International Trade Committee on Nov. 23rd, 2020

[Kim Campbell]

Sure. My understanding is that if we don't have this agreement in place at the end of December, then importers and exporters whose goods will be going to the U.K. will then be dutiable. That would be an additional cost that is not on their balance sheets today, and that they would have to absorb. They would either need support around that, or hopefully people will come together and provide this transitional agreement to alleviate that additional cost.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

That's a cash-flow issue that government might be able to assist with.

[Kim Campbell]

Yes, and a direct cost. For sure, somebody is going to have to eat it.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Ms. Gray, for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair.

I have some questions for our customs brokers here today.

First of all, were you were aware of any consultation process by the minister or officials, or any type of outreach, any structure by which you were able to provide input into a Canada-U.K. trade agreement, transitional or not?

[Candace Sider]

Thank you for that question, but my understanding is no.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

We've heard that from across sectors.

You had testified on the challenges of giving advice on the implementation of CUSMA because of the way it occurred so quickly and it was a rush. Presumably you work with a lot of small businesses. I was a small business owner myself and people do go to organizations such as yours to get solid advice.

Are you finding right now that small business owners are reaching out and looking for clarity as to what the arrangements might be by the end of the year between Canada and the U.K.?

[Candace Sider]

Absolutely, we are seeing companies very concerned, especially small and medium-sized businesses that are often not very savvy with navigating trade environments. They're really looking to a service provider for that level of guidance for them to be able to effectively manage what is oftentimes a myriad of regulations prior to a new trade agreement coming into place and how do they qualify.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

We're around five weeks away from potentially having a new transitional agreement. Are you finding it a challenge right now to give accurate information to your clients?

[Candace Sider]

It's a challenge, but it's also an opportunity for us, because oftentimes we're dissecting those agreements well in advance of their actual implementation and highlighting the grey areas, the areas on which we need additional information in order to provide the best advice forward for our clients.

In our industry, we do this every day. We're always taking a look at what's coming down the pipeline in terms of those trade agreements that are being negotiated and their impact on the client base, whether it's importers or exporters, and how they navigate them.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you for that information. From what we heard today, we're looking at two to four weeks out before we actually have all the details. That puts us literally within a week or a few weeks of full implementation. I'm sure that will definitely create some extra pressures.

You mentioned how predictability and stability is really important for your industry and the organizations that you work with. Not having a sunset clause does create some certain levels of immediate stability, I guess you could say, but what would be the motivation to really get to the table again quickly, especially considering that the U.K. is negotiating with a lot of other countries right now, and with Canada, we have this transitional agreement that will be in place for a while?

What do you think the motivation is to actually get to the table and deal with some of the issues that we've heard about in testimony today?

[Candace Sider]

From my perspective, obviously when we talk about duty rates and the impact on companies, again, to make reference to Ms. Campbell's comment, the bottom line is that if it's not on their balance sheet and they didn't anticipate it, it's going to be a challenge in terms of how they do business and how they execute that.

Having a transitional agreement but with a lot of unanswered questions does not provide that level of certainty and predictability for trade.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Ms. Bendayan, for five minutes.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

Picking up on that conversation regarding a sunset clause, I just want to make sure that everybody is clear about what that is. When our witnesses talk about the importance of predictability and stability for our business owners, a sunset clause would effectively repeal the trade agreement, possibly before the conclusion of a comprehensive trade agreement, so that would be the opposite of providing continuity for our business owners.

I have a question for Ms. Citeau about our industry.

Perhaps you could confirm the following. Without the transitional agreement, if we look at the United Kingdom's tariff schedule, we're talking about tariffs of about 16% on beef, around 12% on lamb and 8% on poultry.

When you learned over the weekend that we had reached a continuity agreement with the United Kingdom, how did your association and its exporters react?

[Claire Citeau]

Overall, it was good because, as I mentioned, it provides stability and continued access—and it seems to maintain existing benefits—to the U.K. market. For those exporters, in particular, on the grain side, this is really welcome news.

There are some concerns, of course, for the meat sector, which is why our industry overall says that we need a meaningful agreement that will deliver on long-term and viable commercial access to the U.K. market.

Our first priority, of course, is to negotiate an agreement that will address all of the barriers that we have with the United Kingdom. This does address the stability issues for a lot of actors, but it doesn't get to the finish line, so we are not fully there yet.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Ms. Citeau.

I believe that you said this earlier. However, I can confirm that the agreement will include a commitment to return to the table to negotiate a comprehensive agreement with the United Kingdom in 2021.

I want to ask you to commit to providing certain documents to the committee so that we can be prepared for any eventuality. I'm talking about documents that set out the quantities of exports and products that may be subject to tariffs according to the United Kingdom's tariff schedule.

Mr. Irvine, I might ask you the same question. Would it be possible for you to file with the committee the documents detailing the quantities? For example, you mentioned that an 8% tariff would apply on live lobster. I think you mentioned 16% for whole frozen lobsters and 20% for lobster meat.

If we could just have an understanding as a committee of the quantities of those exports so that we can prepare for any eventuality, Mr. Irvine, that would certainly be appreciated.

[Geoff Irvine]

Absolutely.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much.

Perhaps, as a final question to both Mr. Irvine and Madame Citeau, were you involved in what I believe was approximately seven years of negotiations and extensive consultations with respect to the conclusion of CETA?

We had heard from Mr. Verheul, who was our chief negotiator at the time, that Canadian stakeholders and in particular our exporters in the agriculture sector, including seafood and meat, were very much involved and were in fact briefed on a daily basis toward the end of those negotiations. Is that accurate?

[Geoff Irvine]

Yes.

[Claire Citeau]

Very much so.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

We will move on to Mr. Hoback for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Of course they would have been consulted. The Conservatives started that process. We set up a really good communications plan for them to be consulted and to be part of it, so I'm not surprised to hear those answers.

I'm curious though. Under the consultations in 2017-18, when they gazetted the fact that they were going to make an agreement with the U.K., and then in 2019 when they decided to pull out of it, did they consult with you before doing so?

Let's start with you, Ms. Campbell, and then we'll move on to Ms. Citeau.

[Kim Campbell]

No, our association was not consulted.

[Randy Hoback, Conservative, Prince Albert, SK]

Ms. Citeau, were you consulted?