International Trade Committee on Nov. 27th, 2020

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

Seeing that all of our members are here and our witnesses are ready, I will call this meeting to order.

Welcome to meeting number eight of the House of Commons Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23. The proceedings are available via the House of Commons website.

To ensure an orderly meeting, I would like to outline a few rules to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of “Floor”, “English” or “French”. For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When you are not speaking, your mike should be on mute.

Pursuant to Standing 108(2), the committee will now proceed with the study of trade between Canada and the United Kingdom and a potential transitional trade agreement.

I'd like to welcome all of our witnesses today. From the Canadian Cattlemen's Association, we have Doug Sawyer, chair, foreign trade committee; and Fawn Jackson, director of government and international relations. From the Canadian Manufacturers & Exporters, we have Matthew Poirier, director, trade policy; from the Fisheries Council of Canada, Paul Lansbergen, president; and from Les Producteurs de lait du Québec, Daniel Gobeil, president; and François Dumontier, director of communications, public affairs and trade union life.

Thank you very much.

Mr. Sawyer, would you like to lead off, please?

[Doug Sawyer, Chair, Foreign Trade Committee, Canadian Cattlemen's Association]

Thank you, Madam Chair.

Good morning, everyone, or good afternoon for some of you now.

My name is Doug Sawyer, and I'm a cattle rancher here in Pine Lake, Alberta. I am also a board member of the Canadian Cattlemen's Association, the national voice of 60,000 beef operations from coast to coast in Canada.

With me today is Fawn Jackson, director of government and international affairs with the CCA.

We thank you for the opportunity to speak with you about the recently announced interim trade agreement with the U.K.

Before I get into the details, I would like to highlight our key message that we strongly encourage a swift return to the negotiation table to establish a permanent and ambitious FTA with the U.K.

The beef industry is one of Canada's largest agricultural sectors, supporting 228,000 jobs, and contributing $17.9 billion to our GDP. Canadian beef and livestock genetics are sold into 58 markets around the world, and we export about 50% of what we produce.

Although COVID has been extremely difficult for all Canadians, agriculture stands out as a vital and resilient part of our economy. Export Development Canada reports Canada's agriculture exports are growing three times faster than the overall Canadian average, confirming that agriculture products are a net cash generator for Canadians and the Canadian economy, and an area for continued growth. This is an important context, indeed, for the conversation we're having today about trade, both for recovery and for the long-term economic benefit of Canada.

With regard to a Canada-U.K. continuity agreement—let's call it CanUKCA—I have the following comments. In 2019, Canada exported about $19 million worth of beef to the U.K., while the U.K. exported $16 million worth of beef to us. So far this year, we are on track to be up more than 20%, while the U.K. is on track for 160% growth in its beef exports to us. This means it will have a 2:1 trade value advantage over us this year.

Despite the growth of Canadian exports into the EU and the U.K., CCA remains concerned with obstacles preventing Canada from reaching its full potential under CETA. I must refer to the CETA, because although we have not seen the details of the CanUKCA, we understand the negotiating mandate was to simply replicate CETA as much as possible. As much as the CCA recognizes the Government of Canada's efforts to maintain uninterrupted trade market access into the U.K., we are equally concerned with the EU obstacles being carried over to the U.K. agreement.

Consequently, we place great importance on the fact that the government's announcement included a commitment to return to the negotiating table within a year. We look forward to reviewing the completed text of the CanUKCA once it has been made available, and engaging the government on any shortfalls needing to be addressed in a future long-term FTA.

To start, we note that under CETA the EU has unlimited duty-free access to the Canadian beef markets, while Canadian exports, on the other hand, are subject to tariff rate quotas. We understand that the replication mandate causes this inequity to persist in the CanUKCA.

While the government has not yet published the amount of access for Canadian beef to the U.K. in the Canada-United Kingdom Trade Continuity Agreement, we understand that its objective was to achieve enough to allow those who are interested in beef production and marketing into the U.K. to continue through the next couple of years, but with little opportunity for growth—and certainly not enough to match the growth of the U.K. exports expected to come here to us.

We would like to re-emphasize the fact that British beef exports to Canada are expected to be double the value of Canadian beef to the U.K. this year. While our exports to the U.K. and the EU are growing, British beef is doing extremely well here in Canada and could realistically outpace us fourfold to fivefold over the next two years.

