THE STANDING SENATE COMMITTEE ON AGRICULTURE
OTTAWA, Tuesday, June 2, 2015
The Standing Senate Committee on Agriculture and Forestry met
this day at 5 p.m. to study international market access priorities for the
Canadian agricultural and agri-food sector.
Senator Percy Mockler (Chair) in the chair.
The Chair: Honourable senators, I welcome you to this
meeting of the Standing Senate Committee on Agriculture and Forestry.
I will now ask the senators to introduce
themselves. I am Senator Mockler from New Brunswick, and I am the chair of the
Senator Merchant: Good afternoon; I'm Pana Merchant and
I'm from Saskatchewan.
Senator Tardif: Good afternoon; Claudette Tardif from
Senator Enverga: Tobias Enverga from Ontario.
Senator Unger: Betty Unger from Alberta.
Senator Dagenais: Jean-Guy Dagenais from Quebec.
Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
The Chair: Honourable senators, as a witness from the
National Farmers Union, we have Mr. Terry Boehm. Mr. Boehm, do you hear us?
Terry Boehm, Chair, Seed and Trade Committee, National Farmers
Union: Yes I do. Thank you very much.
The Chair: Thank you for accepting our invitation to share
with the committee your comments, opinions and recommendations with the order of
reference that we have from the Senate of Canada. The committee is continuing
its study on international market access priorities for the Canadian
agricultural and agri-food sector.
As we know, Canada's agriculture and agri-food sector is an
important part of the country's economy. For statistics, in 2013, the sector
accounted for one in eight jobs in Canada, employing over 2.2 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 3.5 per cent of global exports of agri-food
products in 2013.
In 2013, Canada was the fifth largest exporter of agri-food
products globally. Canada engaged in several free trade agreements. To date, 12
free trade agreements are in force. The Comprehensive Economic and Trade
Agreement with Canada and the EU is completed and 11 FTA negotiations are
That said, Mr. Boehm, we will ask you to make your presentation.
Following that, senators will be asking you some questions.
Mr. Boehm: Thank you and hello, honourable senators. I
appreciate the Senate's leeway in giving me the opportunity to speak. I was
scheduled last week but I ran into difficulties on the farm with seeding.
Therefore, I am quite pleased to have another opportunity to speak.
As many of you know, the National Farmers Union is Canada's
largest direct membership voluntary farm organization. Farmer members have to
participate directly by paying a membership fee in the organization and decide
to be members of the organization. We believe that small- and medium-sized
family farms should be the fundamental food producers in Canada and we advocate
for policies that would benefit economically, socially and environmentally food
production in this country and that would also benefit that type of farm
One of the key pieces in Canadian policy for a long time has been
international trade agreements. Indeed, we're a country with large productive
capacity and large surpluses, in general. As a consequence, we play a role much
beyond our population weight internationally in the export markets.
As a grain producer in Saskatchewan, export markets have been
important, as well as domestic markets of course, throughout my farming career.
However, the nature of the international trade agreements, the consequences, the
power shifts and the impacts on farmers are something that we would question.
I would like to point out that the history of Canada has been one
where a large portion of the agricultural area was formerly controlled by the
Hudson Bay Company under a grant from the British and that the creation of the
country came about through the British North America Act enacted in 1867. Canada
has fought and Canadians have fought for autonomy from various colonizing agents
Later on the Statute of Westminster in the early 1930s granted us
control over our natural resources, of which we have vast amounts. Then,
finally, in the 1980s, we repatriated our Constitution.
Again, these activities have been about power — who holds power,
who holds control, and an attempt to balance power. In the BNA Act, two chambers
were created. We have a bicameral Parliament, with the House of Commons and the
Senate. This was consciously done in order, as in other bicameral systems, to
balance power to offer the opportunity for a second look at legislation and at
Now we are now losing control of our autonomy and our democracy,
we believe, through these international trade agreements that are essentially
constitutions for international corporate players. The investor state dispute
settlement mechanisms go to arbitrators outside the country. An assortment of
intellectual property mechanisms, intellectual property templates, of which some
we have adopted, all of these mechanisms remove autonomy from the Canadian
population and ultimately to farmers as a consequence.
