International Trade Committee on March 10th, 2026

[Andrea Brocklebank]

We do.

Brazil has had a questionable track record when reporting foreign animal diseases. It's been slow to report issues. Ultimately, that can create issues with BSE, foot-and-mouth disease and those types of things. We've seen that in other markets as well.

Ultimately, biosecurity and maintaining herd health within our industry are paramount to the success of our industry and also to the reputation of our industry when we're going to export markets. Given the current situation with the U.S. trading environment, we want to make sure that we're careful not to jeopardize that in any way, shape or form.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Naqvi, you have six minutes, please.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Thank you very much, Madam Chair.

I want to thank all the witnesses for being here today and for their very thoughtful submissions in regard to Canada's trade negotiations with Mercosur. I appreciate all sides of the spectrum that were raised.

I'll start my line of questioning with you, Ms. Saad. You spoke in favour of Canada engaging in an agreement with Mercosur. You highlighted four elements that should be part of it. From a business or industry perspective, what opportunities do you see for Canadian businesses? In what sectors, for example, can you see more opportunities if there is a free trade agreement with Mercosur countries?

[Paola Saad]

With my company, I'm going to say that I've taken about 800 Canadian companies to Brazil in the last 20 years, doing matchmaking and trade missions. I can speak for Brazil only. We have a market that is equal to 76% of the population of Mercosur and 77% of the GDP of Mercosur. A very significant portion of Mercosur is tied to the Brazilian GDP and population.

Really, there are opportunities everywhere—Brazil is a very big country—but we need more transparency. I think the biggest concern for Canada right now is trade diversification and being able to have the companies go to different countries. Many of the companies I took there are established in Brazil. They are thriving in Brazil. It's a very sophisticated market. It's a huge market. There's the export of bovine semen, for example, and ovine semen. On the side of agriculture, there are cattle, fertilizers and potash. There's mining machinery, for example. There are so many opportunities. I've done countless missions in oil and gas to Brazil in terms of providing parts and technology.

In my view, and in my experience from taking all these companies to Brazil, there are infinite opportunities for Canadian companies in Brazil, but they have to be prepared to go to their market. They have to understand the market and be prepared. Loan consultancy and trade commissioner services can all help Canadian companies thrive and expand in Brazil. It's a market that really requires face time and trade identification. I think for Canada, it's one of the main things we have right now in all areas. In terms of receiving, I know that for Brazil, production is complementary to Canada—for example, going back to the last two speakers, providing lean meat for ingredients. The sanitary standards are global standards there as well. I know that Canada exports meat to Brazil. I spoke to JBS yesterday. We export prima quality beef, for example, to Brazil.

We have to look at both sides. I think this has to be balanced on both sides. It has to be a win-win situation. That's the only way any free trade agreement works out.

[Yasir Naqvi, Liberal, Ottawa Centre, ON]

Thank you.

The agreement will provide more predictability, stability and dispute resolution. I think the transparency you spoke to is extremely important in encouraging more Canadian businesses to do business in Mercosur countries. You spoke of Brazil.

Mr. Greer, I have the same question for you. Your organization represents a lot of manufacturers and exporters in the country. From an industrial strategy perspective and this type of diversification, looking at Mercosur in particular, what opportunities do you see for your members in further enhancing exports in that particular market?

[Ryan Greer]

I think we see the opportunities as targeted. As I mentioned, Mercosur is creating some optionality for some sectors. We wouldn't consider them broad-based. Brazil is obviously the largest market. There's an opportunity to expand on what I think is around $550 million to $650 million in manufacturing exports currently to Brazil. That's looking at aerospace, where there's a long-standing Canada-Brazil relationship, as well as mining and energy equipment, industrial machinery and some clean-tech and electrification equipment. That's where some of the opportunity is. Then there are some other small verticals in a few of those other markets that create opportunity.

I would reiterate that access alone is not sufficient to leverage these opportunities. Canada already has more trade access than most countries on earth. Now it's about what we do to best leverage those. With Mercosur and others, we need to take a long, hard look at the cost of doing business in this country. We know that it has long been offset by our geographic proximity to and integration with the U.S. A robust and ambitious plan to lower the cost of doing business can help create more optionality and more opportunity in other markets, including Mercosur.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Savard-Tremblay, please, for six minutes.

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

Thank you, Madam Chair.

I'd like to thank all the witnesses.

