Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 20 - Evidence - Meeting of November 20, 2014
OTTAWA, Thursday, November 20, 2014
The Standing Senate Committee on Agriculture and Forestry met this day at
8:02 a.m. to study international market access priorities for the Canadian
agricultural and agri-food sector.
Senator Percy Mockler (Chair) in the chair.
The Chair: Welcome to this meeting of the Standing Senate Committee on
Agriculture and Forestry.
I am Senator Percy Mockler from New Brunswick, chair of the committee. I
would like to start by asking the senators to introduce themselves.
Senator Beyak: Senator Lynn Beyak, Ontario.
Senator Merchant: Pana Merchant, Saskatchewan.
Senator Robichaud: Fernand Robichaud from Saint-Louis-de-Kent, New
Senator Tardif: Claudette Tardif from Alberta.
Senator Maltais: Ghislain Maltais from Quebec.
Senator Oh: Senator Oh, Ontario.
Senator Enverga: Tobias Enverga from Ontario.
Senator Dagenais: Jean-Guy Dagenais from Quebec.
The Chair: To the witnesses, thank you for accepting our invitation to
come to the committee to share your opinions and your professionalism with us.
The committee is continuing its study on international market access
priorities for the Canadian agricultural and agri-food sector. Canada's
agricultural and agri-food sector is an important part of the country's economy.
In 2012, the sector accounted for one in eight jobs in Canada, employing over
2.1 million people and close to 6.7 per cent of Canada's gross domestic product.
Internationally, the Canadian agriculture and agri-food sector was
responsible for 3.6 per cent of global exports of agri-food products in 2012.
Furthermore, in 2012, Canada was the fifth largest exporter of agri-food
This morning we welcome from Agriculture and Agri-Food Canada, Mr. Frédéric
Seppey, Acting Assistant Deputy Minister, Market and Industry Services Branch.
We also welcome Mr. Gilles Saindon, Associate Assistant Deputy Minister,
Science and Technology Branch.
From the Canadian Food Inspection Agency, we welcome Mr. Tony Ritchie,
Executive Director, Strategic Policy and International Affairs.
Thank you for accepting our invitation. Before we proceed to questions, we
will ask the witnesses to make their presentations. I am informed that Mr.
Seppey will make the first presentation to be followed by Mr. Ritchie.
Frédéric Seppey, Acting Assistant Deputy Minister, Market and Industry
Services Branch, Agriculture and Agri-Food Canada: Thank you, Mr. Chair and
honourable senators. We appreciate the opportunity to speak to you in the
context of your ongoing study of international market access priorities for the
Canadian agriculture and agri-food sector.
As you know, an ambitious trade agenda is a key part of the government's
focus on generating jobs and economic growth. Trade drives 6.7 per cent of our
GDP and one in five jobs. To focus these efforts, the government has created the
Global Markets Action Plan. Under this plan, efforts are being concentrated on
the markets that hold the greatest promise for Canadian businesses. A commitment
to vigorous trade promotion and ambitious trade policy helps our agriculture and
agri-food sector. With almost half of Canada's total agricultural production
exported, the potential for continued growth in the sector lies in its ability
to expand markets abroad. Canada's agriculture and food exports have been on a
growth curve for a number of years. Indeed, for 2013, Canadian agri-food and
seafood exports reached an all-time high of over $50 billion.
Trade and market access is one of our top priorities at Agriculture and
Agri-Food Canada. We work closely with the Canadian Food Inspection Agency and
our colleagues at the Department of Foreign Affairs, Trade and Development — to
maintain, expand and open new markets for the agriculture sector. We are doing
this in close collaboration with provinces and industry.
The department's international efforts are mainly guided by three strategic
objectives. First of all, focusing our efforts in priority markets that offer
the most economic potential. These include the United States, Mexico, the
European Union, Japan, China and India.
The second objective consists of clearly articulating and committing to
specific market access issues with our partners and stakeholders, which I will
elaborate upon later.
The third goal is aligning Agriculture and Agri-Food Canada's science and
trade objectives to direct the department's resources to achieve maximum impact.
This approach helps us ensure coherence and integration not only within the
department, but also with our federal government partners, provincial and
territorial governments, as well as key stakeholders. Collectively we endeavor
to use all available levers in influencing and advancing the international
agenda. One of these levers is the Market Access Secretariat. Created five years
ago — at industry's request — it works collaboratively across governments and
industry to enable improved identification and resolution of market access
issues to aggressively and strategically improve competitiveness and trade
opportunities for the sector.
The Market Access Secretariat has been instrumental in resolving a number of
bilateral trade barriers in key sectors, including beef, pork and canola. At the
same time, beyond addressing urgent trade barriers, officials are working hard
to ensure that access to important markets for our sectors is maintained and
Complementing this work, we are aggressively negotiating free trade
agreements with a number of trading partners — with some significant results.
Since 2009, eight free trade agreements have been concluded with 38 countries —
and Canada is also currently negotiating trade agreements with more than 32
Today, Canada has signed trade agreements with countries representing close
to half of the world's agriculture and agri-food markets; some 44 per cent of
the global market falls under our free trade agreements. The trade potential
more than doubles when you take into account countries with which we have
ongoing negotiations. Once ongoing negotiations are concluded, Canada will have
access to almost two-thirds of the world's agriculture import market. These
include agreements with Europe and Korea. The agreement with Europe is Canada's
most ambitious trade initiative, broader in scope than the North American Free
Trade Agreement. We are also engaged multilaterally in the Trans-Pacific
Partnership, as well as the World Trade Organization.
Beyond formal trade agreements, our department also puts significant efforts
towards advocating bilaterally and multilaterally for the use of science-based
trade rules, regulations and international standards. All of our efforts on
market access are focused on maximizing opportunities for our stakeholders. We
want to help them get their products into the most profitable markets abroad. To
this end, we have created a number of tools to assist our stakeholders.
The first of these tools is the market access support system, which was
introduced to prioritize Canadian agricultural and agri-food market access
issues and allow for the allocation of appropriate resources. The tool allows us
to evaluate market access issues based on a number of predetermined factors in
consultation with the industry. It is then given a priority ranking that is
shared with industry on a quarterly basis for information and ongoing
Industry stakeholders and provincial and federal government representatives
come together once a year to discuss market access priorities and align our
objectives for the year. It happens that this meeting took place yesterday, and
the discussions were rich.
One of our biggest strengths is our team of 12 agricultural trade
commissioners abroad. They act as our eyes and ears in key markets overseas and
are dedicated to promoting and expanding Canadian trade in agriculture. These
AAFC-funded positions complement members of the Foreign Affairs, Trade and
Development Canada Trade Commissioner Service, and all together they cover every
inch of the globe in support of our sector.
CFIA technical experts, including veterinarians, are also posted abroad to
allow the delivery of on-the-ground, timely responses to market access issues.
In addition, the department continues to support industry's pursuit of
commercial opportunities through a number of programs and activities. Let me
name a few briefly.
The first one is the $341 million agri-marketing program which helps national
associations and small- and medium- sized enterprises in their efforts to
undertake promotional and market-development activities, both in traditional and
Second, market intelligence, such as trade data and client-focused research,
helps inform industry decision-making about new opportunities.
Third, promoting Canadian products in new markets helps expand our awareness
of our industry and we are using the Canada brand, which helps industry to
differentiate Canadian food products from the competition, raise their profile
and support the sector to increase sales.
In addition, we provide leadership in fostering coordination and
collaboration across all market development efforts while ensuring that industry
reaps the benefits of a common approach to promoting Canada and Canadian
products. This includes support for eight flagship trade shows around the world
and generating targeted market research reports. Food exhibitions, such as SIAL
in Paris, which took place last October, provide enormous opportunities for
Canadian companies to expand exposure and sales.
Under Growing Forward 2, our framework of agricultural policies at the
federal and provincial level, provinces and territories have greater flexibility
to tailor market development and trade promotion programs to local needs and are
well-placed to play a more hands-on role in these areas.
