Thank you, Madam Chair and members of the committee.
I would like to share the views of Canada's sugar industry on the implementation of the new NAFTA, the Canada-United States-Mexico trade agreement. The Canadian Sugar Institute strongly supports timely ratification of the new agreement but is also seeking assurances from government that vital Canadian export administration procedures are in place when CUSMA enters into force this year.
The CSI represents Canadian refined sugar producers on nutrition and international trade affairs. The industry has three cane sugar refineries, in Vancouver, Toronto and Montreal; a sugar beet processing plant in Taber, Alberta; as well as two further processing, value-added, sugar-containing product operations in Ontario, one in Belleville and one in Scarborough.
Canadian refined sugar and sugar-containing product exports remain constrained by U.S. quotas that were established in the 1980s. These quotas were not liberalized under NAFTA or the WTO. In fact, those agreements further restricted our access to the U.S. market rather than liberalizing it. Our industry suffered the pain of that through the closure of the Winnipeg sugar beet factory in Manitoba, as well as a cane sugar refinery in Saint John, New Brunswick. The CSI strongly supported the renegotiation of NAFTA as a new opportunity to perhaps restore some of that access and gain some new, more flexible rules.
Unfortunately, CUSMA did not achieve the industry's objectives of substantial market access gains, but it did preserve existing access. Of course, during this negotiation we often weren't sure whether we would lose ground rather than gain it, and it did create two new small quotas.
The existing access that has been maintained includes 10,300 tonnes of beet sugar from Alberta, processed from Alberta sugar beets, and just over 59,000 tonnes of sugar-containing products. These are products high in sugar, such as tea mixes and other drink mixes, hot chocolate, gelatin desserts, those kinds of products. Those products are produced in eastern Canada, with sugar refined in Montreal and Toronto. These quotas are very small in relation to the 11-million-tonne U.S. sugar market, but they are critically important to an industry that's constrained by foreign trade barriers.
The two new U.S. quotas that are in CUSMA include a 9,600-tonne sugar beet quota, which is exceedingly important to southern Alberta, approximately doubling the current access; and a new 9,600-tonne quota for sugar-containing products. That's small in relation to the existing 59,000 tonnes, but it does bring with it more flexible rules that will allow the volume to be fully utilized.
The problem with the existing quota is that their restrictive rules of origin and end-use limitations haven't kept pace with changes in the marketplace. That quota utilization has been reduced by about 25% since 2006. The Canadian sugar refining and sugar-containing product operations in eastern Canada have suffered this loss, in the order of $11.5 million and 10,000 tonnes.
Coming back to administration, the value of these quotas to Canada depends on the method that Canada chooses to manage the export administration. Export controls are the firmly established method for managing access to restricted high-value markets in NAFTA and, for example, in CETA. They are necessary to provide predictability to enter into supply contracts with U.S. customers, to maintain supply chains and to justify ongoing investment in those further processing sugar-containing product operations.
We have consistently advocated for export controls alongside our market access objectives in CUSMA trade negotiations, as we did in the prior TPP negotiations. We have now received assurances that Canada will implement export controls. The issue will be a question of timing. It's important that these procedures be in place before CUSMA is implemented; otherwise, the value will not transfer to our industry.
A public consultation has been planned. We have been informed that this will be an omnibus consultation that will extend beyond CUSMA quotas to existing U.S. quotas as well as the CETA origin quotas. Of course we support public consultation. Our concern is that this not delay the necessary implementation of export controls and allocation to companies for the new CUSMA quotas.
We're seeking further assurances that there isn't any unnecessary delay, that Canada notify the U.S. immediately upon ratification of CUSMA, and that Canada will use export controls, because there is a requirement in CUSMA that Canada do so 150 days prior to U.S. acceptance of those export permits at entry. There won't be border enforcement this year, but, at the very least, it should be in place by the beginning of the second year, in 2021.
There is no need to consult on the beet sugar quota, because the only sugar that qualifies for that is produced and processed in Alberta. For the sugar-containing products, which are the key issue for our industry, the quotas should be allocated to those companies that have made and sustained investments in Canada, that have historically and actively participated in those quotas, and that have suffered the volume and financial losses. Essentially, that's the members of the Canadian Sugar Institute who do the sugar refining and the associated sugar-containing product operations. Right now 92% to 95% of the U.S. quota is filled by our members.
Thank you very much.