Evidence of meeting #9 for International Trade in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cusma.
A video is available from Parliament.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Mr. Flaman, do you have an estimate of how much the industry will be paying in the new dairy export tariff?
Chair, Saskatchewan Milk Marketing Board
I think we had some information on that.
Conservative
Chair, Saskatchewan Milk Marketing Board
If we use some historical numbers and we continue with those numbers, we'd be $10 million to $20 million in tariff.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Have you had any talks with the government about what the money collected will actually be used for?
Chair, Saskatchewan Milk Marketing Board
I don't think we've been there yet.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you. I'm going back to the dairy sector.
Mr. Wiens, you said that in Manitoba it employs 7,950 people.
Out of those 7,950 jobs, how many do you think will be gone just because of CUSMA?
Chair, Dairy Farmers of Manitoba
It's going to have an impact beyond the number of jobs. In our province, for example, many of the veterinary clinics are focused and concentrated in areas where dairy is one of the major farms going on, so it will have an effect there. The feed mills that provide feed for dairies and the canola meal will all have impacts. What happens is that, instead of farms growing, they're staying the same.
Right now, it's very hard to determine exactly the amount by which it will reduce these jobs because we don't even know the full impact of the riddance of class 7. It was very positive for us in terms of creating opportunities. As Matt said, all of our imports displace our ability to produce for the domestic market, but the restriction on exports actually makes it even more difficult for us to meet what is left of the domestic market because we'll have this surplus protein. What do we do with it? That is our challenge and that's how it has an impact on every veterinary clinic in the province, on farms. Now they're not growing.
I've talked to farmers. I get calls. It's about how difficult it is for them to make a go of it. They ask, “Where are we going with this?” I'm trying to provide them with answers, not really knowing how this all plays out. It means that investment on farms has really slowed down this year, and when we talked to our suppliers they corroborate that information as well, and on the processing side as well. For processors, if they're in a state of growth, they will continue to increase production. One thing we say about dairy farming is that it doesn't matter whether you have a 60-cow dairy or a 500-cow dairy; it will take about one person for every 50-60 cows. That's a standard across the board. In that way, we will see reduced employment connected to the dairy industry at all these different levels.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Saskatchewan, Alberta, Manitoba, British Columbia, Quebec.... Is there one province affected more than the others, or is it going to be coast to coast to coast?
Chair, Dairy Farmers of Manitoba
We would expect that we will see that from coast to coast. There's different processing in different provinces. Certainly in our province just three years ago there was a $100-million investment made into making these milk protein concentrates, and that part was for export. The other side of that operation was butter production for the domestic market. That was done without knowing that CUSMA was going to come along and take away the ability to export the protein products, the milk protein concentrate. That's had a very dampening effect on that plant. We as farmers, but also as processors, really have to reconsider where we're at and what's going to happen now. There's a lot of concern in the industry.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Ms. Erickson, you said that now we have only one supplier for Metformin. What you said was very alarming.
Pharmacist Owner, Tofield PharmaChoice, As an Individual
I can probably correct that. Metformin is a very popular diabetic drug, and it used to be produced by about 14 manufacturers. When compression came from the pan-Canada decision, where the Government of Canada arranged pricing for these products, they compressed the price, and the number of manufacturers of Metformin went down to about seven. All of a sudden, we have a shortage of product. Not that that's not livable—we're short of product and the manufacturers adjust to it—but when we have a catastrophe like contamination in a company now, it's down to six, and we're in trouble.
Conservative
Chris Lewis Conservative Essex, ON
Thank you, Madam Chair.
Thank you to the witnesses for coming today.
I came across an interesting read while doing a little research. It's called “Dairy processing industry by the numbers”. I'm going to speak about the good side of things first.
Since 2008, there have been $7.5 billion in investments, $18 billion contributed annually to the Canadian GDP, 16% growth in dairy processing real GDP, 12,000 Canadian dairy farms supported by dairy processors and 24,500 Canadians employed by dairy processors, with an aggregate annual payroll of $1.2 billion.
Here are the negatives: a $670-million loss expected in return on investments resulting from CETA, $730 million expected of lost return on investments resulting from CPTPP, and hundreds of millions more in losses expected in return on investments resulting from the USMCA.
I found that very interesting.
I have three questions for anybody from dairy, whoever is the best fit to answer. The dairy processors have asked the Government of Canada to include a TRQ in the compensation package. Could you explain how this would compensate for the market loss as a result of the new NAFTA?
Chair, Dairy Farmers of Manitoba
I could speak to that.
To some extent of course, processors would have a better opportunity to speak to that. I did allude to this before. By not having the import quota, there's no strategic way of bringing in imports. I think it has more of an impact on processors then, because of the way they fill the imports. If they control the import quotas, that certainly reduces the overall negative impact, because they're very strategic in the timing and the kind of products they bring in.
Certainly processors could speak more to that.
Conservative
Chris Lewis Conservative Essex, ON
Thank you.
I didn't get a chance to speak to the processors in the last round, so that's why I'm throwing these questions out now.
It would appear that the Government of Canada has not provided extra resources to CBSA and to CFIA to ensure that the dairy quality standards and regulations are maintained.
Have you any concerns about the implementation of the new NAFTA relative to quality?
February 25th, 2020 / 1:15 p.m.
Chair, Dairy Farmers of Manitoba
I can speak to it, but if Matt wants to add to it....
Yes, that is a concern. At one point, CFIA was involved in having oversight on imports. They had the expertise. When CFIA was removed from that role, CBSA was left to do the job, for which they had very little training. They were more the generalists. If there's a milk powder of some kind or some product that comes across, the concern is that they don't have the technical expertise to categorize it properly. If we don't have that, then any of these import controls don't mean anything because there's no way to control them.
That's a concern, and we hope that CBSA will be staffed so they have enough person power there and also the knowledge to differentiate among products.
Conservative
Conservative
Chris Lewis Conservative Essex, ON
Very well. Thank you.
This is the last one, and I hope this isn't too directed to the dairy producers, but the producers and processors have said that the export cap is a bad precedent. Given the negotiating dynamic and the tough spot that Canada was in, what's left other than to concede these export caps? Are administration measures really feasible?
Chair, Saskatchewan Milk Marketing Board
I said it earlier. The dairy sector aside, that's very troublesome to me as a Canadian citizen. We're in a trilateral deal with two other countries, and they're going to control what we do internationally. That's very troublesome. I can't imagine as this rolls out what other sectors feel or fear coming out of that. It can affect anybody now. Precedent has been set, or could be set. I think we do have a chance through administrative processes to work that portion over a little and get it cleared up in our favour maybe.
Conservative
