International Trade Committee on Sept. 23rd, 2022

[Brendan Byrne]

We have farms across Ontario of all different sizes, so we look at it as something that all growers could take advantage of if it's right. We look to facilitate that, because we see some small enterprises that have found some specialty markets, as well as some larger growers that do the same. We'd like an equal opportunity in that for our growers, but it would certainly be interesting to take a look at the language that you might be proposing and make a comment on it.

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

Thank you.

Go ahead, Mr. Gaudreault.

[Raphael Gaudreault]

Presently, of course, we're a small company, but when we launch production, we're looking at somewhere around 400 employees, so I'm not too sure if we really fit into that category.

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

That's great. Thank you.

Each of you mentioned a number of issues that you're having. As the government enters into various negotiations, what would be some of the top pieces of advice you would give the government to mitigate some of these current issues? Again, we'll go through and we'll see how much time we have here.

Go ahead, Mr. Innes.

[Brian Innes]

From our perspective, prioritizing trade agreements and the infrastructure that is required after them would be our number one piece of advice, in the sense that we should invest energy to achieve both of those objectives.

We know that not all countries in the world are thinking like that at the moment, so the fact that Canada has negotiations with Indonesia is very positive. The fact that we have negotiations with India is also very positive.

However, we also have to realize that success doesn't stop at an agreement. We have to not just build a bridge, but walk across it. Following up on those agreements with investment in regulatory co-operation to resolve issues that are really important for small and medium-sized enterprises around regulations and technical issues would be our second piece of advice.

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

Go ahead, Mr. Byrne.

[Brendan Byrne]

I think that was well said by Mr. Innes. On our end, we're looking to a level playing field with our competitors on this, the carbon tax, fertilizer tariffs and pieces like that which are at play. I'm in an area where I see U.S. crops coming across the border that are not subjected to some of the things that we are.

When we're exploring use in these markets, we want to make sure that our farmers are competing on a level playing field with any of our competitors that are also trying to establish relations in those areas.

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

Go ahead, Mr. Gaudreault.

[Raphael Gaudreault]

I definitely agree with what was said. Anything that makes sure that there aren't tariffs applied to our product and that we can trade as much as we want or are able to definitely facilitates our lives afterwards.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Monsieur Savard-Tremblay for two and a half minutes, please.

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

Mr. Gaudreault, I'd like to make a geographical point. When we talk about the Indo-Pacific region, we think of the ASEAN countries, but it includes other countries too. I just wanted to point that out.

Right now, which countries might be interested in your product and need it most in their supply chains for battery production?

[Raphael Gaudreault]

For battery production, I think it's mainly South Korea, which is a world leader in that field. For fertilizer, it's undeniably India, which had a very hard time in the last season because of serious problems in obtaining fertilizer, including phosphate.

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

I would imagine that you don't have an overview of companies working in your sector, so I'll ask you to talk about your company. Do these two countries already account for a substantial portion of your market or are you waiting for a tariff cut before jumping in?

[Raphael Gaudreault]

We are in fact still at the planning phase. We don't have any product to sell at the moment, but we have been having discussions with companies and investors in these countries about selling our product to them.

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

Based on what you've heard, are Quebec and Canada exporting only a little or a lot of products in that region? Would a future reduction in tariffs simply ramp up existing trade or would an agreement create new opportunities?

[Raphael Gaudreault]

I apologize, but I don't have enough information to answer your question.

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

That's all right.

I see that I have only 30 seconds left, which doesn't leave me enough time to ask any other questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Masse for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I'll go really quickly to Mr. Innes and Mr. Byrne.

Obviously, my area is Windsor, Ontario, with the Great Lakes. Is there any notable change in weather conditions for growing, especially with climate change coming? Are there things that we should be looking at infrastructure-wise as well to help protect the industry or ameliorate what could take place? I'll turn it over to you to hear from you if there's anything you've noticed or something of concern that we need to start planning for.

[Brian Innes]

I'll start, but I certainly want to hear from the ground, from Brendan as well.

When it comes to soybean varieties, they're very sensitive to the amount of heat, so we need to continue to invest in varieties that fit the geographic conditions we have; our temperatures are getting warmer, which is generally a good thing for what we're able to grow, both in eastern and western Canada. Also, they need to be able to withstand periods of prolonged lack of moisture or drought and to be able to take more extremes, whether they be cooler temperatures in the spring or hotter temperatures in the summer.

Brendan, I'm sure that on the ground you can add to that.

[Brendan Byrne]

Yes, I would say that there certainly are climate change pieces at play. Even in our region, we've been pushed to later plantings in the spring than we probably were when I started farming full time almost 20 years ago, and harvest goes out a little longer, but we do find that we are able to access genetics and whatnot that do survive those pieces.

I guess that having the support of the government in case there are some of those once-in-a-lifetime storms that are happening more than once in a lifetime now and having some of those backstops in place are important to our farmer members, as well as investment in some domestic production of fertilizer and fertilizer storage. Pieces like that would help alleviate a bit of the risk as we go, but also, there's working alongside farmers and seeing what they're seeing on the ground, and not having just a top-down mechanism of government, down to farmers. Work collaboratively on what they're seeing in climate change and on what can be worked on together.

[Brian Masse, NDP, Windsor West, ON]

That has been very helpful. Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Sheehan, you have five minutes, please.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

Thanks again to the presenters for this important discussion.

Interestingly enough, there's a gentleman from Sault Ste. Marie, Gerry Fowler, from Manna International, who is a broker that does organic soybeans. He represents a number of farmers in southern Ontario and mainly ships into Europe. He and I have discussed the industry. One of his concerns—not tariff related—is shipping containers and the shortage thereof.

Brian, and perhaps the other speaker, could you update us on what's happening with the shipping containers and shipping? That's one piece of the question.

Further on, where are you guys shipping to? Which ports are you entering into and distributing to in the Indo-Pacific region? I'd be interested to know. The sub-question or thought on that is about the South China Sea. We see certain security concerns from our friends and allies, such as Japan, with some of the claims that China makes in certain areas. Are there any concerns and what do you do to deal with those issues in the South China Sea?

[Brian Innes]

Thank you very much for the question on containers. Containers are really important for our ability to export. In fact, almost all of our food-grade soybeans are exported in containers and, of all the grains in Canada, soybeans are the greatest users of containers for export. About 40,000 containers of soybeans are exported from Canada every year. They're loaded in places like just south of Montreal and farms near Essex, all across the country, including in the Prairies and even in the north.

What we see is that what's happening in the container system is a concentration of market power, which is giving us poor service and discriminated rates here in Canada. What we see is that relative to our competitors—in the earlier question about what our American competitors are facing—our shippers continue to have a really hard time getting competitive service and competitive rates for containers to ship our soybeans.

It's a challenge for us and it's a real challenge on the ground for farmers like Brendan, who are about to harvest their soybeans this year, because we still haven't shipped last year's crop. There's a limited amount of storage available for our soybeans. Thankfully, we're looking for a good crop this year, but that challenge of poor service means that our shipments have backed up and we haven't kept up with what we'd like to export.

Our container shipments go through Montreal and they go through Vancouver and Prince Rupert, so we utilize the ports both east and west for soybeans. It's a critical part of our competitiveness. They're an important link to get food from places that can grow it, like Canada, to people who consume it right around the world.

Unfortunately, it's not just about COVID and supply chains. It's about the concentration of market power, which is really hurting our small and medium-sized enterprises.