As mentioned, I am joined by my colleague Dr. Gilles Saindon, Associate
Assistant Deputy Minister of our Science and Technology Branch. I would like to
take a moment to highlight the important relationship between our two areas.
The Science and Technology Branch uses an approach based on partnerships,
working with industry, universities and colleges and other science providers to
deliver advances in science and innovation that enhance the sector's resiliency,
fosters new areas of opportunity and supports the sector's overall
competitiveness, both here in Canada and in global markets.
For example, with respect to market access, our Science and Technology Branch
teams are working, often in collaboration with experts in other countries, on
issues such as improving the potential for increasing exports of canola by
researching how to increase the crop production at reduced cost and through
reduced pesticide application using biological control agents. This is relevant
given that the European Union is moving to lower maximum acceptable residue
levels for pesticides.
With respect to the United States, our scientists cooperate on pest
management and pesticide issues, helping improve faster access to the global
market for newer and more effective pest control tools. They work globally on
solutions for food safety issues that can limit market access, such as reducing
contamination by mycotoxins in cereals.
Today our network spans the country with 19 research centres located across
diverse agricultural ecozones. Each of our centres has a critical mass of
expertise and specialized facilities that contribute to the international
success of Canadian agriculture. For example, at the Semiarid Prairie
Agricultural Research Centre in Swift Current, Saskatchewan, spring and durum
wheat research programs have been key to providing Canadian farmers with wheat
varieties that can compete in world markets. The centre's work with wheat
illustrates how science investment by AAFC has provided yield and agronomic
benefits for farmers, as well as quality attributes that are recognized in many
markets around the world.
Another example is at the Greenhouse and Processing Crops Research Centre in
Harrow, Ontario. The department supports market access for Canadian food-grade
soybeans through its research and variety-development program.
Two industry-led projects are currently under way to support the sector,
including producers, processors and exporters in meeting the quality
requirements of international markets in a competitive and profitable manner.
The Food Research and Development Centre in Saint-Hyacinthe, Quebec, supports
the market for access to Canadian pork through its research program on meat
quality. Researchers are collaborating to develop tools and products that
specifically support Canadian pork sector access to the very lucrative Japanese
Those are some specific examples of our work, but more generally the Science
and Technology Branch is taking a sector-by-sector approach to support industry
in meeting key scientific challenges facing 21st century agriculture, increasing
agricultural productivity, but also enhancing environmental performance,
improving attributes for food and non-food uses and addressing threats to the
agriculture and agri-food value chain.
A key mechanism for accomplishing this work is the AgriInnovation Program
under the Growing Forward 2 framework. This five-year program provides up to
$698 million, of which $468 million is available for funding projects based on
applications from the industry.
Industry-led research and development funding through agri-science clusters
and agri-science projects also provide a direct pathway for supporting the
domestic and international market-driven science requirements of the sector.
Clusters aim to mobilize and coordinate a critical mass of scientific expertise
in industry. Agri-science projects are aimed at a single project or a smaller
set of science projects that would be less encompassing than a cluster and may
be national, regional or local.
As you can see in the context of our strategic planning around science, we
are focused on finding solutions for the sector, taking a comprehensive approach
in our collaboration with our partners so that our research, development and
knowledge transfer efforts fit within the landscape of other science providers
in addressing the scientific priorities of the sector.
In closing, Mr. Chair, I would like to provide you with a few examples of
concrete results brought about by our efforts thus far. Following extensive
negotiation, an agreement was signed with Taiwan in February to expand market
access to include Canadian bone-in beef and other specified beef products from
animals under 30 months of age.
The Canadian beef industry expects the market for under 30 month bone-in beef
to be over $3 million next year, with the potential to grow $10 million annually
in the years to come.
Furthermore, the recently concluded free trade agreement with Korea will also
result in significant benefits to Canadian farmers and products through the
elimination of tariffs on a wide range of agricultural products. The Canadian
Agri-Food Trade Alliance estimates that the agreement could boost Canadian
agri-food exports to Korea by over $800 million.
In China, our intense efforts continue to generate results. Just this month,
we signed an arrangement for permanent access for fresh cherries. Trial exports
of B.C. fresh cherries in 2014 reached almost $7 million. Industry estimates
that exports could reach $22 million annually.
We also signed a cooperative arrangement of intent to work towards trial
shipping of blueberries for the 2015 season. Industry estimates access to reach
$65 million annually.
Our recently negotiated agreement with the European Union will be fully
implemented; 95 percent of European Union agricultural tariffs will be
eliminated, including for our key export interests such as meats, grains and
oilseeds, fruits and vegetables, and processed foods.
Once again, CAFTA estimates that when the agreement is fully implemented, it
is expected to increase annual Canadian exports by over $1.5 billion.
You can see for yourselves some of the tangible benefits that our work on
market access brings to our agriculture sector and our economy. I would like to
underscore that, in undertaking these activities, we work closely with our
federal colleagues and with industry and the provinces. All of our efforts
combine to ensure the highest possible returns for our Canadian agriculture and
We appreciate the opportunity to appear before you today and are happy to
answer any questions you may have. Before doing so, I will turn to my colleague
Tony Ritchie who will provide an update on how the Canadian Food Inspection
Agency works with our department to support the government's trade agenda.
The Chair: Thank you, Mr. Seppey, for providing us with that
Tony Ritchie, Executive Director, Strategic Policy and International
Affairs, Canadian Food Inspection Agency:
Thank you. I am pleased to appear before the committee this morning.
Increasing Canadian competitiveness and expanding trade opportunities is a
priority for the Government of Canada. As you have heard, Canadian agriculture
producers participate in a highly competitive trade environment. The sector's
ability to compete internationally relies heavily on the stability and security
of Canadian domestic animal health, plant health and our food safety systems and
an international trading environment that is science-based.
The CFIA plays a key role in this regard. As Canada's largest science-based
regulatory agency, the CFIA leads Canada's participation in the World Trade
Organization Sanitary and Phytosanitary Committee, the World Organisation for
Animal Health, OIE; the International Plant Protection Convention, IPPC; and
partners with Health Canada at the Codex Alimentarius.
We participate in these international fora to influence the development of
science-based rules and standards, and to encourage harmonization with
like-minded countries on matters related to food safety, animal and plant
health, as well as consumer protection.
Engagement with other foreign regulators is routinely undertaken to resolve
technical market access issues in order to establish the import requirements for
Canadian products. The CFIA also engages through formal bilateral mechanisms
established under international agreements and arrangements to advance
regulatory cooperation activities.
The CFIA also plays a significant role in the negotiation of sanitary and
phytosanitary chapters of free trade agreements, to help ensure that the
Government of Canada's interests are reflected and articulated in advancing its
ambitious trade agenda.
As we have heard, agriculture is a sensitive domestic sector for many
countries. In the context of tariffs on agriculture commodities going down as a
result of international agreements, countries will often create trade barriers
for Canadian products by imposing unnecessary and not scientifically justified
sanitary and phytosanitary import conditions to protect their own agriculture
We have also seen that as emerging economies modernize their regulations and
infrastructures related to animal health, plant protection and food safety, they
can develop import conditions and new regulations which are not consistent with
the risk being managed, thereby negatively impacting Canadian exports.
These trade barriers and non-scientifically based import conditions vary from
country to country and from commodity to commodity.
The CFIA engages with other countries' regulatory agencies to defend and seek
science-based solutions to advance the interests of Canadian industry. The
agency negotiates technical export conditions and plans the logistics of visits
by foreign regulators who are required to audit the Canadian system before
agreeing to access. Negotiating import and export conditions is complex. It
involves risk assessments or completion of questionnaires, and requires trading
partners to have a good understanding of the Canadian regulatory system. The
effectiveness of Canada's regulatory system for animal health, plant protection
and food safety serves as the basis of the CFIA experts to negotiate our import
and export conditions.
We've just heard from my colleague around some of the successful joint
efforts that CFIA and AAFC have undertaken in the past to open up markets. He
mentioned the Canada-Taiwan expanded market access to Canadian bone-in beef, as
well as a number of other examples.
