International Trade Committee on May 30th, 2024

[Daniel Gobeil]

In Canada, the cheese sector is a source of pride. Still, CETA had some very big limits given the 17,500-tonne quota. Clearly, the CUSMA, which grants a quota of over 100,000 tonnes at maturity and growth over successive years, with a country that is a neighbour, represents a very significant market right.

As you said, Mr. Martel, we don't want industries to compete with each other. We believe that each industry should benefit from trade agreements. Production like ours, where growth has been almost zero since 2015, despite three successive trade agreements, is unsustainable for Canada's dairy producers.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Mr. Gobeil, in regions like ours, what impacts has CUSMA had on our dairy producers? Have they been what you expected?

[Daniel Gobeil]

Yes, they have. Quebec, in particular—a sector I know well—used to have over 12,000 farms. Now it has lost more than 30% of those farms. The entire Saguenay-Lac-Saint-Jean region has been sidelined by the concessions set out in CETA. As for CUSMA, it has had repercussions on other regions of Canada, which now have to do something else to feed Canadians.

So it's clear that this has had significant consequences.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

At the moment, you're negotiating with processors about the National Ingredient Strategy, launched in 2016.

How do you see these negotiations, given that results will have to be presented to the Americans?

[Daniel Gobeil]

We're on the cusp of these negotiations, which will start soon.

We repeat: We want to feed Canadians. To do so, we're taking advantage of the three main pillars of the supply management system. Of course, the consumer has evolved. Sometimes we can export value-added products or products like protein concentrates or infant formula.

Surely, from a growth perspective for processors, we need to be able to export our products to other markets. As Mr. Trew said earlier, we have to think about sustainability. We're talking about business sustainability. Thanks to the territory, access to water, hydroelectricity and land, there's no other place in the world where milk can be “greener” than in Canada.

[The Vice-Chair, Conservative, Kyle Seeback]

Time's up.

We'll now turn to Ms. Fortier for five minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Chair.

I have questions for the Dairy Farmers of Canada. I'll start with Mr. Wiens.

In your opening remarks, you mentioned that you are concerned that the U.S. might try to relitigate the arguments they made during the recent TRQ panels. We've been discussing this in the last hour.

Can you continue to elaborate on that and to discuss why it would be dangerous to entertain discussing these very issues, which were settled within the dispute resolution panels, within a broader CUSMA discussion?

[David Wiens]

Obviously it's a concern. First of all, there's an agreement. They challenged us through a panel and the panel ruled in our favour. We know from their reactions to it that they were not very happy with it.

There's also the other element, electorally speaking, that the swing states in the U.S. are also dairy states, so it's to the benefit of both major political parties to focus on that area in terms way beyond its significance to their economy. We're afraid that, if there's an agreement there and you don't get your way during a panel, you will keep poking away at it through a review. That is very concerning.

Certainly if the agreement were to be reopened for negotiation, one of the first things we would have on the table would be to ask why there are these export restrictions on us. They are punitive to Canadian dairy. I don't think such a thing exists in any other trade agreement.

Let's say the U.S. comes along and says they want to reopen it, and then we have our demands. Our concern is that they might simply use this as another way of trying to get what they didn't get before.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you.

I get to ask questions in both official languages today.

Mr. Gobeil, the next question should be easier, since you've already discussed it over the past hour. Canada has successfully argued, through multiple complaint resolution mechanisms, that its supply management system is not only legitimate, but also in the best interests of Canadian consumers.

Can you explain why we must continue to defend this system and what benefits it has, even today, for Canadians?

[Daniel Gobeil]

Thank you for your question.

It's clear that the goal of the system is to provide a quality product to Canadians. We're responding to the needs of Canadians.

We also need to establish a needs-based production to avoid food waste, and not base production on export markets that all countries could aim for.

We often hear that when we compare the prices of Canadian products with those of American products, prices are lower in the United States, except in states close to the border. However, the prices of our products are comparable when it comes to butter, cheese and milk.

The consumer doesn't pay for supply management in Canada. It's a better distribution of wealth among producers who make a decent living from it, processors who are engaged here and have invested in Canada, and consumers who seek out Canadian products.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Do you have anything else to add for the committee members in the last minute of speaking time you have left?

[Daniel Gobeil]

As I said earlier, we see that governments are making more and more decisions in relation to climate change.

