Evidence of meeting #39 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 post.
A recording is available from Parliament.
Conservative
October 20th, 2016 / 11:50 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I was going to say it's nice to have you in the chair, but maybe I'll take that back after that comment.
Thank you for chairing today.
Thank you, everyone, for being here and for your informative presentations. I have a few questions for you.
Ms. Marsden, could you let me know a little about the industry in terms of your footprint? What are some of your locations geographically?
President, Canadian Sugar Institute
I'll start from west to east for no particular reason. In Vancouver, British Columbia, we have a cane sugar refinery that was established in the late 1800s but is still servicing particularly small and medium-sized businesses in western Canada. Taber has a beet processing facility that is linked to sugar beet production in Alberta. We have a cane sugar refinery in Toronto mostly servicing the food processing industry, and a cane sugar refinery in Montreal, Quebec, servicing mostly the food processing industry. As well, two further operations in Ontario are producing sugar-containing food products.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Your footprint across the nation is pan-Canadian, I think it's fair to say.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
That's great.
You characterize it as a distorted market, and I agree. It must be hard for you to compete in these external markets based on the protections we've seen. I wasn't quite clear, however, on how you think the TPP will help alleviate it, especially into the U.S. market, because I think that's the most protected market when it comes to sugar. How will the TPP let you penetrate that market?
President, Canadian Sugar Institute
Well, the TPP won't change U.S. sugar policy, unfortunately, but it does incrementally increase our access, mostly through sugar out of Taber, Alberta, and a quota for sugar-containing products. That'll help our refineries as well as those plants. More importantly, for other markets, it's those food-processing customers who will have access to those diversified markets beyond NAFTA.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you for that.
Ms. Salmon, I have some questions with regard to the aquaculture industry. I understand you're in favour of the TPP. There'll be some benefits to your industry, of course, but you expressed some concerns about the industry's ability to tap into the increased market. Can you elaborate on that and on whether any solutions might be at hand?
Executive Director, Canadian Aquaculture Industry Alliance
Our major issue, in terms of growth of the industry, has been the regulatory complexity, the overlapping regulations between federal and provincial, and the lack of clarity. We are not even referenced in the Fisheries Act, even though that's the act we are under. There are a number of issues that are problematic for our industry to grow, and for investment to be attracted to that growth. Given that the demand for seafood is so strong, and other countries are doing so well, we need to capture some of that growth here. We can't meet the demand we have now. We are certainly in favour of the TPP, as some of our products are going to those countries, but in order to really take advantage, we have to have responsible and sustainable growth here in Canada.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Without that, the increased market is not going to be met anyway.
Executive Director, Canadian Aquaculture Industry Alliance
Exactly. It's robbing one buyer from another.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Okay, I understand that.
Mr. Everson, you are probably in a similar position. As you said, the demand is exceeding what you can supply right now. Are you confident the ability to meet the demand would follow if the TPP comes into effect?
Executive Director, Soy Canada
Yes, we certainly are. In eastern Canada, we have very sophisticated infrastructure for soybean production. We've been growing soybeans for 60 years. There is new infrastructure going into the port of Hamilton. We now have four large grain-handling companies exporting soybeans from there. Our infrastructure is very modern, very up to date. In western Canada it's growing. What happens in western Canada is that you are relying on the same infrastructure that's there for the delivery of wheat, canola, barley, and so on to international markets. It's a very integrated business. As soybeans come on and there is more production in western Canada, they will go through that system. It's a highly efficient system. There are issues around transportation, which you would be very well aware of, that we are all working to improve. Aside from that, Canada has a very modern infrastructure, so that's not a challenge to growth.
Conservative
The Vice-Chair Conservative Randy Hoback
All right.
We are going to move into our second round now. We are going to start with the Liberals.
Ms. Lapointe, you have the floor for five minutes, please.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you very much.
Good morning, everyone.
Mr. McLinton, I have some questions for you about retail. You spoke earlier about labelling and the country of origin. You spoke mainly about clothing. Are there other ranges of products that would be affected because of their origin?
Senior Director, Retail Council of Canada
Yes. There is a whole range of products that are up for almost immediate tariff elimination. As everyone around this table knows, the original reason for tariffs was to promote domestic manufacturing. There are a lot of examples where there isn't a lot of domestic manufacturing. We certainly support tariffs where they make sense, where they mean to do what they are supposed to do, but there are things like certain types of apparel, footwear, and that sort of thing where there really isn't a lot of domestic production. We would very much welcome tariff reduction there in order to pass those savings on to consumers and reinvest in businesses and jobs. The more affordable these products are for consumers, the more consumers can go and buy other things. In the example of apparel and footwear, I believe right now the tariff rates are at something like 17%.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
You spoke about online sales. You spoke about duty-free sales. It is $20 in Canada, and $800 in the United States. If we modified the rate, what do you think would be appropriate to impose here in Canada?
Senior Director, Retail Council of Canada
That's the de minimis rate above which you have to pay duties and taxes as you would have to here in Canada. It has been $20 for quite some time. If anything, I'd like to see it actually lowered. Of course, that's administratively quite challenging. When that de minimis level was set, the ability of consumers to make purchases online was not what it is today. If a tax break were to be given to U.S. merchants, that same tax break should be given to Canadian merchants as well. Whatever happens to the foreign online market, we would want to see a level playing field for buying in Canada. Otherwise, if you were to increase that—not even to $800, but something like $200—that would be devastating. The average basket of goods, depending on the retailer you speak with, ranges from $45 to $77. Why would you buy in Canada if you could buy the same product online with no taxes and no duties?
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
I will continue with e-commerce. We know that online sales are constantly growing. You also said earlier that Canada Post's services are used for online purchases.
Do you think that, by adopting the Trans-Pacific Partnership Agreement, we could increase the visibility of the Canadian companies you represent, and enable them to export products sold in Canada?
Senior Director, Retail Council of Canada
That's a really interesting question. We focus so much on the import end of things. The other witnesses here are talking more about export. We focus mostly on bringing more types of products, more consumer choice at better prices, more competitive prices for consumers. In terms of exporting, that's a really interesting question that I'd like to follow up on.
Our members are very competitive online. They have a very strong online presence. The one's that do it really well are the ones that are able to match the online experience with the in store experience, because you have consumers doing both. You have them doing research online and then going into the store, or going into the store, touching and feeling products, and then going online.
Our members are very competitive in that area. I'd really like to follow up with you on the impact the deal would have in terms of increasing online sales overseas.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
That's interesting. It will have to be explored.
The sectors are quite varied within retail, the industry you represent. Might some companies experience a positive impact? You spoke about textile companies, among others.
At the same time, might other companies fare worse if the Trans-Pacific Partnership Agreement was signed?
Senior Director, Retail Council of Canada
I don't think so.
The position of the Retail Council is that we're very supportive of tariff elimination generally. The way that the agreement has been written, there are a few exceptions for which tariffs would be eliminated over time and there are some areas in which they wouldn't be, such as on supply-managed goods, and that's understandable. The vast majority—I can't remember the number, but it's something like 93%—of tariffs would be eliminated immediately upon formal ratification of the deal.
It's a matter of principle and it's something that the Retail Council and our retail members are very supportive of in principle.