Evidence of meeting #67 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 nafta.
A recording is available from Parliament.
NDP
François Choquette NDP Drummond, QC
Thank you, Mr. Chair.
The February 2017 report by Canada's Advisory Council on Economic Growth recommended that Canada should “[i]nvest in trade infrastructure to improve our physical access to global markets”.
Is the Canada and U.S. trade-related infrastructure adequate in quality, quantity, type, and location to accommodate current and future trade between these two countries?
Public Relations Manager, Canadian Pork Council
Certainly, I would say, one piece of infrastructure that is in the process of being developed is pre-clearance and e-certification. That's moving forward.
We're an industry that does ship—basically meat and live animals—across the border. There are some steps already in place to facilitate that or to improve the time it takes to get from A to B. It can be improved even further by matching up our system with what's being developed in the USDA.
The work has started. It just needs to continue. Unfortunately, it may require some heavy investment, just because we are dealing with technology, and that changes. That is one aspect. It's a kind of hidden piece of infrastructure that would help to facilitate thinning the border and easing the transportation aspect of it.
Director, Government and International Relations, Canadian Cattlemen's Association
Sometimes there's a requirement to unload cattle at the border and have them inspected—for example, to make sure they have the CAN brand on them—and the facilities at the border to do that are fairly limited. You have a very small number of border crossings that you go over. Rather than suggesting a program to build unloading facilities at all the border crossings, I would say to get rid the requirement so that you don't have to unload them at all.
President, Western Canadian Wheat Growers Association
As it relates to the U.S. and what we're talking about, I think that in the last couple of years farmers in the west have had a tough time dealing with some of the challenges, namely around transportation, and obviously with some of the interactions with the grain companies that have gone on.
The fact is that for most of us out here in the west, as a farmer we're basically a price-taker. We really don't have the ability to pass on any of our costs, and how we recoup our costs is through our production. When you're talking about some of the regulation that has gone on, what we're a little concerned about in terms of the U.S. border, and why we would really encourage wheat trade, goes back to some of these transportation issues that we're seeing.
Basically, while this is not the case all of the time, you really have to be living very close to the U.S. to deliver into the U.S., especially for farmer-based deliveries. It's the same on the U.S. side if you're going to deliver into Canada. That's just because of the cost of freight by truck or, in some cases, on rail. When we look at that with what we're doing here, what we would like to say is that open access to the border is good on both sides. Realistically, it is our best form of ancillary competition in the absence of improved rail links and in the absence of potentially more rail service and those kinds of things. Really, it's access to the U.S. that is helping the Canadian farmer as a source of competition where one doesn't typically exist in the market, especially on transportation. From our standpoint in terms of infrastructure, we definitely support opening the border and also, obviously, any investments that we can have in further processing and the value-added industry here in Canada.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you, Mr. Chair.
Thanks to you all for being here.
As I come from British Columbia, I would like to know how a renegotiation of NAFTA would affect prices and producers in British Columbia, and also how the influx of U.S. products could impact market prices.
President, Canadian Agri-Food Trade Alliance
I can start.
Just briefly, certainly in northern British Columbia, in the Peace country, there's a lot of grain production up there. Canola, wheat, and a number of different products are produced up in northern British Columbia. We've seen through NAFTA that we've really been able to expand our exports into the United States of processed products and things like canola oil and canola meal. When we look at the impact on British Columbia's producers, it's really been a net positive for their being able to access the markets.
Maybe I'll let my colleagues answer further.
Director, Government and International Relations, Canadian Cattlemen's Association
British Columbia unfortunately doesn't have a federally inspected beef packing plant, so for any cattle harvested in British Columbia, that beef can only be sold in the province. That's a great disadvantage for cattle producers in British Columbia, one they wouldn't have if they only had the ability to send those animals to Alberta, say, and to have that beef exported out of one of the federally inspected facilities in Alberta.
I do know that there is another option they have, which is to sell animals into Washington state. There are two U.S. packing plants in Washington state that get used. They have that ability to have some bargaining leverage when they sell cattle by having that open border, so I think that trade and the open border are extremely beneficial to those producers.
Director, Board of Directors, Canadian Pork Council
I'd like to add to that.
As far as the hog industry is concerned, British Columbia, while it doesn't have a large hog industry in production, does have in its possession a couple of smaller plants that have the ability to process product and to adapt to specialty products. On free trade, one of the things I mentioned earlier was niche marketing, so British Columbia can benefit hugely from continued and enhanced free trade in NAFTA simply by being able to process and move those products.
Also, our next biggest target—our desire—is ratifying the TPP. That's a huge potential benefit to British Columbia, both for the small independent producers who can do high-value specialty products for the Asian market and also just for its impact on the export facilities in Vancouver.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
What sorts of infrastructure changes would you like to see that would be beneficial for conducting business in British Columbia?
President, Canadian Agri-Food Trade Alliance
Briefly, in the grains and oil seeds sector, for example, most of our product that's exported goes through British Columbia, whether via Vancouver or Prince Rupert, so in fact the ports of Vancouver and Prince Rupert are one of the key pieces of infrastructure.
I'll give you an example. Canola oil, for example, is shipped by train into Vancouver, so there needs to be a port in Vancouver to handle that canola oil and ship it both to the United States and down to Mexico. It's the same thing for other grains, whether it's durum wheat or canola seed, which goes to Mexico as well. Having the Port of Vancouver and access for those commodities is critical.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
My next question is for you, Mr. Wood.
Earlier, you said that prices were artificially distorted. Can you tell us more about that?
President, Western Canadian Wheat Growers Association
Yes, for sure. When I was referring to it there, I think I was talking mostly about how there are price differences between, say, wheat products in Canada and the United States, but some of those differences are very much based on the type of wheat grown in each place. What we've seen, though, is that if the access.... The price distortion I was speaking to specifically is that the way our grading system has been set up, the price distortion generally has been a negative to a U.S. farmer wanting to export into Canada. For Canadian farmers going to the U.S., the price is based very much on more of a “spec-based” system, so it's based less on the class-and-grade system we have in place today in Canada and more on the different sorts of tests they have.
I wouldn't necessarily say that there is a price distortion for Canadians, outside of the usual effects of cross-border trade, namely, the cost of transportation, the exchange rate and, obviously, the demand and some of the markets that exist. Generally speaking, I think there's more of a price distortion for the American farmer coming to Canada, in that they receive that feed grade for their product in Canada, whereas we have better access to their system in the U.S. The price distortion for the Canadian farmer typically has more to do with the differences in quality, in grade, and in the kinds of wheat.
Liberal
The Chair Liberal Mark Eyking
Thank you.
That wraps up our dialogue and meeting.
Thank you, gentlemen, for coming and for all of your insights on your industry. It's a very challenging industry, especially when you're growing and producing a product. Our trade committee can't help you on that part too much, but we're going to do our best to keep your markets and to get your products some more markets.
Levi, good luck, and have no breakdowns. You have a couple hours of sunlight out there. So, full throttle....
We're going to suspend for a minute or two, folks, and then get to some future business.
[Proceedings continue in camera]