Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 15 - Evidence
OTTAWA, Friday, September 29, 2016
The Standing Senate Committee on Agriculture and Forestry met this day at 8:05 a.m. to study on international market access priorities for the Canadian agricultural and agri-food sector.
Senator Ghislain Maltais (Chair) in the chair.
The Chair: Good morning. My name is Senator Ghislain Maltais, Quebec, chair of this committee. I would like to start by asking the senators to introduce themselves.
Senator Mercer: Terry Mercer, Nova Scotia.
[Translation]
Senator Tardif: Hello, my name is Senator Claudette Tardif, and I am from Alberta.
[English]
Senator Ataullahjan: Senator Salma Ataullahjan, Toronto, Ontario.
Senator Oh: Senator Oh, Toronto.
Senator Unger: Betty Unger, Edmonton, Alberta.
[Translation]
Senator Gagné: Hello, my name is Senator Raymonde Gagné, and I am from Manitoba.
Senator Pratte: Hello, my name is Senator André Pratte, and I am from Quebec.
[English]
Senator Ogilvie: Kelvin Kenneth Ogilvie, Nova Scotia.
The Chair: This committee is continuing its study on international market access priorities for the Canadian agricultural and agri-food sector.
This morning we have the great honour to receive the Honourable Lawrence MacAulay, Minister of Agricultural, with Mr. Doug Forsyth and Mr. Fred Gorrell.
[Translation]
Hon. Lawrence MacAulay, P.C., M.P., Minister of Agriculture and Agri-Food: Thank you, Mr. Chair. Good morning everyone.
[English]
It is a great honour to be here. I had the pleasure of appearing before the Senate Question Period in June. As I remarked then, it's the aspiration of a lot of people down in our house to get up to your house. It is the upper chamber, and we're well aware of that.
Honourable senators, I applaud this committee's hard work on the international market access priorities. I'm very pleased to be here to take part in your study. You've worked long and hard on what is certainly an important topic for the Canadian agricultural industry. I look forward to reading your report when it's tabled.
As you know, the Prime Minister has given me the mandate to promote Canada's agricultural interests abroad and has instructed me to get our products to market.
Senators, the Canadian agricultural sector drives over $100 billion of Canada's GDP, over $60 billion in exports and one in eight jobs. Canada's food processors employ more Canadians than any other manufacturing industry in the country.
This morning, I would like to focus on three key areas that are helping to grow our trade in agriculture and food: the importance of trade to the sector; export opportunities, especially in Asia; and investing in order to grow markets.
Canadian farmers and food processors depend on trade. About half of the value of agricultural production is exported. Our farmers depend on trade to sell two thirds of their pork, 85 per cent of their canola, and 90 per cent of their pulse crops.
Canada is the world's top exporter of canola, flax, pulse crops and wild blueberries, and a top-three exporter of wheat and pork. Last year, Canada's agriculture and food trade hit a record of over $60 billion.
Trade helps secure jobs, growth and opportunities for Canadians and greater food choices for consumers around the world. Trade is a priority for our government and my department.
Our government continues to work hard to open new markets for our farmers and food processors. Last week, we had tremendous news on the trade front when Prime Minister Trudeau announced agreements with China to expand beef access to frozen bone-in-beef from animals less than 30 months of age; ensure stable and predictable Canadian exports of canola to China to 2020; and support trade in Canadian pork, bovine genetics and some processed foods.
Our two leaders agreed to launch exploratory talks toward a potential free trade agreement between Canada and China. They have set a goal of doubling trade between our two countries by 2025. This is tremendous news for Canadian agriculture, and it's the result of hard work at all levels by the Prime Minister, our officials and our industry. China is a priority market for Canada, and it is Canada's second-largest trading partner for agriculture and agri-food.
Their middle class is growing by about the population of Canada every year. I visited China in June for the G20 agricultural ministerial meetings. The Prime Minister was there earlier this month. He promoted e-commerce, which is a powerful tool for Canadian industry to expand markets in China and build the Canadian brand.