The CFIA plays a key role in certifying compliance with export requirements
and issuing certificates; testing commodities prior to export as required by the
importing country and conducting surveillance of animal diseases or plant pests
to demonstrate or maintain freedom status.
The collaborative effort by CFIA and AAFC, which has been highly effective in
resolving market access issues, has also been instrumental in mitigating the
impact of unanticipated market disruptions. The Russian embargo of Canadian food
exports this summer resulted in CFIA and AAFC, with industry, working to quickly
identify other markets where Canada meets the requirements.
I would also like to take a moment to highlight some legislative efforts that
CFIA has been involved with. In December 2013, the government introduced
amendments to the seven agricultural statutes administered by CFIA, the
Agricultural Growth Act or Bill C-18. Many of the amendments proposed in that
bill support international and trade in agricultural products and will help
support our Canadian farmers on the world stage.
Three examples from that bill that touch directly on supporting trade include
the amendments to the Plant Breeders' Rights Act to support Canada's agriculture
industry accessing the latest international plant varieties; amendments to the
Feeds Act and Fertilizers Act to allow for the registration of fertilizer and
animal feed operators and facilities that import or sell products across
provincial or international borders in order to align Canadian legislation with
that of key international trading partners and to help our feed and export
fertilizer industries maintain their export markets; and, finally, authority for
the minister to issue export certificates for many of the agricultural products
to help our farmers and agricultural industry demonstrate they meet domestic or
In summary, the CFIA engages with other countries' regulatory agencies and
officials bilaterally and through international multilateral fora to advance a
science-based trading environment. Within such an environment, the CFIA can
confidently defend its own import framework, thereby ensuring the continued
protection and viability of our own domestic resource base while advancing the
Government of Canada's market access objectives to the benefit of the Canadian
The Chair: You played your part in providing us with supplementary
information to that provided by Mr. Seppey.
Senator Tardif: Thank you for your most instructive presentations.
Given the large number of trade agreements that have been signed and the number
of agreements that are currently being negotiated, it is clear that demand for
Canadian products will increase.
The issue of food safety is important if we wish to ensure that our Canadian
products maintain the expected quality and standards.
How would you ensure those standards are met? Of course, there is the whole
issue of food inspection. Do you have the necessary resources to ensure there is
enough inspection to protect food safety, which is of such vital importance?
Mr. Ritchie: Thank you very much for the question. It is extremely
important that we protect our domestic resource base. Because, as I've indicated
and as you have indicated through your question, if the domestic resource base
isn't well protected it compromises our ability to trade internationally.
The CFIA has a very progressive import framework, based in regulation and
legislation, which enables us to take particular actions. If you think about the
best way to protect Canada, we take multiple stages. First and foremost we
engage with other countries in our comparative regulated partners to ensure that
we can take interventions overseas before the product gets to Canada, if
required. So sometimes we get into arrangements with foreign countries around
pre-clearance activities or arrangements whereby we may undertake inspection of
the product at foreign sites before it leaves for Canada. That way we are
assured, when it arrives at Canadian shores, it's a safe product.
We also take activities or interventions at the border itself, and so we will
work very actively with our colleagues at Canada Border Services Agency to
ensure that products entering Canada meet Canadian conditions. We do that
through a series of activities. We can do that through monitoring import
requirements, surveillance, border blitzes and those kinds of things.
As well, post-market, when products are in the markets, the CFIA has a very
progressive program of surveillance in monitoring as it relates food, our plant
health requirements and animal health requirements as well.
We do surveys. We do monitoring of the market conditions. We'll do inspection
as required. Certainly if we find non-compliance we have a range of tools at our
disposal that we can use, depending on the risk of that particular activity.
We have a very solid import framework that enables us to have a high degree
of assurance that our domestic resources are well protected.
Senator Tardif: I have a question for Mr. Seppey. If I have correctly
understood you, your report on the Market Access Program states that you have a
$211.5 million budget, which should go down by about 16 per cent over the next
two years. How does the federal government plan to promote market development
while reducing the expenditure budget?
Mr. Seppey: With respect to market development, it is true that we
have had to review our way of going about developing international markets. If
the federal government's role decreases, we can still maintain our effectiveness
by working more efficiently in partnership with the other stakeholders. That is
why I mentioned the various tools at our disposal. There are certain federal
tools such as the agri-marketing program, which over the next five years, still
has a $351 million budget which can be funnelled to national associations or
small and medium-sized businesses.
Furthermore, earlier this year, we implemented the second phase of
programming under the Growing Forward 2 Initiative, which is the federal,
provincial and territorial framework of agriculture and agri-food policies.
Under this policy framework, which includes many cost-sharing envelopes that
offer greater flexibility, there is a focus on market development activities.
This allows provinces to play a greater role. On top of resources here in
Canada, there is an entire network of agricultural trade delegates attached to
the Department of Agriculture, of which 12 are working all over the world in the
main agricultural markets, as well as all the trade delegates working for the
Department of Foreign Affairs abroad.
I must add that the private sector is often a better judge of how to develop
export opportunities in foreign markets. The private sector also devotes more
resources to obtaining representatives in key countries. In our opinion, thanks
to this new distribution between federal government, provincial governments and
industry partners, we are in a position to be highly effective in developing
Senator Tardif: Good luck to you.
Senator Maltais: Welcome, gentlemen. I congratulate you for the work
you do. Canada's presence in all the free trade contracts and agreements is
impressive. This file is moving forward, and we believe Canada has a promising
future when it comes to agricultural production to feed part of the planet.
One thing is bothering me a bit; not our exports, as they are growing.
However, our imports are also growing, and this represents numerous jobs that
could be filled here in Canada. I see in the food section that we are importing
nearly 50 per cent of our manufactured food products from the United States. Are
efforts being made to manufacture more here, or is that protected under NAFTA?
Mr. Seppey: Thank you for the question, senator. There are no
provisions in the free trade agreements that prevent us from improving our
manufacturing capacity. You are speaking specifically of food processing. Truth
be told, we have an extremely rich and competitive industry in several areas.
Canada is one of the rare countries in the world to be both a major exporter —
you mentioned our high ranking when it comes to agricultural exports — but we
are also among the six biggest importers of agricultural and agri-food products
in the world. I tend to view this situation as being rich and positive, as it
demonstrates we are fully integrated into global value chains.
Mother Nature has provided Canada with incredible biomass resources. Our
agricultural production is much higher than our capacity to absorb it into the
market. Consequently, it is very important to be fully integrated into global
trade chains. That being said, we have very few tariff barriers in sectors such
as food processing or commodities, with the exception of supply management. This
strategy serves us extremely well. Frankly, it is one of the most promising
aspects of the free trade agreement with the European Union, where tariffs on
processed products are traditionally very high and very complex, as they are
based on the percentage of inputs such as grains and sugar; when it comes to
dairy products, tariffs may vary considerably.
Thanks to the agreement that was negotiated, once that is fully implemented,
from day one, Canada will no longer have to pay tariffs within the European
Union market. We will be the only developed country to enjoy that advantage,
besides neighbouring countries like Switzerland. Consequently, we will have a
I believe that in the North American context — you mentioned the integration
of the North American processed products market — this may provide increased
opportunities for further investment in Canada in the area of food processing,
since that could provide a platform for North American companies to export their
products into a larger global agricultural market, meaning that of the European
Senator Maltais: Thank you for those explanations. You mentioned, with
respect to free trade agreements or markets that we are opening up in China,
Japan, et cetera, that there is another market of nearly one billion people
which Canada has not yet focused on much, and that is India. We know that India
has a huge need for food products. Can Canada penetrate that market? Under what
conditions? After all, we are talking about nearly one billion hungry people.
Can Canada get through that door without negotiating a free trade agreement, and
that being the case, at what cost for our producers?
Mr. Seppey: You raise a very important issue. India is indeed a major
market not only because of its size, but also because of changing demographics.
There is a quickly growing middle class, and all analyses indicate that a
growing middle class leads to changes in dietary habits, that is an increased
consumption of higher-value products. That is why India is one of the six
priority countries under the department's market access program.