As I said before, producers have growth opportunities in Canada. Long-term growth lowers Canadian production costs. We do production cost surveys every year, and our production has been stable for several years. Because of the very significant rise in costs, producers are finding it difficult to spread these costs over a larger volume.

In my opinion, protecting the market also means providing Canadians with a product at a better price.

[The Vice-Chair, Conservative, Kyle Seeback]

We'll now turn to Mr. Savard-Tremblay for two and a half minutes.

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

I didn't think we'd have time to get to a second round.

Mr. Trew, we will therefore continue. You spoke mainly about the environment. I then asked you about investor-state dispute settlement.

Let's turn now to labour. There's a new chapter with many fine principles. Earlier, the Unifor representatives were telling us that there were some interesting mechanisms that should be used to do even better.

How do we make sure that, in any renegotiation, workers' rights are still protected?

[Stuart Trew]

We can do better, and it's something that all three countries want to do better on. This is an area where we don't have to reopen the agreement. We don't have to renegotiate. Mexico, the United States and Canada are already thinking about how to tweak the rapid response labour mechanism to make it more effective.

We have some other recommendations. We need to clarify annex 31-B, the Canada-specific rapid response mechanism, to confirm that it applies to a denial of rights at any covered facility by any domestic legislation in Mexico. It's not just legislation related to the constitutional changes in 2019. We need to clarify and promulgate more specific criteria and requirements for remediation agreements that resolve rapid response complaints, including content such as damages, timelines and requirements for consultations with stakeholders. We need to engage in co-operative capacity building under the CUSMA labour chapter to strengthen the law enforcement and inspection system in Mexico and assist with funding capacity for an arms-length oversight committee with a mandate to collect data and offer training.

I think we can also work with the Canada Border Services Agency, for example, and this comes back to autos. It's kind of related in the sense that we can develop a better idea of how much domestic content is going into automotive products that are crossing borders. In that way, consumers will have a better idea of what they're purchasing when they decide which car to pick.

There are some other recommendations. We do have more, but I don't want to take up too much time.

[The Vice-Chair, Conservative, Kyle Seeback]

You have 30 seconds.

[Stuart Trew]

Keep going...? All right.

As I said, we can confirm and expand the economic sectors that it covers beyond those of manufactured goods and expand the definition of denial of rights. I think this is important, and I should have mentioned it earlier. It's not just freedom of association and collective bargaining that we're upholding through the rapid response process. We can include discrimination on the basis of gender, sexual orientation or gender expression; gender-based violence; child labour; health and safety; and minimum standards of work.

Let's build this out so that we can actually enforce a much broader range of labour protections.

[The Vice-Chair, Conservative, Kyle Seeback]

I will ask you to please submit to the committee the document you're reading from, so we can have the fulsomeness of it and include it in the report.

Mr. Cannings, you're bringing us home today. You have two and a half minutes, but I'm sure your colleagues would be happy if you did less than that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

We'll see.

[Some hon. members]

Oh, oh!

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Yes, it's slow talkers of America here.

I'm going to continue on with Mr. Trew.

In your report, you have a part where you mention the digital trade chapter and how it undermines workers' rights, privacy and competition policy. I'm wondering if you could, in two minutes, tell us how that can be improved.

[Stuart Trew]

It's difficult, because it's a complicated chapter. It's one of the more complicated chapters of the agreement.

Digital services are becoming much more important for our economies, but there are areas where there's a lot of surveillance. There's a lot of abuse of children, for example, in the algorithms we see when we're looking at TikTok and other systems. In order to crack down on that and better regulate that, you need access to the source code sometimes. You need access to the algorithms.

CUSMA makes that difficult or potentially impossible. It's not been tested yet, but the language is new. There's a prohibition on governments accessing that information in order to regulate or put products on the market. I think we need to revisit that. There are a lot of cases. Even to help tax the companies or figure out how many of their sales they're generating in Canada, you sometimes need the source code and the algorithms to go through and figure that out.

There are elements of the digital trade chapter that I think are there to completely benefit big tech companies in the States. They don't help our companies or Canadians. We should be revisiting them.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'm done.

That's just for all of you.

[Some hon. members]

Oh, oh!

[The Vice-Chair, Conservative, Kyle Seeback]

I want to thank the witnesses very much for coming today.

Wait. I have three motions. No, I'm kidding.