Chinese supermarket chains are looking to buy directly from Canadian suppliers to meet their customers' growing demands for high-quality, safe, nutritional products.
We intend to keep building on the Canada-China relationship. I plan to lead an industry mission to China at the end of next month. I understand that this committee will also be travelling to China.
With your help, senators, we will work together to strengthen these relationships and open doors for agriculture and agri-food exports.
We are also reaching out to the other key markets in Asia. With over half of the world's population, these are large economies, with rising incomes, consumption and population. Last year, Canadian agri-food exports to Asia were almost $17 billion, close to a third of our exports.
Building on our successes in China, we have regained access for Canadian beef in South Korea and Taiwan. We have secured access for Canadian pork and pork products to India, which is another priority market for our government.
Outside of Asia, we are working closely with Mexico to ensure the remaining ban on Canadian beef products is lifted, and I plan to be in Mexico within the week, hopefully to finalize that deal.
We achieved the repeal of U.S. country-of-origin law, leveling the playing field for Canadian beef and pork coming from the United States. Looking at new markets, we are committed to working hard to ratify the Comprehensive Economic and Trade Agreement with the European Union. This will open up new opportunities for our high-quality Canadian agri-food products.
We also continue to reach out to Canadians in order to hear their views on the Trans-Pacific Partnership.
Senators, to grow new markets, the first thing we need is world-class products. We certainly have that covered here in Canada. We have the best-quality food in the world. But you also need investment and resources. That is where the government can play a role in opening doors for our agri-food exporters. Our investments are helping a whole range of sectors capture a new global market, from blueberries to beef genetics.
A couple of weeks ago, I was in Vancouver with my B.C. colleague Minister Letnick to announce funding for an export catalogue to help Canada's global customers connect with B.C. agricultural and food products.
Beyond investments, we are dedicating key resources to the trade file. Our Market Access Secretariat works with industry to target priority markets. Our agricultural trade commissioners work hard, on the ground, to promote and expand Canada's trade in agriculture and food.
Our investments in innovation are also critical to opening new markets, meeting global demands. A couple of weeks ago I was in Swift Current to announce an additional federal investment of over $35 million to upgrade research centre facilities there. This investment will support our wheat breeding program and other research on forages and cereals, helping to keep Canada a top producer and exporter of high-quality grains.
Honourable senators, over the coming months I will be working with my colleagues and industry on the next agricultural policy framework that takes place in 2018. In July, I met with provincial and territorial ministers in Calgary, where we set the direction for the next policy framework. We set out priority areas for the next framework, which include markets and trade, research and innovation, risk management, environmental sustainability and climate change, value added and public trust. Together, we will build a plan that will drive our agriculture and food exports, create jobs for the sector, including the middle class, and grow the Canadian economy.
To close, I am optimistic about the future of food-based businesses. This is an industry with tremendous opportunities. Canada's agriculture and food exports continue to hit new records every year. Canada's agriculture and food sector remains in a strong financial position, with record incomes and net worth.
Canada's reputation for high-quality, innovative, sustainable agricultural and agri-food products will give the sector a competitive edge in global marketplace. Over the next three decades, global demand for food is expected to grow by 60 per cent. Somebody is going to fill that demand, and I want to make sure that it's our Canadian processors and our Canadian farmers that fill that demand.
Working together, we can help to make Canadian agriculture safer, stronger and more innovative. Thank you very much.
The Chair: Thank you very much, minister.
Before the first round, welcome to Senator Yonah Martin, British Columbia.
Senator Mercer: Minister, welcome. We're glad you're here. I know we've tried to get you here before, and you've been so busy, which is good news. But you are here.
You talked about new markets, and that's exactly what we've been talking about. As you answer various questions this morning, you might mention any new successes that you've had. But I specifically wanted to ask, we're almost finished our study here, and we're looking forward to presenting our study to the house after our trip to China and any conclusions that we make. We'll grill you on what those conclusions are after we present that. It's difficult for us to do that now since we haven't reached any conclusions. However, we are preparing — actually today — to start to talk about our future studies.
