THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Wednesday, October 23, 2024
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:15 p.m. [ET] to examine Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management).
Senator Peter M. Boehm (Chair) in the chair.
[English]
The Chair: My name is Peter Boehm. I’m a senator from Ontario, and I’m the Chair of the Committee on Foreign Affairs and International Trade.
[Translation]
I would now like to invite the committee members who are here today to introduce themselves, starting on my left.
Senator Gerba: Amina Gerba, Quebec senator and sponsor of Bill C-282.
Senator Gold: Marc Gold, Quebec.
[English]
Senator Ravalia: Good afternoon. Welcome. Mohamed Ravalia, Newfoundland and Labrador.
Senator MacDonald: Michael MacDonald, Cape Breton, Nova Scotia.
[Translation]
Senator Verner: Josée Verner, Quebec.
[English]
Senator Harder: Peter Harder, Ontario.
Senator M. Deacon: Welcome. Marty Deacon, Ontario.
Senator Busson: I’m Bev Busson from British Columbia.
Senator Boniface: Gwen Boniface, Ontario.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia.
The Chair: Welcome all. I would like to extend a special welcome to Senator Verner, who is joining the committee as a permanent member and also as a member of the steering committee.
I would like to welcome everyone who is watching us on Senate ParlVU across the country and recognize that Senator Housakos of Quebec has just joined us as well.
Today we continue our study of Bill C-282, An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management). For our first panel, we are pleased to welcome, from the Canadian Federation of Agriculture, Keith Currie, President; and Brodie Berrigan, Senior Director, Government Relations and Farm Policy; and, as an individual, Jodey Nurse, Faculty Lecturer, McGill Institute for the Study of Canada, McGill University.
Thank you all for being with us today. Before we hear your remarks and proceed to questions and answers, I would ask everyone present to mute notifications on their devices. It could be a distraction as we move along.
[Translation]
We are now ready to hear your opening remarks. This will be followed by questions from the senators.
[English]
Mr. Currie, you have the floor.
Keith Currie, President, Canadian Federation of Agriculture: Thank you, Mr. Chair. We appreciate the committee’s time to hear our presentation today. Hello and thank you for that opportunity. My name is Keith Currie, and I am the President of the Canadian Federation of Agriculture, or CFA, and an eighth-generation farmer in Collingwood, Ontario.
Canada, as we know, is a trading nation. In 2023, Canada exported nearly $100 billion in agricultural and food products and is the world’s eighth-largest exporter of agri-food, fish and seafood products, exporting to over 200 countries.
To suggest that supply management is a barrier to expanding free trade is simply not accurate, and the merits of this bill need to be assessed on the basis of its anticipated real-world implications.
Canada currently has 15 free trade agreements with 51 different countries, and only the last 3 agreements required negotiators to provide significant concessions on supply-managed products. In doing so, those three trade agreements made substantial concessions that have significantly reduced the size of the dairy, poultry and egg markets on a permanent basis. Also, the full impacts of recent trade agreements are not felt immediately.
The reality is that Canada needs both supply-managed and export-oriented producers to succeed, and we have seen for decades that both systems can successfully coexist while we continue to negotiate ambitious and forward-looking trade agreements.
Canada is not unique in having market-access sensitivities in certain sectors. At the end of the day, having a balanced production system that supports both supply-managed and export-oriented producers provides for a more resilient agriculture sector and supports both domestic and global food security.
It is important to highlight that meaningful market access opportunities expected to arise through trade agreements, such as through the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, have not always materialized as expected due to the continued proliferation of non-tariff barriers to trade. Yet, Canada maintains agreements with all major trading partners that have or would have significant offensive market access interests with respect to the Canadian dairy, poultry and egg sectors.
Canada either continues to pursue or may pursue several new trade agreements in the future, such as with India, China, countries of the Association of Southeast Asian Nations, or ASEAN, or of the Southern Common Market, or Mercosur. These negotiations are highly unlikely to warrant concessions in supply-managed industries to achieve Canada’s broader trade objectives due to the offensive interests of those nations and the logistical realities of trade across such great distances. Canada cannot and should not approach such agreements with an understanding that gains in agricultural market access can only be achieved by trading agricultural sectors against one another, particularly recognizing that supply-managed products reflect less than 1% of Canada’s existing tariff lines.
On this basis, while Bill C-282 may raise the threshold required to put supply-managed industries back on the table in future trade negotiations, the CFA recognizes that trade negotiations are not approached lightly by Canada nor our international counterparts. In practice, Bill C-282 elevates the decision-making threshold to trade away Canadian food security by requiring an explicit decision from Parliament to do so. Were a future government to seek such a concession from Parliament, it is worth noting that such a concession, while adding an additional complexity to the process, could carry even greater weight in the negotiations.
To mitigate these risks, the CFA advocates for not only further protecting supply management but also proactively addressing non-tariff and technical barriers impeding market access.
In conclusion, it is our firm belief that this country needs a strong and united agriculture sector comprised of robust supply-managed and export-oriented production, particularly as we strive to meet the global challenges of the day around food security and sustainability.
Thank you for the opportunity to speak to you today. I would be happy to answer questions.
The Chair: Thank you, Mr. Currie.
[Translation]
Small correction on my part: I forgot to introduce Mr. Serge Lefebvre, Vice-Chair, Poultry and Egg Processors of Canada, who is a witness today.
Mr. Lefebvre, you now have the floor.
[English]
Serge Lefebvre, Vice-Chair, Canadian Poultry & Egg Processors: Good afternoon to all, and thank you for the invitation to appear before the committee.
While I’m here as Vice-Chair of the Canadian Poultry & Egg Processors, or CPEP, I’m also a member of the board of Nutri Group, an egg-grading and processing company with locations across the country. I’m joined here today by our association’s President and Chief Executive Officer, Mark Hubert.
I will share the balance of our opening remarks in French.
[Translation]
Since our association hasn’t testified before this committee for some time, I’d first like to give a few details about our association and our members.
Canadian Poultry and Egg Processors (CPEP) represents hatcheries, egg grading and processing establishments, as well as chicken and turkey processors and further processors in Canada. Our members are not governed by supply management, but are the primary customers of Canadian poultry and egg producers.
Together, our members represent nearly 170 establishments of various sizes and process over 90% of the poultry and eggs produced in Canada. In total, our members directly employ more than 33,000 people across the country, generate revenues of over $11 billion, and make investments averaging more than half a billion dollars a year.
Our association strongly supports Canada’s supply management system and the international trade policies compatible with it. We believe that Bill C-282 is consistent with this system. The supply chain we represent, the people we employ and our communities depend on the strength of Canada’s supply management system.
The market access granted to poultry and egg products by the CPTPP, CUSMA and WTO trade agreements is having an impact on supply-managed producers and processors. Our sector is still in the process of adapting to the growing impact of these latest agreements.
Bill C-282 is linked to Canada’s import control regime, one of the three essential pillars of supply management.
We recognize that the bill raises concerns for some.
Trade agreements are essential for non-supply-managed products. We believe that Canada can protect its supply-managed sectors while successfully negotiating trade agreements that benefit Canadians, as has been done in the past. We also understand that the bill is not intended to restrict Canada’s ability to negotiate new agreements.
Our members’ access to volume-controlled and limited imports is also essential for supply-managed sectors. As we understand it, Bill C-282 will not alter the market access already granted to trading partners under current agreements, nor will it affect other trade laws.
In conclusion, CPEP believes this bill is consistent with Canada’s supply management system, a system we strongly support.
We thank you for your time and we’d be happy to answer any questions you may have.
The Chair: Thank you very much, Mr. Lefebvre.
[English]
We will now go to Dr. Jodey Nurse. You have the floor.
Jodey Nurse, Faculty Lecturer, McGill Institute for the Study of Canada, McGill University, as an individual: I would like to thank the committee for the invitation to participate today. I come as a researcher who has studied supply management for almost a decade as well as someone who grew up on a family dairy farm. Based on my scholarly and personal experience, I am convinced that this uniquely Canadian system should be protected, and I recommend the passage of Bill C-282.
While I have many reasons for supporting supply management, in my brief statement, I hope to highlight the system’s importance for, one, stabilizing the dairy, egg and poultry sectors; and two, improving livelihoods and strengthening communities. I will conclude my statement by emphasizing the necessity of this bill in maintaining this system and its noted benefits.
First, as highlighted by previous witnesses, supply management has proven resilient for over five decades because of its ability to stabilize once volatile industries. Supply management’s capacity to effectively manage production, improve farmer prices, stabilize consumer prices, adapt to shifting economies and market conditions and eliminate the need for government subsidies to function have all been to the benefit of these industries and the nation.
Second, supply management is as valuable today as it has ever been for improving livelihoods and strengthening communities. Researchers have demonstrated that the fair prices paid to supply-managed farmers allow them to reinvest in their farms and communities more than their non-supply-managed counterparts and that the economic vitality of rural communities is correlated with the number of supply-managed farms operating in their area. Moreover, the economic stability provided by this system has encouraged younger generations to enter these farm sectors at greater rates than those sectors not under supply management.