The question is this: We have expanded trade drastically in this
country. Agri-food exports have gone up in value significantly, but for farmers
what have the consequences been? We have seen consolidation take place. Farm
sizes have increased drastically, including my own. We've seen debt levels rise
significantly and farm populations drop off significantly, so that now
agricultural producers make up less than 1 per cent of the population of Canada.
At the same time, there is the a consequence of these agreements
and an abandonment of the mechanisms that were recognized a century ago in the
United States in particular and in parallel legislation in Canada, the Sherman
anti-trust, anti-combines legislation in the U.S., which sought to break up
entities that were deemed to be harmful to the general economy in the U.S.,
including the breakup of Standard Oil, Carnegie Steel and an assortment of other
actions. It was recognized at that time that it was important to maintain
competition within an economy and not to allow too much control or power to be
What we are seeing in these trade agreements is that power is
accumulating in nearly every sector, and it is accumulating to maybe two or
three players that internationally control the trade in grains, seeds,
agricultural chemicals, fertilizer, fuels, et cetera. This sort of power has
allowed them to externalize costs onto farmers. That showed up in the debt
sheets. We see approximately 200,000 farmers in Canada shouldering $80 billion
Tantamount for those of us in the National Farmers Union, for
many other farmers and for Canadians in general is that market access and the
expansion of trade, under the terms of these agreements, should be looked at
through a lens of what are the direct benefits to the Canadian economy, and
ultimately to farmers. We see the issues of deficits in the Canadian economy.
For a nation that has such a huge surplus of production capacity, whether
agriculture, natural resources and otherwise, this is puzzling. We also see
farmers expanding in size, adopting the latest technologies and large economies
of scale shouldering more and more debt.
Again, on the one land you see a concentration and the
externalization of costs — whether it is grain companies, railways, et cetera —
on to farmers, showing up directly in farmers' debt balances. We wonder what the
long-term benefits of these mechanisms are.
For example, in the latest rendition of trade agreements, the
CETA, the Comprehensive Economic and Trade Agreement, chapter 21, Article IV,
clause 6 states:
. . . a Party, including its procuring entities, shall not seek,
take account of, impose or enforce any offset.”
“Offset” is defined as:
. . . any condition or undertaking that encourages local
development or improves a Party's balance-of-payments accounts, such as the use
of domestic content . . .
Further clauses go to impact local food systems, including the
restriction on the mash sector, municipalities, academia, schools and hospitals
that are subject to certain thresholds of $110,000 at the federal level and
$335,000 at the municipal and provincial levels. With any procurement over those
values, you could not give more favourable treatment to your domestic supplier
than a party outside of the country.
There are to be no restrictions on the movement of capital, which
could subject us to drastic currency fluctuations and would also impact, at
times, our ability to trade or to export, however it might be.
The National Farmers Union is part of an international
organization called La Via Campesina that has developed a concept called “food
sovereignty” that recognizes that trade will always be part of the agricultural
situation, but that we don't want to impact other nation states. We feel that
they should be able to determine what is culturally, environmentally and
economically important for them, just as we should for our own purposes.
We have seen in these trade agreements, with the investor state
protection clauses, that our democracies are threatened. We can have autonomy,
but that comes at a price. If we put in regulations once these things are in
force that impact future profits, we can certainly do that but we pay, and we
pay outside of our domestic courts.
We see intellectual property mechanisms for alleged infringement
where our courts enforce for these international corporations as a consequence
of these trade agreements. For alleged infringement of an intellectual property,
whether it is plants breeders' rights, copyrights, trademarks, et cetera, the
precautionary seizure of the alleged infringers' moveable and immoveable
property, the freezing of bank accounts and other assets, and the communication
of financial data shall take place. Of course, this creates a culture of fear
amongst the agricultural community and others. In addition, any third party
alleged to have assisted in the alleged infringement would be subjected to these
precautionary seizure provisions.
