International Trade Committee on Feb. 24th, 2020

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order this meeting of the Standing Committee on International Trade. Pursuant to the order of reference of Thursday, February 6, 2020, we are studying Bill C-4, an act to implement the agreement between Canada, the United States of America and the United Mexican States.

Welcome to all of our witnesses and to committee members.

We're about to start another week of consultations. If we can get another 20 hours of consultation.... I'm glad to see that all our members are still anxious to keep going. I'm glad you're all here.

As an individual, we have Wietze Dykstra. From the Canadian Federation of Agriculture, we have Mary Robinson, president, as well as Robert Friesen, trade policy analyst. From the Canadian Vehicle Manufacturers' Association, we have Mark Nantais, president. From the Dairy Farmers of Canada, we have Jacques Lefebvre, chief executive officer; Pierre Lampron, president; and Christopher Cochlin, international trade legal adviser at Cassidy Levy Kent.

We will start the opening remarks with you, Mr. Dykstra.

[Wietze Dykstra, Dairy Farmer, As an Individual]

Good afternoon.

I'm a dairy farmer. I was invited to speak here by way of our local MP, Mr. Bragdon, but more on that later.

I was born and raised in a city in Holland. You might have already guessed that by my name. My parents had no farm. For some reason I always wanted to become a dairy farmer. I knew I would never have enough money to buy any kind of farm in Holland. Because I wanted to become a farmer, I went to the agriculture school in the city where I was born.

ln my final year at school, which would have been when I was 19, I contemplated where to go to pursue my dream. At that time—this would have been the late 1980s—France and Australia were popular. Denmark was also a go-to place. I had heard in school that Canada was good to their dairy farmers, as they had some kind of system in place to ensure their dairy farmers were getting paid a fair price for the milk they produced. That was all I knew in 1986, but it was good enough for me to go on a big adventure. I bought my first plane ticket to go to Canada.

I arrived in Halifax, Nova Scotia, not really knowing much English, and ended up working on a farm in Nova Scotia. Of course, I was very homesick. I slowly started to find out that there was indeed a good system in place here, which I eventually learned was called supply management.

True to the Dutch stereotype, I was not much of a big spender, focusing instead on saving money towards my goal of buying a dairy farm. I managed to save $700 a month of the $900 a month I was earning working on the farm in Nova Scotia. At the age of 25, I began looking around and found this nice working dairy farm in beautiful northwest New Brunswick. I indeed had enough money saved up for a down payment for that farm, and bought it in 1991.

Not coming from a farming background, my attitude might differ from some other farmers. I feel I'm also a businessman. In my opinion, profit is not a bad word, including in a farm setting. Why would I want to work pretty much every day for long hours and not make any money doing it?

It's the same for my 23-year-old daughter, who hopes to take over the family farm someday. She now works full time on the farm and sees the political climate we are in. The trade concessions have gotten her very concerned. She feels that we, as dairy producers, have been picked on from all sides. Over the years I have been following the situations that have occurred in Holland in respect to the dismantling of the Dutch quota system and all the hardship that it caused. I still talk sometimes to my agriculture school buddies about what they have had to endure. In no means was it pretty or easy.

Canadian supply management, in my mind, consists of three pillars, like a three-legged milking stool: supply control, import control and a stable pricing system based on costs and markets. But the system only works if there is political will to safeguard the pillars. If any one pillar is taken away, like a stool, the stool will fall over.

This brings me before you today. All during the time the negotiations went on for CUSMA, when people asked me if I was concerned about the outcome, I would say, “No, I am not.” I always said I had full faith in our government to stand up and defend supply management.

Unfortunately, I was proven wrong. I think I and most other dairy farmers were very disappointed when the final details came out. We have a system here that ensures the primary producer, the farmer, gets a fair price for his product. By no means are we getting rich, but we're doing okay.