Farming in all agricultural sectors is a challenging and difficult business, but the stability provided by supply management should be valued and has real-life consequences for Canadians. Some have suggested during these proceedings that one can support supply management but not necessarily this bill. I would argue, however, that if legislators are honest about their pronouncements — indeed, their promise — to maintain supply management, then they must support the passage of this bill.
Bill C-282 comes at a time when international trade agreements have already disrupted Canada’s dairy, egg and poultry industries. This is also a time — because of recent crises and longer-term factors — when food security, sovereignty and sustainability have never been more important. Officials must have limits on what they can give up to foreign interests if preserving Canadian farms and enhancing local food security are a priority. They must not further erode this system and its very effectiveness by trading it away piece by piece. The government has promised to take further concessions regarding our domestically focused supply-managed sectors off the table. If this is truly the case, then this is the bill to do that.
Finally, I mentioned my own family’s involvement in dairy farming. I have four nieces who are extremely eager to become dairy farmers. Granted, they are currently between the ages of 5 and 14, so we will have to wait and see, but their excitement for dairy farming is undoubtedly connected — whether they recognize it or not — to the benefits awarded through this system. Supply management is a system that must be valued, and it must be protected.
Thank you.
The Chair: Thank you very much, Dr. Nurse.
Senator MacDonald: Thank you, witnesses. Anybody who knows me knows that I have always supported supply management in practice, but there are concerns being expressed, and I would like to run some of them by you.
Bill C-282 appears to create friction between supply-managed sectors and others in the agricultural community. What steps can the government or industries take to ensure that the interests of supply-managed sectors are not overshadowing the needs of non-supply-managed sectors?
The Chair: Who are you directing the question to?
Senator MacDonald: Anyone who thinks they are qualified to answer it.
Mr. Currie: It is true that there are different opinions on this bill and the effect of it. I believe that with this bill, we’re facing a lot of politicization. There is a lot of — for lack of a better term — rhetoric on what potentially could happen to non-supply-managed commodities.
My board is made up of 29 members, 5 of whom are supply-managed and 24 of whom are non-supply managed. So we feel the implications of both sides, and it has been well talked about at our board meetings. Everyone around the board table is in support of Bill C-282 because they feel it brings stability to a 50-plus-year-old industry that benefits food security in Canada. It adds value to the economy of Canada, and there is no proof out there or anywhere that shows that by passing Bill C-282, other commodities would be affected in future trade deals. In fact, former NAFTA negotiator Steve Verheul said that the passing of this bill will not impact future trade negotiations. There is a lot of noise around this bill, but I think the less we turn it into a political battle and political football and get down to what this bill means, the better off we’re all going to be.
Senator MacDonald: Everything is a political battle sometimes.
I have a different question. I’ve been reading lately that, over a 10-year period, 7% of the milk in this country was basically poured out. I remember when I was a younger man, my father was against throwing anything out of the fridge if it was good. I remember when Eugene Whelan was the Minister of Agriculture, we bulldozed millions of eggs one year. I find the destruction of food to be a disgraceful thing — almost sacrilegious. Is there some way to manage supply management without feeling the necessity of destroying food that could be given to food banks or to somebody?
Ms. Nurse: I would like to step in here. I think you are referring to a recent study that was published and certainly promoted by the media quite heavily as well — I think purposely so. As a researcher, I have some concerns about this study, and I know other researchers do as well. This has been emphasized, but these are estimates. These are not real numbers that these researchers have projected. It’s based on very suspect data and methodology, I would argue. The authors themselves admit that they don’t have the data necessarily to support anything more than an estimate.
Senator MacDonald: Whether it’s 4 million, 6 million, 10 million or whatever, I think there is something wrong if we are throwing away good food. Is there a way to adjust the system so that it doesn’t occur?
Ms. Nurse: Certainly, the dairy farmers can speak more directly to the particular programs. They are managed differently province by province, but there are programs. If farmers know that they are going to have surplus milk month to month, they can notify processors in advance. In Ontario, there is a food bank where they can donate their milk to the food bank. This is why I find this article really problematic — because it suggests that milk waste is an issue of supply management, and that’s not the case. I could go on, but I won’t.
The Chair: That’s fine. You can’t because you are out of time. Sorry. We have let that go over a little bit because it was a good exchange.
Senator Ravalia: Thank you to all the witnesses. I will direct my question to Dr. Nurse. I would like to focus on the protection of the family farm. In your view, does supply management protect farming on a smaller, family scale? Do you feel that there are other means of protecting small-scale farming? Furthermore, in this sector, what percentage of farming in Canada occurs on a smaller, family scale, and what occurs on an industrial scale? Do you feel that if this bill is not passed, your particular industry may be forced to look at an industrial-scale production in the export markets?
Ms. Nurse: Perhaps the federation can speak more precisely to the statistics of what you are asking in terms of where farm size diversity falls. Certainly, it does allow for diversity of farm size, supply management. If this bill were not to pass, if in future trade negotiations more of the system were given away, it could compromise the very system itself. If we lost this system, farmers would have to try to compete on an industrial scale, and, according to my research, they would not succeed, given the strength of the market to our south and the fact that every input is cheaper in the United States. There is a whole host of factors as to why we must protect this market in Canada if we care to have domestically supplied milk, eggs and poultry.
Senator Ravalia: Mr. Currie, do you have anything to say?
Mr. Currie: I concur with Dr. Nurse. Between big and large, the fact of the matter is that our larger farmers are probably our most efficient farmers. To Dr. Nurse’s point, if we were to lose the system, you quite likely would lose an entire dairy industry in Canada. The United States loves to dump wherever they can dump, so does New Zealand, and they would just flood this market at world market price where you can’t make a living at it. As Dr. Nurse said, our input costs are much higher, our wages are higher, and our energy costs and all of our input costs are higher, and it would severely damage the supply-managed industry.
Senator Ravalia: On September 26, 2024, we heard from Daniel Gobeil, the Vice-President of Dairy Farmers of Canada, who suggested that the three recent consecutive trade agreements — the CETA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP for short, and the United States–Mexico–Canada Agreement, or CUSMA — may have given concessions to the World Trade Organization, or WTO, as well and negatively impacted your sector. Do you feel that these negotiated trade agreements have impacted your industry in any negative way?
Mr. Currie: I want to be clear that I am not a supply-managed producer, but I represent supply management. Have they impacted the industry? Absolutely. When you are looking at nearly 20% market concession in the last three trade deals, can you imagine going to the Rideau Centre, having two businesses side by side and saying, “We’re taking 20% of your business away and giving it to your neighbour next door,” and what that would do to that business? I realize that’s a conceptual example, but that is what supply management has faced in the last three trade deals in giving up market access.
Their only option would be to try and increase consumer demand for their products. In a country of only 39 million, that’s not as easy as it sounds. So taking that market access away in such a great amount is not a positive thing for our supply-managed sector.
[Translation]
Senator Gold: Thank you and welcome, everyone. Mr. Lefebvre, although your members are not subject to supply management, your association stated during the study of the bill in the House committee that you strongly support the supply management system in Canada and the international trade policies that are consistent with that system — something you clearly reiterated in your opening remarks. You believe that Bill C-282 is consistent with this system. Could you tell us more about why your organization is strongly in favour of Canada’s supply management system and this bill?
Mr. Lefebvre: Thank you very much for the question. Our egg and poultry processors are located all across Canada, not necessarily always in major centres. For the Canadian economy, having processing in regions where the population concentration is not dense helps to keep the regions alive. I think that’s an important point, and I wanted to make it clear, because it’s important for us to have economic activity all across Canada, and not necessarily on an axis where the big cities are present.
To answer your question, as far as we’re concerned, what’s important is to have a stable supply and a stable price forecast. Supply management enables us to have these two important aspects for our industry: to have very high quality products and programs in place to ensure food safety. Supply management also enables us to do this through all our associations. A good example of price stability is that during the last avian influenza episode, Canadians paid much less for their eggs than Americans. Supply management does its job by offering stable prices to consumers.
Senator Gold: Thank you.
[English]
Dr. Nurse, given your experience and research, can you speak more about how this bill, as it puts into law what is already government policy, will help protect Canada’s food sovereignty and food security? Please elaborate a bit more, if you may.
Ms. Nurse: Yes, that is a very important point. It has come up a number of times that these systems do allow for food security and sovereignty. Recent research that I have surveyed on national food security recognizes that agricultural production, first of all, is already a common practice. This is going to likely increase, especially as we have increasing concerns about global food supplies. So maintaining these systems now is incredibly important in order that we can continue to have local food sources.