It's always interesting to conduct this kind of preliminary study. It allows us to hear, early on, the concerns witnesses have about a trade agreement, as well as the positive aspects or opportunities they see in it, especially when it comes to an agreement that is likely to be significant or have a major impact, such as this one. We are all in favour of diversification, of course, but not at any cost. We must not sacrifice the sectors that are important to us.

Mr. Fontaine, you've already talked about your industry, so I'd like you to talk about Brazil's industry so we can compare them, because we hear all sorts of things about it. For starters, there's a cost disparity due to the climate. The costs of drying grain aren't the same, of course. Beyond that, we even hear anecdotes about criminal activities, such as forest fires that are set to benefit poultry farms. We know that the Amazon is the lungs of the planet and that it's an extremely important forest.

Can we really call this unfair competition?

[Benoît Fontaine]

Thank you for the question.

Yes, Brazil has a different culture. It's not North America. It's a different place. Canada has chosen to have family farms across the entire territory in all 10 provinces. Chicken is even raised in Newfoundland and Labrador, Prince Edward Island and all Canadian countryside. Yes, we have northern agriculture. Heating alone, for example, is a piece of data that shouldn't be overlooked. Raising chicks or turkeys in the middle of January requires an enormous amount of fuel. So, de facto, we become uncompetitive with Brazil.

Second, in terms of the rumours of crimes related to chicken farming, I'm a little less familiar with those police cases, but we do hear stories where there is certainly brutality and where gangs or clans engage in that type of behaviour.

The big difference is that, in Brazil, they are large companies integrated from A to Z, a bit like our American neighbours. That's nothing like the model we chose as Canadians, which is based on family farms, data and very high health standards. So we have to be careful. A Canadian chicken or a Quebec chicken raised in Saint‑Hyacinthe has very little in common with a chicken raised halfway around the world, according to strange or foreign standards.

So you're right, Mr. Savard‑Tremblay, but we have to compare apples to apples. Brazil doesn't have the same agriculture at all as we do, let alone the same climate. It also doesn't have the same labour standards. That has to be taken into account as well.

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

That's what my next question is about. In terms of wages, there are also quite significant differences, are there not?

[Benoît Fontaine]

Look, it's not even comparable. In Canada, we chose to have well-paying jobs on all our farms. In the southern United States, even if these are just rumours, everyone knows that there are probably very, very low-paid workers. Brazil has the same type of wage regime. So it doesn't come close to the conditions we have here, with our health care, employment insurance, and so on.

Again, it's apples to apples. Slavery is illegal in Canada. Can we call it a form of slavery there? I don't know, but in any case, the labour standards and standard of living are far from the same, and, in the southern United States, the workforce is strangely similar to Brazil's, which is somewhat exploited.

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

Thank you.

Getting back to the forestry issue, I'm going to turn to the Canadian Cattle Association.

Mr. Fulton, according to the information we have, the expansion of the beef industry is considered to be the main cause of deforestation in the Amazon rainforest. It's 80% responsible for deforestation, and soy production contributes to it as well. Have you heard that figure?

[Tyler Fulton]

Yes. One of the barriers we've had in accessing the EU market with Canadian beef is the claim of deforestation, which needs to be met. Obviously, here in Canada we don't have that concern, but the origin of that claim is South America. The unintended consequence is that we need to meet that same standard and prove that we're not deforesting an area, which is added cost.

I think your point is really that standards, whether formal or informal, play heavily into the cost of production here in Canada, and in South America as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry. Your time is up.

Mr. Mantle, you have five minutes.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Madam Chair.

Before I begin my questioning, I wonder if I could dispose of something quickly. We received a response back from Global Affairs on our production order. Thank you for following up with them. I thought your letter was very fair, so thank you for that. In their letter back to us, they made a suggestion with respect to the form letters that had been sent in by the dairy farmers. I have no problem with them providing just one. If they're form letters, that makes complete and reasonable sense to me.

Could I seek the committee's consent to give them that direction, so they don't need to translate 4,500 of them? They could simply provide us with just one.

[The Chair, Liberal, Judy Sgro]

This is to do with a request for production, and part of that production is 4,500 form letters. What Mr. Mantle is saying is that if the committee is happy, we'll just have one. It's just a sample. There's no sense for them to have to reproduce 4,500.

I appreciate that suggestion. Is everybody good with that?

