International Trade Committee on March 23rd, 2023

[Arif Virani, Liberal, Parkdale—High Park, ON]

Thank you very much, Madam Chair.

I want to start by thanking all of the witnesses for their participation and their contributions to feeding Canadians and feeding the world as, I think, Mr. Klompmaker put it.

I'll just say that there is sometimes a bit of confusion on this side of the committee table when we hear protestations about support for supply management and we know there have been debates on the floor of the conventions of His Majesty's official opposition moving the idea of phasing out supply management. There have been leadership candidates of the official opposition who have pledged to end supply management, thereby causing some concern. Notwithstanding that, in 1972, this system was created by Pierre Elliott Trudeau. It's a good system. It has proven to be very successful, and we as members of the Liberal Party stand by it.

I want to put some questions to Mr. Klompmaker. I was just quoting back to you how you said that you help to feed Canadians. I want to ask you a bit more about this idea of feeding the world. During this time of crisis in which we have the illegal war in Ukraine, food security around the planet has become an acute issue. Could you speak to that from your perspective as a chicken farmer but more broadly as a farmer generally?

What does supply management do to stabilize the food system here and allow us to also be exporters and assist our allies around the planet?

[Tim Klompmaker]

Thank you.

Certainly food security is a great bonus that we have within the supply management sector. If you take a look at Avian influenza and its impacts across the country, we have production in all 10 provinces. We had cases in seven provinces, yet we were still able to maintain a supply of product. We didn't have any empty shelves, so as far as the food security issue goes, we were still able to manage that piece.

We did see some significant losses in the U.S., which certainly impacted some of the supply-managed sectors down there as well, and there were certainly some impacts on some of the imports we have coming out of the United States. With the supply management system, we're able to protect consumers.

With the uncertainty that has been created through the situation in Ukraine and the disruption in grain supplies to different areas and so on, I just think, from a sovereignty perspective, that having a country able to feed itself is in the best interests of that country.

[Arif Virani, Liberal, Parkdale—High Park, ON]

I have about a minute left, but can I build on this idea of the predictability and stability of the industry?

Obviously a challenge for all of us, regardless of which industry, is climate change and moving towards net zero.

What does supply management do to enable you as a farmer, Mr. Klompmaker, to have the predictability to allow you to do the type of innovation that is necessary to move chicken farms towards having a smaller carbon footprint?

[Tim Klompmaker]

That's a good question, because I'm the older guy on the farm now. I have three sons who are there. Certainly they take the approach that supply management offers up the stability for them to have investment in the farm. When we take a look at some of the investments that we've made over the last number of years, we've built several new barns and we brought some technology in from Europe around heat exchangers that significantly reduces our heating costs and improves bird health and welfare.

Certainly the stability that the supply management system creates for us gives us the confidence to invest in innovation and to have the confidence that, years from now, we're still going to be able to have a decent living.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Savard-Tremblay.

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

Thank you, Madam Chair.

I would like to thank all the witnesses for their presentations.

Mr. Klompmaker, when I hear people saying that we had to open some things up so as to not hurt other sectors, I understand this to mean that they still want to use you as a trade currency. It's as if everyone says they are for supply management, but even though everyone believes in it, not everyone practises it, or that everyone believes, but not everybody goes to church on Sunday. It also means that sometimes they are keeping a few percentage points up their sleeve.

How do you feel when you hear MPs saying that they support the system, but that they are not ready to provide a firm commitment apart from a verbal one?

[Tim Klompmaker]

I will say that all parties have openly stated that they support our supply management system, and we're thankful for the support that we have.

I guess the concern we have is that, every time we go into a trade agreement or trade negotiation, we stand the risk of losing market access. For us it seems that we're always the trade currency at the end of the day and that supply management is just slightly sacrificed.

Our concern always is—and I think the term was used by others around this table, other witnesses that you had at this table—that we lose a little bit with each trade negotiation, and it's death by a thousand cuts. Eventually we're going to get to a point where the supply management system is going to give up a certain amount of access and the system will no longer function as it was intended.

I can't answer what that number is, and I don't ever want to find out what that number is.

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

Indeed, that's interesting, because I put that same question to public servants who came to testify. They said that even though the negotiators had sacrificed guaranteed market shares within the supply management system, they had still preserved its integrity. To my mind, integrity means the whole thing. One hundred percent. That means that 0 % of the system would have been sacrificed.

I asked them how many percentage points would mean that we are at a point of no return, that is to say that the system would no longer have its integrity. I wasn't able to get an answer on that.

In your daily life, and I'm talking about your farm as well as yourself, as a producer, what does sacrificing one single percentage point mean in concrete terms?

[Tim Klompmaker]

If I understand, you're asking what percentage I would have to lose before I could no longer function.

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

In concrete terms, what does sacrificing one percentage point of guaranteed market shares within the supply management system mean?

[Tim Klompmaker]

Like I said before, I'm not sure what that point of no return is. That's the problem with it. We've been fortunate that we've had growth within our sector, but I certainly don't want to give my growth away, and I don't want to give what I already have.

My concern always lies with the future of our industry. We have a lot of young farmers within our system, and when we continue to give up access, what ends up happening is that the confidence in the system deteriorates as well. It becomes more and more difficult to keep our kids on the farm and stimulate investment.

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

Mr. Klompmaker, I have about 20 seconds. What does supply management allow you to do in terms of innovation and investment in your business? How does it allow you to plan for the future?

[Tim Klompmaker]

From a dollar perspective as to what I would have to set aside, or just what I do have to set aside, I don't know what the future holds as far as new innovation is concerned. I certainly have sons who are looking at that type of thing.

Certainly, I need to have the confidence that I'm not going to be giving up more access and undermining the stability of the system.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Cannings for four minutes, please.

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

Thank you.

I'm really curious about the cheese situation here, because it seems to be one of the oddities of this whole argument, because of Brexit and CETA and things like that.

Could you tell me how much, before CETA, cheese imports from the U.K. were managed? Did they have their own access to the Canadian market?

[Joe Dal Ferro]

Thank you for your question, first of all.

The original method of importing cheese prior to the recent trade agreements was through the WTO quota allocations. They were broken up geographically, non-EU, meaning non-European countries, and then European Union countries. At the time the U.K. was part of the EU, so it qualified under EU quota status.

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

How much of the EU quota brought into Canada was from the U.K.?

[Joe Dal Ferro]

Pre-CETA, it was roughly 900,000 kilograms.

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

I'm sorry. What proportion of the EU...?

[Joe Dal Ferro]

At the time—and there still are—there were 14 million kilograms of EU quota, so let's call it one million kilograms. One million kilograms out of 14 million kilograms were from the U.K.

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

Okay. If Brexit hadn't happened, is that what the U.K. would have with their access?

[Joe Dal Ferro]

When CETA came into force the U.K. now had access to the CETA quota, and because of that, we were able to meet Canadian consumers' demands for more cheeses from the U.K. The actual import of U.K. cheeses has risen to two million kilograms since that time. Now, because of Brexit, we can't penalize small and medium-sized Canadian businesses or Canadian consumers.

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

I think there are some side agreements right now—

[Joe Dal Ferro]

We have, until the end of 2023, the possibility of importing British cheeses with the EU quota. That will end at the end of 2023.

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

Okay.