International Trade Committee on March 9th, 2023

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

Let's pick up where we left off, Mr. Darling.

I asked you whether two models could coexist. You said that the people under supply management had an upper hand. However, the people you represent operate under a different model, which we respect, I repeat. They have access to business risk management programs, while those under supply management do not. The two models are hardly comparable, but they are the models that producers chose.

Don't you think it would be more constructive to focus on improving business risk management programs rather than working against supply management?

[Dan Darling]

First of all, we're not speaking against supply management, not in the least. We have coexisted, and we will continue to coexist. However, all we're arguing is that by putting this law into effect, yes, you're protecting supply management and you should protect supply management, but you are putting the rest of us—the other 90% of us—at a disadvantage in gaining those markets into Europe, which we depend on.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

We disagree on the principle.

Mr. Phinney, you said that you weren't against supply management and that it should be protected. In the same breath, you also said that it shouldn't be protected because you want to grow your market share.

You make it sound as though we want you to stop exporting your products and to switch models.

Don't you think that's a contradiction?

I'm not attacking you. I want to hear your point of view.

Don't you think it's possible to protect supply management and still enter into trade deals? If I'm not mistaken, 15 or 16 deals were signed before any supply management concessions were made.

Over to you, Mr. Phinney.

[Nathan Phinney]

One thing I can say—not pegging one agriculture industry against the other—is that we're in a unique position with the dairy industry, in that their animals will become beef at some point. As I stated before, $1,500 an animal is the increase in value by export trade and having strong export trade, so without that market the value of that on both sides of the spectrum is completely depleted.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

We are at 18% in that market, Mr. Phinney. If you know anything about supply management, you know it's about controlling quantities, and that will no longer work.

[The Vice-Chair, Conservative, Kyle Seeback]

That's the time.

We will go to Mr. Cannings for two and a half minutes.

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

Thank you.

I'm going to turn to Professor Turp, and I have similar questions along the lines of what Monsieur Perron was asking. It seems that if we should be protecting supply management, one of the pillars of that is the amount we import. That has to be controlled, and here we have a piece of legislation that seems to do that. How related are say the dairy and beef industries when it comes to negotiations, if that's one of your areas of expertise?

It seems that we can do both. We can chew gum and walk at the same time, if you know what I mean. I don't know if that question is clear, but how related are those two sectors when we do the negotiations? Isn't this an important thing to do to control the import supply to protect our supply management system?

[Daniel Turp]

That's a good question.

They aren't necessarily related. They haven't been in the past. They seem like they're related, or people want to link them, as other industries do—which we've heard today—because other countries are looking for concessions in that area in terms of their dairy, poultry and egg exports.

There is something we have to make clear. Canada mustn't be a Boy Scout, as one of the other witnesses put it. Basically, what we have to say is this: now, Canada is protecting the industry. We put a system in place. You've lived with that system all these years and throughout all those trade negotiations, and you have to keep living with it because we won't be making any concessions on that front. We aren't linking it to something else. Let's focus the negotiations on other products and other concessions.

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

I'll just pose that to Mr. Lampron or Mr. Wiens.

If we're going to protect supply management, part of that is protecting the supply. Can you just comment on that and this piece of legislation?

[Pierre Lampron]

I'll sum it up quickly.

The supply management system is our priority, of course. We have to supply the Canadian market. We said and did that despite the disasters.

We aren't against export markets. We are in favour of them. Some countries need Canadian products, and we should be able to bring those products to them. We work on that together, just as we are working together to realize Canada's potential when it comes to net-zero emissions and efficiency. I think there's a lot of potential in Canada.

However, for supply-managed sectors, we decided to focus on the domestic market. We ensure that supply. That is our responsibility. The government's responsibility is to close the border to imports. That is why the bill before the committee today helps to strengthen the system and gives producers some assurance.

[The Vice-Chair, Conservative, Kyle Seeback]

That's the time.

Mr. Carrie, you have five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair.

Mr. Darling and Mr. Phinney, I come from Oshawa. We do cars. Our supply chain is important. It's very sensitive and very accurate. We just want to make sure we get trade deals that are the best we can get for all Canadian interests.

The government committed to not giving up any more concessions to supply management. That's something that all parties agreed on. In the last iteration of this bill, which was Bill C‑216, trade negotiators pointed to the risk of losing future trade opportunities for Canada in the sectors that depend on trade.

Based on that type of consideration, would you say Bill C-282 poses more risks or benefits to the Canadian economy? Could our trade partners retaliate by adopting similar legislation? What would you say the risk is?

Mr. Darling, could you start?

[Dan Darling]

Nobody really knows.

Common sense would tell me that in a negotiation, you're going to use whatever advantage you can get. If another country protects a certain commodity—which they all do—the other country is going to put up something as well to have that protected. That will put us at a disadvantage.

Yes, I think it can create even more issues moving forward than it has before.

