International Trade Committee on Feb. 29th, 2024

[Jeff English]

Certainly. As I mentioned, not unlike other crops, Canada's pulse industry—and it depends on the pulse crop you're speaking of, whether it's peas, lentils, chickpeas or others—is heavily reliant on a few key markets to which we export the majority of our product. Any time we see—and Mr. Roy just mentioned this—a major market disruption from an important market, that drastically impacts not only the price, but the trade flow of our industry. Ours is an industry that requires planning months, if not years, in advance as farmers are dealing with rotations and what to grow.

Having a country like Ecuador—or others—as a market to which we have preferential access adds another outlet for that crop to move. I've never met a farmer yet who wants fewer bids on their product or a company that wants fewer options in terms of a place to export to. As I mentioned, with 85% of pulses being exported annually, having open markets and free and unfettered access to regions around the world is something our industry relies on, and not only relies on but needs.

If we can speak.... I'm sure you are well versed in the sustainability benefits of Canada's pulse industry following that meeting, but the practical reality is that, because they are a carbon-neutral industry, the world needs more Canadian pulses. We have the ability to provide shelf-stable, affordable protein to regions around the world, and free trade is how we facilitate that.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you for sharing that.

As we might all know, Canada is the world's largest pulse producer and largest exporter of pulse crops. You mentioned in your remarks how many lentils and peas are being exported. To follow up on my previous question, I'll ask this: Will trade diversification also help increase the export value of our Canadian pulses?

[Jeff English]

Yes, it will.

Also, we're in a competitive environment here in Canada where we're a major producer of quality crops across the gamut, whether that's pulse crops or, of course, canola or things like wheat. The decision a farmer might make when they look at what they have intentions of seeding happens at harvest time the year before, so having a stable and competitive price for that crop and knowing that there's a market to sell it to is really beneficial in terms of encouraging the adoption and the increase in acreage of that crop. We know it's a competitive environment there, so having more markets to send our pulse crops to and knowing that there's a global demand for them are very important to us.

[Wilson Miao, Liberal, Richmond Centre, BC]

Do you agree that it will generate more revenues for the Canadian pulse industry and that these revenues can be used for better service, innovation research and creating more employment opportunities?

[Jeff English]

We've seen it time and time again, and Canada's pulse industry presently supports tens of thousands of jobs in this country. Farmers are big investors back into their operations. They're drivers not only in supporting the rural economy but also in helping to fund and support jobs and growth throughout the value chain, whether that's at an elevator in rural Saskatchewan or at a port in Vancouver and the chain throughout. The more money that's brought back into the sector, the more that's invested back into the Canadian economy.

[Wilson Miao, Liberal, Richmond Centre, BC]

In the last visit, some of the farmers shared with me their concerns about the damage that climate change has caused them and the agriculture and agri-food sector as a whole. In terms of the increase in extreme climate events that have continued to take place across the prairies in Canada, will trade diversification help the pulse sector generate more revenue that can be reinvested into the sector and help it recover from extreme climate events?

[Jeff English]

Pulse crops are one of the most water-efficient crops on the planet. Certainly, as folks are looking to adapt to ever-changing climates, the more pulses we can grow, the better off the environment will be.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

Monsieur Savard-Tremblay, you have two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Chiasson-LeBel, am I summarizing your position correctly by saying that you are formally inviting the negotiators to reject any investor-state dispute settlement? Ideally, could you answer yes or no?

If a Canadian company were to become a victim of genuine abuse by the political class abroad, through the policies it adopts—which it could, of course—the company would simply have to talk to its state. You are proposing that the situation simply be resolved between the states. We must not have mechanisms that put private companies on an equal footing with states.

Did I understand correctly?

[Dr. Thomas Chiasson-LeBel]

Yes, that's right.

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

So that's clear.

Mr. English, I'll go back to you. Earlier, I asked you about the type of dispute resolution you wanted to see in place. I was wondering if it would be a state-to-state or an investor-to-state settlement mechanism, as exists in a number of agreements. You told me that the regulations should be designed to protect exporting companies.

