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.