada's most critical pieces of transportation infrastructure. It is my responsibility to provide aeronautical and non-aeronautical revenue development for the airport authority.

Halifax International Airport Authority, or HIAA, as we are known, has made significant investments over the past decade to improve its position with regard to passenger and cargo traffic to and from Atlantic Canada. Those investments, including air terminal building expansions and upgrades, state-of-the-art passenger-processing technology improvements, new cargo infrastructure, and a critical extension to our runway, have provided the foundation for the airport's growth and its significant economic impact on the economy, the province, and the region. That impact for 2015 was $2.7 billion.

The importance of international trade is significant to the airport. International trade agreements, such as the Canada-Korea Free Trade Agreement in effect since early last year, are instrumental in moving Nova Scotia seafood to Asia. Our business arrangement with Korean Air Cargo is a product of that agreement. They have two flights a week, and that's 200 tonnes of fresh, live seafood leaving our airport to Incheon, which is the main airport for Seoul, Korea. We have also signed a sister airport agreement with Incheon, which is the third-largest cargo airport in the world, so we are doing many things to market there and share data with Incheon. It is through Incheon and Korea that Nova Scotia's products get shipped all over Asia.

Agreements such as NAFTA, CETA, and the proposed TPP are of particular interest to HIAA in that they can reduce trade barriers and open doors for Nova Scotia's products around the world. From the airport's perspective, it's the ability to move high-value, time-sensitive products that are best served by air shipment, and this is really what the airport does. It is critical for us to help play a growing part in the economy that's benefiting all of the citizens of Nova Scotia and the region.

From the airport's perspective, I'm confident that I don't have to spend time providing the committee with the details of the current state of the Atlantic Canadian or Nova Scotian economies. I'm not an economist by trade, but we need opportunities to move our natural resources, particularly fresh seafood, to markets around the world quickly and efficiently to obtain the best price in the markets where our products are highly valued. We need to lower or remove barriers to expedite the processes to allow access to these high-value global markets. We need preferential access to the TPP markets. That would be beneficial.

There are many better qualified than I am to provide technical detailed analysis for the potential growth represented by the TPP proposal. That said, I do know this: in 2015, goods valued at $450 million were exported from Halifax International Stanfield Airport. Of that number, $150 million was seafood.

The lobster industry is $2 billion, and 85% of that comes from Nova Scotia. Of that, $1.5 billion goes south of the border by truck. Fifty percent of that is processed, 50% is live seafood, and that seafood is then exported around the world. The time that it takes to get to market and the quality of the seafood at the other end are of concern to the Nova Scotia government.

Lastly, much of that live product is marked as U.S. product. We know that the vast majority of lobster bound for these markets is reconfigured.

8:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Can you just wrap up, sir?

8:25 a.m.

Chief Commercial Officer, Halifax International Airport Authority

Ian Arthur

Yes.

In summary, Halifax International Airport Authority encourages the Government of Canada to enthusiastically pursue trade agreements such as TPP, ensuring that they provide access and opportunities that best serve Canada's social and economic development.

Thank you very much.

8:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, sir.

We'll now go from the Stanfield airport to Stanfield's Limited. Go ahead, sir.

8:25 a.m.

Jon David F. Stanfield President, North America, Stanfield's Limited

There are too many Stanfields.

Good morning. I am Jon Stanfield, president of Stanfield's Limited North America. We are an apparel manufacturing company primarily focused on men's, women's, and industrial safety base layers, or what we call underwear. We have several brands that we manufacture and sell into the North American market.

Stanfield's Limited is our Canadian operation. It is based in Truro, Nova Scotia. Our company was founded in 1856, and has been manufacturing products from the same factory in Truro, Nova Scotia, since 1882. It has been family owned and operated since its inception. I'm here to speak today on behalf of our company.

The apparel industry was a thriving industry in Canada prior to the free trade agreement and NAFTA, which was finalized in 1992. Since this time, the industry has seen employment numbers drop dramatically. Canada also has relationships with such LDCs, or least-developed countries, as Cambodia and Bangladesh, which has also led to a manufacturing exodus due to these countries' low-cost labour pool. Fundamentally, there has been a general shift to offshoring manufacturing in our sector. There are very few companies in Canada like Stanfield's that continue to manufacture branded apparel products.