That is what is incredibly important about this bill: It tells farmers that we are going to maintain this system, so it gives them trust, as has been mentioned. Some of that trust has been eroded with the erosion of some of the market share over time. This is incredibly important. COVID-19 and the war in Ukraine have demonstrated the need to support domestically focused food sources. Food research scholars emphasize this point as well.
The Chair: Thank you very much.
Senator M. Deacon: Thank you for being here this afternoon. Dr. Nurse, I’m going to start off with a question for you.
In an article written in 2020 called “The Long Road to Stability: Egg Farmers in Canada and Fair Farm Pricing,” which you co-authored with Bruce Muirhead, who was here and spoke to us on October 10, you wrote:
Although supply management has its opponents, a majority of Canadians support the system because of the concerns about food security and sovereignty, fairer producer compensation and a recognition, frankly, of the associated benefits that supply management has for rural communities.
You also wrote that supply management has caused conflict in international trade negotiations that Canada has undertaken with others.
With supply management, tariff rate quotas, or TRQs, and free trade agreements and negotiations — these are complex issues, no question — do you think the majority of Canadians who support supply management consider the implications of protecting supply-managed industries in our critical trading relationships? Trade is what we see this bill as being about.
Ms. Nurse: Again, surveys have demonstrated that Canadians care about local food sources, so that’s very important, first of all. Yes, they do care about where their food comes from.
If we were to further erode the system, that would be very problematic because we would lose those local food sources. So just based on my understanding of the desirability of local food and Canadians’ concern for that, yes, that does matter.
Senator M. Deacon: I understand that. My question is this: Do you think these folks who support this understand the complexity and implications of moving forward with this bill?
Ms. Nurse: Certainly, people recognize that, in trading negotiations, there are going to have to be compromises. That’s why this bill really sets out those terms of negotiation quite clearly.
There is no guarantee — as has been brought up by others — that by passing this bill, we are going to harm those other elements of trade negotiation, but by passing this bill, we are going to guarantee the security of this system. That means a lot to farmers in terms of future investments and their faith in the system as well.
Senator M. Deacon: Thank you.
With that last piece you said — to the Canadian Federation of Agriculture — I know you understand clearly the trade and market access to the Canadian economy but are also very concerned about market access concessions to supply-managed sectors.
What do you think the change will be in terms of how the CFA does its work if the bill passes and if it doesn’t? What do you see?
Mr. Currie: I don’t see any change. Our job is to advocate for our membership and farmers and ranchers right across this country. We will continue to make sure they have the opportunity to take advantage of all the opportunities out there in food production while providing the food security that we have talked about, along with maintaining what gets lost in a lot of this: the economic sustainability that’s required by our members.
We are working to make sure they have all the opportunities and protections they need so they can fill not only our domestic food markets but also our export-oriented markets.
[Translation]
Senator Gerba: I’m going to give Ms. Nurse the opportunity to tell us a little more about this issue of waste, which has been much in the news recently. In an article you published in October 2023 and co-authored with Bruce Muirhead, who recently appeared before this committee, you explained, among other things, that supply management is a legitimate tool for coordinating production with demand and avoiding overproduction and waste.
However, we’ve heard that significant quantities of milk have been wasted in recent years. Could you tell us more about the role of supply management in this area? How does it help prevent these problems of overproduction and waste?
Ms. Nurse: Thank you very much for the question.
[English]
Supply management is designed to limit food waste through the regulation of supply, or having those quotas, for adjusting production to meet those market demands. That is why I find that there are some particular issues with the suggestion that it does the opposite of that.
There is also a suggestion that has come out recently that farmers are incentivized to overproduce in a supply management system. Again, it is exactly the opposite; farmers are penalized for overproducing. There is also an assertion about this element of waste that there is less of this in the United States and elsewhere, and this is based on self-reporting surveys on farm-dumped milk. We know — these are not estimates — that there are numerous reports of milk being regularly wasted in the U.S. because of market collapses and processor refusal to receive milk.
I find this particularly troubling because I think that it suggests an element of waste that certainly has not been verified with real numbers, and that’s problematic because one of supply management’s successes has been that element of managing production, creating stability in the market and providing those fair prices for producers. Thank you for your question.
[Translation]
Senator Gerba: Thank you for your reply. Some critics claim that consumers — and my question is for either of you — pay more for supply-managed products, i.e., dairy products, eggs, chickens and other poultry. In your opinion, is it true that consumers pay more for these products than in other countries?
Mr. Lefebvre: I can answer that question. Earlier, I gave the example of avian influenza: what’s happening south of the border right now means — and this is a sector I know well — that American consumers are paying more for their eggs than Canadian consumers. They are more subject to vagaries, they have less stability in their production and they have fewer programs than we do. As a result, the industry in the U.S., like the members I represent, can have supply difficulties at a certain point, and this is reflected in scarcity and higher prices for consumers, as is happening right now.
[English]
Senator Harder: Thank you to our witnesses for being here. My question is for Keith Currie. I want to go back to what’s before the committee, and that’s not supply management. It is a bill relating to the Department of Foreign Affairs, Trade and Development Act which requires the negotiators in any future renegotiation or any future trade agreement to not even use the words “supply management” at the negotiating table. This is about negotiations.
The second point I would like to make and have you comment on is your strong statement of the need for a vibrant, live and united, strong agricultural sector. I totally agree with that. Yet, this bill has divided your agricultural sector — perhaps not your organization, but the Canadian Agri-Food Trade Alliance, or CAFTA, is a very prominent and responsible organization, and other organizations representing the 90% of farmers who export. Why take the risk? You yourself said that there is no change whether this bill is adopted or not. Why take the risk in our negotiations?
Mr. Currie: I have full trust in our negotiators going forward. They have a proven track record of negotiating fantastic deals for Canada. However, as I mentioned, supply management has given 20% market access concessions over the last three trade deals. What that amounts to is death by a thousand cuts.
To your point on what’s going on within agriculture as far as division, we work on so many issues every single day. Our staff and our elected people are working back and forth. We all came in together today, and we are shaking hands, and we are talking about things. We may not agree on every issue. If we do, look out; there is trouble coming if we happen to agree on everything. There will be times when we have a difference of opinion. What is happening with regard to this particular bill is the sensationalization of it more than anything else. The reality is that there is no evidence to show that this bill, if passed, is going to affect other commodities. There is no evidence to show that. There is an inherent fear that it might.
Senator Harder: That’s the inherent fear you have, too.
Mr. Currie: I’m basing it on past occurrences: the track record of giving up concessions in supply management.
Senator Harder: Do you oppose CUSMA, CPTPP or CETA?
Mr. Currie: Absolutely not.
Senator Harder: So what are we fighting about? We’re fighting about a hypothetical negotiation where you want other non-supply-managed farmers to be the only ones at the negotiating table, along with the rest of Canadian industries? You don’t want to be there.
Mr. Currie: There are still opportunities for market access through TRQs in the supply-managed sector. I want to see nobody sacrificed. That’s what I want to see.
Senator Harder: That’s the job of our negotiators. Let’s not hamstring them by amending the departmental act to the advantage of one group of commodity producers.
Mr. Currie: That’s a fair comment. But why is it that agriculture is the industry that has to get sacrificed in a trade deal?
Senator Harder: Talk to the aluminum or steel guys, and they would have a different view on that. Thank you.
Senator Boniface: Thank you all for being here. As you indicate, this is a bill that we’re trying hard to understand. My question goes back to Mr. Currie. I’m trying to understand your organization, or whom you represent, and what the split is in terms. If I were to look across Canada at all farmers, what percentage of farmers in Canada would rely on trade versus supply management?
Mr. Currie: I don’t have those numbers or that knowledge. I don’t know whether Brodie Berrigan has any idea on the numbers. I apologize, but I just don’t have those numbers.
Senator Boniface: Okay. Could you tell me within your own organization then, what percentage of farmers you represent would primarily deal in exports?
Mr. Currie: That’s a difficult question to answer — I’ll explain our makeup a little deeper. I mentioned 24 non-supply-managed and 5 supply-managed sectors. Amongst the non-supply managed, there are also all the provincial general farm organizations, which inherently represent all commodities within their province or territory because the Yukon is also a member. We do represent all of agriculture across the country. We don’t have all of the national farm organizations as members, but we have some of their members as members of our members, if that makes sense.
Senator Boniface: Yes. I follow you. Okay.
I’ll use CAFTA as an example, who were here. Would you, in your organization, represent some of those people as well? Would people have dual representation?
Mr. Currie: No. On the national commodities side, no. As I mentioned, through our provincial general farm organizations, that’s where we obtain the knowledge about what’s going on with any issues within groups like CAFTA or other non-members. There’s that, and, as I mentioned earlier, our team works with all the agriculture teams every day on various issues because we need to support agriculture in Canada. They may not be a member, but it doesn’t stop us from working on joint submissions, joint letters or carrying the message that they give us. We can disagree in our approach, but it doesn’t mean that we’re against each other at all.
