International Trade Committee on Feb. 1st, 2018

[Adriana Vega]

I can go first.

In a way, we're trail-blazing. It hasn't been done before. No one is yet an associate member of the Pacific Alliance, so even there you have a strategic advantage in that you can actually partake in how these things are done. The full members, they know they have engaged, as you mentioned, in very progressive conditions for their agreement. I would point you to programs that we have already in Canada, like the NEXUS, for example, or the Trusted Traveler between the U.S. and Mexico.

I think that sometimes it can be misunderstood that it just means they're going to open the floodgates. There are mechanisms. We have a fairly thorough immigration policy here in Canada. I think it's a matter of looking at how these conversations evolve and what the conditions are. It's definitely, I would say, in the modern economy where you're looking at industries like fintech or digital trade. You cannot look at trade anymore without thinking, “How am I going to move data or how am going to move people?” I think it's worth having that conversation.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Mr. Roy, Mr. Lavoie, there's that question and also in particular to labour, because we've heard some issues and concerns with labour shortages when it comes to your sector, your industry.

[The Chair, Liberal, Mark Eyking]

Give very short answers please.

[René Roy]

Yes.

We have a progressive industry, especially in pork production, where we make sure that not only on the economic side but also on the social side and the environmental side we are on the edge. We would welcome this kind of an agreement where it is progressive. We have to remember that we have 70% exports in our market. Opening some opportunities in the world is really important because it allows us to have a more stable market.

[Martin Lavoie]

Basically, yes in the principle, the idea, especially when you're touching the part of labour, which is a key component for growth of Canadian pork, export is a labour issue in processing plants and in farms. This is very important. The only thing I would say about it is that we have to make sure, just as I mentioned earlier, we have a window of opportunity to gain versus if we're not doing anything.

We have to make sure that if you're making it progressive you're not adding too much time to the process.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to go to the NDP now. Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you all for your presentations. In particular, Mr. Lavoie, I really appreciated the specifics of what you brought us today. Adriana, certainly you can weigh in, but I'm not sure if you've done this type of analysis.

Of course, we're always looking for the benefits for Canadians. That comes down to jobs in our communities, so I wonder if you've done any analysis on how many jobs you feel that the access to this alliance would create. For the pork industry, I hear that it really is about Colombia versus Mexico, Chile, and Peru, potentially. Have you done any analysis on how many jobs you feel you could create in Canada with this agreement going forward and the quotas being raised and tariffs lowered, presumably?

[Martin Lavoie]

On our side, the answer is no. We know what the larger TRQs are bringing in the case of TPP, like the value for our industry and the growth and the investment. Some plants are specifically geared towards the Japanese market. They do 100% for Japan, so it's easy to see the link there and the jobs that are supported.

In this case, to be honest, we haven't done that analysis because they are markets that are covered by other FTAs.

[Tracey Ramsey, NDP, Essex, ON]

For instance, if a quota is raised by 1,000 tonnes, how many jobs in Canada are tied to 1,000 tonnes' access to another market? Do you have any type of analysis about that?

[Martin Lavoie]

It brings extra value to the whole value chain. There are no more pigs being raised, so it really increases the value that supports an investment. I don't have specific numbers for that.

[Gary Stordy, Director, Public and Corporate Affairs, Canadian Pork Council]

I was going to suggest that it's not always about increasing jobs. It's also about maintaining the jobs that already exist and allowing producers a sense of comfort to reinvest in their facilities and take on new technologies to maintain competitiveness, but also to adapt to society's needs in that aspect of it.

[Tracey Ramsey, NDP, Essex, ON]

Yes. However, unfortunately, there is always a sector that ends up losing jobs in some of the trade agreements we have, so to me it's always about how we increase the number of Canadians working. I know you have a challenge with that in your field, certainly.

I'll ask Ms. Vega the same question.

[Adriana Vega]

Unfortunately, I don't have the stats with me. We haven't gone to that level of depth in our analysis, but it's really about providing the conditions for those jobs to preserve or grow them. I'd be happy to look into that and consult our members and get back to the committee.

[Tracey Ramsey, NDP, Essex, ON]

I want to go back to non-tariff barriers because I really do think that this is more significant than the tariffs and even the quotas to you, potentially. Maybe I'm making an assumption, but since we've had FTAs with these countries, I'm sure that we've been resolving these issues ongoing. However, seeing that Colombia and Peru are really the markets where you see a potential, what are the non-tariff barriers that exist there and how do you see this agreement addressing those?