To my knowledge, that's not something that exists. In other words, if there is a problem, it becomes a state-to-state trade war, and it goes to court. But something that would protect an exporting company, as far as I know, doesn't exist. Rather, it is intended to protect the investor. So a state has to have invested in the territory of another country to be able to say that country has mistreated it.

You're asking for a mechanism that would protect exporters. Could you elaborate on how that would work?

[Jeff English]

I think, perhaps, that something was lost in the translation, if that's possible.

The dispute settlement mechanisms we're speaking about, of course, are typically done in terms of our industry. Phytosanitary certificate access would be provided by CFIA. Obviously, the exporting companies would be involved. Certainly, there is a role for both industry and governments to play in that.

I'm not sure if that helps answer the question or not.

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

I know we have very little time left, but I would like to ask you another question.

Could you define the mechanism you're talking about? What does that look like on the ground? Is it provided for a funder who invests in a foreign country and feels aggrieved by that country or, as you said earlier, for an exporter who stays in their country of origin?

[The Vice-Chair, Conservative, Kyle Seeback]

I am going to jump in, as chair.

Mr. English, you can correct me, but I think what you're talking about are the dispute resolution sections within a free trade agreement. When there are disputes with respect to sanitary or phytosanitary matters, panels are created to resolve them between the countries.

I think that's what you were saying.

[Jeff English]

That's correct.

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

So it is a state-to-state dispute settlement mechanism.

Is that correct?

[Jeff English]

I'm sorry. Is that a question? The state...?

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

Is it a state-to-state, country-to-country dispute settlement mechanism?

[Jeff English]

Yes, perhaps there's some confusion.

The idea that the exporting company and those involved with commercial interests on the ground wouldn't be involved is not our understanding or how we've ever seen it play out. Certainly, the pointy end of the spear is in terms of government to government, typically.

[The Vice-Chair, Conservative, Kyle Seeback]

Now we'll switch to Mr. Cannings for two and a half minutes.

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

Thank you.

I'm going back to Mr. Chiasson-LeBel.

You mentioned, I think, that the executive is trying to find a way to undo the constitutional protections that previous governments put in there regarding investor-state dispute mechanisms.

In this milieu of a seemingly very shaky coalition, what's the process, and where is that in play right now?

[Dr. Thomas Chiasson-LeBel]

The Ecuadorean constitution was drafted after a constitutional process in 2007-08, then adopted by a referendum in which it had a strong majority.

Currently, what's happening is that, in the middle of a security crisis, the president has called for a popular consultation, in which several questions will be asked of the population at the same time. Most of them are related to the security issue. Slipped inside the pile is one about arbitration mechanisms between investors and states. In this context, it is of concern, because the topic is not related to what the consultation was primarily called for. This comes from the president, who has the power to do that in the current context of a presidency that will be short-lived. He does not have a majority in the assembly. He does not have a party himself. He's the son of the most important banana exporter in the country, who tried five times, unsuccessfully, to become president himself. He's now becoming president to try to speed up those matters in the middle of the security crisis.

It's concerning to me that we are not in a process whereby this would lead to a sane democratic decision on this very important question, because, in the national assembly, the most important party has 51 seats. They are the ones supporting the constitution's adoption and including those dispositions that argue against bilateral trade or investment treaties. They are the ones protecting the investors. Really, it's shaky ground on which to pursue negotiation in the current moment, because we're not sure this is going to hold for a very long time.

[The Vice-Chair, Conservative, Kyle Seeback]

That's time, unfortunately.

We'll now turn back to the Conservative Party, and Mr. Baldinelli, for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Chair. I'd like to thank the witnesses for being here this afternoon.

There seems to be a theme developing. There are a lot of questions with regard to non-tariff barriers and how we can work to prevent those from being implemented or prevent them through this free trade agreement. Before I get there, I want to go to Ms. Proctor from the Canadian Produce Marketing Association.

I come from Niagara, which is a tender-fruit produce area. I just want to get a sense from you, Ms. Proctor. In terms of the Canadian Produce Marketing Association, what are the values? What kinds of major produce are exported to Ecuador, for example? What kinds of benefits in terms of dollars do you see in this type of trade?