Ultimately, we would ask why these negotiations, Trans-Pacific
Partnership, CETA, et cetera, are negotiated in secret? If they are beneficial
to the Canadian economy and to Canadian citizens, why would it be negotiated
with the degree of secrecy that is in place and then be presented to us as a
fait accompli at the end of the day.
In the end, we shouldn’t be terrorized by missing a trade
deadline. What is to hide except that something may be unacceptable and that
Canadians as a whole have resources, food stuffs, et cetera that the world
wants? Tariff levels are low on all of these items. These international
agreements, supposedly free trade agreements giving market access, are highly
suspect and actually very harmful in the long run to farmers, to Canadians and
to our autonomy.
I will give you an example for the Europeans. Many farmers assume
we will increase our access to the European marketplace with our GM crops, for
those who choose to produce those crops. In reality, only a side letter was
communicated between the ministry of the environment in the EU to our
Agriculture Minister saying that these things would be discussed. There is no
definition in the CETA accord in that regard. Most nations in the European
context have exemptions in their annexes for a whole number of items in this.
What farmers need, and what they are being denied in these
international arrangements and market access, may benefit certain sectors of the
agri-food system. But as more powerful players are put in between farmers and
their ultimate markets without direct access, farmers find themselves in a
position of receiving less and less for what they produce. We have studied, over
time, the adoption of innovation and increased production where it has taken
place. Farmers have not particularly benefited. Indeed, almost 100 per cent and
sometimes more of the improved production has been captured by the suppliers of
With that, I will close my remarks and I would welcome questions,
comments and anything else that the Senate chooses to say.
The Chair: Thank you, Mr. Boehm, for sending us your
presentation. We will start first with a senator from your own province, Senator
Senator Merchant: Welcome. The senators are very happy to
hear that Saskatoon is this thriving. You are from Saskatoon; I am from Regina.
I will say nice things about Saskatoon anyway. We only have two cities in
Saskatchewan, so there is a bit of competition between the two.
You did not make any mention about the
situation with infrastructure, particularly in moving these products. What is
the situation exactly? How do you see it from your point of view?
Mr. Boehm: I appreciate that question. Of course, for a
long time, we have had problems with rail infrastructure and constrained port
One of the problems we have as farmers, particularly in Western
Canada, is that we are about the farthest away from tidewater that any
agricultural region is, with only rail service as a possibility. Of course, we
are finding what I mentioned, this externalization of costs that has been taking
place, where farmers are forced to haul to fewer and fewer elevators longer
distances and put up more on-farm storage. We see that the port facilities and
the lack of coordination in the system, which we formerly had, has led to a
situation where (a) the control of the port facilities has become more
concentrated and (b) the railways have been capturing excessive rents for a long
time, as the lack of a costing review and an adjustment in the revenues that
they receive is taking place. We have not seen drastic improvements in that rail
infrastructure even though they are getting excess returns significantly, over
$100 million annually — according to a study some time ago — beyond what is
considered normal, generous returns on long-term variable costs. A 20 per cent
contribution rate is the North American railway standard and they are far
Ports are an issue, as are elevators, roads, et cetera. The
infrastructure is being taxed to the limit. Potentially, changes in our grading
system, new grain classes and other legislation in the Canadian Grain
Commission, could see American grain start to flow through our taxed
infrastructure which is having difficulty serving us at present. Infrastructure
is an important part of this puzzle. Given the financial constraints that
farmers are receiving, including variable wheat and barley prices at the moment
— they’re extremely low — it has to be accessible at a reasonable price.
Senator Merchant: Since you mentioned prices, I will raise
a topic that is maybe a little bit of a soft spot for you. With the changes
since the Canadian Wheat Board, you talked about how the benefits are trickling
down to farmers with the low prices right now. From your point of view, how have
you witnessed the evolution of the new practices now that it has been changed?