Senator Boniface: No. I don’t want to imply that. I understand. In fact, I think one of our witnesses last week actually had two operations, one that is supply-managed and one that’s not; it’s primarily for export.
Some of these questions around the division within are about trying to help us understand the multiple layers that exist across the agricultural industry. Thank you for that.
One of the questions I asked last week of one of our former negotiators was, “If you were on the other side of a negotiation and legislation like this came on the table, what would you look for as an alternative?” I will use the United States as an example of them coming into the agreement: What would they put on the table to offset?
I don’t think you can reasonably say that the negotiator on the other side of the table is going to just take that as a given — that it’s in legislation. In policy, it is well understood, I’m sure, by every negotiating table. Canada tries to protect supply management; that’s the goal. When you put it in legislation, it changes the deal at the table because it is no longer on the table.
The Chair: Maybe that’s one we can come back to because we’re over the four minutes. It is one to think about, and maybe we can get it in the wrap-up phase.
I would like to acknowledge that Senator Mohammad Al Zaibak of Ontario has joined us.
Senator Busson: I believe Senator Harder pursued this question a bit with Mr. Currie, so I will direct my question to Mr. Lefebvre.
Earlier this month, a brief was forwarded to this committee by Pulse Canada that argued that entrenching the protection through Bill C-282 would “set a negative precedent,” leading to other sectors seeking the same protection in trade negotiations and “. . . further complicating Canada’s ability to review existing agreements and pursue new, comprehensive deals.”
I think I know the answer to the question, but I am wondering whether you agree or disagree with that comment. Please explain your opinion.
Mr. Lefebvre: Thank you for the question.
[Translation]
I think that, in any negotiation — and this was mentioned earlier — you trust the negotiator. In all the countries where I’ve had the opportunity to take part in certain trade negotiations, I’ve found that each country has its own products or sectors that are protected. I think that, whatever the state or country, the negotiators make sure they negotiate agreements while protecting the sectors they are responsible for protecting.
At this level, I don’t really see a problem with Canada adopting Bill C-282 to protect sectors that have already been protected for several years and where breaches have occurred over the years. If I just take the egg sector, which I know well, as I mentioned earlier, from the WTO to the CUSMA and the CPTPP, we’ve had a 228.5% increase in foreign access.
So I think that, at some point, if we want our industries to remain viable and stay in the regions, to put our people to work, to develop economies and to make investments, we’re no different from other states and other countries that protect certain sectors to ensure that they develop. That doesn’t prevent us from negotiating with other countries and concluding trade agreements. That’s my reading of the situation.
[English]
Senator Busson: Thank you, but just to clarify, I believe that pursuing this precedent — you have spoken about the fact that you have to trust your negotiators. That was one of the first things you spoke about. Doesn’t this bill suggest that you don’t trust the negotiators to protect the sector?
[Translation]
Mr. Lefebvre: Absolutely not. I think that, at some point, we have to ensure that our consumers here in Canada can be supplied with commodities that will have a stable price and a given quality. I think it’s also linked to the economy, as I mentioned. I’m totally confident, and I think the negotiators will do their job properly. That’s not what I mean. I trust them, the industry trusts them, but I’ve explained what our members feel and want. I also think that Canadian consumers are of the same opinion. I’ve given examples. I think we’ve given a lot over the last few years. Our industries have suffered a little. In other sectors, we’ve had to mention it, but we’d rather receive money from the market than receive cheques to compensate for losses incurred as a result of negotiations.
[English]
Senator Coyle: Thank you to all the witnesses for your testimony. I have a question for Mr. Currie and one for Dr. Nurse. Hopefully, we’ll get to them.
Mr. Currie, I’m interested in understanding the numbers. You spoke about the impact — I think you said “death by a thousand cuts” — of the concessions made in three of Canada’s international trade agreements on the supply-managed sector. We hear about erosion and the risk of further erosion — anybody would be worried about that — in the sector if Bill C-282 is not passed.
Would you be able to tell us, if you have numbers, about the strength of the sector before those concessions were made and the strength of the sector today? However you measure these things, what are the numbers before those concessions were made, and how is the supply-managed sector looking today?
Brodie Berrigan, Senior Director, Government Relations and Farm Policy, Canadian Federation of Agriculture: Thank you for the question. I’ll refer to my notes. We do have some numbers to reflect the significant impact of concessions in the last three major trade agreements — import growth, for example, from 2014 to 2024, when CETA, CPTPP and CUSMA agreements came into effect, in particular.
Dairy product imports to Canada — so increased access to the Canadian market as a result of concessions made in those trade agreements — increased from $899 million to $1.5 billion, which is 67% growth.
Senator Coyle: I know what those numbers are, but I’m asking you about the health of your sector. I know what is allowed to come in, but what has happened to the farms and your industry, comparing that moment before and where you are now? You might have adjusted somehow, but I don’t know.
Do you have those numbers?
Mr. Berrigan: The fact is that those were very significant concessions that those industries had to make. Our supply-managed sectors as well as all agricultural sectors across Canada have had to deal with a rise in input prices in a number of areas, which has made it very difficult over that time period, including fertilizer prices, fuel prices, farmland prices, debt-servicing costs, et cetera. The entire sector has faced increased strain as a result of a number of global factors.
I don’t have any specific numbers related to the overall health of the sector. I know there have been some comments during previous testimony at this committee around an increase in farm cash receipts, for example, in supply-managed sectors during that same time period when they were dealing with the impacts of concessions made in those trade agreements. It is true that they did go up; in fact, they went up across all commodities in the agricultural sector during that period at a time when input prices were also going up at the same time, as I said.
Senator Coyle: Okay. I would love to find the numbers at some point and see whether anybody is doing research on cause and effect.
For Dr. Nurse, my question is about something that you said, which I found very interesting, and maybe I didn’t get it right, so correct me if I’m wrong. I thought you said that the economic stability that supply management provides results in more young farmers entering this sector than other agricultural sectors. Did I hear you correctly?
Ms. Nurse: Yes.
Senator Coyle: Do you have numbers on this?
Ms. Nurse: Yes, I should have recorded the specific numbers, but the brief which I submitted to the Senate cites those studies that will have all those specific numbers, so that’s exactly true. We see younger generations, because of this system, willing to invest in and enter this sector more so than the non-supply managed sectors. I talked about economic vitality as well in those communities, and how it relates to the number of supply-managed farms in those areas as well.
[Translation]
Senator Verner: I’d just like to add to the answers Mr. Currie and Mr. Lefebvre gave to a question from my colleague Senator Harder.
Mr. Lefebvre talked about some breaches and Mr. Currie about some concessions that were made during the last negotiations. If I’m not mistaken, billions of dollars in financial compensation were paid for this. Do you feel that this was not enough to compensate for the loss of market share?
Mr. Lefebvre: Thank you for the question. I think we’re entitled to compensation in the industry. Our members have access to compensation for losses incurred during the last negotiations. Honestly, I think that money could have been used differently for innovation programs, so that we could go out and get our revenues from the market rather than being forced to receive compensation for breaches that occurred.
Senator Verner: Losses of $4.8 billion since 2017 — that’s what I have as a figure — are still a lot for Canadian taxpayers.
Mr. Lefebvre: It’s a lot of money, but in our sector, it’s a lot less than that — in terms of processing, it’s a lot more, when it comes to production and producers.
We’re probably on the same wavelength as the producers. We’d much rather get our money from the market than get a cheque, which we’d probably have a little fun returning and trading for real volume — as far as we’re concerned — processing chicken, eggs and poultry.
Senator Verner: Thank you.
Mr. Berrigan, you said certain things in answering my colleague Senator Coyle’s question. She asked you what the level of production was before these agreements, where some compensation was granted. How has the industry adjusted, and what is the result today? How did things go?
I wonder about the fact that you say that costs for producers are much higher now. You gave as an example the rise in gas prices, gas taxes, et cetera. That wasn’t part of the negotiations. In any case, whether there were concessions or loopholes, as you say, we’d be at the same point today. All Canadians have suffered higher gasoline costs and higher gasoline taxes and whatever else you want to call it.
If we remove these elements, how can we compare production before and results now?
[English]
Mr. Berrigan: The level of compensation provided to supply-managed producers as a result of concessions during those agreements was significant, no doubt, but it was a recognition that those concessions were, in fact, very significant. The market access that was provided is permanent and will go on, so this is going to have a significant impact on producers over the long term.
The reason I mentioned some of those other input prices is because I understood the question to be about the overall health of the sector, and these are factors which have had an impact on the producers on the supply-managed and export-oriented side of the equation and continue to face them, including, now, debt-servicing costs, which are up by over 36% right now. This is the highest it has been since the 1980s for the sector that we’re relying on to produce our food and maintain our domestic and international food security objectives.
The Chair: Thank you very much, Mr. Berrigan. We have reached the end of our time. This has been a very useful and helpful discussion. On behalf of the committee, I would like to thank our witnesses, Brodie Berrigan, Keith Currie, Serge Lefebvre and Jodey Nurse — good luck to your nieces.
