International Trade Committee on June 6th, 2024

[Ron Lemaire]

Mr. Davidson was on that trip. We went with a group of Liberals and Conservatives and senators. We met with U.S. officials, both congressmen and USDA officials, to get confirmation that all we need to do to get privileged access back to PACA in the U.S. is to implement Bill C-280 as written. That was confirmed.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's excellent. Thank you so much.

Mr. Davies, I just want to confirm again what you mentioned in your testimony about how, in general, rising costs can lead to rising prices and that nothing in the new regulations will soften the impact. You're talking about the 5% tax.

Through your association, have you determined what the implementation of this 5% tax will do and what that will take out of the sector in terms of revenue?

[Graham Davies]

Thank you for the question.

It is still very early. The decision in terms of the 5% was only made earlier this week. Our members are still working through what this means.

For our members, as you would imagine, I'm unable to talk to what their individual strategies would be on such matters as pricing. However, we have seen—and hopefully I've explained—that the margin here is very tight. Where the costs are going up, we have seen in other territories that this certainly has resulted in those costs being passed through to the consumer. Again, that was the risk and the concern we're highlighting soon after this decision being taken.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you.

Mr. Lemaire, you had three points in your presentation about what we should do moving forward. They were the notion of trying to protect against the push by growers in the U.S. for seasonal tariffs that will be coming regardless, the notion that regulatory harmonization would be a benefit and the notion of the proposal on the plastics registry and your opposition to that.

Have you shared with the government not only your concerns on the plastic registry, but also your comments on the regulatory harmonization and what you would like to see in terms of that?

[Ron Lemaire]

Yes, we've continually provided the same commentary. We haven't done that within the last few months, but on an ongoing basis we've provided input around science-based, data-driven systems that are harmonized and equivalent across North America. In that approach, we can see an effective trade model that builds business, both domestically and internationally.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's great. Thank you.

[The Chair, Liberal, Judy Sgro]

We'll go to Mr. Arya, please, for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

Mr. Harvey, Bill C-282 is in the Senate. I wish it would not become a law, but it looks as though it will. It would prohibit the Canadian international trade minister from giving any further concessions on the dairy market or the supply-managed sector in Canada.

Do you think this will be an issue when the review comes up for CUSMA?

[Michael Harvey]

Right now it's still in the Senate, and we're asking senators to apply their traditional sober second thought to this piece of legislation. We think that senators are going to see that what it does is highly problematic for Canada's trade policy.

We're not arguing against supply management. We're not arguing against the protection of supply management. Our trade negotiators are instructed to protect supply management. What we think is problematic about this piece of potential legislation is that it would legislatively handcuff our trade negotiators. That's why a large group of recently retired trade negotiators spoke out against the legislation.

Senator Harder, the critic of the bill in the Senate, read that into the record. We think the Senate's going to see that this is a problem.

We have noticed in our discussions with senators that when we mention that we think it's going to be problematic for the CUSMA review, they notice. We've heard reference to it, and we met with counterparts at the World Trade Organization Ministerial Conference in Abu Dhabi. We met with American agri-food counterparts who expressed concern, and they're bringing that up with their elected representatives.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Harvey, I wish I could be as optimistic as you, because there are certain senators, like Senator Gerba, who is the sponsor of the bill there.

Assuming that it passes, I feel that it is going to have a significant impact when the review comes up. Assuming it goes forward, what do you think will be the implications during the review?

[Michael Harvey]

We think it's already having an impact and that it makes us look unserious to our American partners. Nobody else in the world does this sort of legislative handcuffing of their trade negotiators. It's normal to give instructions, but it's not normal to do legislative handcuffing.

I'm actually quite optimistic that the Senate foreign affairs and international trade committee will be making a recommendation to not move forward with the legislation or will be presenting amendments, and we think it's important that it do so.

[Chandra Arya, Liberal, Nepean, ON]

As you mentioned, without this legislation, the Canadian supply-managed sector has been protected well during all the previous trade negotiations Canada's had so far. In case it gets passed, reciprocity is very important in trade negotiations, so even if the U.S. and Mexico may not want additional access, just to argue a point, they may demand concessions in other sectors. What other sectors do you think will be affected?

[Michael Harvey]

I'd say across the board that what's problematic here is legislating in favour of just one sector and against the interests of all other sectors. We think an important thing to be studied in the Senate committee is the interests of other sectors outside of agri-food.

My comment about the lack of depth in the study was not about the level of work on the issue by members of Parliament; the main problem we saw was that there weren't many witnesses called from sectors outside of agriculture. It left a very bad impression that it was an agriculture versus agriculture issue, which it's not; other sectors are also affected. Even inside agriculture, it's not necessarily a majority; it's a minority of the sector that wants this legislation.

[Chandra Arya, Liberal, Nepean, ON]

I agree with you. In fact, I recall the committee work during that discussion of Bill C-282.

Mr. Lemaire, on the same line of questions, what are your thoughts?

[Ron Lemaire]

I concur with Mr. Harvey. Retaliatory levies are very possible, or a retaliatory action. Our hope is that there will be sober second thought and that it would be returned either opposed or returned with amendments. That would be the best course of action. That would give the opportunity for the House to review it and determine if we can move forward.

[Chandra Arya, Liberal, Nepean, ON]

I have a question to both of you. In the current—

[The Chair, Liberal, Judy Sgro]

Please ask very quickly. You have 35 seconds remaining, sir.

[Chandra Arya, Liberal, Nepean, ON]

My question is on any trade barriers that you find in the current agreement that need to be addressed during the review. That is one.

Second, is there anything in the current agreement or in the regulatory alignment that impacts competitiveness and that you guys think needs to be addressed in the review? If you have any comments on that, you can always provide them to us in writing so that we can certainly consider them.

[The Chair, Liberal, Judy Sgro]

If you would like to provide a written answer to the clerk on those last comments that the member made, we would appreciate it.

Thank you very much.

We have completed round two. We have a draft report that we need to work on before the completion of this meeting, so I want to thank the witnesses for their participation as we continue to move forward with this review, and I will move suspension.

Thank you again to all our witnesses.

[Proceedings continue in camera]