Mr. Boehm: The first year the board was gone, wheat prices
were relatively buoyant. Immediately after that, we ran into transport
difficulties and a collapse of grain prices, even though the port prices were
almost double throughout the crop year of what we were receiving inland. We were
having difficulty even moving the product and, even after we paid the normal
handling fees and freight rates, grain companies captured that differential at
the port, which was almost identical to what farmers received. The coordinating
ability of the CWB disappeared and we ran into problems.
Then, we saw grain companies make as much as farmers on that crop
— pure profit, not for their services. They made their normal tariffs there on
that crop. Again, this is what I alluded to in that farmers need the ability to
directly access markets with a minimum of middlemen and international players
that would undifferentiate the Canadian brand, the Canadian product, from
Senator Merchant: I think I will let my colleagues
continue. Thank you so much.
Senator Dagenais: Good afternoon, Mr. Boehm. It is a pleasure to hear from you. I am
going to make you smile. I go to the United States regularly, and last time, I
was grocery shopping with my wife at a Winn-Dixie. We were in the meat section,
and while she was checking out the specials, I was looking at the labelling on
chicken thighs and cuts of beef. My wife was surprised to see how interested I
was in labelling, but that has only been since I have been a member of the
In May, the World Trade Organization rejected
the United States’ appeal concerning the amended version of its labelling policy
to indicate the country of origin. A WTO appeal body confirmed that the U.S.
labelling policy did not abide by international trade rules. So Canada was given
permission to take reprisal measures against the United States. I don’t know
whether you are aware of that. If so, what do think about the decision?
Mr. Boehm: I don't have a headphone for translation, and I
don't want to misinterpret the question.
Senator Dagenais: I understand. That is okay for me.
Mr. Boehm: Would you mind repeating the question in
English so that I get it right? I'm very sorry; I do not want to make a mistake.
I'll ask the people here.
The Chair: Mr. Boehm, you should have a regular feed so
that you can hear the translation. Do you hear the translation?
Mr. Boehm: No, I do not.
The Chair: One minute, please. We will try to solve that
Can you hear me? Do you have the translation, Mr. Boehm?
Mr. Boehm: No.
The Chair: You don't hear any translation?
Mr. Boehm: No.
The Chair: The chair will recognize Senator Dagenais.
Senator Dagenais, would you ask your question in English? Or I could help you
with the question in English.
Senator Dagenais: When you buy your groceries in the
United States, you have a special sticker on a piece of beef or a piece of
chicken, and that is the rule for international commerce.
The United States had a problem. On May 18, 2015, the World Trade
Organization rejected the United States’ appeal regarding the amended version of
its country-of-origin labeling policy. The WTO appellate body confirmed that the
United States' COOL policy international trade rules decision authorized Canada
to take retaliatory measures.
What does your organization think of this decision? Do you
understand my English with a very special accent?
Mr. Boehm: It was very good.
Senator Dagenais: Thank you so much.
Mr. Boehm: Much better than my French.
I think that the country-of-origin labeling requirements in the
U.S. probably will be an ongoing problem. The U.S. is a powerful player and used
to getting its own way, regardless of the WTO rulings.
While we have no objections to taking on COOL, it may be time
that Canadians start to think of it as an advantage in branding Canadian meat
products. If there's country-of-origin labelling, perhaps we could take
advantage of that and market our products with the Canadian brand and attempt to
turn it into an advantage rather than a disadvantage.
Senator Tardif: Good afternoon. Thank you for being here.
Mr. Boehm, you have expressed serious concerns in your
presentation about the free trade agreements that Canada has signed and that
Canada is pursuing presently. Knowing the importance of exports to our economy,
what are the National Farmers Union's proposals to improve international market
access for Canada's agri-food products?