For our second panel, I’d like to welcome from the Grain Growers of Canada, Kyle Larkin, Executive Director; from Tree of Life, Patrick Heffernan, Chief Operating Officer; from the Canadian Cattle Association, Nathan Phinney, President, and Jennifer Babcock, Senior Director, Government and Public Affairs; and from the International Cheese Council of Canada, we welcome Christoph Preusser, Director.
Welcome and thank you for being with us. We’re ready to hear your opening statements. You have three minutes. That allows for more question time. Mr. Larkin, you have the floor.
Kyle Larkin, Executive Director, Grain Growers of Canada: Thank you, chair and members of the committee, for inviting us today.
The Grain Growers of Canada, GGC, is the national voice for 65,000, cereal, oilseed and pulse producers across Canada, 97% of which are family farms. As a farmer-driven association for the grain industry, GGC advocates for federal policy that supports the competitiveness and profitability of grain growers across the country.
Canada is an export-oriented nation. In fact, we’re the fifth-largest exporter of agricultural products worldwide. We rely upon trading relationships with countries around the globe to deliver our products to market, which, in turn, supports the livelihoods of thousands of grain farmers across the country. We export not only raw grain but also value-added products, such as canola meal, malted barley and soy oil.
In 2023, production by Canadian grain producers resulted in 55 million metric tonnes of grain and grain products being exported to over 150 countries globally, generating $40 billion in export value.
This clear importance of trade to Canadian grain farmers is why we are here today to oppose Bill C-282. Simply put, this bill poses a significant threat to Canada’s ability to secure and expand access to international markets. With over 70% of Canadian grain sold internationally, we cannot risk damaging those trade networks, which are vital to our Canadian agri-food sector and broader economy.
Of particular concern to grain farmers is how this bill could impact the 2026 joint review of CUSMA, which comprises two of our largest trading partners. We currently export an average of 7.9 million metric tonnes of grain a year, valued at $9.5 billion, to the United States, making the U.S. our largest trading partner for the grain sector. Mexico, our fifth-largest trading partner, accounts for 2.1 million metric tonnes of grain exports, valued at $1.7 billion.
CUSMA and the open and free trade it created between our three countries must be maintained and improved; however, passing Bill C-282 would not only handcuff our trade negotiators but also put other provisions of the agreement at risk. At a time when both candidates for the presidency in the United States have targeted CUSMA during their campaigns, the last thing the grain sector and Canada’s economy need is an additional trade irritant.
Let me be clear: We do not oppose supply management. In fact, much of the grain produced by farmers is used to feed dairy cows, chickens and turkeys. However, we do oppose any restrictions on our trade negotiators, who have historically secured and grown international markets for Canadian grain through trade agreements. They have always had the best interests of all Canadians, including farmers, in mind when negotiating new and existing agreements. Let’s ensure they can continue to do so by opposing this harmful piece of legislation. Thank you.
The Chair: Thank you. Mr. Heffernan, please go ahead.
Patrick Heffernan, Chief Operating Officer, Tree of Life: Thank you. Good afternoon, senators. Today, I’m here to emphasize that given the negative impacts on many small businesses across Canada, Bill C-282 should not be supported.
Tree of Life is one of the largest distributors of specialty and natural foods in Canada. While we import a diverse range of products, today I come to you as an importer of British clotted and double creams. Enjoyed by millions around the world, these specialty creams are available in over 2,000 small- and medium-sized enterprises, or SMEs, throughout Canada.
It is crucial to highlight that these export-rated creams are not produced in Canada or any other country with which Canada has trade agreements. Despite the absence of a similar product produced in Canada, Tree of Life has encountered numerous challenges when trying to import British specialty creams. For years, our access to the Canadian market was nearly denied because these products did not fit within existing cream quotas.
That being said, we want to state that we’re not advocating for the dismantling of supply management; we want to ensure that the quota policy works for all sectors.
Over the years, at the request of Global Affairs Canada, we have made earnest efforts to find domestic suppliers to meet Canadian demand. Unfortunately, these attempts were fruitless. With steady consumer demand but no domestic production, one would think that obtaining import permissions would be straightforward. Sadly, it has been anything but. From 2019 to 2021, we were unable to bring in any of these products tariff-free. We’ve since been able to secure temporary permits, but this method offers little certainty for business planning and growth. We regularly run out of product and must turn away customers.
The positive bilateral negotiations with the U.K. earlier this year added another layer of uncertainty. As you might know, these negotiations were paused in January due to an unresolved issue around market access for dairy products. The suspension underscores the critical need for a balanced approach to negotiations that doesn’t hinder businesses like ours from thriving. As we strive to ensure that Canadians can enjoy these unique British delicacies, it is vital that negotiations resume in order to foster an environment that supports small businesses across Canada.
However, the implementation of Bill C-282 could jeopardize this possibility, as this bill calls for the exclusion of supply-managed sectors from future trade negotiations, including the bilateral agreement with the U.K. Importers like Tree of Life would be unfairly impacted, thwarting any chance of establishing a tailored cream quota.
In effect, Bill C-282 could paradoxically protect a non-existent sector of the Canadian dairy industry, all at the expense of a very real enterprise and their customers. For these reasons, Tree of Life respectfully urges senators to consider the unintended consequences of this bill and to vote against Bill C-282.
Thank you for your time.
The Chair: Thank you very much. Mr. Phinney, you have the floor.
Nathan Phinney, President, Canadian Cattle Association: Thank you, chair and honourable senators. I’m here today representing 60,000 beef farmers and ranchers, the majority of which are family farms from coast to coast. I farm just outside of Moncton, New Brunswick, with my wife, Jill, and three children: Cole, 13; and twin girls, Kate and Lauren. They also have aspirations of farming in the future.
I’m shocked that we are sitting here today to discuss a private member’s bill that should have never made it this far — all because of politics. Trade is not a political gain; this is my livelihood.
Canada’s beef sector contributes $21.8 billion to Canada’s GDP and creates almost 350,000 full-time equivalent jobs through our value sector. We are a critical part of Canada’s rural economy and the whole economy. Let me be clear: Bill C-282 is not about supply management. We’re not here to talk about supply management. Bill C-282, at its core, is bad trade policy.
While we look at new opportunities to diversify our trade, we cannot forget about the U.S. Our sector alone exports 50% of live cattle and beef; of that, over 70% goes to the U.S. Since trade adds 40% value to our producers, we’re able to keep costs lower for Canadians. We just returned from the U.S. today, where I heard how Bill C-282 is going to create unnecessary tensions before even beginning negotiations. State-level officials and stakeholders across North America raised significant concern about what Bill C-282 will do to our trading relationship. Since the Senate began studying Bill C-282, both presidential candidates in America have come out to say that they will renegotiate CUSMA. This should be alarming for every business and commodity in Canada because 60% of our economy relies on trade with the U.S.
Bill C-282 will be a lightning rod for the Americans. Both Canadian and former U.S. officials are on record as saying that if such legislation as Bill C-282 had been passed before NAFTA was renegotiated, we would not have been successful in the deal.
Canada needs to look beyond the next Canadian election and look long term at our export potential. Senators, you have two choices before you: One, Bill C-282 passes; nothing changes for supply management; Canada becomes a leader in protectionist measures, and Canada’s entire economy is at risk. Two, Bill C-282 dies; again, nothing changes for supply management; however, Canada’s economy can continue with business as usual.
At a time when our economy needs every opportunity possible, we urge you senators to vote down Bill C-282. Thank you.
The Chair: Thank you very much. Mr. Preusser, please.
Christoph Preusser, Director International Cheese Council of Canada: Senators, I’m a member of the board of the International Cheese Council of Canada, or ICCC, an association of small- and medium-sized importers and their suppliers.
The ICCC has coexisted with Canada’s supply-managed dairy sector for over four decades and accepts this rationale. We’re not advocating for its dismantling; rather, we continue to work with the government to ensure its quota policy respects our trade commitments and benefits Canadians.
I’m here to explain why Bill C-282 should not be supported by senators. Parliamentarians must seriously consider the financial impacts this bill will have on many SMEs that import cheese. If Bill C-282 becomes law, it risks obstructing even the possibility of reopening bilateral negotiations between Canada and the U.K. Following the expiry of the “cheese letters” in late in 2023, Canadian importers had to change the method of access to import British cheeses.
This quota we now have to use is already fully utilized with cheeses from the U.S., New Zealand, Switzerland and Norway, among others. Unless changes are made, our three unappealing options are as follows: First, cease importing U.K. cheeses to Canada entirely; second, substitute some of our imports from other non-EU countries with imports from the U.K., ensuring a shortage of available cheeses from multiple jurisdictions; third, import U.K. cheese with a prohibit of 245.5% tariff. This would nearly triple the cost of certain cheeses already on the market and make them unaffordable for Canadians. All of these scenarios unfairly penalize Canadian businesses despite increasing demand by Canadians for imported cheeses.
