International Trade Committee on June 11th, 2021

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

I call the meeting to order.

This is meeting number 36 of the Standing Committee on International Trade.

This meeting is being held pursuant to the order of reference of January 25, 2021, and the order of reference sent to the committee on March 10, 2021.

The committee is resuming its study of Bill C-216, an act to amend the Department of Foreign Affairs, Trade and Development Act with regard to supply management.

Today we have the pleasure to welcome officials from the Department of Agriculture and Agri-Food and from Global Affairs Canada.

From the Department of Agriculture and Agri-Food, we have Marie-Noëlle Desrochers, acting executive director, strategic trade policy division, and Aaron Fowler, chief agriculture negotiator and director general, trade agreements and negotiations.

From the Department of Foreign Affairs, Trade and Development, we have Doug Forsyth, director general, market access, and Kevin Thompson, executive director, market access and trade remedies law.

You are people who have been before the committee many times, so you're familiar faces to us.

Mr. Forsyth, you have the floor, please.

[Doug Forsyth, Director General, Market Access, Department of Foreign Affairs, Trade and Development]

Thank you, Madam Chair and honourable members. Thank you for the invitation to appear before the Standing Committee on International Trade on its review of Bill C-216.

The bill amends the Department of Foreign Affairs, Trade and Development Act so that the Government of Canada cannot make any commitment in an international treaty that would have the effect of increasing tariff rate quota volumes or reducing over-quota tariff rates for dairy products, poultry or eggs.

The intent of the bill is consistent with the long-standing Government of Canada policy to defend the integrity of Canada's supply management system.

I'd like to share with you some considerations regarding this proposed amendment to the departmental act.

First, by introducing specific policy objectives, proposed amendments would fundamentally change the nature of the departmental act. The act is an organizational statute that sets out, in general terms, the powers, duties and functions of the Minister of Foreign Affairs, the Minister of International Trade and the Minister of International Development.

It does not prescribe specific policy objectives. This way, the act sets up a framework that provides flexibility to the government of the day to implement its particular foreign, international trade and development policy without having to change the underlying legislation; thus, it accommodates the policy perspectives that different governments may bring to the management of foreign affairs over time.

As an example, in terms of international trade negotiations, paragraph 10.2(c) of the act provides that the Minister of Foreign Affairs is to conduct and manage international negotiations as they relate to Canada. Section 13 of the act elaborates on the specific duties of the Minister of International Trade, which include improving the access of Canadian products and services to external markets through trade negotiations.

Second, specific foreign international trade and development policy objectives, including how to address sectoral interests or specific constituent concerns, are generally established elsewhere. For international trade negotiations, negotiating objectives and how to accommodate specific sectoral interests are set in the negotiating mandates that are approved by cabinet. This allows the government of the day to develop specific policy objectives in response to evolving international circumstances.

Third, Parliament has the final say over the outcome of any international trade negotiations. Parliament ultimately decides whether or not to pass the legislation necessary to implement any free trade agreement. Additionally, moving forward, trade agreements will be subject to even more parliamentary oversight. The updated policy on tabling of treaties strengthens transparency of trade negotiations and provides additional opportunities for members of Parliament to review the objectives and economic merits of new free trade agreements. The new policy includes the tabling of a notice of intent to enter into negotiations towards a new FTA, objectives for negotiations and, finally, an economic impact assessment.

Fourth, amendment of the departmental act in the way in which Bill C-216 proposes carries risks. By limiting Canada's ability to engage on these issues, this amendment would invite negotiating partners to narrow the scope of their own potential commitments, taking issues off the table from the outset of negotiations, likely in the areas of commercial interest to Canada. This narrows possible outcomes, precludes certain compromises and makes it harder to reach an agreement.

Addressing the interest of any specific sector in the act would set a precedent that could lead to demands for additional amendments to reflect other foreign and trade policy objectives, including sectoral interests, further constraining the government's ability to negotiate and sign international trade agreements and, more generally, to manage Canada's international relations.

Lastly, maintaining the nature of the departmental act unchanged does not affect the government's policy to defend the integrity of Canada's supply management system, nor the ability of negotiators to defend this position at the negotiating table.

The government has made public commitments not to make further concessions on supply-managed products in future trade negotiations. In fact, Canada has been able to successfully conclude 15 trade agreements that cover 51 countries while preserving Canada's supply management system, including its three pillars: production control, pricing mechanisms and import controls.