In a future agreement it is imperative that the beef industries in Canada and the U.K. can equally benefit from and grow this relationship and that the factors currently limiting the growth of Canadian beef exports be removed.

We also advocate for a full systems approval under both the transitional and the long-term agreement. Canada has a world-class food safety and meat inspection system that is recognized through full systems approval by most of the countries to which we export. Full systems approval is based on the two sides gaining confidence in each other's protocols and compliance. While we understand that achieving such mutual confidence was a challenge with the full 28 EU member states, we are likely closest to the U.K. and it is very achievable in a bilateral context.

Finally, we would seek to have the U.K. come into line with international guidelines and remove the EU-imposed requirements to raise cattle without the use of modern technologies, such as hormone implants and feed additives, which enable efficient use of our resources here.

We see all of these objectives as a natural step towards a future U.K. accession to the CPTPP, which they have indicated an interest in.

I would also like to make a comment on trade and the environment, which perhaps applies more broadly than in the Canada-U.K. context. The environment is a key priority for all of us, particularly to those of us who are living and working within that environment. Many anticipate that trade and environment will be intertwined in the future.

What I would like to say on this front is that Canada is already leading the world in sustainable agriculture. In the beef sector, we take our responsibility of stewarding and protecting Canadian grasslands very seriously and have set out numerous environmental goals on grassland conservation, GHG reductions and many other areas. We need to make sure that any future discussions on this within trade agreements are related to trade as outcome-based, and not as prescriptive in nature.

CCA recognizes the importance of avoiding trade interruptions and the need for a transitional agreement, but we are also strongly advocating for a swift return to the negotiation table to establish an ambitious agreement that addresses the current trade-limiting factors.

[The Chair, Liberal, Judy Sgro]

In closing....

[Doug Sawyer]

We look forward to reviewing the complete text as soon as it's made available and to engaging with the Government of Canada on any shortfalls that need to be addressed.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sawyer.

We're now on to that Canadian Manufacturers & Exporters and Mr. Poirier.

[Matthew Poirier, Director, Trade Policy, Canadian Manufacturers & Exporters]

Thank you, Madam Chair. Good afternoon, everyone.

Thank you for inviting me to participate in today’s discussion. It's my pleasure to be here on behalf of Canada’s 90,000 manufacturers and exporters and our association's 2,500 direct members to discuss the transitional trade agreement with the United Kingdom, the implications for Canada, manufacturing and the exporting sector, and the future of our vital industry.

Our association’s members cover all sizes of companies from all regions of the country and all industrial sectors. We represent the majority of Canada’s manufacturing output as well as Canada’s value-added exports.

My plan is to outline the challenges that manufacturers and exporters face with this situation. I will also share solutions that I hope we can discuss in the Q&A session as well.

As the committee knows, with over $20 billion in exports, the U.K. is Canada’s third largest export market after the U.S. and China. Canada-U.K. trade was one of our very first trade relationships and traditionally has been our doorway to the European market. According to CME's management issues survey—a large biennial survey of Canadian manufacturers—the European Union, and the U.K. in particular, is a top-three market that exporters see as having the most potential in the next five years. It is vital that we protect our market access to the U.K.

We were therefore relieved to hear last week of the new Canada-United Kingdom Trade Continuity Agreement that we understand largely copies CETA. Obtaining a permanent Canada-U.K. trade agreement is clearly important and the end goal. Having this transitional agreement in place for January 1, 2020, to avoid any disruption was paramount.

Obviously, not having this transitional agreement in place would be bad, especially in a year where we can least afford it, economically. CME stands ready, therefore, to help this committee and the government avoid that scenario. We urge the government and all parliamentarians to work together to move this agreement through Parliament as quickly as possible to meet that January 1 deadline.

Beyond these mechanical trade agreement issues lies an even bigger problem that I must raise. That is the problem of our declining value-added export performance. It's a decline that has been accelerating despite our signing more and more free trade agreements.

Let me explain what I mean. Two-thirds of Canada’s value-added exports—the type of exports that Canada makes the most money off of—are manufactured goods. In other words, Canadian manufacturers take raw ingredients, transform them into something of higher value and then sell these goods abroad. This bigger bang for your buck type of trade has been declining for years. In fact, with the U.K., manufacturing exports have been declining steadily for five years, even after we signed CETA. We have a 10-year streak of negative trade balances with the U.K. in manufactured goods. Last year, that deficit ballooned to be four times larger than it was in 2010.

