International Trade Committee on Sept. 29th, 2016

[The Chair, Liberal, Mark Eyking]

I call the meeting to order.

Good morning, everybody. Welcome to the House of Commons Standing Committee on International Trade.

We are a very active committee. Over the last year, we've been dealing with softwood lumber issues and many other U.S. issues. Besides softwood lumber, we had a lot of agricultural issues with chicken and dairy. Also we're dealing with the European trade Agreement that is getting tidied up now, which is on our plate. One of the biggest things we've been undertaking over the last year is the TPP, which is a huge agreement. It deals with 12 countries, 40% of the world's GDP, and over 800 million people.

Our committee consists of members right across the country. Not all members are here; some of them are still in Ottawa. I'm Mark Eyking and I'm from Cape Breton, and Tracy Ramsey and Dave Van Kesteren are from southern Ontario. Mr. Ritz is from Saskatchewan, Karen Ludwig is from New Brunswick, Madam Lapointe is from Quebec, and Mr. Dhaliwal is from B.C.

This is our last province. We've saved the best for last. We also did a video conference with the territories. We had over 125 briefs and 20,000 to 30,000 emails, which are still coming in. We're hoping to finish our consultations by the end of October and then put a report together for the House of Commons.

This morning we're so glad to have representatives of the Province of Nova Scotia, Minister Colwell and MLA Farrell. We have roughly half an hour. The floor is yours, with no set time. Usually presenters use five minutes, but it's whatever way you want to cut it. We're very interested, Minister, about your recent trip to Asia and your sense of that. We'll appreciate your insights on the opportunity that is there.

The floor is yours. Welcome.

[Keith Colwell, Minister of Agriculture and Minister of Fisheries and Aquaculture, Government of Nova Scotia]

Thank you very much. If I could, Mr. Chair, I would like to start with a prepared statement, and then maybe we can have an open dialogue after that, if that's all right.

[The Chair, Liberal, Mark Eyking]

Sure.

[Keith Colwell]

Mr. Chair and members of the committee, ladies and gentlemen, thank you for allowing me to appear before you during your visit to Halifax.

I am very pleased to be joined this morning by my legislature colleague Terry Farrell, the member for Cumberland North.

As Minister of Fisheries and Aquaculture and Minister of Agriculture, I take every opportunity to advocate for the importance of trade in the sectors I represent. As the report of the One Nova Scotia Commission pointed out, trade is critical to the future wealth and prosperity of our province, and indeed, in two successive throne speeches, the Department of Agriculture and the Department of Fisheries have identified it as one of the key economic drivers in the province of Nova Scotia. Since the release of the report, we have been working very hard with our partners in the sector and government to meet the goals that it set out and to double the value of exports in our seafood and agriculture sectors within a decade.

I am pleased to say that thanks to the hard work of the people in those sectors, the great Nova Scotians, we are seeing success. Last year, the agrifood sector saw its exports increase by 21% to $385 million. Wild blueberries played an important part in that, and Mr. Farrell will have a few words on that in a moment.

That success means quality. Nova Scotia-grown and made products are finding their way onto store shelves and kitchen tables around the world. We want that to continue.

We see the success in the seafood sector as well. In 2015, our seafood exports grew by 33%, to more than $1.6 billion, almost reaching the goals in the One Nova Scotia report in just two years. I am proud to be able to say that Nova Scotia is Canada's number one exporter of seafood. Naturally, we want to see that success continue. To do that, we need to ensure that fair access for our products continues in markets around the world. That is why ensuring that agreements like the trans-Pacific partnership protect and advance Canada's interests is so important to our agriculture and seafood sectors.