[Martin Lavoie]

In the case of Peru, you are shipping so little that you don't run into major problems. There are limited volumes. We rarely hear back. Part of our job is also to work with the Canadian Food Inspection Agency with our members, if there is an issue at the border. This is what we're doing to support market access. There is not a whole lot. This is more of a systemic access issue with Colombia with the trichina recognition. They recognize it from the U.S., but not for us. We think that there is no reason for that, since the herd status is not different in Canada. We're working with Agriculture Canada and with the CFIA to resolve those issues. It's been a long time. We're increasing it on the priorities, but the context of an FTA only gives you so much leverage to get things done. For the deals at the highest level, we've sometimes seen it, like the chilled pork access from the U.S. to China. For all of these, there is a leverage when you come with an FTA to resolve those issues very quickly.

[Tracey Ramsey, NDP, Essex, ON]

When we studied the TPP, there was a lot of conversation about the committees that were going to be created there and really where they could potentially go in the future to be more enforceable to be able to bring particular cases. Is there something like that in existence in the Pacific Alliance agreement?

[The Chair, Liberal, Mark Eyking]

Sorry, Ms. Ramsey, we're going to have to cut you off. Maybe you'll have a chance on another round.

We're going to move over to Mr. Peterson for five minutes. Go ahead, sir.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, everyone, for being with us this morning.

I have a few questions here that I want to get out. I want to first, Ms. Vega, talk to you about whether any of your members see opportunities for less traditional markets for Canadians, with the Pacific Alliance. Maybe some services agreements, some communications, some technology? Scotiabank, of course, is an example of a Canadian company that is doing well in some of these markets already. Are any of your members looking at this as an opportunity to expand on those?

[Adriana Vega]

Well, I believe so. I understand that Scotiabank actually made a submission to the government outlining the specifics of the benefits for them that would be in this agreement. Definitely in the services space, it's all about rules of trade, and this is uncharted territory. The trade and services agreement, for instance, at the WTO, stalled CPTPP. Of course, it's still in the running. Like I mentioned earlier, this is a race, almost, to achieving the highest gold standard.

I can tell you, in the Pacific Alliance, we are hearing from other countries, competitors that are observing this very closely because they care. They care about what standard you achieve when it comes to regulating moving data, moving people, storing data, what kinds of regulations will attach to that agreement. In a way, you set the standard and you enshrine that in an agreement. Being part of this group, I can tell you, has implications way beyond just that region.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Right, and that's a good segue to the next part of my question, to which I hope everybody has a chance to add their input.

We have free trade agreements with the countries already, but if we move forward with this Pacific Alliance, we'll be part of this important trading bloc that some say will be a good launching pad to a bigger market, the Asian market. Have you analyzed that? Do you have any thoughts on the potentially favourable role that being part of the bloc might play for Canada?

[Adriana Vega]

Certain Asian countries are observing the Pacific Alliance, including China, Japan. There's huge interest in bringing Australia and New Zealand into the mix. I think it tells you something that all this vibrant activity is happening on the Pacific side. I see it as an opportunity, but perhaps I'll give my colleagues a chance.

[Gary Stordy]

Absolutely. Canada has great negotiators out there. Also, Canada brings a lot to the table when we enter into negotiations. We were successful in completing the TPP and CPTPP now.

At the end of the day, it's one of those things where there are always spinoffs. As Adriana mentioned earlier, the modernization of regulations on how trade functions is extremely important. Tariffs and non-tariff barriers are part of it, but encompassing in writing the rule of law regarding trade, which is really what trade agreements are, helps set the standards globally. Canada is a trading nation. We look at the opportunities that trade agreements do provide individually, but we also look at the bigger picture, as you're outlining. Absolutely, with the growth that we see within the Asian regions and whatnot—developing economies, the population—they will be needing, from our point of view, agricultural products that we're more than pleased to provide.

[Martin Lavoie]

I think those free trade agreements are so important for the stability they bring to trade. This is the most important thing, to have stable trade, in any given market. This leads to better presence, having an office in the country, having some investments. We have companies investing in plants in Mexico. This is the kind of environment that that kind of FTA is creating.

Russia was one of our largest markets a few years ago, and it disappeared overnight. I was trading at that time, and I had to deal with all the messy situations that this created. Obviously, there's not a lot of Canadian investment in our industry there because the environment is still unstable. If we can bring this to markets, if we can use it as a platform, then we will have better access to key markets that are not covered under the TPP, like the Philippines, China, and all Asian markets that are growing.

We're doing our strategic plan right now. Really, where we have to look at the growth for our product is Asia. This is really where the growth is happening. If this can be used as a platform for better access to other Asian countries, I think this is a great gain.

Stability is key. I know that the science in food trade, sometimes, is really political. This is a very easy way around it. We're dealing with that on a regular basis.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're going to move to the Liberals for the second round.

Madam Lapointe, you have the floor.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

Hello and welcome to this meeting. Everything I have heard thus far is very interesting. You all talked about the timeline and said that timing is very important. As I understand it, certain competitors would very much like to take our place at the table.

Ms. Vega, Mr. Lavoie, you talked about the timeline. In your opinion, what could or should we do with respect to the timeline?