International Trade Committee on Feb. 18th, 2020

[Michael Bose]

With this agreement, about the only way the government can help us now is by providing compensation for the loss of the value and helping the industry develop new products to regain some of our market share. As was pointed out by Mr. Vermeer, if we're standing still, we're going backwards. My father always said that. Unfortunately, he's not here today. Otherwise, he'd be the one sitting here talking to you.

We need to find a way to help the industry grow. We haven't been a growth industry, and with the TPP and CUSMA.... We know that England's coming, and South America. Chile hasn't signed on yet to the trans-Pacific partnership, and when they do, that's going to be a huge blow because they're a big producer of turkey. It's going to reduce our market share by a lot. We don't know exactly what, but when they sign on, it's going to hurt. There has to be a mechanism put in place to help the industry find a way to grow, and it will be financial.

I find it odd that a sovereign country would sign an agreement that would take five sectors of an industry like agriculture that are self-sufficient, and put itself in a position where it is now going to have to put tax dollars in to help those industries survive. The supply-managed sectors are vital to Canadian agriculture, just as the grain producers have always been.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you.

Mr. Shoan, you said that the trucking industry expects to have gains in this with more trade. What percentage in gains do you expect, or is it just the certainty and then the growth? Also, does Mexico gain any access to trucking routes or ability compared with what we had before?

[Lak Shoan]

In terms of the gains themselves, I think the gains come with certainty. The trucking industry is very much tied to how the economy is going. If the economy is under a state of uncertainty, the trucking industry tends to suffer from that as well.

In terms of some of the positive things that have come out of this agreement for our industry, anyone who's dealt with the cross-border customs process would know that doing anything via paper is extremely cumbersome and onerous, so there is a commitment to move more border processes to an electronic process.

There is also a commitment to look at shared facilities and customs inspections when it comes to goods that are regulated by either the CFIA or the USDA. At the current time, it could take multiple hours to conduct inspections, whether related to meat or other products at the border, so having the ability to do these inspections at one location, with both U.S. and Canadian officials, will really cut down the amount of time the truck drivers and trucking companies have to spend at the border.

Those are definitely some of the highlights that we've seen from the agreement, but the main highlight, I think, is having that certainty in place, because the trucking industry really runs on whether the economy itself is hot or cold in the moment.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Mr. Kucheran, you guys have done a great job of creating trades for the future apprentices and whatnot. Does this agreement protect you from unskilled and low-paid workers who would come in from other regions around the world? Would this protect higher-paid, properly legislated wage jurisdictions in a better way after this agreement has been modified?

[Robert Kucheran]

We're getting there. We're not quite all the way there, but we're getting there. The more we raise the standards in other places, the better we are to be able to compete in Canada. We have a great apprenticeship system in Canada, a great accreditation system, and that system more or less matches the one in the U.S., so there's quite a nice transfer of skills and knowledge, at least from us and the United States. Mexico is a little bit behind the eight ball and has some catching up to do, but with these revisions and modifications, it puts us on a much better playing field.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

On to Mr. Savard-Tremblay.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you all for coming. It's good to hear your presentations, which are always very useful for our study of the new agreement.

In my constituency, there are many dairy farmers. My constituency is a real dairy processing centre. My questions are therefore for Mr. Vermeer.

The dairy farmers I spoke to told me that they were very disappointed, as you are today, with the turn of events. They spoke of the elimination of class 7, the export controls and the opening of 3% of the market. Despite their disappointment, they understand that we can't turn back the clock. However, they're still asking for compensation and for a reasonable adaptation period.

What do you think would be a reasonable adaptation period?

[Jake Vermeer]

As CUSMA comes into effect, I think that compensation needs to happen very quickly.

To give an example, in the last few years our industry has seen significant growth when we created special milk classes. Our markets were growing. A lot of dairy farmers invested in their farms, anticipating growth and new markets. I want to say that dairy farmers have been very good at adapting to the increases in markets and have been able to fulfill the demands of the market.

On a personal note, we built a brand new barn to be able to handle market increases. We spent close to $3 million. These are the types of investments that dairy farms are making to handle market growth.

If we don't see market value compensation soon, for a lot of dairy farms, depending on where they are in their business cycles, especially our youth who are coming into dairy, as I am, it will be a very difficult time.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In terms of the type of compensation, would you prefer direct financial compensation?

[Jake Vermeer]

Yes, there needs to be direct compensation for market value for the quotas that were lost.

We don't believe in programs that are built for innovation as a form of compensation. That is not compensation; that is a program for innovation and efficiencies. When we lose market shares, we need to receive compensation. We can talk about programs for efficiencies and innovations at a later point.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In recent years, these types of programs have been implemented to a certain extent, often with very mixed results.