I believe that farmers in other countries recognize that our supply management system does work well and that we do get a fair price for our product. I know for a fact that a lot of dairy farmers in other countries envy us. Unfortunately, it seems that rather than working towards improving their own system in their own countries, they are trying to compromise or infringe upon our system. I just don't understand that way of thinking of the other farmers in other countries. All the magazines I read from south of the border put CUSMA as a great win for their dairy farmers. In my mind, that would mean we got the short end of the stick.

I have also read of farms south of the border that milk as many as 30,000 cows on one farm. That's equivalent to all the dairy farms in New Brunswick and Nova Scotia combined. Is that where we want to go? In my small community, I employ three people full time. One of them is my 23-year-old daughter. I also use land belonging to several of my neighbours, and at times even employ my neighbours as needed. I employ about six high school students to work shifts during milking, giving them experience in work ethic and some spending money.

If farming becomes too challenging due to these trade agreements, I and other dairy farmers might have to stop farming. Therefore, there would be essentially no economic activity left in our community. If Canadian dairy farmers are forced to abandon their livelihood, this would contribute to the ongoing decline of our rural communities. This might be why my local MP, Mr. Bragdon, asked me to appear before you. He is very aware of what will happen if farms keep disappearing from his riding. Remember that any kind of farming is, and has to be, a business.

Another side effect of this agreement is that we had a processor who was going to upgrade and expand a processing plant in New Brunswick. This processor now has indefinitely postponed this project due to uncertainty. We Maritimes producers are very concerned about keeping processing in our region.

I now want to touch on the compensation package promised, and partly delivered, for CETA and CPTPP. I haven't heard anything about the remaining years and how it will be paid out. That in itself concerns me. The compensation package is bittersweet. Most farmers, including me, received a payment in December of last year for those previous trade agreement concessions. As far as I am aware, no concrete timeline has been set for the next payments. We, as dairy farmers, have always prided ourselves on getting all our money from the marketplace. This is how the system is supposed to work. This is how it did work. The government trading away excess and then offering compensation is not what we want. Having the supply management system tampered with by government trade concessions to the point where we're now looking for compensation should tell you how bad these concessions are hurting us. To be honest, the words “no more concessions will be made” sound a bit hollow to me, as this was the line all along. Of course, we're now getting concerned by the possible trade talks that will happen sometime with the U.K.

I don't pretend to know all the precise details of the agreement. We as dairy farmers have DFC for that. You can probably stump me pretty easily with some in-depth questions. But one thing that stands out to me in CUSMA is the oversight and export cap clause that this government has granted the U.S. I just do not understand how one country, that being Canada, can allow another country, that being the U.S.A., to dictate where and how much it can export to a third country. It's even more frustrating as our domestic market is being given away.

In conclusion, if I could make any suggestion, it would be that compensation for all the agreements will help to maintain my farm and business and allow us to manage for my family's future. As my business model was based on producing milk, I now will need the compensation money to keep the farm viable and profitable for my daughter. Keep in mind that the last 10% to 15% of the milk produced on any farm is the cheapest milk for the farmer to produce, and the most profitable. Having that share of the milk market traded away means we will need compensation funding to continue to innovate and adapt to this new market reality.

Finally, anything you could do to prevent further concessions and limit the U.S.A.'s ability to oversee our system and limit exports would be positive for dairy farmers like me.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Dykstra.

We will go to Ms. Robinson with the Canadian Federation of Agriculture.

[Mary Robinson, President, Canadian Federation of Agriculture]

Thank you for this opportunity to present today on a trade agreement that is important to the success of Canada's agriculture community and industry.

Agriculture is an essential part of the economic, political and social fabric of Canada and it is critical to the well-being of all Canadians. It plays a strategic role in and is the backbone of rural communities. Agriculture and agri-food make a significant contribution to the Canadian economy, directly providing one in eight jobs, employing 2.1 million people in rural and urban Canada and accounting for 6.7% of total GDP.

A significant part of Canadian agriculture and agri-food's growth and success is due to international trade agreements and subsequent export market development and sales. Canada's market is just too small to accommodate the growth potential of what has become a world-renowned, efficient and low-cost agriculture industry. Currently the industry relies on export markets for at least 60% of its output. Consequently, the industry is always on the lookout for additional profitable markets and easily awaits the outcome and potential opportunities of any and every bilateral or multilateral trade negotiation.

