International Trade Committee on Sept. 23rd, 2022

[Chris Lewis, Conservative, Essex, ON]

Thank you, Chair.

Thank you to all the witnesses. I suppose maybe we should have this meeting in Essex today, because if we're talking about Harrow, we're talking about Essex and we're talking about batteries. It's been a really fantastic meeting that's been full a lot of information so far.

Monsieur Gaudreault, I will not be able to get to you in my line of questioning, but if you would please reach out to my office, sir, I would love to have a conversation with you with regard to batteries.

Madam Chair, farmers feed cities. We see those signs right across Essex. Everybody knows that. It's not only Canadian cities. We now have an opportunity for trade.

Mr. Byrne, I just want to let you know that I got home late last night and woke up this morning to my soybean field: It's now turning. Before very long, my yield will be part of this conversation as well.

Just recently I visited ADM. For those who don't know, ADM is a crushing plant and then an export plant in the LaSalle-Windsor area. That's where freighters and trains come and do a bunch of exporting from. Generally speaking, I'm pretty well versed on this site.

Just as a point of interest, the shadow minister for agriculture, John Barlow, will be in Essex on Saturday. I'll be having a conversation with him as well on a lot of these various fronts. There are a lot of things in the mix right now.

Specifically, Madam Chair, through you to Mr. Byrne, I understand the costs. I understand the price of grain. I understand the price of fuel. By the way, I understand the lack of fertilizer and then the price of fertilizer, if you can even find it. In the last session of Parliament, Mr. Lawrence brought forward a private member's bill to take the tax off gas to dry our grains. I believe Mr. Lobb will be introducing that very shortly. Is that something that would help farmers to invest more and have more grain going forward?

[Brendan Byrne]

It's a great question.

I think that in general anytime a farmer can invest in his own operation versus sending the money out to the government side it's a positive on our end.

In this case, a lot of people are doing exactly the same thing they would be doing on their farms to dry their grain, but they're having to send out cheques of $8,000, $10,000 or $20,000 to dry it down, and, as you would know, we don't have a reliable source that we could change to. Usually some of these pieces come into play to enact change, but there's nothing currently reliable that we can switch to from natural gas and propane. We certainly look forward to that private member's bill continuing and we hope that it will pass.

[Chris Lewis, Conservative, Essex, ON]

Okay. Thank you.

Chair, through you, I'd like to go back to Mr. Byrne, please.

Maybe less than a couple of weeks ago, I was fortunate enough to address the Essex County Federation of Agriculture, and they certainly had a lot of concerns with regard to the fertilizer side of things. I asked them, “If we give you some relief, how much more capacity does Ontario have specifically?” I'm wondering, when I say capacity, if we gave the proper relief to the farmers, how much more could Ontario export? Are there any numbers for that, sir?

[Brendan Byrne]

I could certainly pull some numbers from our team. We have an economist on staff and our GR department as well. I know, in general, that the issue you get into with the fertilizers, especially with the tight supplies and the tariff, is that there will be some people, say in planting wheat [Technical difficulty—Editor]

[The Chair, Liberal, Judy Sgro]

Hold on, Mr. Byrne.

You need to go back half a minute, please.

[Brendan Byrne]

Yes, that's no problem.

On that fertilizer piece, there are farmers right now who are planting wheat. They're providing it with just a base level of nitrogen versus a full level, and that's where you [Technical difficulty—Editor]—

[The Chair, Liberal, Judy Sgro]

Hold on again.

[Brendan Byrne]

—impact food production. You'll have—

[The Chair, Liberal, Judy Sgro]

Hold on, Mr. Byrne. We missed a little bit. Go back 30 seconds with your last statement as it's getting broken up.

[Brendan Byrne]

Okay. I'm sorry about that.

Anytime we're using less fertilizer because it costs more or because there is a tariff being applied to it, that is going to directly affect food production, because farmers are going to make decisions based on the amount they can put into the crop with the expectation of the return, knowing full well that they are at the mercy of the weather.

We certainly hope tariff relief comes. We'd like to see the tariff removed—we're the only G7 nation that has enacted that—so that we can provide as much food production as possible, not only for Ontario and Canada, but also for those areas around the world, especially in and around Ukraine, where we could maybe help out. It's certainly going to be needed.

[Chris Lewis, Conservative, Essex, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Mr. Miao for five minutes.

Go ahead, please.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair.

Thank you to all the witnesses attending today.

I'd like to, through the chair, direct my question to Mr. Gaudreault.

Further to the question Mr. Virani asked earlier, global demand for phosphate is increasing at a rate of 2% to 3% each year, indicating a phosphate production requirement of four to six million tonnes per year.