Indeed, according to a poll done by Leger earlier this year, over 50% of Canadians between the ages of 18 and 44 believe that Canada should allow more imported dairy products into Canadian grocery stores to stimulate competition and bring down prices. Canadians select their cheeses like their wine — by provenance. They should continue to be able to do so.
This bill could have dramatic impacts on our trading relationships. Canada should come into compliance with existing trade obligations, while avoiding antagonistic and protectionist measures such as Bill C-282, which risks further putting Canada in a tenuous position with our allies. For these reasons, the ICCC respectfully urges senators to consider the dire consequences of this bill and to vote against Bill C-282.
The Chair: Thank you.
Senator Boniface: Thank you very much for your submissions. I’d like to raise the Tree of Life issue in terms of the U.K. agreement. If you could expand in your comments on the impact of negotiations ceasing for your organization, particularly the knock-on effect for small businesses.
Mr. Heffernan: Thank you. With respect to the cream that we import, we haven’t been able to secure long-term quota agreements, and the agreement that is in place is frustrating for us because it is not produced here in Canada or in the U.S. or by any of our trading partners. Similar to the tariff that you would see with the cheese that we mentioned, it’s a 292% tariff if we choose to bring it in outside of the tariff-free agreement.
The challenge has been that if that agreement continues to be locked, we run the risk of not being able to continue to import that product in the future, and even now we only temporarily have access to bring it in year by year.
Senator Boniface: Thank you. I have a question for either the Grain Growers of Canada or the Canadian Cattle Association. Your comments have been very direct, and I appreciate that in terms of impact. Have you spoken to former negotiators or others who have raised with you a concern about this bill or how it will impact you and your exports?
Mr. Phinney: Yes, we have. Essentially, it’s handcuffing them before they go into negotiations, and we heard that very clearly again from negotiators in the U.S., all of whom were sitting around the table. They clearly stated that the tensions that would be created by coming in are precedent-setting. They were very cautious about us coming here and saying that it would not allow them to do the job necessary for all of Canada.
Senator Boniface: Could you perhaps further comment on what you’re hearing from the U.S., given that it’s your major market? Obviously, we’re hearing — and I’m sure you’re hearing — that they’re watching it very closely. Could you expand on that, particularly at the state level?
Mr. Phinney: We’re at a time where we can’t take what we’ve had as good trading partners for granted. There are geopolitical reasons and issues on both sides of the border, and having an abrasive piece of legislation coming into play with our negotiators is going to make that problem even larger. We need to go in with clear and open minds — that is what we’re hearing from them. Our negotiators do a great job. We heard from the U.S. negotiators that they do an absolutely perfect job, and they know loud and clear where they stand on protecting supply management. Legislation would completely handcuff what they’re able to do for all Canadians and producers going forward.
Senator Boniface: Are there any further comments from the Grain Growers of Canada?
Mr. Larkin: I would echo Mr. Phinney’s comments in terms of this being precedent-setting. Canada would be a pariah in the international world legislatively and legally, taking out an entire sector from trade negotiations. We’re not saying that we should sacrifice that sector, but trade negotiators whom we trust and whom we should trust to have the best interests of Canada and the Canadian economy at heart should have all the tools available to them. To take tools away from them is going to have significant repercussions in current trade negotiations and future trade negotiations. CUSMA comes up quite often, but there are other trade negotiations, too.
My colleagues spoke about the United Kingdom and some of the trade negotiations there. I think the U.K. trade negotiations are a great example of the policy directive that our trade negotiators receive. I don’t have to speak to the former trade negotiators around the table, but it’s clear that they have directives to protect that sector, and they did so in the U.K. trade negotiations. It’s unfortunate that it is where it is, but it’s a clear example that the need for Bill C-282 has always been a question to me. Why do we need this legislation?
The Chair: Thank you very much. I’m sorry, we’re over time.
Senator M. Deacon: Mr. Heffernan, I think I understood most of the information around the whole area of clotted and double creams, the work of Tree of Life and the relationship with the dairy industry. What I would also like to ask just before I leave that is how many jobs would you estimate rely on the Tree of Life’s imports?
Mr. Heffernan: I will have to give you a written answer to that. I don’t have that specific information on me at this point.
Senator M. Deacon: That’s fine; thank you very much. It was very interesting to read the testimony from the president in the House on this whole area, so thank you for that.
To the Grain Growers of Canada, on your website under Trade & Marketing, it is stated that the Grain Growers of Canada exports nearly 80% of the grain that they grow, “. . . and access to international markets directly impacts Canadian farmers’ profitability.” For this reason, growth and diversification are of great importance. It is also noted that:
Unfettered and predictable two-way trade and diversity of markets are the best protection against supply shortfalls, natural disasters, diseases and price shocks.
This sounds similar to the argument in favour of supply management. If Bill C-282 passes as negotiations are entered into with our negotiators’ hands tied, how would you assess the impact on Canada as the fifth-largest agri-food exporter in the world?
Mr. Larkin: Thank you for the question. I appreciate the research on our website as well.
It would have a huge impact because this would be precedent-setting. When our trade negotiators are going to different countries around the world, like Indonesia, Equador, the United States, the U.K., they need all the tools available to them, and they can’t have the folks across the table knowing what they’re not allowed to talk about. This is simple Business Negotiation 101 of putting things on the table, taking things off and keeping things until the end of trade negotiations. Having it legislatively taken out takes an entire tool out of their tool belt to get the best trade agreements possible for Canadians and the Canadian economy. It could have a huge impact.
That’s why I was mentioning before that I question the need for Bill C-282. If we balance the need, which I can’t see, versus the risk, which I certainly see, it really concerns me, and it concerns grain farmers around the risk of our current and future trade negotiations.
Senator M. Deacon: Thank you.
We do hear different perspectives. We’ve listened to a lot of folks at the table who have a lot of different experiences, and we hear that the agricultural sector is united on this bill, and we hear that the agricultural sector is very divided on this bill. I want to hear responses that any of you may have on that statement. I think I can make my own deductions from what I’m hearing, but I’d like, for the record, you to expand on that if you could, any of you.
Mr. Phinney: Agricultural producers shouldn’t have wedges driven between them, and this is exactly what this poorly written piece of legislation has done. We do work together on numerous fronts; however, all of agriculture is not supply management, and the vast majority of agriculture is trade-focused. That’s where the wedge is driving. We don’t support this bill in any shape or form, and that is where I think the division is happening.
The Chair: Thank you.
As a note to Mr. Heffernan, when you’re submitting something in writing — I think you were asked for some statistics — please, send it to Chantal Cardinal, the Clerk of the Committee. That’s the way we usually do things here.
Senator MacDonald: This is a fascinating subject. If there’s one thing I’m happy about, it is that it ended up on the Foreign Affairs Committee. It’s great.
Mr. Phinney, there are basically five products that are in supply management, and it has been in existence for over half a century. Why didn’t other sectors, like beef or pork, embrace supply management 50 years ago, and what would your sector look like today if you had embraced supply management?
Mr. Phinney: We wouldn’t have a sector because we have a unique product where we take a finished product, and it’s broken down into multiple pieces and parts. There are only certain portions of that which are desirable and consumed here in Canada. You talked about food waste and not dumping food. What do we do with the rest of it? That’s our value, and that’s where we’re helping to feed the rest of the world.
We have a moral obligation in our industry to help feed this world. Our products and the diversified cuts and portions that come out of it allow us to do that. Frankly put, if we had gone to supply management and tried to consume a whole beef animal, we would have been broke doing it. We need those values, and we need those increases from other countries to make us competitive and to help keep costs lower for Canadians.
Senator MacDonald: Mr. Heffernan — I think I heard you correctly — you said there were certain creams that aren’t produced in this country; is that correct?
Mr. Heffernan: Correct.
Senator MacDonald: Why aren’t we producing them? What would the reason be if there’s a market for them?
Mr. Heffernan: Specifically, we’re talking about the double-clotted creams we import from the U.K. We did actually source, as I mentioned, through Global Affairs Canada, to try to get a domestic producer to make them. We could not for a couple reasons. One, the capital for any domestic producer to invest in something of that magnitude just wasn’t there. There was no interest. Although there is demand, there isn’t enough demand specifically for that product to be produced within these borders. As such, it stays where it is, where it’s produced only in the U.K., yet the tariff still exists.
Senator MacDonald: Thank you. I was curious about that.
Senator Harder: Thank you to our witnesses. I have a couple of questions, but my first is for Mr. Larkin. Thank you for being here.
You have confirmed in your testimony that this bill isn’t about supply management — I totally agree — and you’ve confirmed that you have no problem with supply management. Yet, you say that this bill as written would be precedent-setting. Can you tell us whether you are aware of any jurisdiction that has used its primary legislation creating the ability to negotiate and amend that it couldn’t negotiate a particular issue? Are you aware of anywhere in the world where they’ve done that?