Having said that, it's equally important to recognize that our supply-managed sectors have built stable and viable industries without reliance on export markets, and it's important to ensure that they are not undermined and destabilized in any trade agreements Canada negotiates.

The North American Free Trade Agreement has underpinned growth in agriculture production and processing not only in Canada but also in the U.S. and Mexico. It creates a market of 449 million consumers and generates agri-food and seafood trade of $289 billion. The benefits of NAFTA are undisputed and have been since its implementation. Nearly 80% of Canada's total processed food exports go to the U.S. and Mexico. Canada is the number one supplier of agriculture goods to the U.S., and we have considerable potential to increase ag trade with Americans. With its growing middle class, the same goes for Mexico, where Canada is the second most important supplier of agriculture goods.

Furthermore, integration between Canada and the U.S. is such that our respective industries have grown to rely on open borders to strengthen and feed each other. A specific state example points us to the $2 billion Canadian in trade we do with Iowa. It exports close to $300 million in animal feed to Canada, imports around $170 million in live hogs from Canada, and then turns around and sends us $180 million in fresh and frozen pork. Trade and investment with Canada creates 100,000 jobs in Iowa.

CFA, from the beginning, maintained that NAFTA did not need renegotiation, that changes and improvements could well be made within the agreement already in place. The priority of course was to maintain the benefits that Canadian agriculture was already enjoying. In short, supply-managed sectors would not be undermined through market access concessions, achieve imported market access for our sugar beet producers, and advance regulatory alignment and domestic support equity.

In reviewing the new agreement, CUSMA, it is evident that the open borders and subsequent market benefits from NAFTA remain largely intact. In fact, some additional benefits were achieved, but they came with a price, and some may say, far too heavy a price. It is clear that the Alberta sugar beet producers came away with the biggest gain. Ever since the original CUSFTA, where the requirement to institutionalize TRQs at historic import levels was ignored by the U.S., our sugar industry has dealt with a very restrictive U.S. TRQ. In CUSMA, our access for sugar beets was more than doubled to a total of 20,000 tonnes.

Central to the success of any trade agreement is the ability to reduce no-tariff trade barriers. This includes a process for regulatory transparency, co-operation and alignment. CFA applauds the efforts made by our government to include the provisions set out in chapter 28 of the agreement, which calls for transparency and a process for communication and co-operation among North American regulatory authorities. The establishment of a committee on good regulatory practices composed of government representatives, including from central regulatory agencies, will enhance collaboration with a view to facilitating trade between the parties.

Canada tried hard to have the U.S. remove the requirement for Canadian meat imports to be reinspected when they cross the border, but to no avail. This issue should be one of the priorities on good regulatory practices to go before the committee.

Canadian agriculture has built and developed a successful export industry, but its success is contingent on operating within a robust rules-based trading system. An important component of such a system is an effective dispute settlement mechanism. For that reason, maintaining chapter 19 was critical and will be an important element in creating a level playing field.

American farmers have long had the ability to sell and ship wheat to Canadian terminals just across the border and have negotiated prices reflective of quality. However, even though the price may have reflected the grade quality, the documented designation did not reflect the grade. This agreement calls for the Canadian grade to be assigned to the imported product with appropriate documentation. CFA has been assured this will not compromise our system of variety registration.

Canada paid a very high price for the conclusion of CUSMA renegotiations by conceding significant dairy, turkey, chicken and table eggs market access to the U.S. It's another economic hit in the wake of CPTPP and CETA with the accumulation of access concessions devastating supply-managed industries. For example, by 2024 the combined market access concessions made by Canada under the WTO, CETA, CPTPP and CUSMA will represent 18% of our dairy market.

Supply-managed industries are anxiously waiting for government to fulfill its commitment to quickly and fully mitigate the impacts of these trade agreements. As well, every effort needs to be made to eliminate all forms of TRQ circumvention—circumventions that escalate the volume of imports far beyond the negotiated TRQs.