I know in some circles it's considered gauche to point to trade balances as cause for concern. Sure, consumers may be winning, but we cannot ignore the lost economic potential that the decline in value-added exports represents. It would be like me being happy with the price of things going down a bit while my take-home pay is cut year after year. It's just simply not sustainable.

Why is this happening and how do we fix it? Simply put, Canada’s manufacturer exporters are too small and are at capacity. Generally speaking, of Canada's businesses, a higher proportion are small SMEs than most of our global competitors. From a fundamental structural perspective then, we need to get our companies to invest in their businesses, help them to grow and scale up. Larger companies are simply better-positioned to take advantage of global trade.

CME's 2020 manufacturing survey results backed this up. When asked what is holding them back from exporting to new markets, they told us that the risks are too high because they lack competitive edge with foreign companies. They simply feel they can't compete and don't bother to.

It is important that we agree that this structural domestic business problem is driving our export underperformance. Landing new global customers through FTAs is rather pointless if we cannot produce the goods to sell to them at competitive prices.

You may ask yourselves if this isn't the point of EDC, BDC, CCC and the trade commissioner service. Aren't they supposed to help de-risk exporting and help SMEs get out there?

The answer is yes and we would argue they all are quite good at doing just that. The problem is the disconnect between these great programs and the exporters knowing that they exist. When we polled manufacturers, we found that those who use these agencies and programs love them, but a majority of respondents couldn't even identify some agencies, let alone the programs they offer. This is a big problem. We have the dual challenge of our exporting companies being small, underinvested in and uncompetitive, and a big gap between government assistance and companies actually using that assistance.

Here are some concrete solutions that I would love to discuss in the Q and A session.

Number one, create a manufacturing strategy for Canada that focuses on modernizing and growing the sector. It needs to help companies invest in the technology that will help them scale up and truly become global players. We happen to have such a plan, which we discussed with many of you in the spring. I will be happy to leave a copy of this report with the clerk.

Number two, launch a made-in-Canada branding exercise at home and in international markets to celebrate our manufactured goods. This will boost awareness of Canadian capabilities and technology as well as sales and exports. As my friends here in the food and agricultural sectors can attest, the maple leaf is a global brand with a sterling reputation that we don't take advantage of enough.

Number three, bridge government export agencies and exporters by leveraging the vast networks of business trade associations. This can be done by investing in Canada's trade associations' capacity to link the two sides and act as a concierge service for exporters. The government used to do these types of initiatives to great effect. We think they should again.

Number four, expand our efforts on SME exporter mentorship. Organizing and managing private peer-mentoring networks is another way in which Canada's trade associations can be used to maximize company-to-company learning.

All these actions are table stakes if we want Canada to play a bigger role in global trade. They will also go a long way to helping current manufacturers maximize their export potential for years to come. However, while we at CME believe these solutions are something we need to work on now, the priority, of course, is ensuring that we maintain current global market access.

Let me reiterate that CME stands ready to assist you to make certain that a transitional agreement is in place between Canada and the U.K. before the end of this year and, in time, a permanent trade agreement between our two nations.

Thank you again for inviting me today. I look forward to the discussion.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Poirier. I appreciate your suggestions and solutions.

We'll move on to the Fisheries Council of Canada and Mr. Lansbergen, the president.

Please go ahead, Mr. Lansbergen, for 10 minutes.

[Paul Lansbergen, President, Fisheries Council of Canada]

Thank you, Madam Chair.

Thank you to the committee for the invitation to testify today.

The last time I appeared before this committee was in the previous Parliament. Oddly enough, if I remember correctly, I did that one remotely as well, due to business travel.

Before I get into my specific comments on the trade agreement, I would like to spend a few minutes to provide some context on the council, the sector and our trade context.

The Fisheries Council of Canada is the national voice for Canada's wild-capture commercial fisheries. Member companies are processors who process the majority of Canada's fish and seafood production. Our members include small, medium and larger companies, along with indigenous enterprises that collectively harvest fish in Canada's three oceans.