I wanted to get your opinion on a couple of things. A couple of suggestions are that we do a study on foreign ownership of farmland in Canada, as one thing. The second issue is that we examine the possibility that we follow an American pattern of having a farm bill, a bill that would come along periodically to cover all aspects of agriculture, from — if you will pardon the pun — soup to ducks, if we could.
I'd like to have your opinion on that. Do you see any pressing need for either study, the foreign ownership one or the thought of a farm bill, similar to the American farm bill that they introduce periodically?
Mr. MacAulay: Thank you, senator. I think it's vitally important, of course, that we own our land. My opinion would be that a study on that would be interesting just to see exactly what the situation is. That's what you want to try to do, see just where we are in the situation and what can be done. We're certainly not opposed to foreign investment, but there has to be a bit of a balance. That would be an interesting study, for sure, and a valuable study, as are most of the studies that the Senate does. It's of great value to what takes place. I appreciate what the Senate does. Over my years in Parliament, no matter what, when you came to the Senate, you found a bunch of knowledgeable people that were interested in what's taking place in the country, and I found it always so valuable. Studies like this would be quite valuable, I would think.
On the farm bill, it would be interesting to see just what would take place. You would have to evaluate, of course — and I suspect you would evaluate — what the American policy was and what the farm bill contained in total in the United States, and then you would look at recommendations as to what you might present here. I expect that that's what you would do, and it would certainly be an asset.
Senator Mercer: My next question: I noticed that in your presentation you mentioned that you were in British Columbia a couple of weeks ago, and you announced funding for an export catalogue to help Canada's global customers to connect with British Columbia agricultural and food products. Is this something that you hope to duplicate in other provinces, so that all provinces can benefit from this type of project?
Mr. MacAulay: Thank you very much, senator. Of course, in all of these things, as I mentioned, we're working now on the final stages of our policy framework. With that, as you're fully aware, 60 per cent is federal, and 40 per cent is provincial. The decisions sometimes are made by the different provinces as to how they wish to spend their money.
In British Columbia, Minister Letnick I know quite well, and this was a priority for him. I've seen the catalogue. It's certainly a very informative piece of material. It's online. But, again, it would be up to the discretion of the different provinces as to how they want to do this.
It reminds me of a one-stop centre. For many years in this business, I've heard governments talk about one-stop shopping for government information. I don't know how successful we've been on that. This would be a step toward that, on the export side, which is so valuable to us.
Senator Ogilvie: Minister, welcome. It's nice to have a Minister of Agriculture from another of our great agricultural provinces. It's very difficult to go around your province without driving through agricultural activities.
Minister, it's important for us not only to identify new markets and trade agreements but also to protect our producers from the abuse of existing trade agreements. I want to ask you about one in particular, the one commonly known as "the great spent fowl caper,'' in which we have a significant issue around the illegal importation of counterfeit chicken products, which has a huge negative impact on our own market.
Specifically, to spell it out for our audience, the egg producers that have reached the end of their active life are called "spent fowl,'' and generally they enter the country at lower or no tariff duty, compared to those value-added products in the supply chain, like broiler chickens, on which there are duties and limits.
We've had a situation where millions of kilograms of broiler chicken entering annually are labelled as spent fowl, having a huge negative impact on our own producers. It's estimated that the cost of Canadian jobs is over 2,000 on an annual basis; 37 million kilograms is a figure considered to be an illegal import that I got from a recent year.
My first question is what are you and your department doing on a very, I would hope, highly proactive basis to eliminate this fraudulent use of importation of product almost exclusively from the United States?
Mr. MacAulay: Thank you very much, senator. It's a question that I've dealt with many times, and I appreciate your question and concern.
You're absolutely right, and I know you're fully aware that figures indicate that we import more spent fowl from the United States than there is spent fowl in the United States; so there's a problem, without question.
The figures I have from 2009 until 2015 indicate it increased by about 55 per cent, but we have taken some moves. I think five businesses have lost their certification to import for a period of time because of problems at the border.