Two other issues in addition to market access concessions which cause alarm for the industry are the concessions Canada made with respect to policy development and export controls. Canada has agreed to consult with the U.S. before making changes to Canadian dairy policies. This is clearly a loss of sovereignty in Canadian policy development and one that should never have been surrendered.

Second, Canada agreed to cap dairy sector exports of milk protein concentrates, skim milk and infant formula to CUSMA and non-CUSMA countries with an applied export charge on exports over the cap. This is disturbing on several fronts. Canada has long argued against the use of export tariffs to regulate trade and it sets a dangerous precedent by allowing a regional trade agreement, and a party in that agreement, to control trade of another party to countries outside the agreement.

Finally, it's a precedent that may have implications for Canadian export reliant agricultural sectors. If Canada exports to other countries and out-competes U.S. products, the U.S. may try to use CUSMA or some other mechanism to manage and restrict Canadian trade to the rest of the world.

In conclusion, CFA applauds government for its part in consummating an agreement. The importance of profitable markets around the world for Canadian agriculture cannot be overstated. However, the CFA would implore government to negotiate successful trade agreements in agriculture without paying the heavy price we have in the past with access concessions in supply-managed domestic markets.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will move to Mr. Nantais with the Canadian Vehicle Manufacturers' Association.

[Mark Nantais, President, Canadian Vehicle Manufacturers' Association]

Thank you very much, Madam Chair.

Good afternoon, honourable members.

I'm pleased to be here today representing Fiat Chrysler Automobiles Canada, Ford Motor Company of Canada and General Motors of Canada Company.

Our members operate four assembly plants, as well as engine and components plants. They invest many billions of dollars in the development of zero-emission technologies and advanced vehicle safety technologies. We have over 1,300 independent dealerships across Canada, and we contribute quality employment opportunities for over half a million Canadians.

The CVMA has been a primary advocate of CUSMA, and we recommend passage of Bill C-4 without delay. The passage of CUSMA is essential to provide certainty to North American automobile manufacturers. The automotive provisions, as well as the side letters that provide protection from the U.S. section 232 tariff actions, are indeed critical elements to support automotive manufacturing competitiveness within the North American trade bloc.

It's important to remember that, for the auto sector in Canada, the alternative to reaching this agreement was the cancellation of NAFTA, the reimposition of tariffs on finished vehicles and parts, and likely section 232 tariffs on input materials. So, if we are anxious to see ratification, that is indeed why.

We again want to say thank you to the Canadian negotiators for working so closely with us and ultimately ensuring that we maintain Canada's auto sector as a truly integrated part of the North American industry. This agreement was existential for Canada's largest manufacturing and export industry.

The agreement reinforces the long-established integration of the auto industry supply chain necessary for its competitiveness and, importantly, the ongoing need for continued regulatory alignment with the United States of vehicle technical regulations that are integral to trade and the environment while ensuring greater consumer product choice and affordability.

The auto portions of the new agreement, including the rules of origin, the labour value content provisions and the section 232 side agreements, are things that all our members support and can adjust to over a reasonable time period so that we will remain compliant, enabling us to continue to enjoy duty-free access to the largest and most beneficial auto market in the world.

Since the Auto Pact of 1965, Canada's automotive industry and its supply chains have become deeply integrated with the United States and, over time, with Mexico. Vehicles are built seamlessly on both sides of the border. The resulting deep integration has led to a more competitive Canadian auto industry, greater consumer choice at more affordable prices and a strong North American trade bloc.

When the original NAFTA came into force in 1994, it provided a foundation for a strongly global competitive trade bloc. The geographic proximity of the three NAFTA partner facilities, the multi-billion dollar sectors, the parts sector and the just-in-time supply chains are critical to vehicle assembly operations in North America. It also created inherent transportation and supply chain logistics cost advantages.

Today, automotive manufacturing represents the second-largest Canadian export sector, with $54 billion in trade in 2019. Ninety-two per cent of the total value of that was to the United States. The United States is our number one automotive trade partner, and it's absolutely critical that a trade agreement be in place to provide the foundation for Canadian automotive production and exports in the future.