Most recently, the Canada-United Kingdom Trade Continuity Agreement fully protects Canada's dairy, poultry and egg sectors and provides no new incremental market access for cheese or any other supply-managed product. Where new market access has been provided, specifically and exclusively in the Canada-European Union Comprehensive Economic and Trade Agreement, CETA; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP; and the Canada-United States-Mexico Agreement, CUSMA, the access was deemed necessary to include an agreement that was in Canada's interest.

While new access was provided in those agreements, the supply management system and its three pillars were maintained. These outcomes were part of the overall balance of concessions through which Canada maintained preferential market access to the United States and secured new access to the European Union, Japan, Vietnam and other key markets.

In conclusion, while the spirit of Bill C-216 is consistent with the government's policy of defending the integrity of Canada's supply management system, amending the Department of Foreign Affairs, Trade and Development Act as proposed by the bill would change its nature and create risks.

Along with my colleagues here today, I welcome your questions. Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Forsyth.

Ms. Desrochers, do you have opening remarks? You do not.

All right, we'll go to our committee members.

Welcome, by the way, to Mr. Hardie and Mr. Berthold. We're glad to have you joining the international trade committee today.

Mr. Aboultaif, go ahead for six minutes, please.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Mr. Forsyth and other witnesses.

Thank you, Madam Chair.

With different markets and different conditions when you negotiate trade deals, you have to have flexibility and you have to have options in order to be able to achieve agreements. I know that Bill C-216 is aiming to somehow further protect supply management or preserve it, as Mr. Forsyth just said, but in the meantime, it carries risk, which Mr. Forsyth also stated in his opening remarks.

What I'm interested in is this. Although we've signed so many trade agreements without having to really jeopardize the supply management system and we have successfully done that throughout its history—and we have so many trade agreements that I don't have to mention it at the moment—the question is, are there any live examples out there that can advise us on what the consequences will be in the long run if Bill C-216 is implemented, since we know that we will lose that flexibility and we will be limiting our team of negotiators on the road when they try to achieve trade agreements with countries in the world?

[Doug Forsyth]

Thank you for the question.

Madam Chair, I will start, and perhaps my colleagues will join in afterwards.

From a trade negotiation perspective, Canada has a long history in negotiating free trade agreements and has been at the forefront of negotiating free trade agreements for the last 25 or 30 years.

I would just note off the top that our supply management system, as you've indicated, has not stopped us or hampered us from concluding any trade agreements, but I think what is certainly possible is that the wording proposed for this bill will give trade negotiating partners pause with respect to wanting to engage with Canada. From a trade negotiator's perspective, when we start a negotiation, we like to start with the full possibility of access in the back of our minds, whether or not that's where we end up. It's rarely the case that you would see 100% access in any free trade agreement, but you like to at least start with that notion in mind.

As you go through a negotiation with your various partners, you find that interests are enunciated, elaborated and narrowed down. You understand what's in the art of the possible, but you like to start as wide as possible when you do launch those negotiations. When you start from a very narrow band of possibilities and then that gets narrowed, the scope of the negotiations and the scope of the agreement is very much smaller than you would have seen otherwise.

If we were to end up with this bill as it is written, I think very much that we would start with a much smaller scope of negotiations with various partners. It wouldn't be unusual for them to say “That's fine. Canada has taken these issues right out of play. We will take issues that are of interest to Canada right out of play.” Then you're talking about negotiating from a smaller pie, as it were.

I'll turn it over to my colleague from AAFC to see if he has anything to add.

[Aaron Fowler, Chief Agriculture Negotiator and Director General, Trade Agreements and Negotiations, Department of Agriculture and Agri-Food]

Thank you very much. Thank you, Chair.

I would certainly agree with everything Doug has said so far and associate myself with his response.

I believe the question was whether there are examples of similar measures being imposed by some of our trading partners around the world and what the consequences of those might be. I have to say I am not aware of any legislative prohibition on our trading partners' ability to discuss an issue.

Were such a prohibition in place, I feel that depending on the level of commercial interest that Canada had in the matter that was covered by such a prohibition, we would use the exploratory stage of our trade negotiations to indicate that we see this as an important issue that needs to be discussed in the context of the negotiation.

Free trade agreements are really about changing the legislative and regulatory regime that our trading partners have in place in order to create commercial opportunities for Canadian exporters, so I suspect that were our interests sufficiently significant for us to want to discuss that issue in the negotiations, we would make that clear at the exploratory stage and base our decision on whether to move forward in the negotiations on our partners' indication of their capacity to have discussions in that area.

On the specific question of whether there are examples I could point to, I have to say offhand that I can't think of any similar prohibitions that are in place.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Keep it very short, Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Okay.