The first compensation payments arising from the previous trade agreement came a short time ago. Do they really make up for the losses?

[Jake Vermeer]

No. Lots of times the compensation is less than market value, and that sets us back. As I have said before and mentioned in my speech, Canadian farmers want to produce the market milk production that is needed. Truly, we'd rather just see no concessions and allow Canadian dairy farmers to produce for the domestic milk production need. As was said before, we have one of the highest qualities of milk in the world. It's unparalleled. That would be my answer.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In the dairy industry, is there any discussion about a strategy to compensate for the elimination of class 7?

[Jake Vermeer]

I am just a dairy farmer. I am here as an individual on behalf of my farm. I am not privy to any information that is above my head, so I would direct your question to Dairy Farmers of Canada.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Unfortunately, those witnesses aren't here because of the storm. That's too bad, because we would have liked to hear from them.

Thank you for representing the dairy sector today.

[The Chair, Liberal, Judy Sgro]

We expect them probably next week. Hopefully the weather will be good at that point.

Thank you very much.

I'll move on to Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I'll start by saying thank you to all the witnesses for making time to be with us here today, particularly those who had to travel long distances.

Mr. Kucheran, we talk about the labour mobility provisions. It is a frustration of mine. If you look at the CPTPP, for instance, you see that chapter 12 has a lot of labour mobility provisions that might not look terrible on paper but are quite open to abuse. I know there are some follow-up discussions happening to try to get adequate record-keeping of who's coming into the country under chapter 12 and for what purposes. Chapter 16 of CUSMA allows for temporary entry for a business person. I wonder if there are similar concerns about chapter 16 in CUSMA as we saw with chapter 12 in the TPP. Beyond that, it's a frustration for me, and it might well be for you. We see labour mobility provisions that have something to do with bringing people into Canada to provide wage competition. But when you have comparable certifications and you could actually facilitate the movement of labour across a border without its being about wage competition or about bringing in folks who don't have the same level of certification and therefore charge less for their labour, or when it's easier to get people in large numbers if the threshold for certification is lower.... When we actually have what could be a fair trade in labour, we can't seem to get provisions that facilitate that, which makes it hard.

I'm an IBEW 2085 member. I'm a construction electrician. I know that work is sometimes short out here and that there's work in the States. Guys can't go to a sister hall in the States and work out of there, and vice versa when there has been an abundance of work in Canada sometimes. Employers have been complaining about skilled labour shortages and we have brothers and sisters in the United States who are out of work and would love to come to Canada and work on a job after Canadians have had their first crack at it. Do you have any sense as to why it is we can't get labour mobility provisions for non-competitive labour and why we only seem to get it when it's about under-cutting Canadian workers' wages?

[Robert Kucheran]

There are two things, and one you picked up on. It has always been a challenge if you have a market that tends to be so unbalanced between us and Mexico—and even in the States it can be unbalanced in certain areas—because just invites more of an underground economy, which is very alive and well, in certain sectors more than others. Without trade provisions and protections, that's exactly what you get, a thriving underground economy, and nobody wins. Nobody gets the taxes, nobody gets the revenue and nobody gets the product.

We had lobbied for better access to the U.S. because our training is based on the same model. Our members belong to 15 international unions, and the same training standards and accreditation go back and forth across the borders. There's not an issue there. The problem is some of the lack of accreditation and understanding on the Mexican side. Again, that just invites more of an underground economy. Then nobody wins, and nobody can really judge what that level is because then you get into a situation where companies are undermining each other based on the cost of labour and really trying to make a profit off the backs of working families.

I hope that has answered some of your questions.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Some of them, yes, enough for now, because we do have limited time.

I want to ask a question of some our farming folks. First, I want to say thanks again for coming, and by no means does anyone here think that you're just farmers. That's good information for us to have. I don't have a farming background, but I do come from the Prairies; and the NDP has a long history of supporting supply management, which I think we've continued to do in this debate.

There's something I've been trying to understand, and maybe either of our supply- managed farmers would like to contribute. We heard some discussion along these lines already. I find it really frustrating, as someone who is often in the position of arguing against the so-called “parties of business” for supply management. The parties of business who say they want low taxes and don't want direct subsidies are the very same parties that have been undermining an industry that has been able to supply, at fair prices, the products Canadians need, and to sustain itself. In international markets, it's doing that against competitors who are very heavily subsidized by taxpayers in the other jurisdictions. How does that fit with parties that say they want low taxes and don't want government subsidies yet undermine the supply-managed sector in Canada that accomplishes that? I can't square that circle. I'm wondering, given your experience in the industry, if you could help me do that.