When NAFTA was enacted, governments of the day needed to determine which industries they were and were not going to support. Unfortunately, apparel manufacturing was not supported. Subsequently jobs left the country. A solution was to have agreements with LDC nations allowing product to flow in duty-free. Low-cost labour, poor infrastructure, and possibly poor oversight of working conditions has led to abuse and fatalities. In some circumstances, Stanfield's Limited has produced certain products in Bangladesh. It has not been our choice but the choice of our customers, our retailers, who want the lowest price possible.

Canada needs to have access to more open markets for its goods and services. We are a small but mighty nation, and we need to have access to markets to increase trade, allowing Canadian companies to grow and expand internationally. Canadian companies need new markets to have a sustainable future. Canada alone is too small, and scale is only gained through global access. TPP is one of those opportunities. Will some industries suffer? Yes. Do we need human rights assurances and good, clean, healthy working conditions in partner nations? Yes, absolutely.

Stanfield's Limited, through its U.S. subsidiary Performance Apparel Corporation, created a partnership with a Vietnam-based manufacturer several years ago, prior to even contemplation of this agreement. Our vision was that this country would eventually become part of a trade pact like this, and it would have a positive effect on our businesses in both the U.S. and Canada. Vietnam, as an example, has greater infrastructure, a large employment pool, and is more willing to invest in equipment and technology than are other LDC nations.

Our company's objective is to produce as much of our apparel products as we can in Canada. We still produce more than 80% of our branded products in Canada, mostly for the Canadian market. Our challenge in small-town rural Nova Scotia is human capital, by which I mean employment. Our main challenge for the future of our company is to be able to hire people, but we cannot find the skilled labour we require. You might think sewing is a mundane role, but it's definitely a skill. For every 10 people we hire here, one may make it, and that is not sustainable.

Companies like Stanfield's need access to a labour pool. As much as Canadians felt that the temporary foreign work program was a bad program, the TFW was actually a perfect fit for our unique challenges in rural Nova Scotia. It gave us access to a skilled pool of sewing labour. It allowed us to continue to produce a larger portion of our products in this country. These people were gainfully and willingly employed, paying taxes in our province and in our country.

As I look forward, I see our company having to import more products from foreign sources, which takes our money. It leaves the country. As well, it will lead to lower employment levels as we scale the business properly.

Inside of TPP, along with trade, I would like to see access to human capital or labour become transferable between the participating nations. It would allow companies like ours to choose to import product or choose to import labour. I believe this to be very important to our future in Nova Scotia. I encourage movement of people through a type of foreign worker program with the TPP nations. I encourage government to cut the red tape in a needs-based assessment for certain industries. I believe apparel is a specialized and underappreciated job engine in this country.

When we sign these types of trade deals, we need to seriously look at the LDC nation scenario. We need to shift policy away from these types of countries whose track records on working conditions have not been good. LDC countries' access to Canada has only led to a flood of low-cost, cheap products coming into Canada, hurting those who wish to stay and produce here. There are no advantages otherwise, and it should stop.

Canada should participate in the TPP to increase our access to new and emerging markets in the Pacific Rim. It will allow for the flow of goods back into Canada from nations that are investing in technology, innovation, and manufacturing. It will allow for Canadians to lead the way with these investments, as we have done in the past.

Finally, I encourage the government to allow for duty-free and easy two-way access to labour in Canada, thus allowing us to choose where we manufacture.

In the end, trade is global, and human capacity and capital are mobile. Canada must participate.

Thank you for your time, and I appreciate the opportunity to say a few words.

8:30 a.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, sir.

Thank you all, panellists, for your briefs.

I'll just remind everybody that this is the House of Commons, and we operate in two official languages. If you need translation, then there are translators. You might get questions in French.

We are going to take part in a dialogue with the MPs, and we're going to start with the Conservatives.

Mr. Ritz, you have the floor.