Mr. Larkin: No, I am not aware.
Senator Harder: Would you not agree with me that it would be completely counter to the interests of Canada were this bill to pass?
Mr. Larkin: Absolutely. I can add to your question and say that a significant portion of the grain farmers whom we represent are mixed-farm operations. They’re doing barley, corn and soybeans, but they’re also doing dairy, chicken, turkey, et cetera, and they enjoy a good livelihood on both sides. That’s why I question the need of Bill C-282 — because as you were stating, it’s precedent-setting.
There is no country around the world that is handcuffing their trade negotiators, because they understand that trade, especially in the globalized world that we are in right now, is important for their economy and the livelihood of their citizens. It’s the same for Canada, especially since we’re the fifth-largest agricultural exporting nation in the world.
Senator Harder: The second question is for Mr. Phinney. This has tended to be a debate within the agricultural community. In my view, the risks are associated not just with the non-supply-managed agricultural sector but with other sectors of the Canadian economy. We’ve had a submission to our committee from the Business Council of Canada, which represents principally large companies outside of agriculture, stating that they share the risk that you’re describing. Can you remind us all that this is not just an agricultural issue? It’s actually an exports interest of Canada writ large.
Mr. Phinney: You’re exactly right, Senator Harder. This came to light when we were in Japan about a year ago and spoke about free trade agreements. Maybe agriculture pays particular attention to free trade agreements and how they work. There were 150 business communities — everybody from AI to tech to natural gas and so on — and they didn’t realize that if something like this were to be precedent-setting, it’s not an agricultural bill. It doesn’t make them immune from what another country — potentially, if they were going to follow suit — could come in and protect on their own. They are at every bit of risk as the agriculture sector is if something like this were to pass.
Senator Gold: Thank you. My questions are primarily directed to you, Mr. Phinney, and to you, Mr. Larkin. I’ll give you both questions and hope that you can find time for the answers.
We have had a lot of testimony on many sides of this issue, including testimony that, in fact, the trade negotiators even before the three agreements — especially those three agreements where market access was conceded — have done a very good job on behalf of Canadians. Mr. Phinney, given the growth of beef and the importance of your exports, can you comment on the evidence that we have heard that the protections in Bill C-282 would not, in fact, prevent our negotiators from continuing to achieve terrific objectives for the export industries and our industries more generally?
It is really the same question to you, Mr. Larkin, on behalf of the Grain Growers. It is important to maintain market access for grain, but supply management and the grain industry have coexisted, as you suggested, for decades. Why would this bill, which implements government policy, really change that significantly?
Again, we have had testimony. Obviously, we have heard many versions of testimony you have given, but we have also heard many versions on the other side. I just would like you to comment on both.
Mr. Larkin: I can answer that question; thank you, senator. I’ll answer that question and a bit of Senator Harder’s question as well, because I think there are similarities there in terms of the questions.
The concern for us is this: If supply management isn’t on the table for our trade negotiators, what is on the table? If I put myself in the shoes of our American counterparts, for example, who are obviously our largest and most important trading partner, what do they go after next? If they can’t talk about supply management, do they talk about restricting grain exports or grain product exports to the United States? Do they talk about steel and aluminum? Do they talk about auto rules of origin? Maybe they would like more per cent on their side versus places like Windsor or Oshawa. Softwood lumber? There are many issues that can be discussed at the trade-negotiating table.
I’m not saying that supply management needs to be discussed, but if you are taking that out of the tool belt of the trade negotiators, it simply limits their ability to get the best trade agreements for Canadians and Canadian grain farmers.
Mr. Phinney: Yes, and to back Kyle up, everybody in every testimony that we have heard has full support of our negotiators. For decades, they have been doing an excellent job for Canadian agriculture. So why handcuff them? Why set them up with a precedent-setting bill? There are a lot of hypotheticals being thrown around. Is the risk really worth it? The first place it will be tested if this were to pass is with our largest trading partner south of us.
Senator Gold: If I have time for a comment in the guise of a question — to be transparent — those of us who have participated in negotiations, big, small and in between, know that there are always issues that are not on the table.
Opening comments notwithstanding, everybody knows that there are red lines behind the scenes and in terms of mandate. There have been a lot of hypotheticals, but is it not the case that the risks may be overstated in terms of the reality, in fact, when you are sitting around the table, negotiating, when there are so many issues that are already very important to both sides?
Mr. Phinney: I think Canada has a policy to protect and hold up the integrity of supply management, and I don’t think you’ll find a sector on either side that would not agree with that. But the legislation portion is the issue. Again, to handcuff and say, “This is completely off the table to discuss,” we’re sending the wrong signals that we’re a trading country and looking more like a protectionist country all the time.
The Chair: Thank you, Mr. Phinney.
[Translation]
Senator Gerba: Welcome to our witnesses. I’m really pleased to hear you all say that you’re in favour of supply management. I understand that you can be in favour of supply management, but at the same time, you want to continue to use it as a bargaining chip — that’s what I understand, basically. Otherwise, there would be no reason to oppose this bill; it’s because people want to continue to use it as a “bargaining chip”.
Previous witnesses have explained here that in the past, there have been 12 free trade agreements that were negotiated without making any concessions on supply management. This just goes to show that agreements can be concluded without using supply management as a bargaining chip.
Therefore, I find it hard to understand why you’re in favour of supply management, but at the same time, you want us to continue using it as a bargaining chip, when it should instead be protected. Supply management is already protected, and you agree that we should continue to protect it.
Could you give us some objective reasons — and I’d really appreciate clear reasons — why you think this bill will tie the hands of our negotiators? I don’t want to hear hypotheticals, but clear reasons. What, in the past, has prevented negotiators from negotiating, when 12 agreements have been reached without having to touch supply management?
I really want to have specific and objective reasons, not hypothetical ones.
Mr. Larkin: Thank you, Madam Senator. I can answer your question.
[English]
Thank you for the question. This is how I will respond. First of all, as I said in my opening remarks, we’re not here to say that we want to sacrifice our supply-managed sector, and we don’t want to sacrifice it in trade negotiations either.
However, I would ask senators and Canadians at large, if we sacrificed just a little bit of supply management in our CUSMA negotiations a few years ago, is that okay, or did we not want an agreement with the Americans? Did we not want a trade agreement anymore? You can ask the same question about CETA and CPTPP. Do we want to sacrifice just a little bit —
[Translation]
Senator Gerba: I want an answer. I’m sorry, I asked a question about whether this bill that’s before us today, that wants to protect essential products that Canadians consume every day, that was passed by a House represented by Canadians, that affects Canadian products that are used by Canadians, a bill voted on by a majority of Canadians…. Why do you think this will be detrimental to future negotiations? I want a clear answer.
[English]
Mr. Larkin: I think it relates exactly to what I said before. Yes, the majority of members of Parliament voted in favour of this legislation, but the proper question wasn’t asked. Do you want CUSMA, or do you not want it? Do you want trade agreements or do you not want trade agreements? That’s the question that should be asked with this trade bill.
Senator Ravalia: Thank you very much to our witnesses. Mr. Phinney, I’ll direct my first question to you. You have talked about travelling to the U.S., working very closely with your partners and trading heavily there. What about other countries that you export to as well? Are you in regular contact with them in terms of how they feel about this bill and what potential outcomes and negative consequences could arise?
Mr. Phinney: Yes, and we are spending a lot of time in the U.S. coming up to the presidential election and the review of CUSMA, or USMCA, due to the magnitude of that deal. But we have diversified, and CPTPP is an excellent example of where a great deal was negotiated for all of Canada. The Indo-Pacific and the ASEAN region, where we’re focusing a lot of our trade, is growing.
We wouldn’t want to challenge what potentially we wouldn’t get if we went to these measures of handcuffing our negotiators to be able to try to get the best trade deal. It wasn’t just our sector. Sectors outside and within agriculture have all benefited from these trade deals.
Senator Ravalia: Mr. Larkin, we have seen the consequences of the war between Russia and Ukraine on grain exports, particularly to the Middle East, and Canada stepping in as a result to fill in some of the gaps. Do you think a bill like this would negatively impact that exporting route as well, with negative consequences on countries that depend on some of our agricultural products?
Mr. Larkin: That’s a great question. Nathan Phinney said it before. We have a responsibility, because of the bountiful resources we have in Canada, to provide those globally. We meet so many food demand needs in over 150 countries globally. I agree with your question. We did have to step in because of the war. I’m thankful to see Ukraine’s agricultural sector is recovering. We’re getting back to a place that maybe we used to be, but we did have to respond.
I’m not exactly sure if this bill would impact that trade, because this would have more of an impact on trade agreements that we have globally. With a lot of these countries, we don’t have trade agreements yet. If you look towards the future, with a bill like this in place, could it impact trade negotiations, supposedly, with countries in Africa, for example? Absolutely.