It's fair to say, meeting with the chicken farmers across the country — and I don't know if they were here. They were before the House of Commons Trade Committee, I believe, a week or so ago, and they were somewhat pleased with the direction taken by the Canada Border Services Agency. There has been a substantial reduction with the charges.
My officials are working with the United States officials to create a certification program. As you know, when the meat comes to the border, you can't send it to the lab and wait for word to come back. Things have to move. That's one of the big problems.
What we're trying to do is put a certification program in place so that we will know, when it comes, that it's certified by our counterparts in the United States. That would be a big help.
The industry was pushing the DNA certification program. We're looking at that, but it is how long that would take. You have to make sure that the product moves, you understand, fairly quickly when it gets to the border.
All that said, we're fully aware that it's been a problem for quite a few years. We have had some success, but we need more success, and we're working on it.
Supply management. I appreciate your kind remarks about Prince Edward Island. Everyone is proud of where they come from, and I am certainly proud of Prince Edward Island, and I milked cows and grew potatoes. That's kind of an interesting scenario for me. I wanted the government to keep their nose out of the potato business and fully involved in the dairy business. That's about the way it was. I was split in my thinking.
But coming here, as Minister of Agriculture, to say the least, I'm a very strong supporter of the supply management system, understanding its value.
Senator Ogilvie: Certainly, we're aware of the tremendous entrepreneurial and creative capability of our farmers with regard to regulations and other opportunities to compete based on the climate in this country.
I want to pick up on one item you indicated. First of all, the certification, that's very good. I'm encouraged to know that that is a joint country initiative to deal with that. The DNA testing, however, offers potentially a very quick check on the actual content.
It's my understanding that Trent University, among others, has developed DNA testing where they can distinguish between spent fowl, broiler chicken and others. Generally speaking, a DNA test can be converted to a quick colour test that will give an indication at the border. Even if we do have certification, we're going to have to monitor because, as I said, people are very creative in all aspects of commerce.
I understood that the government was working with Trent University in this regard, and I would strongly encourage you to continue, first, the issue of certification across the border, and second, the development working with our research base in Canada. We have leading expertise in Canada in the DNA area, and I hope you would work with them to come up with a quick test at the border to protect this enormously important economic activity for this country.
Mr. MacAulay: Senator, I couldn't agree more with everything you said. The truth is, if I downplayed the DNA test, I had no intention of doing that. Whatever works efficiently. We do not want products coming across illegally. There was entirely too much coming, there's no question about it, and we want to make sure that we put a system in place that will be efficient. I don't know if Mr. Gorrell would like to expand on that, but we are doing a lot of work in that area and understand it's a big problem.
Fred Gorrell, Assistant Deputy Minister, Market and Industry Services Branch, Agriculture and Agri-Food Canada: Senators, yes, the minister is right that we're working with Trent University, as you've indicated. We are looking at a suite of actions, not just one, to make sure that the product coming in has verification with our CBSA colleagues and making sure there is a verification program with the USDA as well as a DNA test to ensure we can keep the program and its integrity very well understood.
Senator Tardif: Welcome, minister. Minister, you were saying that you are very concerned about products crossing the border illegally. I would like to speak about diafiltered milk. We are familiar with rising U.S. imports of diafiltered milk, which have managed to evade the crippling duties that we normally impose on dairy products that come in from foreign countries. In fact, Canadian producers are saying they lost I believe up to $231 million because of cheaper milk products coming in for food processors as they produce cheese, for example.
Minister, what action will you and your department take to ensure that the imports of diafiltered milk are monitored and stopped?
Mr. MacAulay: Thank you very much, senator, and I appreciate your question. As I indicated previously, being a dairy farmer, I'm certainly not very happy seeing this situation. As you're fully aware, I inherited this situation, and it has expanded over the years. I indicated early in the year that we were going to sit down, and the Minister of Trade has done it too. We had consultations right across the country with the dairy industry and the processing industry in this country, and without question it's a problem. In the supply management system as a whole, what we have to do is make sure that, whatever we do, it's long term and sustainable, and that is exactly what we're going to do with these industries. With the dairy industry, it's fair to say that there are other factors that have taken place. Higher skim milk powder has helped to create lower prices for the farmers in the dairy industry.
