International Trade Committee on Feb. 1st, 2018

[Adriana Vega]

It depends on how these negotiations unfold.

As I said, being part of the trailblazers is a good thing, because you get to have a voice on how the rules are made. Also, we don't exactly know what the process is going to look like. I would say, as my colleagues have already mentioned, timing will be important. It's not just in terms of beating the competitors to it but also in the sense that, as you mentioned, the conditions are right and accessibility is right at this time. It's very difficult to actually put a hard deadline on these types of negotiations. You're seeing it with NAFTA, for example. We set a deadline for December and now there's a new one for March. These things are very complex. It depends on how deep you want to go in the negotiations, the political willingness, and what other dynamics are in the mix. I think it's very difficult to predict. Ideally, it's something that can be done fairly quickly considering much of the legwork has been done with these countries individually. I can foresee this as a fairly short negotiation, hopefully.

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

Mr. Roy, you said that there are 31,000 jobs related to pork production in Canada and 65,000 jobs related to pork processing. You did not mention direct and indirect jobs, however. The indirect jobs are related to grain, transportation and so forth.

Do you have any figures in that regard?

[René Roy]

I do not have the figures for indirect jobs. I would, however, like to talk about valued added. It is important to us as producers that our products have value added. This type of trade would allow for that. In export markets such as Japan, we are able to sell pork at a much higher price. That can be beneficial for us and enable us to create jobs. I am talking about value added jobs, not only in production but also in processing.

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

I fully understand the issue of value added and the price you charge depending on the part of the pig.

What is the proportion of processed, ready-to-eat products as compared to refrigerated products? You seem to be saying that, as regards the Pacific Alliance, exporting refrigerated products would be more attractive.

[René Roy]

We do export processed products right now, such as bacon and ham, but Canada mostly exports frozen hams that are processed according to local tastes. Frozen products represent a portion of trade. On the other hand, the fresh, vacuum-sealed products that leave Canada have a shelf life of 55 days. When they reach Japan, they are sold immediately. Right now, all Costco stores in Japan sell Canadian pork. Our products account for a full 50% of the fresh product import market. If not sold fresh, the same product is worth one or two dollars less per kilo in Japan. When you add it all up, there is a huge difference.

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

You seemed to be suggesting earlier that there are opportunities in Colombia and Peru.

[René Roy]

Yes.

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

You said that opening markets would probably give you the opportunity to sell carcasses.

[Martin Lavoie]

That is correct. The United States can now sell fresh products that go right onto supermarket shelves in Colombia. For our part, for a certain period we will have to be satisfied with selling frozen products, with the additional costs entailed.

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

Is transportation an issue as regards export capacity and infrastructure?

[Martin Lavoie]

Yes, there are certain issues. The disputes that arise at ports have a very significant impact on us. Right now, the rate at which containers can be loaded at ports is what is a problem for us.

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

And that is not a play on words.

[Martin Lavoie]

No.

Managing CN and CP is very time-consuming. Truckers do not want to go to ports any more. Service improvements are definitely needed to correct this.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

We have time for one more, so Mr. Hoback, you have the final hit there. Go ahead, sir.

[Randy Hoback, Conservative, Prince Albert, SK]

I don't know if Earl had a few questions, but I'll go through mine first and see if there's time.

I was shocked: 50,000 containers a year. That's 140 containers a day. We could say you are bringing home the bacon by doing that, couldn't we?

I'm just thinking about the economic activity that you've generated by getting that market access. I was in Tokyo a few weeks ago and I sat down with three of our trade commissioners. They complimented pork and how well you've done in gaining market access and gaining brand loyalty for Canadian pork. I think the beef sector and a few other agrifood sectors could look at your example and learn from what you've done there with the trading houses and do the same thing in their sectors.

The other thing that I thought was really interesting was that they talked about these trading houses that are 100, 200, 300, or 400 years old and they're excited because they're going to get Canadian pork and Canadian beef at preferential access and they can put that as ingredients in the stuff that they manufacture in Japan and ship to other Asian countries also. We have such a great springboard.

[Martin Lavoie]

Yes.

[Randy Hoback, Conservative, Prince Albert, SK]

I look at the same scenario in the Pacific Alliance countries. We were involved. I remember being down in Cali with Prime Minister Harper when the Pacific Alliance was having a set of negotiations and how Canada, even though we weren't directly involved, was sitting on the fringe at that point in time and actually having a fair bit of input in what an agreement looked like that Canada could participate in. As you said, I think we've done a lot of that work before.

What it does is set the rules, just as TPP does for Asia. It sets the rules for Central and South America. What does that mean? You talk about just the three or four countries getting market access, but what about Guatemala, El Salvador, Uruguay, Paraguay, and places such as that? Have you even looked at the possibility of that flooding into those markets?

[Martin Lavoie]

Yes, we have. This is very easy. You look at what free-market conditions are doing. In terms of Guatemala, U.S. exports there are 20 times ours.

It's very easy to see. On a daily basis, you know the customers; you know the opportunities. We're really hands down on those opportunities. Central America is an area where I think the U.S., for many reasons, is doing better than we are. If one direction is to look closely at that region, we'd definitely be supportive of that.

Thank you very much for your comments on Japan. We're working really hard and it's based on the commitment of our members. We've changed the strategy.

I just want to explain something. Some of the programs that were supported by the government at the farm level we've branded as “Verified Canadian Pork”, which is now the brand we're promoting in Japan. We're making an application for growing forward 3. This is a big part. We have growth in access, but we're going to need growth in promotion. We're going to need funds to promote in Japan.

[Randy Hoback, Conservative, Prince Albert, SK]

Look at those guys.

[Martin Lavoie]

You were talking earlier about competitive advantage. This is one where the budget to promote meat in the U.S. is some 20 times ours. This is something that we're going to come to, and I'm doing a more ambitious plan to support Canada branding.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm going to cut you off there. I think you need to have that conversation with them for sure.

[Martin Lavoie]

Yes.

[Randy Hoback, Conservative, Prince Albert, SK]

I get only five minutes and the chair is really tight with time.

[Martin Lavoie]

Okay.

[Randy Hoback, Conservative, Prince Albert, SK]

Ms. Vega, you and the Chamber of Commerce, of course, must be excited, but when you look at the concerns, Colin talked about the tax changes in the U.S., how it's going to impact our competitiveness in Canada and how we have to be sensitive to that. I guess one of the ways to offset that is to get market access into regions that the U.S. doesn't have market access into. In fact, talking to the U.S. Chamber of Commerce and groups such as that, that's actually their biggest concern. They're going to have almost economic boom in the U.S. and no place to ship it.

I think that would be something that you'd look at in a positive light here in Canada. By having CETA, by having TPP, by having a strengthened agreement with the Pacific Alliance countries, do you not see that at least providing some stability for the Canadian business sector?