That is also why it is important that we work vigorously to oppose any moves to unfairly close borders to our products. Recently there has been a lot of concern within our government and the lobster industry about the efforts in the European Union to have North American lobster declared an invasive species and ban the imports of live lobster from Canada and the United States. Since we are Canada's leading seafood exporter, including $200 million in live lobsters in 2015, every market is important to our lobster industry. The potential loss of the European market, which accounted for over $66 million in live lobster exports for Nova Scotia last year, would be detrimental to our sector. We want to see fair access for Canadian lobster exports maintained. We are disappointed and concerned with the recent opinion by the European Union's scientific forum recommending further consideration of Sweden's request that North American lobster be labelled an invasive species, possibly leading to an import ban.

Nova Scotia will continue to support Global Affairs Canada, the Department of Fisheries and Oceans, the Canadian Food Inspection Agency, and the Canadian lobster industry in their efforts to ensure that the European Union makes decisions on this issue that are based on fact and not speculation. It is still quite some time before the EU makes a final decision, so our efforts remain critically important.

At the same time, we are working hard with industry and our government partners to develop other export markets for our high-quality, premium seafood products—markets like Asia, which is covered by the TPP. In Asia, our seafood exports totalled $407 million in 2015. We see the potential for continued growth in that market as its share of the world's middle class continues to grow between now and 2030.

As I said a few moments ago, our success depends on ensuring that we are successful in every market we can reach. It also depends on our ability to ensure that the stability of our domestic markets for agriculture products is not adversely affected by an agreement like the TPP.

As Minister of Agriculture, I have been very clear with our federal counterparts that trade agreements must not compromise our successful supply management system. Supply management has allowed producers of agricultural products to ensure that good jobs are available in our rural communities. It has also ensured that domestic markets have a dependable supply of fresh local products for consumption.

I urge the federal government to continue to balance the export gains that are possible through trade agreements with our national interest in preserving the advantages of the supply management system. That includes ensuring that producers are adequately supported in countering any negative impacts of trade agreements like TPP. We want our exporters in agriculture and seafood to succeed. We want that success to keep our rural and coastal communities vibrant. That will happen in free trade that's balanced with fair access for our products.

I would now like to allow my colleague Terry Farrell to say a few words about the importance of the wild blueberry to Nova Scotia.

[The Chair, Liberal, Mark Eyking]

Go ahead, Mr. Farrell.

[Terry Farrell, Member for Cumberland North, Legislative Assembly of Nova Scotia, As an Individual]

I want to thank you, Mr. Chair and the members of the committee, for giving us the opportunity to be here today. I'm very grateful for that.

I'm the member of the legislature for Cumberland North.

Cumberland County is the hub of wild blueberry production and processing in the province. It's at the forefront of change, development, and growth in the industry. It's home to the biggest and most successful producer and exporter of wild blueberries, Oxford Frozen Foods. I know you're going to hear from their representative, Mr. Hoffman, later today. They've been instrumental in making Nova Scotia wild blueberries the most important export fruit crop in Nova Scotia.

In 2015, our province exported over $122 million worth of wild blueberries. That's 32% of all of Nova Scotia's agrifood exports.

Blueberry producers, large and small alike, have really stepped up their game. Our government is supporting them to employ best practices, and this has resulted in greatly increased productivity.

We're ready to compete on world markets. Unfortunately, one of the results of this increased productivity has been low prices. This has resulted in a very difficult year that has seen many of our growers leaving crops in the field.

To counter this recent trend, we need government support to help us gain increased access to markets in places like Asia. This is how we're going to increase demand and reward producers for their hard work and innovation. This is something the industry has talked about publicly, and I know you're going to hear later this morning from members of the Wild Blueberry Producers Association of Nova Scotia. We are all actively encouraging the federal government to use its leverage in Asian markets to gain more access for our blueberries. This is what will start expanding market access through trade agreements.

I know how hard Minister Colwell and other members of our government are working with industry and other government partners, such as the federal government, to make this happen.

On behalf of the communities and the producers in my riding, I also encourage the federal government to make that a priority.

Thank you once again for having me here today.

[The Chair, Liberal, Mark Eyking]

Thank you, gentlemen.

