International Trade Committee on June 6th, 2024

[Michael Harvey]

Canadian agri-food exporters have a very good carbon profile with low carbon production and are constantly working to improve the technology. We think it's very important that sustainability at a global level not be used as a disguised trade barrier. We do think that sustainable trade has a very key role to play in reaching our sustainability goals.

[Ron Lemaire]

I'm a founding member of the national agri-food sustainability index, which was created to find the benchmarks to gauge our strength and sustainability within agri-food. It's a vital piece moving forward.

I'm in agreement with Mr. Harvey. This cannot be a trading tool or a competitive tool. This has to be a fabric of how we do business, and it cannot add cost pressure on the farmers, whether in Canada, the U.S. or Mexico. The only one who will pay in the end is the consumer, so we have to ensure that we develop a strategy that effectively leverages sustainability and at the same time enables business.

[Wilson Miao, Liberal, Richmond Centre, BC]

You mentioned sustainability. Can you talk about the contribution of this trade partnership in the agriculture and agri-food sector as well?

[Ron Lemaire]

In the trade relationship with the fresh fruit and vegetable sector, we've seen growth and development within our trading relationships in an increased export strategy with our U.S. partners, as well as growth in the Mexican market.

Where we've actually seen some challenges is in our own domestic internal trading framework. A good example, when you talk about the wildfires, is British Columbia, which is looking for rootstock for wine grapes as well as their tree fruit industry. Ontario has rootstock available, but they cannot sell that to B.C. without fumigation. We need an exemption for that. It's an internal non-tariff trade barrier to moving product from one province to another. These are some of the issues we see domestically.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you for sharing that.

Mr. Harvey, do you have anything to add?

[Michael Harvey]

The CUSMA has means of managing disputes around non-scientific trade barriers. A good example is Mexico, which has banned GMO corn; the United States has opposed that, using the dispute settlement mechanism, and the Canadian government has supported the U.S. position, and we supported Canada's support for the U.S. position.

We think that the CUSMA provides a way to manage disputes like this so that they can come to science-based decision-making.

[Wilson Miao, Liberal, Richmond Centre, BC]

On some of the sustainable measures our government has introduced, such as the national adaptation strategy to combat climate change, could you please share with this committee how the environmental measures are helping the sectors to combat climate change while also securing competitiveness between our trading partners?

[Ron Lemaire]

The water component is a fundamental factor. Water will be a future challenge for everyone. That's the first and foremost step within our sustainability strategy, especially within a North American context and our trading relationship within agriculture: How do we solidify and manage our sustainability framework and drive forward with ensuring everyone has the water necessary for production?

[The Chair, Liberal, Judy Sgro]

Thank you very much. Your time is up.

I'll hand it off to Mr. Savard-Tremblay for two and a half minutes, please.

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

Mr. Volpe, I'd like to turn to you again. Do you have any suggestions for protecting the North American market from imports and investments that could come from China?

[The Chair, Liberal, Judy Sgro]

Excuse me, Mr. Savard-Tremblay, but Mr. Volpe left. When he came on, he said he was only here until 4:30.

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

Really? Is anyone from that group still with us?

[The Chair, Liberal, Judy Sgro]

No.

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

In that case, I'm going to ask a broader question and anyone who wishes may respond.

Representative Katherine Tai recently stated that disputes and dispute outcomes need to be part of the joint review, as the disputes could not be resolved using the dispute settlement system itself only. Some people have already witnessed conflicts and been at the centre of them. Everyone wants to avoid future trade wars.

What comments and recommendations would you make about the systems in place? In which areas do we need to be vigilant?

[Ron Lemaire]

That's a good question.

I'll speak to the question that was asked around the deemed trust discussions.

In Canada, if we move forward with the mechanism around financial protection, then Bill C-280, which is in front of the Senate, would be one of the other tools that would enable working around and within CUSMA. Because it is built within the framework of tri-national modelling, it would give us access to a dispute resolution model within a preferential system that no others have internationally. Then Canadian growers in the fresh fruit and vegetable industry, and exporters, would be able to access that dispute resolution tool.

It just means moving our own bankruptcy protection here forward to enable the U.S. to reinstate that preferential access, due to the reciprocity nature that they're requesting. It's slightly outside of CUSMA, but it's founded within the context of the North American free trade agreement.

[The Chair, Liberal, Judy Sgro]

I notice that Mr. Davies has his hand up. Does he want to add something to the question?

[Graham Davies]

Yes, please. Thank you.

DiMA's members, and comments made by numerous U.S. and Canadian stakeholders—including the U.S. Chamber of Commerce, USTR, U.S. lawmakers, academics and other experts—indicate that introducing a 5% tax that forces U.S. and international companies to pay into a fund they cannot access creates a risk of this becoming a trade irritant. We would encourage members of this committee to review the comments made by all of these stakeholders and review the implementation of the Online Streaming Act.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, you have two and a half minutes, please.

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

Thank you.

I'd like to turn to you, Ms. Tranberg.

We heard a brief mention of non-tariff barriers just now. We hear a lot about this situation in relation to meat exports, for instance, between Canada and the U.K. and Canada and the EU. I'm wondering what your association or your members are concerned about, if they are concerned at all, around non-tariff barriers that might hinder the trade of cattle, especially live cattle, back and forth between Canada and the U.S.

[Janice Tranberg]

Thank you for the question.

One of the things we're seeing is around the voluntary labelling, the voluntary product of U.S. labelling, that just went in. We were very concerned. It's sort of a wait-and-see situation on how much this will actually impact trade, since it is voluntary and not mandatory.

As we mentioned, the trade between Canada and the U.S. on beef is over a very open border. In 2021, for example, 638,000 head of cattle were imported from Canada. At the same time, there was an export of about 377,000 head of cattle from the U.S. This goes back and forth. Given that there is such open trade between the two countries, the limits around labelling are a concern. Certainly we hope that this will not become a trade irritant.

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

That's fine, Chair. I'll leave it there. Thanks.

[The Chair, Liberal, Judy Sgro]

Mr. Baldinelli, you have five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I'd like to thank the witnesses for being with us today.

Mr. Lemaire, I'll start with you.

You spoke in response to my colleague Mr. Hoback about the plastics registry and the possible impact under CUSMA rules currently. I think many of the witnesses here today have talked about the need for regulatory harmonization as we move forward with our partners, both Mexico and the United States.

In your response about the probable impact that might happen with food prices because of this, you talked about a Deloitte study and a 30% increase in food costs as a result. I think our committee would benefit from that Deloitte study, if you could share that with us. For our purposes, I think that would be hugely important.

You also spoke about Bill C-280, which is a private member's bill from our colleague Scot Davidson. He's spearheading it. It's in the Senate right now. It received unanimous support in the House of Commons, and I believe the same in the Senate. I think this legislation will potentially pave the way for reinstating the Perishable Agricultural Commodities Act protection in the U.S. for Canadian growers.

What does the government need to do to push for this to happen as part of CUSMA, or even prior to CUSMA?

[Ron Lemaire]

We need to get it out of the Senate unamended. It has to get out. It has to go into force. We need to demonstrate to the United States....

I was fortunate enough to go to D.C. with some parliamentarians and some senators to meet—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Was Mr. Davidson on that trip as well?