The Canadian seafood industry creates 80,000 direct jobs, mainly in coastal and rural communities. In essence, the sector is the beating economic heart of these communities. The sector accounts for $7.5 billion in exports, to roughly 130 countries. The largest export markets are the U.S., at 61% of our exports; China, at 17%; Japan, at 4%; Hong Kong, at 3% and the U.K., at 2%. If you take the EU as a whole, it would be ranked third, at 7%.

Growing global demand for protein, including fish and seafood, points to growth opportunities for the sector. The Food and Agriculture Organization of the United Nations is projecting global seafood demand to grow by 7% to 10% annually. You might wonder where this is going to come from. Seventy-one percent of the earth is covered by oceans, yet only 3% of our direct diet comes from oceans. Research from the High Level Panel for a Sustainable Ocean Economy indicates that the ocean could supply over six times more food than it does today. This would represent more than two-thirds of the animal protein needed to feed the future population. Because ocean-based food is so sustainable, increasing its fraction in the global diet would contribute significantly to climate change mitigation.

The last statistic I want to share with you on the ocean economy is that the World Resources Institute estimates that every dollar invested in ocean-based protein yields $10 in health, environment and economic benefits. That is a great ROI.

Some of you may be aware that the government is developing a blue economy strategy. FCC and the Canadian Aquaculture Industry Alliance, our counterpart on the farmed side, have developed a joint vision and action plan for that strategy. Our 20-year vision is to be a global top three best sustainable fish and seafood producer—not the largest, but the best.

With this vision we have three aspirational goals: We want to double the value of Canadian seafood, double the economic benefits and double the domestic consumption of fish and seafood. These are definitely ambitious, but if you don't aim high, you don't achieve high. All members of Parliament were sent a copy of our submission this fall. I would be happy to discuss this more fully with you individually at your convenience.

The last and most important backdrop for our conversation today is our sustainability performance. Canada is a global leader in sustainable fisheries management, with a robust regulatory regime. In addition, Canada's adoption of independent, third party certification is multiples higher than the global average of only 16%. As a result, DFO reports that 96% of our fish stocks is harvested at sustainable levels. We should feel proud of our collective stewardship of our fish resources.

All of this is important context for my remarks today, and I would now like to move on to the specifics of our trading relationship with the U.K.

Industry values its trading relationship with the U.K., our fifth-largest importer. Our exports to the U.K. in 2019 were $131 million, or 1.7%, rounding up to 2%, of our sector's annual exports. The top product grouping exports to the U.K. are salmon, at 35%; shrimp and prawns, at 26%; lobster, at 25% and scallops, at 5%. The importance of the U.K. market to individual companies ranges from nothing or very little to their being a large supplier to the U.K. market.

The most recent global tariff schedule proposed by the U.K. earlier this summer suggested that Canadian fish and seafood exports would face increased tariffs. Our assessment of the impact it would have on our sector, using export data from 2019 and if a new deal is not in place with the U.K. by the end of the year, is that non-CETA rates would add roughly $11 million on the top four product groupings I previously mentioned. This would represent an average tariff rate of nearly 10%. This is high enough to be a prohibitive disadvantage in the marketplace. However, it is important to note that some of the salmon exports contain salmon from Alaska and are not eligible for preferential tariff treatment under CETA or the transitional agreement with the U.K.

The new transitional trade deal will ensure that Canadian seafood products continue to enjoy tariff-free access to Britain. It will also give us an advantage over other countries that don't have a bilateral trade agreement. In response to the announcement on Saturday, we issued a press release that applauded the transitional agreement.

FCC would urge all parliamentarians to swiftly ratify this agreement so that it can go into effect by January 1, 2021. Canadians working in the fishery sector supply chain will thank you.

With that, I welcome any questions you might have.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lansbergen.

We move on to the Producteurs de lait du Québec. We have Mr. Gobeil, president, for 10 minutes, please.

[Daniel Gobeil, President, Les Producteurs de lait du Québec]

Good afternoon, everyone.

I am happy to be here with you today on behalf of Les Producteurs de lait du Québec. Thank you for the opportunity to share our point of view on the Canada-United Kingdom trade agreement negotiations.

I am joined by François Dumontier, director, Communications, Public Affairs and Trade Union Life, at Les Producteurs de lait du Québec.

The Producteurs de lait du Québec organization is affiliated with the Union des producteurs agricoles. In Quebec, 4,877 dairy farms deliver nearly 3.33 billion litres of milk, the farm gate sales of which total more than $2.7 billion.