We only have about 10 minutes, so I've decided to just give each party a few minutes to ask a question to the minister and Mr. Farrell.

Ms. Ramsey, do you want to start? Take a few minutes; there's no set time. Each party can ask a question, and maybe Mr. Colwell will wrap up.

[Tracey Ramsey, NDP, Essex, ON]

Thank you for your presentations and for joining us here this morning.

It's great to hear about Nova Scotia agriculture. I come from a rural riding myself.

You mentioned the lobster ban. Are you concerned that something similar will happen with TPP countries, that a non-tariff barrier may come up that would impact that sector?

[Keith Colwell]

Could you repeat that, please?

[Tracey Ramsey, NDP, Essex, ON]

When you were speaking about the invasive species—and I believe you referenced Sweden and the issue you're having in regard to the European agreement—do you fear or have similar concerns of a ban in TPP countries for this same invasive species?

[Keith Colwell]

It doesn't appear to be an issue at this present time, and I don't think it will be, but again, who knows? It's hard to say.

We're really concerned about the European Union. Hopefully we'll be successful with the federal government and the other provinces all working together to make sure that the ban doesn't happen.

It is going to affect the U.S. as well, because a lot of our lobsters are shipped into the U.S., where they are then shipped to Europe as U.S. lobsters. This is unfortunate, but it does happen. Hopefully, we'll be able to reverse that trend over time.

It is a serious issue for us. It's one of those issues on which, realistically, is there science to back it up? We hope there isn't.

[Tracey Ramsey, NDP, Essex, ON]

I have one other quick question. How many dairy farms do you have here in Nova Scotia? Can you speak to the threat that they would face under the TPP with the supply-managed sector being open? I know you mentioned the compensation. We're unclear whether the current government will honour the previous government's commitment, but I wanted to get a snapshot of dairy farms here in Nova Scotia.

[Keith Colwell]

I can't give you the exact number of farms, but they represent the biggest sector in Nova Scotia. It's $564 million a year, I believe, in the rural economy. Dairy has a huge impact on Nova Scotia, but it's more than just the financial part of it: we should be looking in more at food security. I'm talking about safe food and also the supply of food. If, for instance, something happened at the border between New Brunswick and Nova Scotia, we would run out of food in two weeks. Realistically, our grocery shelves would be cleaned out in two days. That's a serious factor, and that could happen, for all kinds of reasons.

There was a goal set of 20% self-sufficiency within five to 10 years. I think we have to go further and faster than that to ensure that we meet our goal. It's a serious concern not only in Nova Scotia but right across the country, and people aren't talking about it.

One thing I will say about Nova Scotians is that they're really stepping up to the plate. They're interested in buying local food and local produce. We have much better control of the quality, the food safety that goes with it, and the supply. We're working closely with the agriculture and fishing industries to see if we can't get a sustainable food supply, well above 20%, for Nova Scotia.

[The Chair, Liberal, Mark Eyking]

Thank you.

Thank you, Ms. Ramsey.

We go now to the Conservatives.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Chair.

Keith, it's good to see you again. I know you continue to work hard.

I was interested in where you went in Asia and the reception you had there. I know it's usually top shelf. They really appreciate the quality and consistency of supply from Canada. I know you're focused on food availability here in Nova Scotia, and you would export beyond half of what's produced here. Having a diversity of markets certainly strengthens our position when it comes to demanding a better price. I'd like to hear about where you were and what discussions you had.

[Keith Colwell]

I recently came back from Hong Kong and China. We're planning to go to China again in October and November. We still have to make sure I can get out of the legislature to do that, but the premier's office has given me the go-ahead, so that's a good indication.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, the big food shows are on then.

[Keith Colwell]

I want to thank you for the great work you did in China as Minister of Agriculture, and for the fine working relationship we had. It's a great market for us. We've seen our seafood trade, particularly in lobsters, grow by 200% to 300% a year, and we mean to continue that trend. We really have to look at those markets. The markets are demanding higher quality now than they were before.

