International Trade Committee on Feb. 18th, 2020

[Chris Lewis, Conservative, Essex, ON]

Very well. Thank you.

I'll promise to go very quickly, Madam Chair.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds for the question and the answer, sir.

[Chris Lewis, Conservative, Essex, ON]

That's perfect. That's very quick. I'm now down to 27.

Because I don't know what the government has put in place for training and those types of things, I guess my comment without an answer is: if they haven't done a whole lot on that front, I hope they have some anger management sessions ready for our owner-operators because there will be a lot of very upset people.

Thank you so much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Sarai.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Madam Chair.

Mr. Bose, I'm glad you mentioned that poor Canadian families have to pay a high price for expensive milk. Canada is a trading nation. The richness, the high standard of living we have today, basically has come from trading. Sixty per cent of our GDP is from trading. It is from exporters like Mr. Hilgartner and others that we continue to have this richness in Canada.

You already mentioned the New Zealand dairy farmers. You said milk is expensive there. Nonetheless, we have to appreciate how the New Zealand dairy industry changed and has grown to be a significant player in the world. If we don't allow imports into some sectors inside Canada, how can you ask other countries to open their markets for our exports?

Mr. Hilgartner, you mentioned some trade barriers with respect to India. I think it is important that we know both the tariff and non-tariff barriers faced by exporters like you. Before going to other markets like China or India, do you have any concerns or are there any non-tariff barriers in the North American market?

[D'Arcy Hilgartner]

The NAFTA we established in 1994 helped with so many of them. We had duty-free access to the U.S., and then into Mexico. An area that I, as a producer, see some concern with is the harmonization of regulations. The grain industry has become extremely efficient, but that means subtle changes in market input costs can be a huge disadvantage for us. In terms of crop protection products, stuff is available on the U.S. side that is maybe not available here in Canada. The challenge is harmonization. We look at those crop protection items. With the moving of value added into the U.S., sometimes you see the differences. We're seeing a lot of that now with regulations on packaging. I know with the value-added products, whether they be ingredients or nutrition, we run into difficulties with labelling. Those are some areas of harmonization that would be helpful for the agri-food market.

[Chandra Arya, Liberal, Nepean, ON]

You mentioned the non-tariff barriers in India. Some time back, I was told that the biggest export from Canada to the fastest-growing market in India is lentils. I don't know if that's still the case.

What is the current situation with respect to those?

[D'Arcy Hilgartner]

There were two items there. There was a tariff imposed on peas and lentils as well as chickpeas entering the Indian market, as well as a fumigation requirement. Canadian farmers along with provincial organizations, Saskatchewan Pulse Growers, and Pulse Canada, along with CFIA, have been working really hard to promote the value and high quality and the steps we take here in Canada to address some of the Indian government's concerns about the introduction of foreign species or parasites, nematodes, into their region.

I know that discussion continues, but again, it hasn't really been resolved. So what's the next step? The lack of a trade agreement with India makes that a longer process because we don't have that dispute mechanism or any way of trying to start that conversation.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Arya. Your time is up.

Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madame Chair.

I want to thank the witnesses for being here.

Mr. Vermeer, Mr. Hilgartner and Mr. Bose, when you say you're just farmers, well, I'll tell you, for all of us around the table here, without you we'd not be eating, and Canadians rely on the work you do. We want to make sure with this agreement.... The concern that we've been bringing forward is that this is going to affect families, businesses and sectors, some of them negatively. Earlier today the committee heard from the minister, and again, we've been asking for economic impact studies since December 12th—over two months—and we're still not getting them.

The minister's mandate letter says that she wants to maximize the implementation of...I could probably read it to you here. It's CETA and CPTPP, but it doesn't mention in there maximizing the benefits of the new NAFTA. The agreement was actually being discussed just as the mandate letters were being sent out.

So I believe it was you, Mr. Vermeer, who talked about CETA and how the Europeans are actually trying to change things there, and we're concerned. We just want to make sure that Canadians such as you have an opportunity to come to committee because we want to make sure that, if there are going to be negative consequences, we've got the proper support programs in there, even though you would ideally want to continue doing exactly what you're doing.

So my question to you is this. What does the government need to do to make this right? I've heard of challenges with the implementation dates that we need to have a look at. You mentioned the compensation package.

Could you comment on how they're doing with the CETA and CPTPP agreements as well, if you have that knowledge?

Mr. Vermeer, you brought that up and so maybe you could start off.

[Jake Vermeer]

I think first of all, one of the ways that government could help us with the CUSMA implications—and this is something that Mr. Shoan actually brought up—is that right now we have a very porous border and there is a lot of diafiltered milk coming across our border, and this is not being inspected. Anything that looks white is just coming across as powder, getting across our tariff limits. So that's something that our government could really do, if it could help out with the CBSA and make sure it's more strict on products that are already coming in to Canada. That would be significant and would really go a long way in helping Canadian dairy farmers and a lot of other industries in regulating our borders and making sure they're tight and up to date with what is allowed.

As for your compensation question, I think I've answered that a few times. Of course, Canadian dairy farmers, as you mentioned, would just prefer to fill market share themselves. I think we worry about the future. As was mentioned before, Brexit is around the corner. The U.K. will be looking to negotiate its own trade deal and, of course, it was part of CETA when we agreed to that, where we had already given dairy market concessions. So we worry about what the U.S. did during the CPTPP agreement, which was pulling out of it, and then, of course, we gave them new concessions.

So we really want to be clear with the government that this will not happen with the U.K., because we're sitting on an industry now that's going to be faced with death by a million paper cuts. You can't keep giving out small increments of percentages of dairy market shares. There won't be an industry left.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Bose, I can see you're nodding your head. Do you have anything to add to that?

