International Trade Committee on March 9th, 2023

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

That's just speaking more about milk dumping and the relationship between supply management and milk dumping and how, to my knowledge, it's not related, but please go ahead.

[Pierre Lampron]

We produce the milk. We don't process it. Something has to happen in between.

[David Wiens]

What we experienced during the pandemic were supply chain issues. Everything went from this balance between retail and food service to where suddenly there was no demand in restaurants, hotels and so on. It took a while for the supply chain to readjust. On the farm, we had to make some massive adjustments, because at first the demand went way down, then it spiked and then it came back down again. We were having to respond to it, which we could do very quickly.

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

Absolutely, and I want to that say every country protects certain agriculture products. They protect them whether it's in the form of subsidies or tariffs. They all do it. Whether it's the sugar industry or whether it's a farmer making money or not but gets subsidized per acre, every country has an interest in protecting their agricultural products, because we need to feed Canadians. I want to thank all of you who are sitting at the table for doing that.

I know that I didn't get the chance in five minutes to ask a question of my other friends here, but I want to thank you for doing what you do.

[The Vice-Chair, Conservative, Kyle Seeback]

So—

[Richard Lehoux, Conservative, Beauce, QC]

I have a point of privilege to raise, Mr. Chair.

I don't want to take anyone's time away, but may I respond to the honourable member since he referred to me by name?

[The Vice-Chair, Conservative, Kyle Seeback]

Unfortunately, no, we are in the rounds of questioning, so you cannot.

On that, we will now turn to the third round, and we will go with Mr. Baldinelli.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

This is kind of interesting. I'll just build on what I indicated at our last meeting in the interest of disclosure. During the late 1990s and early 2000s, I worked as a lobbyist for a consulting firm in Ontario. One of my clients was Dairy Farmers of Ontario. I'm pleased to have worked for them and the school milk program throughout Ontario. I think all of us recognize the importance of supply management to our farm organizations and our farm families.

I want to follow up on two comments.

Mr. Darling, you indicated in your comments the fear of the possibility of a protectionist response, in that if Bill C-282 were implemented, it would encourage, for example, our largest trading partner, the United States, to adopt similar legislation. What would be the impact on our farm sector if that were to occur in certain sectors such as, for example, the beef sector?

Mr. Phinney, you can follow up as well.

[Dan Darling]

Thank you. I won't answer on the beef, but maybe I'll defer this question to my vice-president, Greg Northey.

[Greg Northey, Vice-President, Canadian Agri-Food Trade Alliance]

Thank you, Mr. Chair.

That's a good question.

If you can, imagine if every country legislates protection for anything. As Canada, we tend to try to sign comprehensive trade deals. Countries could decide that they would like to not sign the chapter on labour, say, or on the environment, or on anything else that we would like to see in that deal. It could be on the agriculture sector. It could be on anything. They will follow Canada's example. Because we are so dependent on trade, Canada tends to set examples for the world.

We're productive at WTO and productive all over the place in terms of trying to develop quality trade deals. If any country that we go into a bilateral or multilateral with sees how Canada is going to legislate protection for any sector—supply management is sort of secondary in this case—you can imagine that we would never get to commercially functional deals.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

If I can just build on the second comment, which I just want to follow up on, Mr. Lampron, you talked about how the legislation would lead to greater stability and predictability. I fear that, if we legislate this, if we codify it, it may lead to the opposite result.

For example, building on what my colleague said in the last meeting, look at dairy production in Canada. We went from 75 million hectolitres in 2000 to 94 million hectolitres in 2021. Today I just pulled off the exports of dairy products by country of destination and, to the United States, the value of our dairy exports went from $189 million in 2019 to $241 million. It went up by $52 million.

I would imagine that those exports were negotiated—weren't they? That market access was gained through a trade negotiation—wasn't it? If we codify through Bill C-282, what would stop the Americans from renegotiating our trade agreement and saying, “Forget it. Trade dairy exports into Canada are not permitted”.

Do you not feel that's a risk to the sector, a risk we want to try to avoid?

[David Wiens]

I can start off.

First of all, in terms of the exports, right now the Canadian dairy industry is still not experiencing the full impact of the trade deals that have already been signed on to. There may have been an incremental increase, but in fact, there's more to come because it's being phased in over a number of years. It will be another three or four years before the full impact of past trade agreements are felt here in this country.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Okay, but will that impact exports? It seems that exports are going up.

[David Wiens]

In fact, with the latest CUSMA agreement, we're restricted in certain of our exports. There's a cap placed on some of our skimmed milk and—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Would you not like greater access?

[David Wiens]

Well, that's—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

If you said no, on the other side what's to stop the Americans from saying no? In fact, forget the $241 million; it's all off the table.

[David Wiens]

Yes. I think it's already been said before that every country has sensitive areas that are a no go. For the Americans, it's sugar, cotton and so on.

Overall, when you look at it, Canada is a good place to do trade, and I think a lot of countries want to do it. I think it's a bit over-speculation to say that there's a restriction in one area, and all of sudden people are not interested in trading with Canada. I don't believe that for a minute, because I think Canada is a very attractive market for many different areas within the economy.

[The Vice-Chair, Conservative, Kyle Seeback]

With that, we have to move on, because we're 29 seconds over.

We'll go to Mr. Miao for five minutes.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Vice-Chair.

Just to put it on the record, on December 8, 2022, Conservatives voted against Bill C-32, which certified the $1.7 billion for supply management. Furthermore, the leader of the official opposition did not commit his full support of Bill C-282.

I'd like to ask my first question of Mr. Slomp.

In your policy briefing on the previous verison of the bill, the National Farmers Union stated that passing the bill was in the national interest. Do you believe that this bill, Bill C-282, will impact the competitiveness of the Canadian agriculture sector on the global market?

[Jan Slomp]

I probably misunderstood you, but we are in support of this bill and not against it.

Did I understand you wrong?

[Wilson Miao, Liberal, Richmond Centre, BC]

No. The initial statement was for me to put it on the record, but my question to you was because.... You stated that it was of national interest in the last Parliament. Do you believe that this bill will impact the competitiveness of the Canadian agricultural sector on the global market?

[Jan Slomp]

I don't quite know how to answer. I think this bill definitely strengthens the position of supply management in Canada. It doesn't have to impede other sectors, in my opinion.

I'm pretty sure that doesn't answer your question, but that's all I have to say about that.

[Wilson Miao, Liberal, Richmond Centre, BC]

That's good. Thank you very much.

I would like to have my next question go to Mr. Lampron.

Can you tell the committee why predictability and stability are so important to Canadian supply management, particularly in the dairy sector?

[Pierre Lampron]

Thank you for your question.

Supply management is important because it's a good system, based on the cost of production, not on the market. It's a system that really examines the cost of production. What producers are paid is based on their production cost, in other words, an average production cost. That way, every farm is always trying to be more efficient to bring down prices and make the product more affordable for consumers.

Supply management is not based on the global market, so it affords producers stability. We don't make huge profits, but we also don't incur huge losses. We can survive quite a while without making a lot of profit. That's how the system works. It provides predictable conditions. That's the system we chose, and that's the system people want to keep. It does the same thing for consumers. It keeps the price stable, without any major jumps or drops. Producers are able to survive, and consumers have peace of mind that the product will be on store shelves.