There are other sectors. We offer a wide variety of products and solutions to the world. What would you see as the reaction of other sectors if something like Bill C-216 went forward? What would you see as the reaction as far as opportunities on the world stage with trade go?

[Doug Forsyth]

Do you mean reaction from Canadian stakeholders, or from—

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Yes, I mean Canadian stakeholders.

[Doug Forsyth]

Honestly, I think if this did go forward, the reaction we would see would be other groups seeking to have their concerns, their issues, inserted into the departmental act as well.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will move to Ms. Bendayan for six minutes. Go ahead, please.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much, Madam Chair.

I thank the witnesses, of course, but also the members who have joined us today for this important meeting. I particularly thank Mr. Plamondon for introducing this bill.

Before beginning, I would like to stress the importance of the supply management system here in Quebec and everywhere in Canada. It is important not only to our producers, but also to our food security. We must continue to be open to the world and encourage international trade while at the same time protecting this supply management system. I believe we have shown that this was entirely possible.

We have continually renewed that commitment. We upheld it in concrete terms in the new trade agreement with the United Kingdom, which does not grant any additional access, as you know. I have repeatedly said in the House: not one ounce more of cheese will enter the country under that agreement.

Perhaps, since I am addressing you, Mr. Forsyth, I will switch to English.

Mr. Forsyth, could you explain to us whether, in your view, the adoption of this bill is necessary for the government to continue to defend Canada's supply management system?

[Doug Forsyth]

As I mentioned in my opening statement, since supply management was introduced, which was well over 50 years ago, various governments of various stripes have been very clear about defending the supply management system and ensuring that everyone understands how well it works for producers and farmers all across Canada.

I think the government has done a very good job of promoting and ensuring that all of our trading partners understand what supply management is. It's certainly part and parcel of all trade negotiators' mandates that we understand it well, that our trading partners understand it well, and that throughout the world, whether bilaterally or multilaterally—for example, at the World Trade Organization—it is well known what Canada's policy is.

To answer your question as to whether it would have any effect, I think that, as I said, the policy is well known and well understood, so I am not sure that there would be any.

[Rachel Bendayan, Liberal, Outremont, QC]

Sir, if I may follow up, I believe you mentioned in your introduction, and I have certainly heard from legal experts within government, that policy objectives are not normally found within the departmental act. This is not the usual instrument to include policy objectives like the one regarding supply management. Can you perhaps give us examples or let us know where these types of important policy objectives should be found, if not in this particular act?

[Doug Forsyth]

I think that assessment is correct. It would be unusual to find policy-prescriptive issues like this in a departmental act. I'm not aware of any departmental acts that include them.

I think that where we see policy prescriptions like this is in the words enunciated from the government. It's clear that this is a Government of Canada position, a policy position. You find it in speeches. You find it in departmental legislation, for example, at Agriculture and Agri-Food Canada, and you find it in various places like that. I think it would be unusual to put something like this within the context of the departmental act.

I'll just ask my colleague from Agriculture Canada if he has anything more to add.

[Aaron Fowler]

No, I would agree with the answer. I would say that generally this type of policy constraint would be found in the negotiating mandates we receive that inform our engagement with our negotiating partners. I would endorse the answer that Mr. Forsyth provided.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

Just as a quick follow-up, Mr. Forsyth and Mr. Fowler, you referred to a negotiating mandate. Mr. Forsyth, you were at the negotiating table with the United Kingdom. Did you receive a mandate on behalf of our government not to hinder supply management in the negotiations that you undertook with the United Kingdom?

[Doug Forsyth]

Yes, absolutely. In fact, the mandate that we received and that we put forward through the Minister of International Trade and that was approved by cabinet included words to the effect that there would be no incremental market access for supply-managed products. Words to that effect apply in every negotiating mandate that I'm aware of when we launch free trade negotiations. They are words to live by, I think—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Forsyth.

I'm sorry, Mr. Perron; I had not acknowledged you earlier. I'm glad to see that you're joining our committee today.

We'll go on to Monsieur Savard-Tremblay, please.

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

Thank you, Madam Chair.

Greetings to all the witnesses.

I will yield my speaking time to Mr. Perron for this first round of questions.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Chair, thank you for your greetings. It is always a pleasure to be with you.

Thanks also to Mr. Savard-Tremblay.

I will address Mr. Forsyth first.

In your opening statement, you acknowledged that this bill was consistent with Canada's long-standing policy and its intention of protecting supply management.

Did I hear you correctly?

[Doug Forsyth]

That's correct.