Mr. Boehm: On the one hand, I think that everyone assumes
that increased access is important and that trade is important. We would agree.
On the other hand, again, the question was: Who are the beneficiaries of these
particular mechanisms? For a long time, we've called for agriculture to be
negotiated outside of these comprehensive agreements, and for agriculture and
food to be treated differently than other sectors of the economy because we're
subject to so many variables that are out of our control — weather, pricing,
et cetera. This is problematic in sort of an agreement that has chapters on
agriculture, et cetera, in that there are the underlying principles that I
mentioned, namely, no offsets, the impact on local food production, no favouring
of a domestic supplier, et cetera.
Regarding your question about access to international markets, I
think what we should be looking at domestically, for example, is that we have
tremendous concentration in the meat-packing industry with two companies with90
per cent of beef and two companies with 70 per cent of pork. We do know that
premium markets exist in the world, for example in Europe where they are looking
for hormone-free beef, and that we have difficulty fulfilling even the quota
levels that are available to us right now. We should be looking at our domestic
packing industry and thinking about how we would supply those premium markets
with special runs or maybe opening up to smaller abattoirs, in particular, to
encourage farmers. They don't get particular direct benefit because they just
don't have access to those premium markets through our current meat-packing
system, except maybe on a limited scale.
These kinds of opportunities are not being translated through
these trade agreements, which are sort of a one-size-fits-all and a kind of
standardization internationally, because of the degree of concentration that
we've allowed to be dominated by companies that are based outside of our country
in meat-packing, as one example.
One of the recommendations in our brief was that things be looked
at through the lens of the beneficial impact on farmers, community, soil, the
environment, et cetera, and that we look and cherry-pick, because transportation
is expensive. We would look at accessing those sorts of niche markets that could
Senator Tardif: You've mentioned in your brief, Mr. Boehm,
that trade deals feature harmonization of regulations and standards so that
global agri-business corporations can operate seamlessly in several countries,
while nations are deprived of regulatory tools to differentiate their products
in the marketplace or to create economic space within their countries to pursue
other values that are important to their citizens and residents.
What do you mean exactly and could you give us some examples?
Mr. Boehm: Sure. For example, standardization has benefits
in some regards, but excess of standardization leads to an inability to
differentiate a Canadian brand; that is, American wheat from Canadian wheat or
from Australian wheat or beef, or whatever it might be. When you have
standardized systems and undifferentiated products, traders in those products
can easily move across borders and they're selling commodities. It doesn't
matter whether it's Canadian beef or Canadian wheat or wheat of such-and-such a
specification. They can play one country off another.
Other mechanisms — for example international seed protocols
facilitating a variety of registration systems to allow international varieties
to come into this country rather seamlessly in different food crops — can be
problematic in that ability for us to differentiate ourselves from other trading
Senator Enverga: Thank you for the presentation. I want to
go back to the earlier question with respect to your view being against more
trade agreements and you want to more or less separate the agreement from
agricultural trade. Would you rather keep the status quo at this point and not
do trade agreements at all?
Mr. Boehm: I don't think that the status quo has been
particularly beneficial, given the evolution of what's happened in the
countryside. Again, we all know farm debt levels are going up and farmers are
disappearing, particularly younger farmers. We know there's a demographic issue.
What we would like to see conceptually is a shift away from pure
volume, dollar value-added exports to a shift towards sort of an actual benefit
relationship that translates both to the country of Canada and to farmers
directly. That isn't taking place with the status quo and it certainly won't
take place with the new trade agreements because they're about externalizing
cost onto the least powerful and that happens to be farmers. We can see a
continued round. We can increase production; we've done it. We've done it
threefold in the last decade, or maybe a bit longer in the last 20 years. At the
same time, the negative impacts continue. This is why we're calling for a
different look through a different lens as to what the consequences of these
Traditionally, so-called free trade agreements have meant to be
tariff agreements so that tariff barriers and other mechanisms don't restrict
the flow of products into countries. But these are not about that. These are
about mechanisms that make countries less autonomous and farmers more dependent
on a few increasingly powerful players in many different sectors. Right now, we
see Monsanto's bid to take over the huge Swiss firm Syngenta.