What other uses of phosphate beyond EVs and fertilizers are contributing to the growing demand?

[Raphael Gaudreault]

Eighty-five per cent of the production goes to the fertilizer world and then the 15% that's left is for all other applications—specialty phosphate and the technological side also. It plays a role in hydrogen production as well. It will increase the solubility and increase the performance of the hydrolyzer, so these are the main applications for phosphates.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

The next question I'd like to direct, through the chair, to Mr. Byrne or Mr. Innes.

How would you describe the value of gaining increased access to the Indo-Pacific region markets? Is the value in expanding your potential consumer base or more focused on access to cost-competitive supply of services and goods?

[Brian Innes]

Maybe I'll start and then Brendan can add his perspective as well.

When we look at our soybean sector, we're really export focused, and so access to the Indo-Pacific is about accessing growing demand to grow our exports but it is also very importantly about having options, and about having diversity.

I'll let Brendan elaborate on what he said in his opening remarks on the impact of instabilities when there's a problem in one market and you can't sell there, or you have difficulties selling there, and what happens on the producer side when that happens. However, from an industry perspective, we want to have as many options as possible, as many open channels, if you will, because that helps us have growth but also helps us have diversity when challenges come up.

[Brendan Byrne]

I would simply add that farmers like consistency and the ability to avoid some of the market volatility.

I know we're at the mercy of the weather and that's a volatile thing, but we like to be able to know that there are markets for our crop that are available to us and to explore that. I know from talking to farmers across Ontario that you'll find all different types of growers that are interested in providing for specialty markets—whether they be tofu or organic—across the board that way.

I think at our end it's just about opening that extra market for the export opportunity in case something like what we saw with China happens again.

[Wilson Miao, Liberal, Richmond Centre, BC]

Continuing with you, Mr. Byrne, what is the competitive advantage of importing Canadian grains as opposed to grains from other countries? What countries are your largest competitors in relation to exporting to the Indo-Pacific region and the ASEAN region?

[Brendan Byrne]

I would probably look to Mr. Innes for that last part in terms of our largest competitors.

I'd say that it's probably 35 years ago or so when my family—my uncle and cousin—went on a trade mission to Japan, which was looking at our identity preserved soybeans. Even at that time, they were known as the best in the world. When you were looking for identity preserved food-grade soybeans, you looked to Ontario.

We've continued that all the way through, including pieces on sustainability and on making sure that everybody knows exactly what has been put into that crop. I can't speak to the growing regions in those other areas, but I know that the soybeans grown here in Ontario are perceived as a very high-quality crop around the world.

[Wilson Miao, Liberal, Richmond Centre, BC]

Mr. Innes, you would like to add to that?

[Brian Innes]

Building on Brendan's remarks, we have an agriculture sector that adopts technology really quickly. We create technology, including seed technology and seed varieties, to produce the best tofu in the world, as Brendan describes, and we have a logistics and small and medium-sized enterprise system of exportation that is able to deliver their side of the responsibility quite efficiently. We often rely upon other partners, such as container lines, for example, or railways, which are less reliable, but our sector is competitive because of those things that we do along the value chain.

You asked about our competitors, and it's often the United States when it comes to identity preserved food-grade soybeans. South America also produces a lot of soybeans. Where we fit in is really in providing a high-quality product that works for food manufacturers. Also, we provide sustainable products that our customers have confidence in, and they can also have the confidence that we will deliver them reliably because of producers like Brendan, and because of our system that's highly developed and the trustworthy relationships that our businesses develop.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will go on to Ms. Gray for five minutes.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair.

Thank you to all the witnesses for being here.

When this committee was looking at trade with regard to Canada and the U.K., I know that one recommendation we heard at the time was to put a chapter on small business into trade agreements. This chapter would enhance the ability of SMEs to benefit from trade agreements through things such as information sharing.

Would having SME-focused measures in trade agreements in the Indo-Pacific benefit your organizations?

I'd like to ask all three of our witnesses here that question. Maybe we'll start with Mr. Innes.

[Brian Innes]

When it comes to the soybean industry, we have a lot of small and medium-sized businesses. From our seed companies to our exporters, we have many small and medium-sized businesses spread across the country. We also have a lot of small and medium-sized businesses in the processing industry, not far from Ottawa, which turn soybeans into oil and meal for various purposes. We're very focused on small and medium-sized businesses, including farmers like Brendan. There are tens of thousands of them across the country.

When it comes to trade agreements, I think we're certainly interested in how the language can help us. It's something that we would like to look into more. The issues we face are often regulatory in nature, so if there are provisions that help to facilitate those discussions on regulatory issues, which are much easier when you're a larger organization, we would see that as really helpful.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

Go ahead, Mr. Byrne.