Senator Ravalia: Mr. Heffernan, I would like to thank you for the double-clotted cream. Do you have a special deal for senators?
Mr. Heffernan: We can have some shipped out to you.
The Chair: I have never called anything out of order here yet but, senator, you are getting close.
Senator Coyle: Thank you to all the witnesses for being here. You can see the Ping-Pong that’s happening here. It is our job, clearly.
Mr. Phinney, I believe you said, “Trade is not a political game; this is my livelihood we’re talking about.” You said this bill is bad policy. Yet, many people in the other place voted for this — not everybody, but many people voted for this. That adds pressure on us, as you can imagine. In the clearest way you can think of, can you explain to us why this is a bad policy?
Mr. Phinney: First, it would be precedent-setting. Canada would be the first country to adopt something like this. We don’t know what kind of reaction will come out of an action like this. It is not worth the risk. It is too consequential. It is too large.
On your first point, I sincerely want to thank the Senate for not adhering to political pressures to speed this up and for taking the time to actually study the bill to its fullest extent and realize what a bad-policy bill this is. On behalf of my industry and my livelihood, I thank all of you for taking the time to appropriately study this.
Senator Coyle: I’m curious, and I don’t know who can answer this: In previous trade agreements — not all of us around the table are trade experts, but we’re learning — I know we had some give-and-take in the three agreements we have talked about. We have made some concessions that caused concerns for obvious reasons in the supply-managed sectors. Have there been concessions in other agricultural sectors that you know of that have been made in trade agreements that have been consequential or even not as consequential as that?
Mr. Phinney: First off, if we’re talking about compensation for concessions — and we’re all about facts and figures — how do you put a cost on potentially losing out on a deal because of a piece of legislation like this?
How do you adequately compensate the grain, beef and canola farmers who lost potentially $21.8 billion worth of revenue because of a trade deal? There are many hypotheticals. It is hard to challenge what kind of backlash or losses you would have before we even get into a compensation conversation.
Senator Coyle: Part of the argument in support of this bill is there has been erosion — and there is fear of further erosion — in the supply-managed agricultural sector. They have real-life experience with it. That’s part of the argument there that we are listening to.
Have we seen that, not hypothetically, but actually happen in other agricultural sectors? Have we had to give?
Mr. Larkin: I can answer for grain, if you would like.
It is not about giving, because for us it is taking. We are going internationally. We want to take as much market access as possible. When we go globally, we’re continuously competing with countries that are, to be honest, larger and more successful than us. You look at the United States, Australia, the EU and Brazil. Brazil is growing by the day in terms of their agricultural exports globally. They are doing well in terms of gaining that market access we are still challenged in getting.
When our trade negotiators and sectors go globally, we are always trying to grow our market access. We are always trying to grow our markets in the markets we already have, but also in other countries, through trade agreements, negotiations or otherwise.
For us, it is more about taking the opportunity out there to grow our exports to benefit Canada’s economy.
The Chair: Thank you.
Colleagues, we are into the second round. We have 9 or 10 minutes left. We have five senators who want to ask questions. You can voluntarily remove yourself if you wish. We will do two-and-a-half-minute rounds.
Senator Harder: My question is for Mr. Preusser. You have not been in the game much today. I want to give you an opportunity. My question is about the unspoken interest of the Canadian consumer. What your council provides is the choice to the Canadian consumer. I’d like you to expand on how this bill has significant impact on Canadian consumers.
Mr. Preusser: Thank you for that question. You are right. I would like to talk about the U.K.-Canada deal as an example. We saw that those negotiations broke down, especially because of the dairy file.
Several of our members had difficulties getting the cheeses that Canadian consumers are looking for into the country from England. Some of these cheeses they got in are more expensive too because of the quota allocations they have to use to bring those cheeses in.
Our organization conducted a survey earlier this year and asked Canadians what they wanted. The great majority answered they wanted to see more choice on the shelf. With more choice, you have more competition and lower prices as a consequence. This is one of the reasons why we are against this bill.
The Chair: Thank you.
Senator Gold: All of you have said you support supply management. I appreciate that.
In the testimony heard from those who live in the supply-management world, they have underlined how important it is for Canadian food security and for regional economies and communities and, indeed, for families. They have also noted that losing up to 20% of access poses a serious concern to them. These are folks from across this country, as are those you represent.
What do you say to them when you say it is either a free trade deal, or we’ll lose free trade deals if we give up more supply management? What do you say to the family farmers who are surviving and the communities that rely upon supply management for stability and food security?
Mr. Phinney: I live it every day as a family farmer. I will say that supply management does not have a monopoly on family farms. All farms across this country, regardless of commodity, are family farms, and also they don’t just produce food for here, for Canadians; it is our moral obligation, as I said earlier in my testimony, that we feed the world.
So being sympathetic and understanding supply management, we all — I have three kids who want to be in farming. If we don’t have solid trade foundations for the beef industry, they are not going to have that opportunity.
Senator Gold: Do you have anything to say to those who say that your opposition to this bill is putting their futures at risk?
Mr. Larkin: I’ll add to Mr. Phinney’s comments.
In my opening remarks, I mentioned that 97% of the 65,000 grain farms that we represent are family farms. Just like Nathan’s operations, these are mothers, fathers, sons, daughters. A lot of young farmers are looking to get into the sector, but they will only be able to get into the grain farming sector, and the agricultural sector at large, if we have trade agreements in place that promote their profitability and their livelihoods. Without trade agreements in place, we wouldn’t have the grain industry that we do today.
The Chair: Thank you very much.
[Translation]
Senator Gerba: I’d just like to give you some numbers. According to an Abacus Data survey released in 2023, nine out of 10 Canadians say it’s important to them that the dairy products, eggs, chicken and turkey they buy come from Canada; 97% believe it’s important for Canada to have a strong domestic food supply chain that allows us to produce enough food to feed Canadians year-round; finally, 94% of Canadians also think it’s a good thing when they learn that a food product has been produced by a Canadian producer under supply management, which imposes important and mandatory standards for food safety and animal welfare.
Considering that Canadians care about local production and food safety, why put supply management on the line? In fact, that’s what you’re asking us to do, if we refuse to go ahead and we drop this bill.
The Chair: To whom is the question addressed?
Senator Gerba: To Mr. Preusser and Mr. Phinney.
Mr. Preusser: Thank you for the question.
[English]
We are not against supply management systems and the products. We just feel that, as a consumer myself, we want choice. For example, consumers go to the supermarket and choose their wine by provenance. They should be able to choose their cheeses as well by provenance. Consumers also clearly stated that bringing in more competition will lower prices. That is why I think you can have both. We have lived with the supply management system, especially in cheeses, over the last 40 or 50 years, so it is possible.
Mr. Phinney: Our industry prides itself on feeding Canadians and providing safe Canadian beef for all Canadians. Fifty per cent of what we produce is consumed, and the other 50% — as I said earlier in my testimony, again — are the portions that aren’t desired here in Canada. That’s where we’re helping feed the world, and we’re going to continue to try to build off of that and ensure that every Canadian has the ability to have safe, healthy Canadian-produced food in front of them.
The Chair: Thank you very much.
Senator MacDonald: Mr. Larkin, I’ll put this question to you. It’s about our relationship with the grain industry in the United States. We have a big grain industry of exports to the United States, particularly canola and other important products. Is there a part of that industry that would be particularly vulnerable if the U.S. wanted to respond to this bill if it were passed? If they wanted to respond and take a shot against the Canadian grain industry as a response, is there a particular grain that would be vulnerable?
Mr. Larkin: That is a great question.
I think all grains would be vulnerable, but if I had to pick one particularly, I would mention canola. There is a huge growth market — and I think my colleagues at the Canola Council of Canada could speak more to that — there is a huge opportunity for canola meal and canola oil in the American market. The Americans know that; they know they have the need for those products. That’s why we see that growth. But they also know there is a vulnerability there.
Senator MacDonald: Who are the major competitors for us — where does the major competition come from in the canola industry?
Mr. Larkin: A lot of it obviously comes from the American farmers. There are a lot of soybeans and soy oil produced in the U.S. They are growing those crops. There are other oils, as well, that come into the U.S. for biofuel production from around the world. A lot of it is dirtier, I would say, than canola oil. You think of palm oil, for example. However, there are global competitors that are looking to get their oils into the U.S., a lot of it for biofuel production. If you ever go to a gas station, for example, in California, you are always going to have the option between regular diesel or biodiesel. That’s a growing market across the United States.
The Chair: Thank you very much. We’re really at the end of our time. You have given us lots to think about, as has the other panel. I would like to thank you all on behalf of all senators of this committee. We appreciate your testimony.
Colleagues, before we adjourn, I just want to emphasize that we will reconvene tomorrow at 11:30, again on Bill C-282.
(The committee adjourned.)