We must always keep in mind that Canada is one-tenth of a complex, fully integrated long-lead industry. Multi-billion dollar product plans and manufacturing investment plans generally begin over five years in advance of the start of production. Planners require regulatory certainty to make their decisions. They especially need Canada to maintain fully harmonized safety, vehicle GHG, criteria emissions regulations with the United States.

This remains imperative if we are to continue to be part of this fully integrated, long-lead, high-capital-cost industry. Put simply, we did not work this hard to modernize integrated rules of trade in North America to then take our eye off the ball and drift away with unique or different regulations. That could actually put us back to square one and leave us on the sidelines.

Canada's officials must also maintain a high degree of engagement with their counterparts in the U.S. and Mexico. We cannot relax our efforts to ensure that Canada is sufficiently competitive to win future manufacturing investments that anchor much of the Canadian automotive supply chain. Canada must have competitive, in fact, more competitive, costs of auto operation in Canada, including investment incentives, carbon costs, competitive labour agreements, taxes that keep pace with the United States, competitive electricity prices and competitive regulatory regimes.

It's important to remember that the auto sector is going through one of the most dramatic periods of change in its 100-year history for auto technology and mobility business models. We must work closely together with the Canadian industry and all levels of government to demonstrate that Canada is the best place anywhere to invest in the future of this important industry.

In closing, we fully respect the committee's need to hear Canadians and ask questions. We have worked with all parties over the last two years to discuss this very complex issue. We have been truly involved, and we appreciate your interest and open dialogue. We thank you for that, but we must ask you to ratify this agreement promptly.

I'd be pleased to answer any questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will move to the Dairy Farmers of Canada, and Jacques Lefebvre, Pierre Lampron and Christopher Cochlin.

Mr. Lampron.

[Pierre Lampron, President, Dairy Farmers of Canada]

Good afternoon. On behalf of the Dairy Farmers of Canada, I want to thank you for the opportunity to offer our perspectives on Bill C-4 concerning the Canada — United States — Mexico Agreement.

I'm accompanied by Jacques Lefebvre, our chief executive officer, and Chris Cochlin, our legal advisor from Cassidy Levy Kent LLP. Mr. Cochlin is an expert in international trade.

The vast majority of politicians in this country say that they support supply management. However, in the end, actions speak louder than words. Today, with CUSMA, supply management has never been more weakened. There's no doubt that Canadian dairy farmers have been hit by the three most recent trade agreements. This is something that even the Government of Canada recognizes.

When the imports already authorized under the WTO and the access previously granted under the Comprehensive Economic and Trade Agreement, or CETA, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, are added together, these total imports will be equivalent to 18% of Canadian milk production by 2024. CUSMA also gives the United States oversight over the management of our dairy system by requiring a consultation with them prior to any changes in its administration.

Is this not an abdication of the independence of Canadian decision-making and our sovereignty? Have we negotiated reciprocity with the United States, given the non-tariff barriers that our products must face in order to enter the American market?

The Prime Minister has repeatedly committed to full and fair compensation to the dairy sector for the cumulative impacts of CETA, CPTPP and CUSMA. In terms of the first two agreements, at the end of 2019, we received a first instalment representing a little more than 12% of the total promised compensation. We await guarantees that the sums still to come are locked in. Once again, actions speak louder than words.

This compensation doesn't include CUSMA. Some wonder why financial compensation is being offered instead of programs.

First, our recent experience with programs set up to mitigate agreements with Europe hasn't been conclusive. Of the $250 million granted, almost 10% was allocated to the administration of the program by the public service. This amounts to $22 million returned to state coffers for the administration of the program by federal public servants. The remaining sums benefited only a small number of producers.

Second, the compensation formula announced in August 2019 is consistent with the recommendations of the mitigation working group created by the federal government after the signing of CUSMA. However, beyond the numbers, realities on the ground affect some 11,000 families across the country.