That includes two stages: first of all, we must develop relationships,
maintain a presence and go on trade missions. To that end, the Honourable Gerry
Ritz, Minister of Agriculture and Agri-Food, visited India over the last few
months, in September, and met with several ministers and senior officials to
discuss business opportunities. He met with the Minister of Agriculture, the
Minister of Industry and Food Processing, and the Minister of Fisheries. All of
this work allows us to foster a relationship, helps to open doors for our
businesses and to work together in the longer term.
On top of these efforts, I must emphasize that we are currently negotiating a
free trade agreement with India. However, this negotiation creates certain
challenges, since India is not accustomed to negotiating bilateral free trade
agreements. Canada is one of the few countries with which India is negotiating a
free trade agreement. We are currently in the 10th round of negotiations. These
are intensive negotiations, aimed specifically at creating unique market access
and providing us with an advantage over our international competitors.
Senator Maltais: Thank you very much.
Senator Merchant: My question is regarding the CETA agreement with the
European Union. We phase out the tariffs over I think it's a period of seven
years, but I think that our farmers could immediately engage in exporting
sweetcorn. They have concerns about the GM attitudes that the Europeans have.
Should they be concerned? And how are you working to resolve this?
Mr. Seppey: You are absolutely right that the agreement with the
European Union will see the vast majority of tariffs to be phased out
immediately upon entering into force in terms of tariffs to the European Union.
With the exception of a few sensitive products for the European Union, which
include pork, beef and sweetcorn, the liberalization will take place over seven
years, after which we will have greater access. We will have a volume of
sweetcorn free of any duties. Thereafter, a most-favoured-nation tariff will
Genetically modified organisms in Europe are a sensitive issue. It has not
been flagged by our industry as an issue because, especially in the red meat
sector, they feel that opportunities in terms of volumes and access justify
developing lines of production to allow for hormone-free in the case of red meat
We considered the basis on which the European Union makes its regulations
with respect to GMOs. It is not always based on science but rather on other
factors. Given the reality and the commitments we obtained in the Canada- Europe
free trade agreement, we continue to have advocacy and corporate efforts at the
level of regulators from the food inspection agency as well as the science side
to ensure that the benefits of biotechnology are better understood. With the
challenges we face globally with respect to food security, we cannot afford to
ignore the advances of technology. It is not a panacea but it is part of meeting
the challenges we face globally.
Senator Merchant: Mr. Ritchie, we heard from you this morning and also
from other witnesses about the Russian embargo. How did you handle that?
Mr. Ritchie: The first part of that answer has to be in partnership.
We work in partnership with both the industry and our colleagues at Agriculture
and Agri-Food Canada and the Department of Foreign Affairs and International
The issue on such an embargo is that sometimes you have products already out
on the water. Our first intervention with Russia would be to ask if they would
accept the product already on the water or close to their shores. That would be
the first intervention. We would try to negotiate with the Russian authorities.
If they were to decide that they don't want it, which was the case, then we
would work quickly with industry to open up alternate markets. The industry is
already engaged in other markets and has a good sense of where they need to go.
As well, we are negotiating with a broad range of markets in a variety of
countries in terms of market conditions for our Canadian products. With our
advanced intelligence and that of the industry, we would get together and
quickly identify alternate markets available within reasonable economic
distance. We would work with those countries to ensure that their import
conditions are met. From our perspective, we would issue the valid export
certificates that would be acceptable in those markets. The product on the water
would then be diverted to alternate markets.
A product that has not left Canada wouldn't go anywhere. However, we would
begin negotiations with the markets we opened up for the product already on the
water to see if they would accept additional volume. Product that perhaps has
not left Canada could automatically find its alternate market.
The only way to do that efficiently and within the necessary time lines is
through partnership. Quite frankly, this is thanks to the great work done to
date with the industry through the Market Access Secretariat to identify
priority markets. There is an open and transparent dialogue with industry. They
have certain intelligence that we don't have. They know where they want to go in
terms of market openings. The relationship we have built with the industry has
been instrumental in allowing us to better prioritize the use of our resources
and to engage quickly when we have a disruption of that nature.
Senator Dagenais: I would like to thank our three guests. I would also
like to come back to supply management. Supply management is a commitment to
producers made by the current government, but we know that sometimes, it creates
irritants with our global partners. Can you tell us about the difficulties this
may create in developing our exports? I would like to know whether it is
possible to make changes to the principle of supply management, in order to
better help our own producers.
Mr. Seppey: First of all, with respect to the first aspect of your
question as to the impact on our exporting efforts, we favour — and I believe
you heard the testimony given by Mr. Bonnett, president of the Canadian
Federation of Agriculture, during the earlier portion of your study — Canada
adopting a balanced position, meaning an extremely diversified agricultural
sector, to improve its exporting capacity. We also have the supply managed
sector, which is more focused on the domestic market. That characteristic has
not prevented us from negotiating free trade agreements so far.
In the case of the European Union, it did pose certain challenges given the
Europeans' marked interest in cheese. That did not prevent us from achieving a
result that preserves the supply management system.
I should mention that a major part of the interest our trading partners have
shown in the Canadian market's supply management system is an indirect result of
supply management itself, which guarantees producers an adequate income, but
also ensures that the market prices are higher than global prices. That is what
makes the Canadian market attractive for our international trade partners.
In that spirit, when our foreign counterparts speak to us of greater access
to Canadian markets in the poultry and dairy product sectors, we always remind
them of the fact that the Canadian market is appealing specifically because of
the supply management system. Therefore, you can be sure this has generated a
great deal of interest on the part of certain trade partners, for example our
transpacific partners, which include New Zealand and Australia, who are major
dairy product exporters and who consequently have a marked interest. From our
perspective, we have a marked interest in other countries for red meat and
grains. Each participant has interests to which they are more sensitive.
The government's position has been extremely clear. As negotiators, our
instructions stem from government policies. Supply management only covers a very
small portion of trade and a very limited number of our tariff lines. When it
comes to all the other tariff lines, Canada is extremely open. We are in a
position to develop a very advantageous negotiating relationship which allows
us, specifically, to advance our exporters' interests while preserving a system
that has worked well for our producers so far.
Senator Dagenais: Thank you very much.
Senator Robichaud: I cannot help but follow up on the issue of supply
management. When you say you have protected the supply management system, you
seem to have a different interpretation from mine. Supply management will remain
in place as long as we protect it; protecting it means not allowing products in,
as we have with the European Union, when it came to 18,000 tons of cheese
entering the country. You mentioned I forget how many litres of milk that will
not be produced by Canadian producers. So you should not be claiming to protect
the entire system. You are trying to protect it. If supply management
disappears, it is because we are quietly pulling on a small rug here and a small
rug there. Do you understand what I mean? I understand your position, and I
understand you must defend the government's position.
However, that was not my question. We heard witnesses on Tuesday, including
Mr. Pomerleau, the president of Canada Pork International. They defended the
efforts made by the government, and it was quite something to hear.
Mr. Pomerleau shared his concerns about the structural changes within the
agency. He feels that this is a threat to Canada's brand, which is known
worldwide and which is based on our efficient oversight system. The agency in
question was the Canadian Food Inspection Agency. Mr. Ritchie, my question is
for you. Mr. Pomerleau is concerned about the fact that there is no longer any
recruitment. He said that inspectors cannot get their training from a training
centre or community college. They have to take their training on-site. He said
that the people working there were extraordinary, because of their expertise.
However, there has been no recruitment and he is very concerned about this, is
he not, Mr. Chair? Can you reassure us and tell us that there will be
Mr. Ritchie: Thank you very much for the question.
The agency, as you know, is undergoing an extensive modernization of its
activities. That modernization is taking place at multiple levels. We are
looking at our legislative and regulatory base and making sure that that
particular legislative and regulatory framework is the most modern it can be.
The Safe Food for Canadians Act is a prime example of that particular direction.
We are also looking at the way in which we are modernizing our inspectorate.