In Quebec, dairy production generates 83,000 direct and indirect jobs, which contribute to fiscal benefits of $1.3 billion. That accounts for nearly 50% of dairy farms in Canada. Quebec alone generates more than 58,000 direct and indirect jobs. It is ahead of a number of sectors, including aerospace, mining and electric energy.

Nationally, Les Producteurs de lait du Québec account for 37% of Canada's dairy production. We are a leader in dairy processing in Canada: nearly 77% of yogurt produced across the country is processed in Quebec, as is the case for 52% of all cheeses. We produce nearly 65% of fine cheeses, which we offer in some 400 varieties. We also set ourselves apart through organic production that represents nearly 42% of Quebec's dairy production. Note that the fine cheese we produce is considered a niche product.

Since 2002, cottage industries have set up in a number of regions, and their development has accelerated. Their number has increased from 34 to 53.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Chair.

[The Chair, Liberal, Judy Sgro]

Yes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Can we ask Monsieur Gobeil if he could go a little bit slower, so we can hear the translation?

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Aboultaif. I thought it was just mine that was seeming to echo a little bit.

Would you just go a little bit slower, please, Mr. Gobeil.

Thank you.

[Daniel Gobeil]

Okay. Thank you, Mr. Chair.

As I was saying, Quebec's dairy sector contributes $6.2 billion to the gross domestic product, or GDP. The dairy sector contributes significantly to the employment and the socioeconomic fabric of Quebec regions and communities. The dairy sector is a significant source of jobs across all professions. Among them are veterinarians, agronomists, input suppliers, farm machinery dealers and mechanics. There are other sectors such as the transportation sector. As a result, concessions made in the dairy sector affect many industries. Thanks to all those investments made on farms, more than $500 million returns to Quebec's economy annually.

Canada's dairy producers have been hit hard by the concessions made in the last three agreements. Any additional concessions would threaten the future of family farms, of Quebec's and Canada's dairy producers, of rural communities and of hundreds of thousands of people whose livelihoods depend on that sector.

As you know, we are talking about market concessions to the tune of 8.4% granted through the last three agreements—the Comprehensive Economic and Trade Agreement, or CETA, the Canada-United-States-Mexico Agreement, or CUSMA, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. Added to that are concessions made in various agreements related to the World Trade Organization, or WTO. In 2024, 18% of Canadian dairy production will be covered by other countries.

There is no doubt that, for us, that is a significant market loss. Few sectors or business owners can prosper in a business environment when a growing portion of their market is given to other countries. Those losses stemming from market concessions represent $450 million every year, of which $165 million for Quebec.

You will remember that, for CETA, which we are discussing today, the concession is 17,700 tonnes of cheese—16,000 tonnes of fine cheese and 1,700 tonnes of industrial cheese. For us, that is a heavily affected sector, as there are only two tariff rate quotas. As mentioned earlier, Quebec produces 65% of fine cheeses. So we are genuinely impacted by this agreement.

Dairy producers support the signing of a free trade agreement with the United Kingdom, on the condition that Canada not give additional access to its dairy sector, as dairy producers have paid the price of Canada's participation in the last three agreements.

So we are pleased about the continuity agreement announced last Saturday. The government has granted no additional access to the United Kingdom, in keeping with the commitment made by the Prime Minister and the Minister of Agriculture and Agri-Food, Ms. Bibeau.

So I thank the government for keeping its promise. That clearly shows that it is possible to conclude trade agreements without sacrificing supply management. However, we are very aware that this is just a continuity agreement that will lead to a renegotiation of a more long-term agreement. Our position is clear. The provisions that concern us in the continuity agreement must be reproduced in their entirety in a potential long-term agreement.

No additional access to the Canadian dairy market must be given for cheese or for any other dairy products. In the continuity agreement, the United Kingdom took already included tariff rate quotas—in other words, those reserved for the European Union in the negotiations with the WTO.

Let's keep in mind that, under CETA, import access is equivalent to 1.4% of our domestic dairy production. The United Kingdom decided to leave the European Union and, if it wants to have access to the Canadian dairy sector, it must negotiate with the European Union, and not with Canada.

All the party leaders with a seat in the House of Commons have unanimously confirmed their opposition to any new concessions being made in the dairy sector through the trade negotiations. The Prime Minister himself committed to a potential agreement with the United Kingdom not containing any more concessions than those we already granted in CETA.