Again, there's nothing in these agreements that would limit those
sorts of things from taking place. That sort of power allows for excess rents to
be extracted from farmers. The canola example is a perfect example where farmers
are paying over $600 a bushel for canola seed, when that same bushel that's
perfectly viable as seed, when they go to sell, it is worth $10, 60 times less.
Senator Enverga: When you say you want mechanisms, you
want to keep supply management? I understand that during the negotiation for
TPP, they talked about supply management. Is that what you're saying, that we
should remain with supply management; we cannot do away with it?
Mr. Boehm: I think supply management in many parts of the
world and here in Canada has been recognized as generally a success story.
Supply management for dairy, poultry and eggs has allowed farmers to generate a
reasonable income without support from the state. Most other developed countries
in the world have been supporting agriculture through various mechanisms —
whether it's income adjustment schemes, et cetera, direct subsidies and whatnot
— because actually the markets that are generated by these kinds of agreements
don't return sufficient amounts to farmers. It's an issue of power and control.
Supply management changes that equation. It comes with the
requirement that you don't allow outside products into the country. There are
exceptions — tariff rate quotas, et cetera — on certain items. Nevertheless,
farmers generate a reasonable income. There's no cost to the public purse.
Processors get a stable, reliable product for the domestic market.
I think it would be a huge mistake to dismantle the supply
management system developed in Canada for some tenuous benefit of Trans-Pacific
Partnership in expanding trade or market access elsewhere. I think this would be
a huge mistake in domestic policy.
Senator Moore: I'm sorry I've been late coming here, but I
got hung up on a long-distance phone call at home.
Mr. Boehm, thank you for being here. The U.S. Department of
Agriculture recently developed a voluntary certification for the labelling of
genetically modified crops. What impact do you think that new certification
process will have, and what will be the consumers' thoughts or reception or
perception of that process?
Mr. Boehm: Of course, as with many things — trade
agreements, et cetera — the devil is in the details, and I haven't had the
opportunity to carefully read this protocol.
Generally, voluntary protocols can be subverted to a certain
extent. We see, I think, a real interest on the part of food consumers to see
improved labelling, particularly around GM products. I think in the future,
products with nanotechnology should become a concern as well.
GM has been around for some time and there's been great
resistance in labelling protocols. I think the resistance partly is a fear that
there will be a reduction in demand for those products by the purveyors of those
products. Nevertheless, I, as an eater, and I think most people like to know,
based rightly or wrongly on their biases, what's in their food. So, regarding
the impact, I'm uncertain and unfamiliar with the details of that protocol I
Senator Moore: I appreciate your answer. In the closing of
your brief today, the first recommendation is that trade and agriculture be
treated separately and excluded from comprehensive trade agreements such as
NAFTA, the Canada—uropean and the Trans-Pacific Partnership.
Has your organization been consulted with regard to those —
NAFTA, CETA and TPP — and if so, when and what was the manner of the
Mr. Boehm: We have participated in a few calls in CETA
that were put out by DFAIT, where they gave us updates of the state of
negotiations. We have not been directly consulted in terms of our opinion, but
we have participated occasionally in these update calls. The Trans-Pacific
Partnership has been much less in that regard. In general, this is one of the
problems we have with these agreements; for the most part they're negotiated
secretly and presented to the Canadian and European populations after the fact.
We have had the benefit of receiving leaked documents throughout
the CETA process. At one point I asked Steve Verheul if the leaked documents
that we had were indeed what they were working with at that point. He is
Canada's chief trade negotiator in CETA, as you would know. He confirmed that
indeed they were. So we raised alarm bells, including speaking tours and things
about that. But in terms of direct consultation, our organization has not been
directly solicited in these negotiations.