[Michael Bose]

I'm just agreeing with what Mr. Vermeer said.

My family has been very proud of the fact that for over 130 years, roughly, we've not taken government money. We've not had to use government money. Regarding the comment that we need to allow access to our markets because we're a trading nation, I don't see anything in this agreement that's going to allow us to trade south in the supply-managed sectors without subsidies. Again, I don't understand why we would throw government money into industries that don't need it if they were left out of this agreement, as they were in NAFTA.

[Colin Carrie, Conservative, Oshawa, ON]

I think you mentioned, too, these new American oversights and how they affect our sovereignty.

Are you aware of any trade agreement that was ever negotiated that had something like this in it, or is this like a first...

[Jake Vermeer]

As I mentioned in my speech, it's the first of its kind. I think I asked Mr. Kurek if the Americans would agree to a clause like this. Mr. Kurek said no. I would agree. I don't understand why we agreed to it. That would be my rhetorical question for that.

[Colin Carrie, Conservative, Oshawa, ON]

As I said, my colleagues and I have been asking for these economic impact studies over and over again because we realize that small businesses and families will have to make investments. Business decisions are going to have to be made. Without knowledge of the implementation or the compensation, it's going to be extremely difficult.

I want you to know that you're exactly the witnesses we need to hear from, and I think you'll be welcome, and we're hoping that more of you come forward to help us. Ultimately, as I said, this is about families, about businesses, about sectors that are going to be negatively affected and we really want to do the best job we can on this.

How am I doing for time?

[The Chair, Liberal, Judy Sgro]

Thank you. You've got 12 seconds.

Mr. Dhaliwal.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Madam Chair.

Thank you to all the witnesses for coming to the committee and sharing your thoughts with us. I come from beautiful Surrey and so does Mike.

Mike, you have worn many different hats with your family being the pioneer family in Surrey, as you mentioned. Also in agriculture, you have seen your crop base changing from time to time. Now blueberries outstrip every other aspect of farming. You have also worn the hat in charity, and volunteered in many different organizations. Last but not least, your great-grandfather was the mayor Uncle Bose, and you have put your name on the ballot previously. I am sure you will do that in future as well because you've been involved on the ground.

You mentioned the turkey industry and how it's going to impact you and your farm. You have asked how the government can offer support.

If we look at the overall scheme of things, Surrey being the fastest-growing municipality in Canada, and you yourself always being in the forefront of public service, do you see the benefits that CUSMA will bring when it comes to small businesses, including women who are running the majority of the small businesses in Surrey, and the trucking industry, which is another key, and lumber, going back and forth to the U.S.

Can you give me your thoughts from a Surrey perspective?

[Michael Bose]

Without question, many aspects of this trade deal are important and are going to benefit the city of Surrey and Canada hugely. It's going to give the grain sector stability. My only issue is the instability it's going to cause within my industry and for my family. I can give you the date. March 2023 is when we have to make a decision on whether our family is going to continue to farm or not. We know that. We can only move forward if we have market stability and industry stability, and this agreement takes that away from us.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

The NAFTA was fine. Was it the other way around, or did it offer that time than with CUSMA?

[Michael Bose]

NAFTA did not include a supply-managed segment of the agricultural industry. We always knew that this was going to come up. Even before talks started, we all knew that it was going to get renegotiated. We all knew that we were going to get thrown under the bus, so to speak.

It can't be a surprise. When the Pacific partnership was negotiated, we were hoping that it would include the U.S. For the turkey industry, the U.S. is our biggest threat. There aren't a lot of countries in the world that produce turkey. Chile is the next biggest threat.

Are their standards going to match ours? These are the questions. I've been here for the whole five hours, and harmonization of others' standards with ours has been brought up many times, not lowering our standards, but raising everybody else's standards, because those standards come at a huge cost.

On our farm 12 years ago, we built a new barn, and it lowered our carbon footprint. We burn half as much gas to produce the same number of birds. We use way less than half the electricity. We've put in LED lights. We've made significant investment. Being included the way we are in this agreement has impacted our security.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you for all the great work that you and your family have done in Surrey. It's always inspiring.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Savard-Tremblay for two minutes.

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

I have another question for the farmers here.

As my colleague did earlier, I want to emphasize the importance of your role. Farmers probably have the only occupation that we all need three times a day. There are all sorts of jobs. We need accountants once a year, and lawyers as little as possible. However, we need farmers three times a day. The first thing that we all do every morning is open our refrigerator. Thank you for your major contribution. You have every reason to be proud.

That's why we must pay attention to your sector. It can't be treated the same way as an auto plant or a market that satisfies only the laws of supply and demand. The sector needs oversight and regulation.

We won't repeat what you said and what has often been said, which is that the new agreement will affect you. You've spoken to us many times about compensation, but I want to focus more on the transition period.

Mr. Vermeer, you said that, as soon as the vote takes place, the compensation must come through the mail as soon as possible. In your opinion, what would be the best time to vote on the ratification so that you have time to prepare?

[Jake Vermeer]

I think that the first ramifications we're going to feel are those of the class 7, because that ends six months after CUSMA is ratified by all three countries. If that would be in line with the compensation package, because we will feel the effects of that class 7 inside our industry....

Further to that, with the CETA agreement, we were guaranteed one full year of payment, but the next seven years' payment were not guaranteed. Any sort of compensation package that was to be rolled out for supply management producers would need to have guarantees in it. We can't make any sort of investment, innovation or efficiencies based on the promises of a government.