International Trade Committee on March 9th, 2023

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you for that.

Would Mr. Gobeil have input on this question, as well, regarding predictability and stability?

[Daniel Gobeil]

Our market here, in Canada, isn't subsidized, as we often say. That means consumers pay a fair price in relation to the cost of production. When it comes to our ability to compete and exports, it's hard to draw comparisons because other countries' sectors are often subsidized, as are other sectors in Canada. Therefore, we can't compete with our counterparts in heavily subsidized markets.

In Canada, the principle behind supply management is to control the border to keep subsidized products out of the Canadian market.

[Wilson Miao, Liberal, Richmond Centre, BC]

This is a follow-up question for you. It's a bit about Quebec's collective marketing of milk.

Can you share with the committee how it is unique and how it benefits Quebec farmers?

[The Vice-Chair, Conservative, Kyle Seeback]

Answer in about 20 seconds.

[Daniel Gobeil]

As mentioned, we share the costs and expenses, so all the transportation and marketing costs are shared collectively. The cost to access markets and growth is the same for all producers. That's why it's referred to as collective marketing. That model ensures that farms can survive in every region of Quebec.

[The Vice-Chair, Conservative, Kyle Seeback]

We'll go to Monsieur Savard-Tremblay for two and half minutes.

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

Thank you.

I have a quick question that requires a quick answer. A yes or no would be perfect.

Is it true that, before Canada signed the three trade deals that undermined the supply-managed dairy sector, Canada said officially that it would support supply management and pledged to preserve the integrity of the system?

[Pierre Lampron]

Yes.

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

Very good.

Mr. Turp, I'm going to ask you something that will make you laugh. None of your first-year students would ever dare to ask you this, but I think we're at the point now where the clarification is necessary. That tells you what we've come to.

Mr. Turp, does legislation carry more weight than a verbal commitment?

[Daniel Turp]

Of course. You should know that. You are all parliamentarians, after all.

Bill C‑282 carries weight. It would prevent Canadian negotiators from being able to make concessions. The bill very formally sets out a commitment restricting the prerogative of the government and the minister.

I'd like to say something, if I may. When I hear people describe the supply management system as outdated or protectionist, it brings to mind a question. Instead, why not suggest that other countries adopt the system?

The system has proven its worth. What's more, it contributes to food sovereignty. Some U.S. states—Wisconsin, for instance—are now looking at the system. They think it may be the way to protect farmers and ensure food sovereignty.

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

Thank you, Mr. Turp.

You said that we should know the answer. We should, and that's why I was counting on you to remind us of that.

I'm coming back to the dairy producers for the little time I have left.

When I hear people say that we need to stand up for supply management but keep the door open so we can stay in the game, here's what I take that to mean. Dairy farmers could once again be sacrificed if there's something to be gained in another sector.

Do you share that concern?

[Pierre Lampron]

We definitely do. What we are saying is that Canada did pretty well, but it always makes concessions at the 11th hour. No more 11th hour concessions. Canada has to negotiate without giving up additional market access. Every country has similar protections in place for certain products. In Canada, those products are supply-managed. There are a growing number of hungry people on the planet, so let's be smart about how we manage this.

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

How much time do I have left, Mr. Chair?

[The Vice-Chair, Conservative, Kyle Seeback]

You have 10 seconds.

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

If the government is telling you that it's supportive of that but isn't willing to give the system ironclad protection, to me, that means the government is leaving itself a little room to sacrifice the system. That's my fear.

[Pierre Lampron]

We have the same fear, and that's why we support the bill.

[The Vice-Chair, Conservative, Kyle Seeback]

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

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

Thank you.

I'm going to turn to Mr. Phinney.

I have far more ranchers in my riding than I do dairy producers, so I wanted to make sure I gave you fair time. I don't know if you remember, but we met briefly in Penticton when your organization met there. Thank you for coming to Penticton for that. It meant a lot for us in terms of our conference industry.

I wanted to give you a chance to respond to some of the questions I've been asking. I'm assuming, when I look at import and export numbers, that the major market you're concerned with is the American market. It seems to be something like 75% to 80% of your market. I'm wondering how concerned you are that these two things are really connected. They don't seem to be, for instance, when we look at CETA where you have way more capacity than you've been using or can use. Can you comment on that?

[Nathan Phinney]

Yes.

You're exactly right. The U.S. is our biggest trading partner: 80% of what we're producing in beef products is going into that market. Together, among the U.S., Mexico and Canada, we have created the world's largest beef-integrated system in the world. To our point, we have a moral obligation in Canada to help feed the world. The only way that we can do this is to continue to have these open and free trade markets.

There is one point I want to make. Back in my opening comments, I talked about the sustainable protein that is less than half the world's greenhouse gas emissions. There is an absolute need globally for meat protein. It is going to be produced. If we're going to be world leaders on a global front on the sustainability and environmental front, Canada is best positioned to do that. If not, it's going to go to somewhere else in the world other than Canada to be produced, to somewhere that doesn't have the same moral obligations on an environment stand as what Canada has.

Our fully integrated U.S.-Canada-Mexico system on beef is unlike any other in the world.

[The Vice-Chair, Conservative, Kyle Seeback]

You have about 30 seconds, Mr. Cannings.

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

That's okay. Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

Then we will go to Mr. Lehoux for five minutes.

[Richard Lehoux, Conservative, Beauce, QC]

Thank you, Mr. Chair.

Thank you for the opportunity to participate in the Standing Committee on International Trade and ask questions. It's a pleasure to be here this afternoon.

Since the honourable member on the other side Mr. Drouin referred to me by name earlier, I'd like to correct the record on a few things.

The government made commitments in its November economic statement, but I only hope those amounts make their way into the budget. These are compensation payments that will be made from 2024 to 2030. As we speak, producers are being directly impacted. It wasn't long before our neighbours to the south took their place in the market. I want to make sure we are on the same page when we discuss those things.

I have a question for Mr. Phinney about non-tariff barriers. As we know, some are in place now and more could be added. You said this legislation could hinder Canada in negotiating future trade agreements. I don't think a country can intervene when there's a non-tariff barrier. The World Trade Organization has rules, of course, but we are already seeing some of the effects.

I'd like you to talk about the impact of those non-tariff barriers in relation to Canada's recent agreement with the European Union and Canada's ability to export beef to Europe. Are you exporting beef to Europe right now?

There were a lot of questions in there, but I'll let you answer.

[Nathan Phinney]

I'm going to defer to our trade expert, Dennis.

[Dennis Laycraft]

That's a great question. We haven't realized the potential from the European agreement that we were expecting. We do have an application in on one of the non-tariff trade barriers to get the products we use in North America in our food safety system. Part of the reason we're not selling more is that our processors aren't prepared to turn down our food safety system to go to Europe. That's basically it in a nutshell. We're going to see by this time next year whether Europe is prepared to approve a product that they use extensively throughout the entire continent, so that will be a real test of that.

I do want to clarify this idea that there aren't trade negotiations going on. One of the most important things we're working on right now is our accession to the CPTPP, and that is probably the gold standard for ambition in trade agreements. The last thing we want to do is see that ambition eroded. It is proven to us. We lost access to China for a number of reasons that are not science-related, but because of the CPTPP and the ambition we achieved there, we were able to move on very successfully and still have a record level of exports.

There are active trade negotiations. These are real conversations, and it's important that we have the best opportunity to negotiate the most ambitious agreements. We did export 85 billion dollars' worth of Canadian agri-food products. This is pretty important to the Canadian economy.