Senator Moore: You said you participated in two calls by
DFAIT. What's a call and what's involved?
Mr. Boehm: These were conference calls where Mr. Verheul
would give updates of the state of negotiations in the CETA process. We
participated in probably more than two, maybe four of those calls.
Senator Moore: Were they consultative or advisory from his
Mr. Boehm: Largely advisory.
Senator Merchant: Thank you, Mr. Boehm. I had an inquiry
from someone, and you mentioned it yourself, about being interested in what you
are ingesting. When you're eating something, you'd like to know something about
it. He said, because I come from Saskatchewan, there is something you may be
able to tell me about. It's called glyphosate, I think, and it's
something we use a lot in Saskatchewan. It's a desiccant, I think, that we use.
Those things are not really on labels anywhere. We know if something is organic
or not organic. Since you mentioned that, what's that about?
Mr. Boehm: Glyphosate is the base product of what's called
a non-selective herbicide. It kills anything green. It's used widely in
agriculture. Increasingly, herbicide-tolerant crops have been genetically
modified to tolerate that. Rather than being non-selective in a herbicide-tolerant
crop resistant to glyphosate, you can spray it on your crop and the crop
survives; everything else dies, at least initially. Resistances have started to
show up in some parts of the world, and here as well.
Glyphosate is probably the largest consumed herbicide in the
world. It comes under different trade names, including Monsanto's Roundup, which
of course the Roundup Ready GM crops have been adopted extensively.
Certain crops — canola, soybeans, corn
and cotton — are the big ones in the world.
There are others. There's glufosinate, which is known as
LibertyLink, which is another breed of genetically modified crops largely
produced by Bayer, and this is another non-selective herbicide.
Glyphosate is used extensively, not just in the early stages of
crop production. It's used as a burn-off prior to seeding so that farmers can
seed their fields without tilling them and knifing the seeds so the weeds are
killed in advance. It's also used as a desiccant pre-harvest, where crops are
forced into an early death and an early dry-down.
The promise of reduced herbicide use with GM crops hasn't exactly
borne out as promised because, for a number of reasons, glyphosate has become
the single most popular herbicide used, particularly in Western Canada but also
in many parts of the world. It has become one of the big things that has also
become very cheap, and it's directly connected to the crop production and
genetically modified seeds that are tolerant to it.
Residues are increasingly going up on food, and my understanding
is the tolerance levels are being increased because of the widespread practice
of using it, particularly just immediately pre-harvest for forcing the dry-down
in the earlier harvest of crops.
Personally, I'm not enthusiastic about that. On my farm, I refuse
to do it.
The National Farmers Union includes many types of farmers, some
that are doing this practice, but they all recognize that we need increased
studies on the long-term human health consequences of the ingestion and, of
course, the environmental consequences of such a singular widespread shift to
one particular form of herbicide in agricultural production.
Senator Merchant: Does it present any difficulty for those
who are handling it, the farmers, not those ingesting it?
Mr. Boehm: There are some new reports. I also have not
taken the time at the moment to look at it. I've been totally focused on seeding
While in the tractor, I did hear on CBC radio an interview on a
report that's come out of the UN that there is likely a carcinogenic link to
glyphosate. They say “likely.” There's been no definitive establishment of this
study and I have not read it.
With all of these herbicides and creations, extended-release
fertilizers, et cetera, judicious use can be beneficial in certain circumstances
and excessive use can be problematic. At the moment, I think perhaps we've
reached an excess level and that we should be undertaking independent studies
and establishing made-in-Canada regulations. However, things like CETA and the
investor-state protection clauses make that very difficult, if not impossible,
without extreme costs to the public purse. Basically, what we get locked into is
a standstill once these things come into force.
Let's just pick the example of the prohibition or the reduction
of pre-harvest applications of glyphosate for forced dry-down and perennial
wheat control. We can do that, but with these mechanisms, the investor-state
protection clauses, we would likely be subjected to international arbitrators
outside of our Canadian court system imposing fines on us for the lost future
profits of the utilization of that product. This is why we find these trade
agreements so problematic.