That includes, for instance, ensuring that our inspectorate is well trained. We
do have training requirements in place at this point, and we are looking to the
future to be able to modernize those training requirements and ensure that they
are progressive and in line with other countries. We do ensure that, through
appropriate organizational structure and guidance and direction to those
particular inspectors, there is consistency in the way in which they interpret
our regulatory regime so that our regulated parties can be assured that they
will get a consistent response, regardless of where they are in the country.
We do ensure, as well, from a risk-based perspective, that we allocate
inspectorate resources to areas and products of highest risk in Canada. So we
are taking a risk-based approach and refining the way in which we do that as we
At this point, through those modernization efforts, the CFIA will be very
much in line with some of its progressive international partners and, in some
cases, more advanced in terms of those particular partners. We have a very
strong framework on which we are continuing to build and modernize. Where there
is a requirement to recruit inspectors, we would recruit those inspectors as the
need arises, and those inspectors will be trained as required and used on a risk
basis, as required.
Senator Robichaud: You have spoken about the issue, Mr. Ritchie,
however you have not spoken at all about the skills of these inspectors. I am
not questioning CFIA's operations, because inspections are carried out
everywhere. Mr. Pomerleau is concerned that not enough recruitment is being done
in order to ensure that that expertise remains. You told me that there will be
recruitment. Is that currently the case?
Mr. Ritchie: Let me back up a little bit first. The agency, through
Budget 2014, has received resources for a number of particular areas. We've
received some $390 million for five years to strengthen our food safety system
to better protect Canadian families. We received resources to look at how to
better prevent unsafe food from entering Canada and to continue with some very
important programs. That investment from the Government of Canada does permit us
to advance our inspector recruitment where necessary, in line with those
particular risks and activities. So yes, thanks to the government's
intervention, we do have the ability to move — and have moved — forward on
Budget 2014 announcements.
As in any case, we have inspectors who will leave, retire, for instance, and
the agency, as in all organizations, will take a decision in terms of replacing
and proceeding with staffing based on our requirements, on the needs and on the
risks of those particular positions.
Sure, we do advance our staffing as required, and we do, in fact, proceed on
government budget announcements that provide additional funds to the agency. In
those particular cases, yes, we would recruit as required.
Senator Robichaud: You said that at this point in time recruitment is
Mr. Ritchie: In terms of recruitment, we would recruit, as I have
indicated. If a position is vacant, and it's a position that we deem to be of
importance and that deals with a particular component of the agency that we
would deem to be high risk, sure, we would recruit if necessary. So it's a
question that's dealt with on a case-by-case basis in terms of the inspectorate
we have. As I have indicated, in terms of areas of new and emerging priorities,
where the government has deemed that these are priorities that should be funded,
with the funding that comes from the government through various budget
allocations, we proceed to enhance our staffing requirements.
Senator Robichaud: I hope that that answer will satisfy Mr. Pomerleau.
No doubt industry will continue to encourage you to maintain CFIA's services at
the highest level, because this is key to our commercial trade.
You stated that there had been budget adjustments, in other words less money,
and that you have found ways to work more efficiently with your partners, that
is industry and the provinces. Provinces are currently faced with significant
operational deficits. Apparently, the federal government is on the verge of
generating a significant surplus that it will not know what to do with. To use a
common expression, are we not putting the cart before the horse by counting on
the provinces to fill the gap when they do not have the means? The federal
government is gradually withdrawing while it does have the means. This is a
political question and you probably will not be able to answer. I, however, will
have expressed my point of view.
The Chair: Without answering, Mr. Seppey, no doubt Senator Robichaud
will participate in the future committee meetings.
Senator Robichaud: I will send my questions in writing.
The Chair: We can always count on your presence, Honourable Senator
Robichaud. Now, Senator Oh has the floor.
Senator Oh: Thank you, gentlemen, for being here today. Your
presentations were just wonderful. I want to say that AAFC and CFIA have both
done a great job of helping Canada to export agri-food all over the world. I
would say that there is no other government than this government, this federal
government, that has helped Canadian farmers the most to export agri-food all
over the world.
I had the honour of accompanying Prime Minister Harper to China just last
week and witnessed the signing of the cherry and the blueberry market access to
China. You mentioned that there would be $20 million worth of cherries and $65
million worth of fresh blueberries exported to China yearly. Does that come from
British Columbia or from across Canada?
Mr. Ritchie: The cherries are primarily from British Columbia. For
blueberries, British Columbia as well is a key player in that. We may find it
comes from other parts of Canada as well. I think the Maritimes are quite active
in blueberry production as well.
Senator Robichaud: And Quebec.
Mr. Ritchie: And Quebec and Ontario.
Senator Oh: That's great. Are we still negotiating on exporting more
beef to China?
Mr. Ritchie: Absolutely. Those discussions continue, as well as in a
number of other countries where we're trying to increase our beef access.
Senator Oh: It is now capped, I think, at 30-months old?
Mr. Ritchie: That's correct. There are certain conditions imposed by
China in terms of our ability to access its market. A lot of those requirements
are not necessarily in line with the OIE and its international standards. Like
any country, they are imposing those particular conditions. Our perspective with
China is that it's not in line with OIE and they are not scientifically
justified, so we continue to have those discussions.
The minister has been very active in China. We're very active. There is a
working group that we have, a CFIA and China working group, on animal health,
and a key part of that discussion is to look at those technical barriers that
are in place with China to be able to assure them that those conditions that
they are imposing are not scientifically justified and that we should be able to
open that particular market for increased access to beef.
Senator Oh: We had a witness yesterday who was saying that when they
export cattle to China or wherever, there is more value added on the
international market than the domestic market. For instance, the tongues are
worth far more. They increase $30 per cow when you are talking about
In closing, I want to thank CFIA and AAFC for the great work they have been
doing. Thank you.
Senator Tardif: I have a supplementary question further to Senator
Robichaud's question on the inspection program. It's interesting, because every
time we hear the words ''modernization'' and ''efficiencies of the framework,''
it also means that there are budget cuts involved. That seems to be a general
term that we use for those situations.
I remember when we had the meat recall crisis with Maple Leaf three or four
years ago. At that time, I don't know if it meant more inspectors, but certainly
closer surveillance of what was happening. I understood further to that that, in
fact, there had been reduced monies and that the number of inspectors had been
reduced. I'm talking here about the meat industry. How many inspectors do you
have presently? How many did you have four or five years ago? Where are we at?
Mr. Ritchie: I do not have those numbers with me today so I cannot
answer that particular question.
Senator Tardif: Could you send that to the committee? I'm interested
in the last five years, over the five-year period, the number of inspectors.
The Chair: Mr. Ritchie, could you provide the clerk with that
Mr. Ritchie: We can provide that information to you.
Senator Tardif: Thank you. Can you tell me how many of the
recommendations have been put into effect from the report that was chaired by
Mr. Ritchie: All of those recommendations are now in effect.
Senator Tardif: They are now in effect. Thank you.
Senator Enverga: Thank you for the presentation. I know that you have
been working very hard on these free trade agreements. As we try to market our
products from one country to another, we are also opening our markets to certain
pressures. We heard last time about dairy producers and CETA, and they are
having challenges with this trade agreement. Do your organizations have any
resolutions for this? How could you assist the sector in this? How many more
affected industries in Canada are you assisting? Do you have any details?
Mr. Seppey: I can provide you with a certain indication. It is clear
that, as part of any trade negotiations, it's like any contract. In order to get
something from the other side, you need to address their issues of interest. In
our case, in agriculture, we are a very open country. It's only for those few
products under supply management that are more directed, and the operation of
the system requires that we have import controls, that we are not as open.
In that context, that's reflected by the announcement that the Prime Minister
made in October 2013 when this agreement in principle, and I mean by that the
broad scope of the elements of the agreements, was announced. There will be
additional market access concession made with respect to cheese. It was clear
that this could have an effect on the Canadian dairy industry, both the dairy
farmers as well as the cheese producers, the dairy processors. In recognition of
that, the Prime Minister, upon the announcement of that agreement in principle,
made the commitment that the government would closely work with the industry and
closely monitor the implementation of the agreement, and, if there is an impact,
committed to provide compensation to those directly affected. That commitment
stands by itself. It's a solemn commitment by the Prime Minister.
