Madam Speaker, I want to speak to Motion No. 1, especially clause 3.4. Clause 3.4 of Motion No. 1 indicates that in the case where imports exceed the established tariff rate levels, the minister shall impose tariffs to ensure that such products are not permitted at prices lower than those in the domestic market.
The concern that is being raised in Bill C-57 is the proposal that would allow supplemental imports of supply managed commodities as "within accessed commitment", which means they would enter Canada at low or no tariff.
In talking to people in the industry about section 3.4, they have indicated that they think the section is far too restrictive in that it provides the minister with little or no discretionary power.
It is important to understand that in supply managed industries some commodities require from time to time to import and require supplementary quotas. The problem is how do you do that in such a way so as not to allow the industry to use the supplemental quotas as a lever with which to either manipulate prices or to break the supply management system?
Let me give the House an example. A cheese manufacturer who makes frozen pizzas, when asked for future milk demands, understates them. Later when the cheese manufacturer needed milk to manufacture cheese for pizza he would indicate that market demand has all of a sudden increased. Milk could not be sourced in Canada because no one would be prepared to produce that unexpected demand in that short a time. The manufacturer then could apply for and be granted a tariff free supplemental import permit. Other manufacturers would learn of this advantage and either try and beat the system themselves, as the original applicant had done, or pressure domestic producers for a lower price to match that of the non-tariff imports so that they could compete.
That kind of situation could happen if supplemental quotas are granted without restriction. This amendment has restricted the discretion of the minister to the point that it would be unworkable.
The supplemental quota is an extremely important area, especially as a result of the new arrangements under the GATT in which we are moving from import controls to tariff level controls.
The government has assured us that supplemental quotas can be granted in such a way so as not to undermine the supply management system.