My experience isn't unique, but it sheds light on why financial compensation is needed. When my brothers and I took over the family farm some 30 years ago, we knew that the market was equivalent to the potential of Canadian consumers. We made calculations and projections on this basis. We determined that we could make ends meet despite the significant costs associated with acquiring a farm.

The Canadian government will have ceded nearly one-fifth of our production to foreigners by 2024. We know now that our business plan didn't take into account the fact that our market would be conceded in this way. If we had known this, my brothers and I would have given serious thought to whether it was worth it to take over the family farm. This would be true of any business confronted by a loss of nearly 20% of its market.

However, since the concessions have been granted, we have a few recommendations.

We recommend that the Canadian government continue to give dairy farmers, in the form of direct payments, the remaining seven years of full and fair compensation to mitigate the impacts of CETA and CPTPP. We ask that the total amount be formally accounted for within the 2020 main estimates and that the government announce the amount of compensation for CUSMA prior to its entry into force.

On the other hand, CUSMA contains a provision that imposes export taxes, above a certain threshold, on skim milk powder, milk protein concentrate and infant formula.

This threshold is draconian. In the first year of the agreement, it represents about half our exports for 2018, and then it declines. This export tax undermines the competitiveness of our products in relation to the products of other global players, including the United States. This provision sets a dangerous precedent for any dairy product that may be exported.

In addition, if CUSMA enters into force before August 1, the beginning of the dairy year, the export thresholds will see a dramatic decline of nearly 35% after only a few months. For Canadian dairy producers, CUSMA presents a fourfold threat.

On the one hand, we've conceded more of our domestic milk production to foreign producers for products that will end up on our shelves. These products will be made from foreign milk whose production is directly and indirectly subsidized, which isn't the case here. This results in cheaper milk for foreign processors that export products here. This gives rise to the question of whether this unfair competition constitutes the dumping of foreign dairy products on our shelves.

At the same time, we face export barriers for dairy products made with milk from our own country. Add to that the fact that our border is porous and the government isn't in a position to test foreign dairy products coming into the country. It's important to note that these products aren't subject to the same production standards to which we adhere.

Given the impact on our industry and the dangerous precedent set by the export thresholds, we call on the government to take mitigating steps. We understand that this could be done through administrative measures after the ratification of CUSMA, on a voluntary basis, without reopening the agreement.

When it comes to controlling our borders, the government must commit to giving the Canada Border Services Agency the resources and training to enable officers to fully play their roles. After our discussions with the union management, we're convinced that the officers expect nothing less.

Canadian dairy producers are committed to the highest standards of sustainable production. This is done through the proAction program. These standards come with costs for farmers. For example, unlike American producers, our Canadian producers don't use artificial growth hormones to increase milk production at the expense of the health of the cows.

Instead of supporting our farmers so that they can maintain these rigorous production standards, the government has chosen to open its market to surpluses of foreign dairy products that don't meet our domestic standards.

In conclusion, the Dairy Farmers of Canada understand the importance of international trade to the Canadian economy in general. They aren't opposed to Canada exploring or entering into new trade agreements. However, let's be realistic. All countries have both offensive and defensive interests when it comes to trade negotiations. The United States, for example, has a long tradition of protecting their sugar, cotton and dairy sectors. Unlike in Canada, these industries receive production subsidies, directly or indirectly, from the American government.

The defence of supply management has never prevented Canada from entering into an international trade agreement. Trade negotiations don't seek to pit one Canadian industry against another. However, we firmly believe that access to the Canadian dairy market should no longer be the price of entry into these agreements. Despite the government's assurances, we remain concerned about what could be conceded in a free trade agreement with Great Britain. It's also important to consider that the impacts of recent trade agreements weren't limited to dairy farmers.

The Canadian government should also provide full and fair compensation to dairy processors, in addition to Canada's poultry and egg farmers. Lastly, the time may have come for a committee of the House of Commons or Senate, or even of both, to look into the possibility that foreign dairy products are being dumped in Canada. Your farmers aren't scared of international competition, provided that there's a level playing field.

I'll be pleased to answer your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lampron.