[Some hon. members]

Agreed.

[Jacob Mantle, Conservative, York—Durham, ON]

I would note that we wouldn't have known those were form letters if we hadn't made this production order, because they did not disclose that to us prior to us making this order, so there's that.

With respect to their request for priorities of submissions to receive, I'll leave that to each individual member. I haven't considered that myself yet.

[The Chair, Liberal, Judy Sgro]

Okay.

We'll start your time now.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you very much, Madam Chair.

Our chair is nice, I know. She's a good letter writer, too.

Thank you to our witnesses for their testimony.

I wanted to ask a question about competitiveness. Mr. Greer, you brought it up in your comments.

When we open up our markets, whether we are able to succeed in accessing new customers and new markets often depends on whether we remain competitive. There are obviously global forces at work with respect to why labour costs or input costs are different around the world. Some of those are not within our control, but many of the issues that affect competitiveness in Canada are within our control. In fact, I would suggest that the government is often the worst enemy of industry with respect to our own competitiveness.

I wanted to ask witnesses if they could identify for the committee any areas where the government is holding back their competitiveness in their industry, which would prevent them from accessing more markets as we seek to diversify our trade.

That's open to all the witnesses. I leave it to them to decide who goes first.

[Ryan Greer]

I'll jump in quickly, since you referenced my remarks.

I think regulatory burden is a fairly obvious and smart place for all levels of government to start. Our members would call it suffocating. We might use a more friendly term, such as a high-friction economy, but the point is the same.

When I speak to manufacturers, especially small and medium-sized manufacturers, and ask, “What's on your mind? What's keeping you busy? What's keeping you up at night?”, more often than not, it's regulatory issues from all levels of government and the fact that they keep getting layered on top of existing requirements. Nobody really takes responsibility—any department, agency or regulator at any level of government—to say, “What are we adding this to? What are we adding this on top of? We're making a narrow calculation on a narrow rule as opposed to considering the broader operating context.”

There's a range of other issues around infrastructure connectivity and certain tax competitiveness and tax simplicity, but regulatory reforms, I think, are where we see the greatest opportunity. It's not just around permitting and major project approvals, although that is very important, but around regulatory reforms that touch on the entirety of the Canadian economy and focus on freeing up manufacturers to do what they do best, which is compete globally for market share.

One small thing I would add is that we got the sense, especially this time a year ago and before, in the face of relatively new U.S. trade and tariff threats, that there was a lot of momentum, not just behind interprovincial trade barriers but behind all levels of government, to say, “We need to make it easier to do business. We need to lower our regulatory burden.” We're increasingly concerned that some of that urgency is fading as we adjust to the new normal, so we're looking for a reinvigoration of effort across all regulators and all levels of government to start to lower the burden that impacts manufacturers of all sizes.

[Tyler Fulton]

If I may, I have two examples that I think might help the committee understand some of those barriers.

The first one is a long-standing issue we've had that's called SRM removal or specified risk material removal. These are regulations that require additional processes at the processing of cattle that relate back to the days of BSE. We estimate that the cost of that to the industry is about $30 million a year, and it is a barrier to growth and productivity.

The second thing I would reference—and it's specific to this example—is the use of a technology, or the lack of ability to adopt a technology that is a common practice in the U.S., called “defatted beef”. The technology allows us to shift the proportion of fat to protein by using a mechanical process and separating it. That would have a material impact on the amount of imported lean trimmings, which is largely what Canada is importing right now, when we're at our lowest portion of the beef cycle. Given that it's a barrier to being able to get CFIA approval for it, I would reference that as having a significant cost.

[The Chair, Liberal, Judy Sgro]

You have 30 seconds, Mr. Mantle. Did you want it?

[Jacob Mantle, Conservative, York—Durham, ON]

I think Mr. Roy wanted to say something. I'm sorry, but I'm going to have to cut him off, because I have only 20 seconds and I want to make one other suggestion to the committee.

All of our agricultural witnesses have identified food safety and SPS concerns. I know that we're going to have one more meeting on Mercosur. I would like to seek the committee's consent to see if we could invite someone from CFIA or another appropriate body to speak to us on that and how Canada might address those concerns, if there's consent for that.

[The Chair, Liberal, Judy Sgro]

Is there any opposition?

Okay. We'll put CFIA down as one of our witnesses.

Your time is gone.

Now we have Madame Lapointe.