[Nathan Phinney]

I'm going to divert to Dennis Laycraft.

[Dennis Laycraft]

I wanted to share some numbers, because I think there was the impression that our exports and our imports.... We had a net export last year of $4 billion. That was a record net. During the pandemic, we increased production. Every year, we fully met the needs of Canadians and we set new export records.

We helped Japan. We helped all of the countries we're exporting to meet their food security needs as well. We don't necessarily adopt “food sovereignty”. We have a bigger moral obligation than that, in our view.

As we get into the trade with United States, we had a $3.4 billion trade surplus with the United States last year. Whenever you get into negotiations, it is going to get into sensitivity and the sensitive products that are down there.

I was involved in the original work to actually get agriculture under the GATT, as it was in those days. It became the WTO. The whole purpose there was to actually get.... The exact words were “fair and market-oriented trade”, so that we didn't have everybody hiding their own particular special interests and we could actually bring the entirety of agriculture under a comprehensive agreement that would allow for negotiation and fair trade.

We worry that if everybody starts to build legislation around everything they think is sensitive, we're going to set back that whole process in the exercise.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you for that, and thank you for those numbers. I didn't realize you guys did so much during the pandemic. I do believe we have a moral responsibility, because we're so blessed here in Canada to help out the world.

My concern is with the different sectors. Do you see this bill potentially pitting one sector against the others? What could be the repercussions of that?

[Dennis Laycraft]

We work closely with our friends in the dairy sector. It's how it compromises the negotiations that take place. Over the years.... We do have very skilled trade negotiators who try to balance the interests that the Government of Canada establishes. Unfortunately, that is the nature of a negotiation. Both sides are going to have interests that they're trying to pursue. At some point, if we get into another negotiation with the United States, I can guarantee you right now that it is going to come up. There's no question.

[Colin Carrie, Conservative, Oshawa, ON]

If Bill C-282 passes, would industries such as yours seek economic compensation for the missed market access opportunities that the bill could create? Is that something you guys have pondered?

[Nathan Phinney]

The precedent has been set. If there is damage.... Obviously, with the loss of quota on some of the negotiations, there was a precedent set where they were compensated. If we're looking at economies of scale, as I put it in my opening statement, $1,500 a head on three and a half million head of cattle gets to be a lot bigger number than what was paid out before.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much for that.

[The Vice-Chair, Conservative, Kyle Seeback]

We will now go to Mr. Drouin for five minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I'd like to thank all the witnesses for being here today. I also want to say that I don't think it's necessary to pit one sector against another. The agriculture industry should speak with one voice, and that bears repeating.

At the same time, I want to correct some of the false statements made by members on the other side.

I want to reiterate that the government committed to providing $1.7 billion in compensation. I want to thank the Bloc Québécois and the NDP for voting in favour of Bill C‑32. I don't want to thank the Conservative Party, however, for how it voted on the $1.7 billion in compensation. Just to clarify, I want to say that Mr. Lehoux and Mr. Martel voted against the bill. That is very clear, and I think people need to know that.

Canada was nevertheless able to make progress. I know the dairy sector experienced market loss. I meet with the 300 producers in my region, in Saint‑Isidore, and I know it's a problem.

That said, Mr. Lampron or Mr. Weins, supply management is often framed as being very costly to consumers. I know you represent the dairy sector, but two or three weeks ago, news reports coming out of the U.S. indicated that consumers were paying eight dollars for a dozen eggs. It's a country with a free-market system. I was in Florida, in fact, visiting my parents. Here, in Canada, I can get a dozen eggs at Foodland for $3.29, and those eggs are from a local farm, the Laviolette Poultry Farm.

Certain professors whom I won't name always seem to be saying that supply management costs consumers more.

What do you have to say to them?

[David Wiens]

I would certainly disagree that supply management would do that. In fact, some of the studies that have been done show that when you compare, for example, dairy products in Canada versus in countries around the world, Canada is pretty much in the middle of the pack. What happens with supply management is that the farmer ends up with more of the consumer dollar. It's not the final price, so certainly, supply management is not impacting retail prices in Canada.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

I want to talk about this because I think it's important. I wholeheartedly support Bill C‑282, and I'd like to thank the members on the other side for their support. We work together closely on this issue.

Other falsehoods were going around during the pandemic. One of them was that we could use a tube to get cows to stop producing milk, and then all of a sudden, supply management was blamed for it all.

Again, a professor whom I won't name blamed supply management, and people knew this was going on in the states. The market changed. Consider this. Last year on December 24, my region was hit by a big storm. When drivers can't get to the farm to pick up the milk, producers have to dump it. That has nothing to do with supply management.

I would just like to hear your opinion on that.

[Pierre Lampron]

Thank you for your question.

We produce milk. We also explained today how every rule has been put in place to ensure that we produce enough to meet domestic demand. Obviously, some things we can't control, like snowstorms, and producers have to respond accordingly.