Senator Enverga: One of your recommendations was the
excess revenues be returned to farmers. Do you have any figures about this? What
percentage of excess revenues are you thinking of here?
Mr. Boehm: Mr. John Edsforth, a well-known analyst in rail
costing, has produced a number of reports over time analyzing the excess
contribution levels, as it's termed, or excess profits and returns to the
railways that have been taking place as a consequence of their ability to
externalize costs on to farmers. The numbers would be in the neighbourhood of
$100 million to $150 million excess revenues annually over the industry
standard, the 20 per cent contribution level that's sort of a North American
rail industry standard for profits. They define it as contribution over
long-term variable costs.
Currently under the revenue cap, when the railways exceed their
allotted cost for a given volume of grain, under the freight rate regime, that
excess is given to the Western Grains Research Foundation to undertake varietal
development research, agronomic research. We think that given that revenue cap
mechanism — nothing has been addressed in regard to this $100 million or
$150 million excess — that should be directly returned to farmers through
reduced freight rates.
Under the former Western Grain Transportation Act, where we had a
costing review every four years and the efficiency gains were shared between
railways and farmers, where the improvements in railway productivity and cost
savings and the investments that farmers made having to haul to fewer elevators,
greater distances and more on-farm storage. Every four years freight rates would
get rolled back and the efficiency gains would be shared 50-50.
For almost 20 years now — actually longer, 1992 was when the last
formal costing review that took place — the railways have captured all of those
revenues and kept it to themselves and externalized more and more costs on to
The Chair: As we conclude, Mr. Boehm, I would have two
questions for you, and if you could be succinct in answering. I'll make a
statement and then I'll ask you the two questions.
When Canada and the EU concluded CETA, which will arguably
immediately make 93.6 per cent of EU agricultural lines and 92 per cent of
Canadian agricultural tariff lines duty-free — that is according to our
agreement — now the NFU has raised a number of concerns regarding the
implementation of CETA. I am asking you to share with the committee your three
most important concerns with that agreement.
Second, in your view, what should be done to ensure that CETA is
implemented in the best way possible? There, again, give me three reasons or
Can you please share with us your three most important concerns
Mr. Boehm: Sure. The first is around intellectual property
rights and the provisional and precautionary enforcement of intellectual
property rights for alleged infringement, particularly with regard to plant
breeders' rights patents and the extension of the patents.
The second one is the procurement provisions disallowing offsets,
no requirement for domestic content and anything that encourages local
development or improves the parties' balance of payments.
The third one, of course, would be this issue of procurement with
regard to not being able to favour a domestic supplier. Particularly with local
food systems, both on the European and Canadian sides, the threshold levels are
far too low and particularly problematic. In our brief, we called for the
elimination of the investor-state dispute-settlement mechanisms.
The Chair: Thank you. To implement CETA, what would be the
factors that would ensure that it would be implemented the best way possible for
Canadians? As we know, a little over 50 per cent of our agricultural products
Mr. Boehm: First of all, we need not worry about whether
we export products or not, whether these agreements are passed or not. We
exported before and we will export during and after the agreements. I think
there is a real demand for our products.
I think that these agreements are so fundamentally flawed,
particularly the impact on our democracy and our ability to autonomously, as a
nation state, act in our citizens' public interest, that we really should open
it up and present to Canadians in the widest possible way what actually is in
this agreement and undertake consultation as to whether they find it acceptable
in any shape or form.
If some of those provisions that I mentioned were removed, it
would make it more palatable. But, given that I have read all of the drafts of
these agreements from front to back for several years now, and the annexes and
related agreements, I would not be particularly inclined to implement it at all.
The Chair: Thank you very much, Mr. Boehm, for sharing
your opinions with us.
Honourable senators, at this time, I will now adjourn the
(The committee adjourned.)