[Michael Bose]

I don't think you can square that circle. During these negotiations, when dairy was brought up—because dairy's the biggest part of the supply-managed sector—we always looked at the New Zealand model. In 1984 New Zealand went broke. The International Monetary Fund forced New Zealand to abandon supply management. In Australia, it was the same thing—they abandoned supply management. In both those countries, when they abandoned supply management, prices for local consumers went up. They have been forced to subsidize. New Zealand is a big contributor to the world's oversupply of milk, and yet they continually build new farms, eliminating sheep production in favour of producing more milk that's not needed on the world market.

The popular concept out there is that supply management causes high-priced food. That's actually not true. The difference between Canada and the U.S. is that in Canada you're paying full value for your food and in the U.S. you're not. The government is paying well over 50% of the value of the food. The only argument, for me, against supply management that holds any water is the fact that the disadvantaged in our communities, those who are struggling to get by and can't put food on the table, are still paying full price, whereas in the U.S. they aren't paying full price but neither are those who have no problem paying full price. Our cost of production is, in most cases, lower here. The difference is that you're paying the actual value, and it's really hard to square the circle to undercut supply management. There are only five supply-managed sectors because they're the only five sectors that can, 12 months of the year, supply 100% of the needs of Canada.

[The Chair, Liberal, Judy Sgro]

Mr. Bose, I'm sorry. We're all listening to every word you say, but it goes way over your time. It's very interesting. I'm sorry I had to cut you off.

Mr. Lewis.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much.

How much time do I have, Madam Chair?

[The Chair, Liberal, Judy Sgro]

You have five minutes, and it will be just five.

[Chris Lewis, Conservative, Essex, ON]

I'm going to do this committee a favour and probably not even use it all. I'll try to get us back on track, but I make no promises.

My question is for Mr. Shoan. I'm not going to keep repeating myself, but this, again, falls right in line with what I've been preaching all day. My riding is Essex, which is very close to the new, hopefully soon to be built, Gordie Howe International Bridge. As a matter of fact, just last week I got an update on that bridge, which for all intents and purposes is trending in the right direction, although it's never quite quick enough. Also in my riding, the transport industry is huge, as you are well aware, be it for shipping grain or for the auto industry. Another huge one for us is the produce industry. We are one of the largest ridings “under plastic” so to speak—the greenhouse industry. It's huge for our area, so I've kept myself relatively up to speed on that.

One interesting thing that came out of my update meeting about the Gordie Howe Bridge was specific to what you mentioned about the electronic process. I understand the paperwork process dearly, because for many years with our business, that's what I did. Friday afternoons were just lovely. What was worse was Monday mornings when I would get a phone call at three, four-thirty or five o'clock in the morning saying, “Chris, your temporary import bond doesn't go through.” I'd have people waiting to go to work who are sitting at the border. The reason I continue to bring this up today is that I know how many years I did it for, how many times things changed and how many of my owner-operators were less than pleased with the situation many times.

My question to you is this. Notwithstanding the fact that we—the government, so to speak—are very much going to the electronic process and getting away from the paper, at the end of the day it's of my belief system that unless our CBSA border officers are taught properly and are knowledgeable of the new tariffs, unless it's the people like me who sit at the desk and write all these new tariffs out, eventually it's going to fall in the lap of the person who's spending the most time away from home, the owner-operator. They're stuck at the border. What kind of provisions and/or concerns from your association have been brought up, and if not, do you think it's a good idea that we bring that forward?

[Lak Shoan]

When you're looking at cross-border trucking, border wait times have been a historical issue for many of our members going back a number of years. A lot of this goes back to the lack of staffing at the border and the cuts that have been happening on that front. The benefit of going fully electronic, whether it's using technology such as facial recognition or licence plate readers, is that it really speeds up the amount of time a truck has to spend at the border. For instance, an ongoing pilot project at the Ambassador Bridge, which does employ the use of RFID and licence plate readers, cuts the time it takes for a truck to cross the border by more than two thirds. Looking at technology and employing technology in the absence of staffing at the border and the absence of resources for that is something we've definitely been behind in the industry.

Again, technology is going to be ever-increasing in the border process. We have some members who currently conduct a few paper processes for cross-border shipments, and some of the paper has more miles on it than the actual load that's going across the border. Anything that will speed up the amount of time a truck has to spend at the border is definitely something we'd be in favour of. Looking at electronic options is definitely a no-brainer for our industry moving forward.