International Trade Committee on March 23rd, 2023

[Chandra Arya, Liberal, Nepean, ON]

Mr. Sherman, Canada is currently negotiating trade agreements with India and with Indonesia, which are—

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

We can't hear the interpretation, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Hold on, Mr. Arya. We have a problem with translation.

Would you like to start again, please?

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

I would like to ask Mr. Sherman a question.

Canada is currently negotiating a preliminary trade agreement with India and with Indonesia. Canadian agriculture produces the biggest exports from Canada to India. CUSMA is up for renegotiation in three years. I know that, for canola, one of the biggest markets for you is the U.S.

Considering all of this, if this bill becomes law, how do you think it will affect our position in negotiations with India, Indonesia or the U.S.?

[Troy Sherman]

Yes, it's a really great question. I think ASEAN is also part of that mix in terms of free trade agreements, and we're really excited about the government's efforts there.

It's about the level of ambition that we're going to have. If we're starting off with a red line of automatically going to the negotiation table and saying that we're not talking about a particular sector, there's nothing that's going to prohibit them from doing the exact same. That could be in different areas. That could be in biotechnology. That could be in dispute settlement. That could be on labour chapters or environmental chapters, areas where they have challenges domestically or where they have concerns domestically.

That's not the appropriate posture from a trade negotiation perspective, so we think our level of ambition would have to diminish as a result of this bill's passing.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Sherman.

We now go to Mr. Savard-Tremblay and Monsieur Perron.

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

Thank you, Madam Chair. I would like to thank the witnesses once again for being here with us.

Mr. Bouchard, as you mentioned, other countries, such as the United States and Japan, have laws that protect certain production sectors. These are not small-time bit players on the world trade stage. But in order to be able to protect a sector and make that protection legitimate by entrenching it in law, that sector has to be of strategic importance.

Why do you think eggs would warrant such protection?

[Paulin Bouchard]

Eggs are precisely what is defined as a strategic product.

Let me give you a few figures. In Canada, all our producers put together have approximately 28 million laying hens. In the United States, two producers, that I can name, each have 30 million laying hens. One single American business owns more laying hens than all of the Canadian producers put together, and there's another business with the same amount. The United States has a total of 325 million laying hens. The American industry is so concentrated that it would not be possible to produce enough eggs in Canada without supply management. Without protection, we would lose our production capacity.

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

We are talking about prolonging the committee's study. Are you fearful or do you think rather that we should pass the bill as quickly as possible?

[Paulin Bouchard]

The bill is very simple. We have seen the government make concessions four times now. I follow trade agreement negotiations, because I have been interested in agricultural policy for a long time. Every single time, our government tells us that negotiators had to put supply management on the table, but that they would not make any concessions and we had nothing to worry about. However, each time, they came back to us saying how sorry they were, but they had had to make concessions because they had put supply management on the table from the get‑go.

Our elected officials should send a clear message to our negotiators, who are amongst the best in the world. To be sure, they are going to create wealth thanks to these agreements, but they have to do so without making concessions on supply management.

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

Thank you.

Can you describe the regional impact of supply management? I was talking about it earlier with Mr. Ruel.

[Paulin Bouchard]

Let me tell you about my town. I live in the country, in the town of Saint‑Gédéon‑de‑Beauce. We used to have 30 farmers. Nowadays, however, there is just my business and my son's business left in terms of farms, as well as two dairy producers who are also under supply management. Supply management gives us a good structure and allows for predictability. It is therefore essential.

I would go even further: supply management is a catalyst. I grow canola, soya and corn. Because my business enjoys stability thanks to supply management, I can branch out into other sectors. Actually, I am also a forestry producer. Supply management creates a base, a foundation for agriculture for Canadians. The other sectors are developed around this.

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

What do you think about the suggestion being bandied about that we consult other sectors? How do you react when you are told, as I heard earlier, to consult other sectors such as the car industry? As far as I know, the aluminum industry doesn't consult other sectors when it is negotiating.

[Paulin Bouchard]

We have had a lot of consultation during the study on the former Bill C‑216 and the current Bill C‑282. I firmly believe that our elected officials should send a clear signal on what we can put or not put on the negotiating table. As I said earlier, negotiators will do their job and will create wealth through these agreements.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Bouchard. I'm sorry to interrupt again.

Mr. Cannings has four minutes. He will be the last member who is able to ask questions.

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

Thank you.

I would like to ask Mr. Sherman some questions about the canola situation.

You have my apologies if I missed some numbers you gave at the start. I'm multi-tasking here.

The United States is your big export destination. How much is exported to the United States?

[Troy Sherman]

In dollar amounts, it was close to $7 billion in 2022.

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

How much canola comes in from the United States to Canada?

[Troy Sherman]

Canola is a very small crop. It's just about two million acres in the United States.

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

How much has that access to the United States changed over the past agreements, with the CUSMA and NAFTA?

[Troy Sherman]

There are no tariffs on canola going into the United States. That's a result of the free trade agreement.

I think where this bill comes into play really is where our level of ambition is if it is reopened and renegotiated. Are there other chapters that we do avail ourselves of that could be watered down as a trade-off for not talking about supply management?

That's where our concern really does come from.

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

I guess I am trying to get at this because everybody here says they support supply management.

I am just wondering how you would feel if canola had been cut down by 3%, 3% and then 3% over these last issues, yet people said they supported canola.

[Troy Sherman]

We faced a serious challenge with China, as you may remember, with Viterra and Richardson losing their export licences. That cost the canola industry close to $3 billion in exports for an issue that was outside of our control, obviously.

We're very sympathetic. My point is not that it's supply management. It's the principle that the act should not be reopened for any industry, sector or issue to legislatively prohibit what a negotiator can do at the negotiation table. It just happens to be supply management at this juncture.

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

It also happens to be that supply management is supply management. There comes a time when you just give up on managing that supply if we cut it down by 3% each time we negotiate something.

I'm just trying to see how someone from outside would feel about that. You would get the impression that someone didn't like canola, if every time you went there you could export less.

[Troy Sherman]

Absolutely, and we did face that challenge.