International Trade Committee on March 20th, 2023

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mr. Baldinelli for five minutes, please.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Again, thank you to all of the witnesses for being here today.

I enjoyed speaking with Mr. Pelissero at the beginning. I indicated to him that in a previous life, before getting into politics, I worked with the Dairy Farmers of Ontario. I got to know one of his former employees, Mr. Mitchell. I had the pleasure of working with him for several years on the supply management aspect.

I think you can see that many here—I believe all of us, in terms of the political side—support the supply management side. If we have any concerns, I would say it's just the aspect of codifying this and the impact it might have on other agricultural sectors going forward in any potential trade negotiations.

I'm going to go to Mr. Currie first.

We've had Pulse Canada, the Grain Growers of Canada, the National Cattle Feeders’ Association, the Canadian Cattle Association and the Canadian Agri-Food Trade Alliance come forward and speak about their concerns about what putting this into legislation may do.

My question is how CFA considers that when it comes forward. I think Mr. Drouin was reaching the same point. Others have come forward sharing their concerns.

As a global organization representing all of Canada—this is for the Canadian farm association—how does one rectify that or coalesce those competing ideas?

[Keith Currie]

Well, as was mentioned, it's always difficult when you have so many commodities that you're representing.

At the end of the day, our policy on defending supply management comes at the wish of our membership. The membership around our table has supported the policy of defending supply management, so we continue forward. It doesn't mean that we don't support other aspects of agriculture as well, because we represent everybody, by and large, by default, from some of our provincial general farm organizations that sit around our table.

As I mentioned, you don't necessarily have to give up one for the other. I will go back to CETA as a prime example, in which there was consensus to bring dairy imports into Canada, yet we've seen almost no reciprocation by the European Union from a trade standpoint with respect to agriculture. If we can't gain access by giving up supply management, maybe we should stop giving up supply management until people are willing to give us access to other products.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That's all about negotiating and negotiating the best deal. Again, my only concern—and I support supply management—is the notion of codifying it. Even with respect to whether this legislation is in fact required, we have government negotiators, and all government officials are saying they are committed to supply management.

I in fact asked Mr. Aaron Fowler from Global Affairs, when they testified at the beginning, whether this legislation is even required. He commented that Canada, in the past, regularly concluded ambitious comprehensive free trade agreements that did not make commitments with respect to market access for supply-managed goods. That was in the absence of this piece of legislation. Therefore, I would conclude that this legislation is not required in order to achieve such outcomes.

I was just wondering if you would agree with that.

[Keith Currie]

Well, the 11% in CUSMA would say that Mr. Fowler did not follow through on that commitment. If you want to get down into details, supply management gave up 11% in CUSMA, and yet there was a commitment not to give any further access to supply-managed commodities.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

At the same time, when you look at the statistics provided by the Government of Canada, milk production has gone up from 75 million hectolitres in the year 2000 to 94 million hectolitres today. Market access into the United States for exports of dairy products has gone from $189 million to $241 million in 2022. It's gone up by $52 million.

Again, our concern is that if we're not sitting around the table talking about it and excluding certain sectors, these types of results may not be achieved.

I am looking for your comments on that.

[The Chair, Liberal, Judy Sgro]

Could we please have a brief answer?

[Keith Currie]

Your reference to what we've exported is good and it's accurate. What you didn't comment on are the dairy imports that have come back in return. They have almost tripled in some cases, depending on the commodity within dairy that you're talking about. While it may be fine that we have increased the dollar value of the price going in, the products coming back into Canada have almost tripled in some cases.

Numbers are what you use them for, right?

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Yes, but our milk production has gone up as well.

[The Chair, Liberal, Judy Sgro]

I'm sorry, but your time is up.

Mr. Arya, go ahead, please, for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

This is a quite interesting discussion. As I'll keep repeating, in Canada we are prosperous because of trade. Trade, especially international trade, makes up 62% to 65% of our GDP. Though Canadian farmers are numerically small in number, forming a small part of our population of 39 million, their excellent exports have placed Canada fifth in worldwide exports of agriculture and agri-food products. I think we should all be proud of that fact.

I am quite surprised that the Canadian Federation of Agriculture, which I thought was supposed to represent the interest of all farmers.... But I'm so glad that we have organizations like CAFTA, which represents Pulse Canada, the Canola Council, Grain Growers of Canada, the Canadian Pork Council, Cereals Canada and the Canadian Cattle Association. The members of these organizations work hard to export Canadian products across the world.

We have access through free trade agreements to 51 countries. Currently we are negotiating a free trade agreement in the Asia-Pacific region. As you know, outside of China, the Asia-Pacific region is a growing market. The population is growing there. The economies are growing there. That's a growing market for Canadian exports. Among those countries, we are currently negotiating a preliminary free trade deal with India, and with Indonesia, the third most populous country in the Asia-Pacific region, and possibly the fifth most populous in the world.

Now, with this legislation, we are tying the hands of our negotiators and giving a tool to the negotiators from India, Indonesia and other countries. We are handing them a tool through which they can limit Canadian exports and free trade agreement rules that would be beneficial to Canada.