We're working on a lobster quality project in the province now with three or four companies, for live lobster. There has been a concern that lobster quality wasn't as high as it should be. We're working on that now and we've worked on a new brand that we announced in China. We haven't announced it in Nova Scotia yet, but we announced it in China and Hong Kong when we were there. It went over very successfully, and the new brand is 45N 63W. It identifies a location in the centre of Nova Scotia, actually a very historic site. It's the site of a disaster at the Moose River gold mine that happened in the 1930s and was the subject of CBC's first live news broadcast. We're going to move a monument to that location and do some other things to make that a very special place. Luckily, it's on crown land, so we can do the things we need to do there.

Only companies that have high-quality products will be allowed to use the brand, companies with a consistent quality assurance system. We're working on that system now. We feel that we can penetrate the market even further. One of our major customers has demanded this process, and they've guaranteed us in writing that they're going to give us a higher price than they've ever consistently paid before. That is a major change in the marketing process.

Nova Scotia set the standard for Canada with Alibaba. We're the first ones to go to Alibaba with lobster sales, and the first year we did, they charged us $65,000. We sold $2.2 million's worth of lobster in 24 hours and we ran out of lobster.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

When I was there, they did a little auction on their Internet site and sold 250,000 pounds of Canadian lobster in nine minutes. It was unbelievable.

[Keith Colwell]

There's no question. I've held up lobsters.... You weren't there when I did that, but I held up a lobster and the room was full of people. No matter what they were doing, they went right to whoever was holding up the lobster to see the lobster. It was really something else.

It goes to the culture there. All ladies get married in red wedding dresses, so if you have a red lobster sitting on the table during your wedding, it's a big event. The bigger the lobster, the more valued it is.

Last year we did the same promotion, and Alibaba only charged us $6,000 to do it. They've seen the real value in Nova Scotia lobsters. We export 95% of all live lobsters in the country, so we are the lobster export people. That's why we're so concerned about the EU sanction, but Asia has tremendous potential.

One thing I still can't get over is that if you say to somebody in Asia to come visit us, just in a casual conversation, they come and visit and they bring a delegation and they want to spend money. It's very positive. We've seen great success there and we're going to expand on that.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Ritz.

We'll go over to the Liberals. Ms Ludwig, go ahead.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Good morning, gentlemen. Thank you very much for your presentations.

I represent a riding across the bay. I represent New Brunswick Southwest, and we're also very proud of our lobster production, so it's great that we're all on the same page.

I have a number of questions and I'll try to fit them in. Regarding the lobster production itself, certainly Nova Scotia has done an amazing job of promoting Nova Scotia lobster. How closely are you working with the other provinces in this region to promote jointly seafood production, and lobster in particular?

[Keith Colwell]

We're working very closely with them. Your minister, Rick Doucet in New Brunswick, is very passionate about his lobsters, and he claims they're better than Nova Scotia's. That's an ongoing discussion.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Rick and I would agree on that.

[Keith Colwell]

The minister on P.E.I. is the same. We work very closely together, the three of us. Actually, we met a week ago in Charlottetown to discuss lobster and other fisheries and agriculture issues. It's good to see that both of them now are, as Newfoundland is, agriculture and fisheries ministries, because it's a lot better for all of us when we're working together.

We're striving to get a really strong Atlantic working relationship, including New Brunswick, P.E.I., Newfoundland, and Quebec, because we all share the same areas and we have the same problems. I can tell you that when we go to markets like China or any place in Asia and they come and sit across the table from us and say they want a containerload a week of this product, we can't supply it. I think all of us together would have a very difficult time to supply it. This is one thing that we have to start working on closely. We need to see what products we have. Maybe New Brunswick can supply two containers over a year. Maybe we can supply eight, Newfoundland can supply two, and Quebec can supply two. That way we can get to the marketplace. It's all Canadian product. We have to start doing that in a closer and closer working relationship.

It's a very good point. We are doing it now.