International Trade Committee on Feb. 16th, 2023

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

It's not like the CETA agreement, where the EU gets it all.

[Doug Forsyth]

That's right. It's in our control.

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

It's in your control.

[Doug Forsyth]

The WTO quota is in Canada's control, for administrative purposes. That's correct, but it's only a temporary arrangement.

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

I think Mr. Baldinelli raised a question about challenges, before. He and I have a lot of wine produced in our ridings, and Australia put forward a WTO challenge on our excise tax. A lot of Canadian wineries didn't have to pay excise tax. Australia challenged that, so now they have to.

Have there been any successful challenges to the supply management system in Canada, in the past? I'm trying to find out how this bill might affect.... That was the question he had: Would this bill make those challenges more likely, or has nobody challenged it? Every country protects its farmers in various ways.

Again, I want a sense of that question: Will this expose us to more challenges?

[Aaron Fowler]

The way the bill is structured, it would apply prospectively. It would apply only to future negotiations and commitments the government may consider with future partners. As such, it should have no particular impact on Canada's existing commitments contained in agreements that are already concluded. I see no reason to believe the passing of this bill would subject us to any greater risk of a challenge to the commitments we've already taken on.

There have been challenges in the past—both at the WTO and under our FTAs—focused on aspects of the Canadian supply management system. The initial panel under the CUSMA, which was referred to in an earlier question, was brought by the United States and focused specifically on aspects of Canada's TRQ allocation and administration regime for supply-managed products—for dairy products.

This bill, however, in my view, would have no impact on existing commitments, or subject us to any higher level of legal risk in that regard.

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

What about the other countries and their subsidies? How are they protecting their sectors, and what does Canada do about that?

[Aaron Fowler]

Countries deploy a variety of tools and policies to protect and advance the interests of their agricultural sectors. In some cases this includes subsidization, and in some cases it's tariff protection for the domestic market. When we negotiate with these countries we try to secure concessions from them that respond to interests that are brought to our attention by Canadian agri-food stakeholders and other stakeholders. It has been suggested that other countries have legislation in place that is similar to the bill that is before the committee. I must say that to the best of my knowledge, I am not aware of any Canadian trading partner that has a legislated prohibition on the negotiation in a specific area.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We now go to Mr. Seeback for five minutes, please.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thanks very much.

I know these are tough questions, so I appreciate the answers that we're getting here today. It's a really important issue.

I have a quick question first. Is there a sunset clause in either CPTPP or CETA? I know there is one in CUSMA. Do we know if there are in those other two?

[Aaron Fowler]

I just wanted to look at my counsel to make sure I had it right.

No, neither of those agreements contains a comparable clause.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

There is one in CUSMA, though—is that right? I think it's 16 years is the sunset, but it can be reviewed in six.

[Aaron Fowler]

There is a clause in the CUSMA that requires the parties to complete a review after six years, at which point in time the parties will determine whether they want to extend the period of application of the agreement. Should they determine after six years that they do not want to formally extend the period of application of the agreement at that time, then the agreement would nevertheless remain in force until the 16-year anniversary, during which time the parties could discuss whatever topics they want.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

This bill would mean that if we went into that negotiation, supply management is off the table completely, even though they've had access previously. Is that correct?

[Aaron Fowler]

I don't think it is correct. I think the commitments that exist in the CUSMA today, to the extent that they continued to form a part of the agreement going forward, would not fall afoul of this.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

For 16 years. In 16 years it's sunset, and you renegotiate, like we just did. Would this bill then mean that supply management is off the table?

[Aaron Fowler]

If the CUSMA were to sunset, then any subsequent agreement would be a new agreement, therefore it would be subject to the provisions of this piece of legislation.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I think one of the things you said in your testimony, and I don't have it all, is that the concessions made in supply management allowed Canada to conclude deals that are in the overall economic best interest of Canada.

I know this is hard, but if we went back in time and we didn't have access—if supply management was off the table and this bill existed and we were renegotiating CUSMA—how difficult would that renegotiation have been?

[Aaron Fowler]

It's a difficult question to answer and it requires me to speculate, which I don't like to do when I'm sitting in this chair—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

In your experience.

[Aaron Fowler]

—but as the lead agriculture negotiator at the conclusion of those negotiations, it is my opinion that there was no deal that did not include market access commitments for dairy.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Would you say that that's the same thing that happened with CETA as well as CPTPP? If supply management had been completely off the table, would it have been extraordinarily difficult for Canada to make a deal?

[Aaron Fowler]

Madam Chair, I was not a part of the negotiating teams for either of those negotiations. However, the stated policy of the Canadian government during both of those negotiations was that it would—

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

I understand that.

[Aaron Fowler]

—make no concessions. Therefore, having ultimately determined that such concessions were necessary, I can only conclude that failing to do so would have put the deal at jeopardy.