Evidence of meeting #5 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 chicken.
A recording is available from Parliament.
Executive Director, Chicken Farmers of Canada
The response that we got from Minister Freeland was that if we were to make a decision right now on compensation, it would be as though we'd already made a decision on signing the deal. So you understand where they're at.
NDP
Tracey Ramsey NDP Essex, ON
If the compensation package isn't on the table, will you still be in favour of signing the TPP?
Executive Director, Chicken Farmers of Canada
If the compensation and the indemnification package that was there were not supported, it's a hard hit on our industry. It is a package for us. We worked through this deal and we were positive on this. We were trying to find ways to make this deal work because we knew that issues were going to be addressed as part of that.
Executive Director, Dairy Farmers of Canada
It's important to make clear that we're not a proponent of that deal. We're not demanding it. We don't gain from it. We actually want to ensure that we don't prevent it from happening, but it is very important that our industry doesn't pay the price of that deal.
NDP
Tracey Ramsey NDP Essex, ON
The other question that I have is around the milk protein isolates. The TPP would eliminate tariffs on Canadian imports of milk protein isolates, a product made from skim milk that is used in the production of dairy products such as cheese, yogourt, and ice cream.
Are these potential tariff eliminations likely to increase imports of MPI, and if so, what would be the implication to skim milk prices for dairy producers in Canada?
Yves Leduc Director, Policy and Trade, Dairy Farmers of Canada
With respect to the tariff on milk protein concentrates or isolates, it is not likely going to result in increased imports of MPI into Canada in part because MPIs are currently coming into Canada tariff free, duty free, from the United States. The market is completely open for MPIs originating from the U.S. That concession is not going to have an additional impact on our market.
NDP
Tracey Ramsey NDP Essex, ON
We're talking about the potentials for these new markets for Canadian poultry, dairy, and egg exports. Are Canadian dairy and chicken producers priced competitively in these foreign markets?
Executive Director, Dairy Farmers of Canada
We have the fine cheeses where you can have a niche market and that's why I was mentioning in the presentation that if we were to go and export, we would have to go into a niche market, not into commodities. We can't compete with New Zealand. Ninety-six per cent of their production is exported on the world market. That's their full business with the situation of no winter.
That's just the reality and the reality is that doing business in Canada is more expensive than elsewhere. We have numbers that show it's in everything. It's regulations. It's all kinds of things.
However, we do have some great products and we have great cheese makers across the country that are actually very creative and have the best product in the world of which we can be proud. There is definitely some niche market. They are not easy to pick. Those are not low hanging fruit. They will demand the work together.
Executive Director, Chicken Farmers of Canada
We sit next to the largest poultry producer in the world, which does not have our winter and does not have to have fully insulated barns to carry them through, so our production costs are higher from that perspective.
The other thing to understand as well is that the chicken market is two markets. It's white meat and dark meat. What gets exported, even by the U.S., is frozen dark meat, which is a low-value product. Even though they're the biggest exporter in the world, it is of a low-value product because the fresh market is the domestic market.
That's the high-value product. A bird is kind of fifty-fifty, but the preference in North America is white meat. The preference in Asia, Africa, and Latin America is dark meat, so what gets traded is the other part of the bird for that consumption.
Liberal
The Chair Liberal Mark Eyking
We're going to the last questions for the Liberals.
Mr. Fonseca, you have six minutes and that will wrap it up.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Chair, thank you.
I'd like to thank our presenters and all of your members for providing us with such healthy safe food from coast to coast to coast.
I would like to get an understanding from an urbanite perspective on how the whole quota system works. For a layperson, can you put it in those terms? How does somebody sell their farm? Do the quotas come with it? How do the quotas work? Are they sold on an open market? How does that work exactly? Are there shares? Are they worth so much?
Executive Director, Dairy Farmers of Canada
We'll have to take that offline.
The quota is actually the right to produce. In our case, I can't speak for the others, but I know it's provincially managed as well. Each province has their own way to do it. In some it's rated openly and they have different rules in every province. It depends on which province you want to start your dairy farm, and then we can look into that—
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
Are you saying as soon as you have a quota you can produce as much as you want?
Executive Director, Dairy Farmers of Canada
You have to produce your quota. It's a responsibility as well. As I said, we manage the whole system through the quota.
Liberal
Peter Fonseca Liberal Mississauga East—Cooksville, ON
If I want to get into the business, do I buy a quota? How exactly does that work?
Liberal
Executive Director, Dairy Farmers of Canada
You would actually buy a quota.