Every time the Canadian government concedes access to markets, more Canadian dairy products are replaced by foreign products on our store shelves. We have to put an end to that erosion if we want Canada's dairy industry to remain strong and dynamic.

Globalization is being heavily questioned these days, especially in the context of the pandemic. Consumers are becoming increasingly aware of the importance of safeguarding local production in order to protect their food security, but also the environment. Breaches in supply management lead us in the opposite direction of food security protection.

Concessions conditional on indemnities are not a model for trade negotiations. The government has committed to stop granting concessions on dairy products in future trade agreements. That must be the norm going forward.

I also want to take this opportunity to remind you that we are still waiting for compensations. For over a year, Prime Minister Trudeau, Deputy Prime Minister, Ms. Freeland, and the Minister of Agriculture and Agri-Food, Ms. Bibeau, have been saying that producers will be compensated for the losses arising from those concessions.

The first installment was paid in 2019. However, no details have been provided since on the implementation of commitments related to those three agreements. I am using this opportunity to applaud a motion that was passed yesterday by all political parties, so that compensations for the last three agreements would be announced as quickly as possible to end the uncertainty in the countryside. It is clear to us that we shouldn't have to annually beg for promises that have already been announced.

The government will provide a financial update next week. Our producers would find it very hard to understand if the government did not make an announcement on the compensations at that time.

As you briefly mentioned, supply management is a model based on the Canadian demand, and producers adjust their productions. There have been concessions, adjustments and compensations, but I repeat that this is not a sustainable model for Canadian dairy production. It is clear to us that we must be vigilant in the negotiation of future agreements.

Thank you for your attention. I would be happy to answer your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Gobeil.

We'll go on to Mr. Aboultaif for six minutes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Good afternoon, and thanks to the witnesses for appearing before the committee today.

I would like to start with the last testimony, by Mr. Gobeil. I couldn't hear everything, but what I did catch from his remarks is that he is concerned about supply management and the compensation throughout to protect the industry in Quebec—the dairy industry specifically.

Would he be able to comment on that based on this rollover agreement the government announced last Saturday?

[The Chair, Liberal, Judy Sgro]

Mr. Gobeil.

[Daniel Gobeil]

Thank you very much.

The continuity agreement is indeed good news for Quebec's and Canada's dairy farmers because it prevents the arrival of new products on the Canadian market. As you said earlier, nearly 18% of the Canadian market will be conceded to other countries.

Quebec's and Canada's dairy producers have made massive investments over the past few years to respond to market growth. However, when the market growth goes to other countries, farms experience financial difficulties. That is why we must be vigilant. When the figure is 18%, it is clear to us that the concessions and compensations model has reached its limit. I really want to bring that issue to your attention.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

I'll go to Mr. Sawyer. He mentioned his concerns about tariffs.

Again, this is a rollover agreement that the government announced. We don't have the text in front of us. We don't know when we will see that text. All we know is that it's a replica of the CETA. Based on my knowledge of CETA and if it's a rollover without our having any details in front of us, would Mr. Sawyer be able to comment on his main concerns when it comes to the industry he represents?

[Doug Sawyer]

Certainly, we're poised to have a significant increase in the EU and certainly the U.K.'s part of that, and a large part of it. We've had long-term large trading capacity and ability with the U.K.

However, the TRQs are very limiting to us. They don't allow us to fully expand into that market, in particular at the same rate the U.K. is allowed to expand into our market. They're basically open to import whatever they can sell, and we are very limited by these TRQs. I think we can survive them for the next couple of years, but beyond that, given that we trade 50% of our production, it's vital that we get into these very significant and the high-priced markets, and the U.K. has certainly been one. Those TRQs are definitely holding us back.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Sawyer, do you believe that these concerns will be a feature of this interim agreement, or this rollover agreement, again?

[Doug Sawyer]

Yes, it appears that, if they follow the methodology they were describing going into this, we will be faced with a limited number of TRQs going into the U.K. We don't know that number yet until we get the text, the same as you.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Are you satisfied with the consultation by the government on what's been done so far?

[Doug Sawyer]

Certainly we've had a voice, and we've had a good working relationship with all parties in the entire government. It's certainly been helpful to have that. However, we do look for broader consultation in the future on the impact this trade agreement, this FTA, could have on our farms.