I think, Madam Chair, when you study different bills, different studies, etc., there'll be one witness who comes out with a very important statement. I think here it was by Mr. James Bekkering, a farmer himself, of the National Cattle Feeders' Association, who said this bill pits “Canadian farmer against Canadian farmer, neighbour against neighbour”. I think that's absolutely right.

Ms. Noble mentioned that this bill has limited benefits for the supply management sector, but will cause a significant loss to most of the agricultural sector's exports.

Ms. Noble, I don't think your members are directly exporting to the Asia-Pacific region, but at the end of the day, you understand the significance of the Asia-Pacific markets and the free trade agreement negotiations that are going on there.

Do you agree with me that this bill, if passed, will provide a tool to the negotiators from India and Indonesia to bring down access to, or to offer fewer concessions to open, their markets to Canadian exports to their countries?

[Cathy Jo Noble]

Thank you for the question.

I'd just like to clarify your earlier comments. The Canadian Federation of Agriculture is a very credible, excellent association, but it doesn't represent all of agriculture, and the CFA isn't a member. We're a member of the Canadian Agri-Food Trade Alliance, and I think it's important to clarify that.

Canada is a trade-dependent country, and we need the ability to negotiate. As James stated, 75% of our beef exports go to the States. That's dangerous. We know it's dangerous to rely on that market, because we don't know, politically or otherwise, how that market may unfold in the future.

We need new trade agreements and we need to diversify our exports. The Indo-Pacific, as you state, is one very exciting opportunity for beef and for all of the agriculture sector.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Arya. Your time is up.

Next we have Mr. Seeback for five minutes, please.

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

Thank you very much, Madam Chair.

Mr. Currie, you said that in CUSMA, 11%.... I want to back up.

Everyone around this table supports supply management. I support supply management. I have many supply-managed farms in my riding. I visit them often and I fully support them. Supply management is a fantastic and excellent system. I know all Conservative members agree with this. I want that to be very clearly stated on the record.

When we're asking these questions, we're trying to understand how this bill could affect future trade negotiations. When we ask these questions, we're not asking them because we don't like supply management or because we feel that it shouldn't be protected; it should be protected.

What I think we get to is this. You said that 11% access was granted through CUSMA. We have had Government of Canada officials come and say that we do everything we can to protect supply management, everything. When we go into a trade negotiation, we say that we are not giving access to supply management.

Does it not then lead you to the only inevitable conclusion, which is that they granted that market access because if they didn't, there would be no trade deal?

[Keith Currie]

Well, to be fair, I also was not in the room during those discussions, so for me to comment on how those negotiations went is not fair to me, or anyone else, because we don't know what the conversations were like. Yes, I know that governments have committed to not giving up further access for quite some years now, but the reality is that they continue to give up access.

I know it's a negotiation. We understand that. However, it seems like supply management is always first on the chopping block when it comes to giving concessions in trade deals.

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

Why do you say it's first? To me, it seems like it's last. To me, it seems like it's absolutely last. It's the last resort to get the deal done, and if they don't do it, the deal doesn't happen. That's how it appears to me when I look at these negotiations, because every party supports supply management. Every political party in this country says, “If we go to make a trade deal, supply management is not on the table.” Then ultimately, occasionally, it is on the table. To me, the only logical, inevitable conclusion is that if it wasn't on the table, there would be no deal.

When government officials came here, I asked that question. I asked, “If supply management was off the table with the United States, would there have been a deal?” They said that it would have been extremely difficult, or something to that effect, which I take to mean pretty darn near impossible. This bill will make it impossible for that concession to be made, and therefore it could very clearly affect the ability of this country to sign a future trade deal.

Do you see the logic of the statement that I'm making?

[Keith Currie]

I see the concept of the logic of what you're saying, even though your party is supporting this bill, but to your earlier point, when I said it was the first one on the chopping block, what I should have said was that it was the only one on the chopping block. That has been fairly consistent in some recent trade negotiations.

We have many other examples of trade negotiations in which it did not have to be negotiated. What this bill is saying is that you can go forward and do a trade negotiation without putting supply management on the table.

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

I don't know how you define the chopping block. The chopping block is reducing tariffs and granting access. We do that with all other industries in trade deals. That's the whole nature of a trade deal. You reduce tariffs in certain sectors, right? It's not that you're the only one on the chopping block; every industry is on the chopping block when you enter into a free trade agreement.

[Keith Currie]

I'm only speaking in agricultural situations. That's why we're here: It's because of supply management in agriculture. In the three deals I cited in my comments, only the agricultural sector had to make supply management concessions.

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

Is there no access to beef from other countries in any of these deals?

[Keith Currie]

There is, both ways.

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

Right.

[Keith Currie]

By and large, supply management in Canada does not export. Yes, we do have some exports of some peripheral products, but by and large, it's about supply and demand in this country.

I heard earlier about how much domestic product had increased, but that goes along with demand. It would not have had to increase if the demand was not there for those products. That's how the system works.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll now have Mr. Sheehan for five minutes, please.

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

Again, thank you for all of your testimony on this important subject.

I have a couple of questions.

One thing I'd like to ask Keith is this: What happens if supply management is off the table and is dismantled? What happens to farms in my area, like Lock City Dairies? Your predecessor and my good friend, Ron Bonnett, was from Bruce Mines. There is Farquhar's Dairy on Manitoulin Island.

What happens to the smaller dairy farms if there's not supply management?