Since 2013, throughout the negotiations, we consulted very closely with the
industry, especially with the dairy farmers and the dairy processors. Over the
past year, I had numerous meetings with individual companies, with farmers,
farmers' organizations at the provincial and national level. You heard testimony
from the Dairy Processors of Canada and other interested parties. I met with all
these individuals over the past year on several occasions, as recently as last
week, in order to understand how we can accompany their efforts toward
It is important to note that the agreement includes a market access
commitment for 17,700 tonnes of cheese. This will start to be implemented only
upon the date of entry into force of the agreement, which is from 18 to 24
months from today. It's not before 2017 that we will start seeing that increase
in imports. It will be phased in. The 17,700 tonnes will not come in on day one.
It will be spread over a period of seven years. During that period of time,
there's a lot of things that governments can do, and it's not only the federal
government that has levers in that area, but both provincial and federal
governments, as well as the dairy sector, which has a number of levers in their
hands to address these issues.
If you allow me, just in reference to a point that the senator from
Saint-Louis-de-Kent mentioned earlier about the 170 million litres of milk that
would no longer be produced, I beg to differ that it is a guarantee that it
would happen that way, because I think that the dairy sector has recognized that
it's very difficult to assess what would be the impact in reality, as is always
the case with economic elements. You can have the sector adjust to reality.
There's a growth in the dairy consumption — not a high growth — because of the
growth in population. The per capita consumption of dairy in Canada is lower
than in other developed countries. There is a shift through marketing, various
innovations and developing further the artisan cheese expertise that greatly
exists in Canada by building on the excellent assets we have in dairy. For
example, we have one of the best dairy genetics in the world. These elements may
contribute to mitigate. It's not to say that it will eliminate completely a
negative impact, but it has potential. A certain number of tools are at the
disposal of industry and the government to mitigate those impacts.
Senator Enverga: Of course, you're opening up the market for them
here. Is that right? They will have a broader market. It's more like you give
them the tools. Is that how you do this? Is there more information about other
Mr. Seppey: In terms of the market access, it is true that through the
agreement with Europe, all their dairy tariffs will be eliminated upon entry
into force. That being said, the tariff is one element that prevents access; but
it's not the only element. The industry would have to get organized to create
the condition to be able to take advantage of that opportunity if it wished to
do so. I think that you heard testimony from both the dairy farmers and the
dairy processors about the challenges that exist in terms of their ability under
the current system to be able to take full advantage of these export
opportunities. Again, our supply management sector is managed largely within the
hands of the provinces and how the sector is regulated. It's largely regulated
at the provincial and industry level, not at the federal level.
Senator Enverga: I have one other question, please, with regard to the
Canadian Food Inspection Agency. Recently, we have been studying bees and
low-level neonicotinoids. Will the agreement have a big impact on our bee trade?
Is that a concern for the industry?
Mr. Seppey: There's no direct connection between the free trade
agreement and those elements because under the free trade agreement you codify
tariff measures, market access conditions, and phytosanitary and sanitary
principles. Your committee has been studying this issue for some time, so you
know that intense discussions are taking place among regulators and the industry
sectors in that regard.
Nothing in the agreements would affect the ability of Canada to export
products that have been grown from seeds treated with those products. It really
is a matter for Canada and Canadians to decide how to regulate those types of
substances. You can regulate them in a way that is deemed appropriate in Canada
well within the principles set out in the free trade agreements.
Senator Merchant: I have a supplementary question in regard to supply
management. You have been talking with industry. You seem to be very well versed
in the issues. You concede that things will have to be repaired. Do you know the
amount of compensation that will be appropriate? What is the industry asking?
What are they saying to you will happen? We'll see how things turn out and what
markets will open up but surely you have more substantive conversations with
Mr. Seppey: Definitely. Part of the main reasons to have discussions
with them after the terms of the agreement were made public was to get their
perspective as to how they think things will unfold so it can inform the
government's actions in terms of how to accompany the sector.
On the issue of compensation, it's almost impossible to define a number prior
to seeing the real impact unfold with the progressive increase in imports. So
many factors can come into play.
One indicator that can be used to assess is how it affects the volume of milk
produced or sold to dairy processors. From a dairy farmer's perspective, given
that there's time to adjust, they may well decide to adjust things so that
through promotion, for example of a variety of dairy products, they may adjust
elements of the system to allow for an increase if there is an expectation that
the demand for Canadian cheeses would diminish in the demand for other dairy
products, such as yogurt, nutraceuticals and other products where consumption
A number of other elements can inform the issue of compensation, which needs
to be based on observed impacts. We will not see any observed impacts until the
date of entry into force and over that period of seven years of the progressive
phase-in of the market access commitment.
Senator Beyak: Thank you very much, gentlemen. Canada's agri-food and
agriculture sector is in excellent hands under your work. You're professional
and knowledgeable; but most important is your attitude. I've never seen a better
use of taxpayer dollars in changing conditions. You didn't talk about doing more
with less but doing better with less, and I appreciate that.
Most of my questions have been answered from your presentation. We've heard
from witnesses about the labour market shortage. Do you talk across other
ministries about that problem? How do you see it being solved?
Mr. Seppey: It is definitely an issue that we hear a lot from our
stakeholders. As part of our mechanisms in place to engage in dialogue with the
industry, we have a series of value-chain round tables where we meet on a
regular basis with the meat, food processing, grains and all seeds sectors to
discuss issues of importance to the competitiveness, sustainability and the
innovation of those sectors.
I would say that across all sectors and at different levels, issues of access
to competent skilled people, temporary staff or work seasonality come up. I'll
give you two examples: In meat processing, you can simply not operate without
access to temporary workers. The conditions of the work and the economics of the
sector require assistance. We're all familiar, especially in Quebec and Ontario,
with the huge contribution that foreign workers make in the fruit and vegetable
sectors. In the horticultural sector, for example, you have challenges similar
to those in the fisheries sector with periods when work is intense over long
hours and periods when the work is dormant because that's how Mother Nature
We hear a lot from stakeholders about this issue. In that vein, many
discussions take place with departments across government with those issues in
their core mandate, for example Citizenship and Immigration and Human Resources
and Skills Development. Yes, we have discussions to try to find solutions that
address the needs of the sector while being in line with the overall orientation
of the government and trying to address the challenges that give rise to the
proposed changes. That's what we are doing.
I made reference to the annual market access meeting that we have with all
stakeholders in the industry, which covers everything from poultry to cattle and
beef. This issue was raised in that context by some of the same individuals who
appeared before your committee. The points are well registered, and we are
trying to assist the industry. It is our responsibility at Agriculture and
Agri-Food Canada to look at the issues facing our sector to see how we can
assist in influencing the development of policies and regulations that are
supportive of their competitiveness. Yes, we are working with other departments.
Senator Beyak: I'm sure you'll find a solution with the positive
attitude you've found with all the other things. Thank you.
Senator Robichaud: My question is about supply management again. In
your reply to an honourable senator's question, you said that there are
checkpoints at the border when these products come into our country. If I have
understood correctly, and if nothing has changed, the border officers are the
ones who inspect what comes into the country, are they not? They are the ones
who let the agency know that another inspection is required? Is that accurate?
Mr. Ritchie: Yes.
Senator Robichaud: We heard from the poultry producers who told us
that there was more poultry for processing coming in from the United States that
was actually produced in the United States, which means that poultry other than
poultry for processing was coming in that way.
As a matter of fact, the same happens for cheese. When a pizza mix comes in,
cheese is coming in but it is not considered to be cheese. Is that issue being
examined? From the producers' perspective, this is economic activity which is
not to their advantage.
Mr. Seppey: Thank you, senator. You are referring to cull chickens? It
is known under different names.
The second point you raised was that of mixes for pizza. The short answer is
yes, the government is examining those issues in its discussions with industry.