Mr. Dhaliwal, on a point of order.

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

Thank you to the presenters.

Fellow members of Parliament, I am speaking against my own intent of last week. Last week, I moved a motion that no motion will be entertained this week. There was some miscommunication in the wording. I had discussions with the Conservatives, and I'm sure the Bloc and the NDP will be fine if I could move a motion to clearly indicate that there will be no motions this week.

[Randy Hoback, Conservative, Prince Albert, SK]

Wasn't that agreed?

[The Chair, Liberal, Judy Sgro]

I think we already had that agreement that we would have no motions until we go into clause-by-clause—

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, to clause-by-clause.

[The Chair, Liberal, Judy Sgro]

—and all members would be present.

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

That's fine. I just wanted to make sure that we put in the wording that there will be no motions by—

[The Chair, Liberal, Judy Sgro]

There will be no motions by any members until we reach a point when we're ready to deal with clause-by-clause.

[Randy Hoback, Conservative, Prince Albert, SK]

With clause-by-clause you have to; there's just no way around it.

[The Chair, Liberal, Judy Sgro]

Exactly. Is everybody good with that?

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Dhaliwal, for clarifying that.

We will move to Mr. Berthold.

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

Thank you, Madam Chair.

I want to thank the committee members for the opportunity to be here today to ask a few questions regarding an issue that has kept me busy in recent years.

In concrete terms, I've enjoyed working very passionately with the people in the Canadian agricultural sector.

I also want to thank you, Ms. Robinson. I was very pleased to work with you.

Obviously, one issue has been of greater concern to us than other issues in recent months, especially in Quebec. That issue is dairy production.

Although there has yet to be an announcement on compensation for the new free trade agreement with the United States, we expected the government to tell us its intentions before asking us to sign the agreement. We haven't heard any news. We still don't know what will happen to the remaining seven years of compensation for the other agreements previously announced. We're also concerned about this issue.

We expected that the dairy processors would receive compensation, but we've had no news on that front. There's still absolutely nothing for egg and poultry farmers.

You can appreciate why it's important for us, on the opposition side, to have the opportunity to ask you questions about this free trade agreement. That's why we want to thank you for being here to answer these questions.

Last week, I was particularly surprised to hear the presentation given by Chrystia Freeland, Deputy Prime Minister, who was here at the Standing Committee on International Trade.

I listened carefully to her presentation. In response to a question about the new export tariffs on milk proteins, such as skim milk powder or infant formula, Ms. Freeland said that the supply management sector was consulted extensively regarding the imposition of export tariffs on powdered milk.

I would translate that as “consulté intensément.” You're part of the supply management sector, because you were the representatives of the Dairy Farmers of Canada. Do you consider that you were “consulted extensively” on the Canadian government's new approach?

[Jacques Lefebvre, Chief Executive Officer, Dairy Farmers of Canada]

Thank you for your question, Mr. Berthold.

Throughout the negotiation, there were information sessions. There were also consultations on certain items. However, we weren't consulted regarding the magnitude of the export thresholds. These thresholds would apply beyond the signatory countries, along with the provision giving the United States oversight over the administration of the dairy system.

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

We're stunned. This is different from the statements made by Ms. Freeland here in the committee and in the House of Commons, when she urges the opposition to move quickly. She told us that all the consultations were done, and that extensive consultations on exports and tariffs were held.

I gather that the government didn't consult you on this issue. You've just made that quite clear.

Was there any discussion on this? Were you advised that this option would be put on the table? Did you learn this, as we did, after the end of the negotiations?

[Jacques Lefebvre]

The comment made be the Deputy Prime Minister concerned a fairly wide range of people. We're producers, but we aren't the only producers.

As for us, the Dairy Farmers of Canada, we weren't consulted on these measures.

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

Do you know whether other countries that have free trade agreements allow this type of agreement?

Have you ever seen a country with which we have a free trade agreement be allowed to decide that we can't sell milk powder to other countries that aren't part of the agreement?

Have you seen this in your field? Does this exist elsewhere in other agreements, or is this a first?