International Trade Committee on Feb. 24th, 2020

[Pierre Lampron]

I don't think that I've seen this. That's why I mentioned it in our brief. The sovereignty of the country is really under attack. Perhaps our expert, Mr. Cochlin, could tell us whether he has seen any cases of this nature.

[Christopher Cochlin, International Trade Legal Advisor, Cassidy Levy Kent LLP, Dairy Farmers of Canada]

As far as we know, there are no precedents. As we've already heard, this is a first. Other agreements are somewhat similar, but the idea of applying export tariffs to sales in third markets is really new.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

You can ask a very short question.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I don't have any more questions. You've answered my questions nicely.

Once again, I deplore the fact that we're being told one thing and that, unfortunately, when we talk to the people directly concerned, we don't get the same answers.

I would expect the minister to make clear and accurate statements when she appears before a committee and to tell us the truth.

Madam Chair, in my opinion, there's an unacceptable gap between “consulted extensively” and “did not consult.”

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Berthold.

Mr. Dhaliwal.

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

Thank you, Madam Chair.

Thank you to the presenters. I just want to make it very clear to you all that Americans were not concerned at all about supply management, but it is us as Canadians. Our government was able to preserve supply management within this agreement. Probably most of you agree but you did not necessarily get everything you wanted.

My first question is for you, Mr. Lefebvre, carrying on with the conversation. When you said that you were constantly in touch with the negotiation, were you in an engagement when the negotiations were going on?

[Jacques Lefebvre]

To address your first comment, we do react a little bit. We understand that U.S. Secretary of Agriculture Perdue indicated clearly that the Americans were not interested in supply management. They were interested in an innovation strategy that had been adopted in Canada.

With regard to your point as it relates to being informed, yes, as those in many sectors do, we travelled to Washington and to Mexico City, and officials would brief us on a regular basis after the meetings. These were briefings. They were not consultations per se, but we were kept abreast.

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

Ms. Robinson, you were here in 2018 and you have met many MPs as well. What is your experience when it comes to briefings and being in contact with...?

[Robert Friesen, Trade Policy Analyst, Canadian Federation of Agriculture]

I would have to agree with the comments that were already made. I attended the briefing meetings as well, and it's quite right that we were told what was taking place but were not consulted on whether or not something was a good idea.

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

Mr. Chris Cochlin, when it comes to export threshold on particularly the skim milk powder concentrate, there was a supplier who was concerned that if we ratified the CUSMA right away, it would affect them if it weren't done in August. Is there a way to mitigate that?

[Christopher Cochlin]

The agreement and the rights and obligations have been agreed to. That has been concluded, but of course anything is still possible at the administrative level after the agreement has been concluded. There is always a possibility for both sides to agree to further accommodations in terms of timing or enforcement.

In contrast to what we see, for example, in the intellectual property rights space, for certain provisions in the agreement itself, there are transition periods provided for two and a half years or four and a half years for certain changes. We don't have that in the dairy provisions on the export charges, but that doesn't necessarily mean those accommodations can't still be arrived at country to country at the political level between negotiators and the political decision-makers. I'm not saying that would be easy of course. None of the contexts of these negotiations, I imagine, were easy, but it is a possibility.

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

My question is for you, Ms. Robinson.

You mentioned that 18% supply management is affected by WTO, CETA, CPTPP and CUSMA. What, out of that 18%, is related to CUSMA?

[Mary Robinson]

I think our friends at Dairy Farmers would be better to answer that question. Sorry.

[Pierre Lampron]

That's fine.

For CUSMA, it's only 3.9% of dairy products.

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

You say it's 3.9%. On the overall scheme of things, Mr. Lefebvre mentioned earlier that the U.S. was not concerned about supply management at all. By protecting or preserving supply management, do you still think that government has done its role to help the supply management sector?

[Pierre Lampron]

Yes, supply management has been protected, but as I said, it has been undermined. In terms of the 3.9%, that's fine in itself, but the problem is that there was already the CPTPP and CETA, and there was already the WTO. It's that buildup that's the problem. We are really weakened. That's why we don't want any more concessions. It has hurt producers, and as you've heard in testimony, while supply management has been preserved, it has also been weakened. That's the state of affairs.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Dhaliwal.

We will move to Mr. Savard-Tremblay.

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

Thank you, Madam Chair.

Good morning, everyone. Thank you for being here and sharing your experiences and those of your respective groups.

My colleague asked a question earlier about what the Deputy Prime Minister said. When she came to the committee, I asked her a question about the concessions being asked of the dairy sector and she said that producers understood the situation.

However, your presentation shows that there is a lot of disappointment and irritation. As you said, every time, they promise that there will be no breach; then, once an agreement is reached, they tell us that it's only a small breach; and when the breaches of all the agreements add up, you end up with a pretty big crater. Not only do you need compensation, but you also need to make sure there's never another breach. In fact, we, in the Bloc Québécois, introduced a bill earlier to ensure that there will never be another breach of the system. Let us hope that our colleagues will hear this appeal.

Do you think supply management was well defended in the negotiations?

[Jacques Lefebvre]

Thank you for your question, Mr. Savard-Tremblay.

A lot of people say a lot of good things about supply management, but the reality is that when you concede almost one-fifth of your milk production to foreign producers and at the same time—exports being one of the tools that compensate and mitigate that loss—you are told that you will not be able to export beyond draconian thresholds, you find yourself in a vise. So we're stuck, both by the concessions on our production, and by our ability to export that could have mitigated the impact.

Actually, as our president has said, supply management is as weakened as it has ever been in its history.

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

Thank you for that very clear answer.

Beyond supply management, there is also, as you rightly said, the issue of export controls. As far as this aspect is concerned, we know that, for you, the Dairy Farmers of Canada, the effective date changes everything. In fact, after the vote and ratification, it will come into effect within three months, and, for you, the dairy year begins on August 1. So the effective date changes everything.

In this context, what would be the ideal date for ratification?

[Pierre Lampron]

We're talking about ratification on May 1 for entry into force on August 1, the beginning of the dairy year, as you said. Since the ceiling is 50 tonnes in the first year, we start the second year right away—

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

That would leave you only the summer to get through it all, which would be unthinkable.

[Pierre Lampron]

That's it. We must already adapt and see how we will manage this. At least the industry would have more time to adapt.

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

In your opinion, it would be ideal to hold off on ratification until May 1?