With respect to cull chickens, we are working closely with Chicken Farmers of
Canada, the Canadian Food Inspection Agency, and the Canadian Border Services
Agency in order to figure out how we are going to deal with this. It boils down
to two things: there have always been cull chicken imports because they are an
important input for the food processing industry.
Some groups like the stronger taste of these products. It is a very important
input for the food processing industry, for chicken soup, for example, which
accounts for a large part of imported cull chicken. There has always been that
kind of import and chicken farmers acknowledge that.
On the other hand, the problem is that there appears to be a large quantity
of chicken labeled as cull chicken and which therefore is not subject to the
same inspection when it comes in, when it actually might be standard chicken.
That raises the issue of labelling practices that may not be compliant and which
could therefore suggest fraud. That is what we are working on closely, not only
with Chicken Farmers of Canada, but also the American authorities, in order to
figure out how we are going to deal with this. It is a very complex question
that we are working on.
With respect to pizza mixes, an amendment to the customs tariff was passed
last year in order to clarify the tariff treatment of these products because it
was obviously a legal vacuum that was being taken advantage of. I do not mean
that negatively, but it was used by some importers to import something that
really was cheese. The correction was made to the customs tariff. It was part of
the legislative amendments in the 2013 Budget Implementation Act, therefore it
was done last year. The problem has been resolved because now these products are
considered to be cheese-like and are therefore subject to the same border checks
that cheese products are subject to.
Senator Robichaud: With respect to the cull chickens, producers have
been telling us about this for a while now. When will the issue be resolved?
Until it is, there is chicken coming in and that is certainly not to the
advantage of our producers.
Mr. Seppey: You are right. However, the challenge is to distinguish
between legitimate and not-so-legitimate imports. The key is finding a solution
that does not involve throwing the baby out with the bathwater. That is very
important because if our reach is too long, we will end up with a situation that
is going to be very harmful to the food processing industry. It is a problem
that chicken farmers understand perfectly well. That is why we are working with
them in order to find a solution. The producers have come up with a few
innovative approaches that will allow for that distinction. We are working very
closely and collaboratively with them.
Senator Maltais: There are a lot of chicken stories. One happened to
me recently. I went to my grocery store to buy some chicken. The label said
''fresh Canadian chicken'' but there were lots of other chickens on the shelves.
I asked the young man at the counter if my chicken was fresh because it was a
Canadian product, and if the others were spoiled or rotten, then why were they
being left on the shelves? If this chicken was fresh and the rest was not then
why was it being kept? The young man did not know. He went to find the owner who
provided me with an explanation.
Let us leave supply management for a moment in order to look at demand. We
have an unused commodity in the Gulf of the St. Lawrence, near New Brunswick,
Nova Scotia, Quebec, Newfoundland-and-Labrador and Prince Edward Island, which
the Europeans have excluded from the free trade agreement. It is an
extraordinary resource, providing meat and protein, and it is called seal.
When you are negotiating other free trade agreements with other countries,
could you highlight that in order to help our fishers? Canada could easily
increase its seal quotas because there are so many and we do not know what to do
with them. They are destroying other fisheries resources. I think we could make
breakthroughs outside Europe. Europeans do not remember that they ate seal meat
during both World Wars and they liked it. Is there a way to actively promote the
sale of seal products?
Mr. Seppey: With respect to free trade agreements, the tariff
treatment of those products is no different than that of other products. That is
not the problem. There are two types of measures that can affect the trade of
these products. On the one hand, we have sanitary issues and, on the other hand,
technical measures that may impact trade. It is the latter that is problematic
with the European Union and that has nothing to do with the safety of the
product or the health of the animal or aquatic mammals. The European Union
adopted measures that are not based on science and that have more to do with
consumer concerns about a series of what they feel are ethical issues. Canada
complained to the European Union about these kinds of measures arguing that they
were inconsistent with the World Trade Organization's technical trade barriers
position. From Canada's perspective, this type of restriction is inconsistent
with existing trade rules. With respect to our dispute with the Europeans, the
special group that was struck to deal with this issue rendered a decision that
did not answer to nor reflect our arguments. We were very disappointed. I do not
really see what more we can do about this within the framework of free trade
Senator Maltais: I understand. There are two important points to make
clear. First, our seals are the most well- nourished in the world; they only eat
salmon and cod. They are also better quality. There are 500 million Europeans,
but let us leave Europe aside and offer this product on bigger markets. They can
be shipped live, boxed, frozen, in all kinds of ways. Let us actively tackle
these markets and forget about Europe and the European Community, given that
they are still involved in litigation on this. Let us not waste our time on this
and let us turn towards other markets. That is where we have to launch our
marketing offensive. I will not name the countries but you know which ones they
Mr. Seppey: In terms of market development, we can examine the issue
with our domestic partners, industry and the provinces. For example, the
federal-provincial committee on market development identifies priority markets
and coordinates our actions if industry and provinces with the necessary
resources express an interest in promoting those products. So that is definitely
something that we could integrate into our market development strategies.
Senator Maltais: However, in order to sell products we have to be able
to offer them. There are several billion individuals who are not aware of the
quality and mildness of seal products. If we were to go there and have them try
it, then maybe they would buy it. For example, if there was no beer advertising
in Canada perhaps less would be sold. We have to make seal products known.
''Bardot burgers'' sell well in Quebec and they could also sell well elsewhere.
We have to launch a marketing offensive for these products elsewhere than on the
European market, which is a small market for seal. There are other people around
the planet who would no doubt enjoy consuming quality commodities such as seal
The Chair: Could you pass Senator Maltais' recommendation on?
Mr. Seppey: Yes, we will do that.
The Chair: Thank you.
Senator Robichaud: Senator Maltais' question is a good example of how
some countries can use trade barriers that have nothing to do with scientific
data on seal. In the case of neonicotinoids, there is a moratorium in some
European Union countries. How could we defend ourselves, using other reasons
besides scientific reasons, in order to gain easier access for some products to
the European Union, given that neonicotinoïds are used?
Mr. Seppey: There are several aspects to that. Canada has a very
strict and longstanding policy based on scientific criteria. This is extremely
important, because our imports suffer. The strategy for counteracting that kind
of behavior happens at several levels. I mentioned that Canada is very active
within organizations that set international standards. Mr. Ritchie listed those
involved with agricultural commodities, including the Codex Alimentarius, the
World Organization for Animal Health and the International Plant Protection
Convention. Canada must be very involved in order to make sure that
international standards are properly defined and based on science.
Within free trade agreements, it is also important to use science-based
principles and — in the event Canada is accused of a violation — that we turn to
independent dispute resolution mechanisms. We do not always win but sometimes we
do. Take, for example, a trade barrier in the United States, mandatory country
of origin labelling; we won three times.
Senator Robichaud: We win, but we end up losing anyway.
Mr. Seppey: It puts the United States government in a delicate
position. The American Secretary of Agriculture admitted for the first time
yesterday that the legislation is a problem and that this inconsistency with the
WTO cannot simply be solved through regulation. That is an opportunity for us to
put forward our arguments.
The third and last point is to defend our interests. A large part of our
efforts, including in Brussels but also elsewhere — increasingly in China —
involves, through our embassies, having representatives involved with those
making regulatory decisions. These decisions are often supported, as is the case
in Brussels, by staff from the Canadian Food Inspection Agency based abroad.
They can have daily technical discussions on the ground with, for example, the
European Union's Directorate General for Health and Consumers, in order to
improve their understanding of our regulatory framework. These are tools at our
disposal that can be used to keep practices in other countries that are not
based on science at a minimum.
Senator Robichaud: I encourage you to continue your efforts.
Mr. Seppey: We do not have any other choice.
The Chair: I have a question given that you raised the issue of
labelling. You just said that the American Secretary of State has begun
acknowledging the problems with the legislation. Mr. Seppey, could you please
tell the committee what measures the federal government will adopt given what
the WTO has just done?
