Good afternoon. My name is Hans Kristensen. I'm a producer from New Brunswick and am the Maritimes representative on the Canadian Pork Council board of directors.
I'd first like to thank the members of the committee for the invitation to appear before you this afternoon.
The hog industry is extremely important to the Canadian economy, contributing 103,000 direct and indirect jobs across the country. These in turn generate $23.8 billion in economic activity. With well over 70% of our industry's output now exported to almost 100 countries, the Canadian pork sector is the classic example of what positives can occur with improved terms of trade.
Over the years since the implementation of the Canada-United States Trade Agreement, followed by NAFTA, the completion of the Uruguay round of multilateral trade negotiations, and ratification of several bilateral and regional trade agreements, we have increased the amount of exported pork and pork products by 387%, from $700 million to just over $4 billion in 16 years.
The U.S. is our strongest market, purchasing 408,000 tonnes of pork worth $1.4 billion. Mexico is our fourth-largest market, to which we ship 314,000 tonnes valued at $587 million. In 2016, we also shipped 4.8 million feeder pigs to U.S. producers to raise and 848,000 market hogs direct to slaughter.
This is an excellent example of each country focusing on its strengths and of the strengths of each country complementing the other's. Canada offers an advantage in swine health, since its cooler climate and lower herd density significantly reduce the development and spread of swine diseases. On the other hand, the U.S. industry has an advantage in finishing hogs, due to the abundance of low-cost and easily-sourced U.S. corn and soybean meal, which gives the U.S. an advantage in finishing the hogs.
There is no doubt that Canada and the U.S. have both benefited from a long trading relationship, the integrated nature of which enables both countries to remain competitive internationally, supporting jobs and exports on both sides of the border and enhancing our potential to increase our respective contributions to the Canadian and American economies even further.
The Canadian Pork Council takes the U.S. and Mexican market relationship very seriously. We invest a great deal of time and money to participate in trade missions whenever possible. We regularly meet with our U.S. and Mexican counterparts to discuss areas of common interest and concern. We have a strong relationship, since Canada, the U.S., and Mexico share many of the same animal health and trade policy goals in opening new markets together. We are natural allies, which helps in advocating our messages in various multilateral trade forums, including the World Trade Organization.
The North American meat and livestock industries have benefited from trade under NAFTA. Our counterpart in the U.S., the National Pork Producers Council, has publicly stated that their producers benefit from North American trade. Mexico and Canada are the number two and number four export markets respectively for U.S. pork. Canada alone imports close to $1.2 billion of U.S. pork, and disruption in that trade affects producers on both sides of the border negatively.
The U.S. industry knows that tariff-free trade is essential. Needless trade barriers provide no benefit to either country's economy. In Canada, we know what it's like to deal with disruptions in the marketplace. We are concerned when the issue of COOL keeps creeping back into the news and into trade negotiations. Challenging the U.S. COOL was a long and expensive fight for Canadian producers, and I encourage the federal government not only to protect it but also to retain its retaliatory rights to action in the future.
Canada and the U.S. serve customers with similar preferences for food safety, animal health, and risk profiles. Both countries follow almost identical science-based risk assessment frameworks for managing food safety and animal health, and both countries require very similar HACCP-based food safety programs in federally registered meat plants.
That said, although we speak frequently of an integrated North American market, the unfortunate reality is that the Canadian meat entering the U.S. is subject still to substantially greater bureaucratic requirements and cost than U.S. meat coming into Canada. We are disappointed that Canadian meat entering the U.S. must still proceed to privately owned inspection houses that set their own fees, while U.S. meat entering Canada can proceed directly to a federally registered establishment.
There is an opportunity here to smooth the flow of pork between Canada and the U.S. by reducing regulatory barriers and further aligning our regulatory processes. We support the work of the Canadian government as it works towards this end.
I welcome any questions you may have.