Mr. Seppey: There are two possibilities: the WTO legal process and our
work with our allies in the United States, both at the industry level and at the
level of Congress, in order to have some influence over legislative changes in
Congress. Those are our two strategies. With respect to the WTO, they confirmed
last month that the measures taken by the United States last year to render
their regulation more consistent with their international commitments were not
That is the stage we are at with the WTO. The United States can appeal the
decision, which was not in their favour last month. Everyone expects them to
appeal the decision. They still have a few weeks to do that. If they do, we will
definitely, as well as Mexico, which is also a party to the trade dispute,
present our arguments in detail. We will be presenting our arguments but in
terms of legal steps, the next step is that Canada — if the United States
persists in not complying with WTO requirements — could take retaliatory
measures in the shape of additional tariffs on American imports, in other words,
the equivalent in value of the negative impact this has on Canada. To do that,
we will need authorization from the World Trade Organization and we will have
had to exhaust all legal recourse. In terms of the last legal recourse, that
will be a potential appeal on the part of the United States regarding the last
ruling that was not in their favour.
We are preparing for that possibility. This is also important because the
solution does not lie in Geneva nor does it lie with retaliatory measures. The
solution really lies in legislative change in the United States. However,
mid-term elections recently took place in the United States. In January there
will be new dynamics in the House of Representatives and in the Senate. We are
therefore working very hard to continue promoting legislative change amongst
members of Congress. There are many stakeholders in the United States who have a
problem with mandatory country of origin labelling for meat products. This has
been very problematic within the United States. There are Republicans and
Democrats on both sides of the debate. It is important to get the numbers to
have the necessary legislative changes made.
Mr. Chair: No doubt during our visit at the beginning of February 2015
this will be a topic of discussion. Is there a limit to the number of times a
country can appeal to the WTO?
Mr. Seppey: Yes, and I believe this is the United States' last chance
to appeal. If they decide to appeal, we will then ask for the right to impose
retaliation measures. The United States will be able to make a case about the
legitimacy of giving Canada the right to retaliate. However, given that the
United States lost their case at the first level and on appeal, we have good
reasons to argue for retaliation measures. Once again however, reprisals are not
an ideal solution. They are a way of wielding influence; they are not a remedy
for our pork and beef producers.
The Chair: For Mr. Ritchie or Mr. Seppey, from November 2012 to
January 2013, the federal government held many consultations on the proposed
domestic policy on the management of low level presence of GM crops in imports.
Witnesses also said that the LLP of GM crops is a challenge for Canadian
exporters, especially for exports to the EU.
How is the LLP of GM crops currently managed in Canada? In this regard, what
is the status of proposed domestic policy that you believe would impact emerging
Mr. Seppey: I suggest that Mr. Ritchie deal with the treatment of low
level presence, in Canada, and I can address the question of policy.
Mr. Ritchie: The way Canada proceeds when it comes to genetically
modified organisms is that there is a very intensive safety assessment that
takes place around a new novel plant or product that comes forward. That safety
assessment is done in collaboration with Health Canada, to ensure that any newly
developed product is safe for human consumption and has no negative impacts on
food safety. As well, a safety assessment is undertaken in terms of animal feed
and environmental impacts. Once the product is deemed safe from a Canadian
perspective then there is no difference between that product and a
non-genetically modified product.
In a context of low level presence, the issue is that in most industries,
when they develop a product, they'll try to get that product approved in
multiple countries, so there are no trade barrier implications. Canada has
approved the majority of the GM products that are currently in the marketplace.
Some of the issues that might happen, through low level presence, is that there
may be products that might come into Canada that were approved for domestic use
in another country and that were never intended to get into the marketplace.
They may have gotten into the marketplace through unintended circumstances.
So from our perspective, because a good majority of the GMO products
currently traded are already approved in Canada and, if there is a product that
is encountered, then it most likely is a domestically approved product that
would have got into the systems unintentionally. Overall, therefore, the risk is
very low. Again, I go back to the way that we would allocate our resources; we
would react to those kinds of circumstances, as required, on a risk basis and,
as required, undertake surveillance and monitoring. Globally, we would most
likely come to the conclusion that it would be a low risk situation and we would
The Chair: Thank you.
Mr. Seppey: Just to confirm what Mr. Ritchie said, because this is an
issue that we have faced in the case of flax, where a very small trace of GM
flax was found in a shipment and then, overnight, led to the European Union to
halt all trade. This is an indication that these types of issues can emerge in
the future and given that Canada is a significant grain and oilseeds exporter,
we felt it was important to encourage other countries to adopt practical
solutions to deal with low level presentation.
It is important to note that low level presence is referring always to the
very small traces of GM events that have been approved, in at least one country,
for food use. Therefore, it is not an issue of food safety because at least in
one country it is approved for food use. It is really an issue of risk
management, as Mr. Ritchie pointed out. For example, when you think about a ship
that would carry a typical load of grain to Europe, which is 28 million
kilograms in one load, then even with a trace level of 0.2 per cent of
unauthorized GM event, you are then talking about something that is about 3,000
kilograms. For anybody familiar with grain transportation and how grain handling
operates, then you don't need much to reach a level of 0.2.
That is why using the expertise of the Canadian Food Inspection Agency of
Health Canada and Environment Canada, Canada is developing a domestic policy,
even if we are not a significant importer of grain. Our industry feels strongly
that if Canada shows the example and develops a practical policy, then it is a
good way to encourage others to adopt similar policies. We had the consultant
draft a policy in 2012 and we analyzed the results in 2013. We are still in the
process of improving the elements of that draft policy. Our intention over the
coming months is to issue a revised draft policy, taking into account these
comments and additional analysis that we have done. Then we will resubmit that
for consideration by Canadian as well as international stakeholders, because
when we tabled our draft paper earlier we did it also internationally and got
comments from other countries.
We are still in the development stage, because it is a complex issue. But it
is very important for our grain and oilseed sector in Canada.
Senator Enverga: We have all of these demands from other countries
that we are looking at. How are we protecting our own local supply? I buy
cherries all the time and they are all from California and you are exporting
more cherries to China. How do you protect our local supply with all of the free
Mr. Ritchie: You make a very good point. As I indicated before, the
domestic supply enables us to undertake a very active export activity. So
protection of that domestic supply is extremely important. We do that through
our import framework. Canada, like other countries, is able to put in place
import conditions to ensure that we are not, through imports, subject to
unwanted pests or unwanted diseases that could impact our domestic resources. We
work through the various international standard setting bodies.
We mentioned the OIE, the Codex and the IPPC. It is at those international
bodies that we work collectively with partners to ensure that there is an
appropriate science-based trading program in place. That then enables us, when
we set our import conditions, to set the conditions according to the
international standards. If all countries did that, then trade would be fine. We
do get into these situations, as we've mentioned before, where certain countries
don't adhere to that kind of thing. We work very hard with our international
colleagues to set those particular standards. Once the standards are set, we
work bilaterally with our major trading partners to ensure that, through
bilateral arrangements and agreements and those kinds of things, we could put in
place conditions that are appropriate, that respond to our import as well as
their export requirements.
We would then, as well, in some of those cases, in particular high risk
areas, for instance, work on situations whereby we might be able to put in
place, let's call it, ''pre-market clearance,'' for instance. So we would,
again, working with those authorities, be making sure, for products that are
about to come to Canada, that our partner authorities in that other country
understand Canada's import requirements and can sign-off that those import
requirements have been met. It's an outreach; it's sort of an education
arrangement with them. As well, in certain cases, we'll have more formal
arrangements whereby we would maybe have a presence overseas that would be able
to ensure that products that do meet those requirements are legitimately
signed-off and approved by Canadian resources overseas. There are certain
arrangements that enable us to have some assurance that the product that comes
forward is safe.
When they get to Canada, we have our own intelligence and risk-based approach
to those particular products. We do active surveillance and monitoring across
the Canadian landscape for a range of products and activities. We also work very
actively with the provinces because they do have their own abilities to do
surveillance and monitoring, and they do have their own ability to undertake
control measures. So we work with them as well to ensure that there is a
comprehensive approach across the Canadian landscape.
The Chair: Mr. Ritchie, Mr. Seppey and Mr. Saindon, thank you very
much for appearing and sharing your comments and informing the committee on
Agriculture and Agri-Food Canada.