But we have to make sure that whatever we put in place is long term and sustainable. When we met with the farmers right across the country and the young dairy farmers in Quebec, they certainly indicated to me they don't want a knee- jerk, quick solution. They want a long-term solution so that they're going to be able to milk cows down the road because they want investment in the industry, and I think, if you look at my mandate letter and our platform, we have indicated that we're very strong in the area of innovation in the agricultural sector. We want to make sure that that takes place.
However, we cannot stop all the diafiltered milk coming into the country because some of it does come in legally, but what does not come in legally is a big issue. I can assure you we're dealing with it, but it's not something you can solve quickly.
Senator Tardif: I have two questions: You've said it's not quick, but have you established a timeline? And what work are you doing with your U.S. counterparts? I understand that certain U.S. senators are very concerned about how to respond to recent changes in the Canadian dairy industry.
Mr. MacAulay: There are always concerns, and there's always somebody wanting to get a step up on whatever is taking place. That is why we have to make sure that whatever we do is sustainable, and you understand exactly, when you're dealing with the world community, that it has to be done right. That's what we're trying to do.
As I indicated before, that is what I've been asked to do. There are some farmers who would just like to get a payout, but mostly, I would have to say, in the dairy farming industry, they want to make sure that we put a long-term, sustainable solution in place that will pass the test of time and whatever can take place in these issues.
As you know, in our supply management sector, I've been here quite a few years. Any time you go anywhere, everybody seems to like to get a lick at our supply management system. We have to make sure that we protect it. I can assure you that I fully intend to make sure we have a long-term, sustainable dairy industry. I have been involved in the supply management system for most of my life, and being a dairy farmer, I can assure you it's a main priority of me and my government. And that's what we will do.
Senator Tardif: Thank you, minister.
Mr. MacAulay: Thank you for the question.
Senator Pratte: I have follow-up questions to the questions of my colleague Senator Tardif, and it certainly concerns a lot of Quebec producers also.
[Translation]
I have not consulted with as many producers as you have, but I know that this is causing a lot of concern and frustration in many provinces, especially in Quebec, and also among dairy producers. Since last spring, they have felt that they keep getting the same response, which is that you are considering a long-term solution. But they are having trouble understanding what the problem is exactly, in other words, what is getting in the way of finding a solution to the problem. They keep getting the same response as the one you are giving us today. You are looking for a long-term solution, but we have trouble understanding what the problem is and what is preventing you from finding a solution. Can you give us further clarifications on the subject?
[English]
Mr. MacAulay: Senator, thank you very much for your question, and as I indicated previously, I arrived here a few months ago. I inherited this situation, and it's all involved, diafiltered milk and other problems, in the supply management sector. What I indicated when I was appointed Minister of Agriculture and Agri-food and questioned on this issue was that we were going to work together with industry and farmers to make sure that we put a long-term, sustainable solution together. I've been on both sides of the table on these issues. I've been a farmer, and now I happen to be the Minister of Agriculture.
You've talked to some farmers too, but what I hear from farmers is that they want a solution, a solution that will last, a solution that's sustainable. In your province of Quebec, I met with the young dairy farmers. They want to make sure that we have no knee-jerk solutions. This issue has gone on for a number of years between the United States and Canada. We have to make sure that it's handled in a very appropriate manner, with all the information that we can have, and I'm sorry if you're not pleased with the response that I have. But that's exactly the response that I do have, to make sure that when we're done we have a long-term, sustainable, viable supply management dairy system in this country, and I can tell you I intend to make sure that will happen.
Senator Pratte: Now, sir, last summer, there was an agreement about which we don't know a lot, but there was an agreement between Canadian processors and producers that seems to have had an impact on diafiltered milk imports and that has provoked some reaction from producers in the U.S. who are not happy. I'm wondering whether that seems to have solved part of the problem, in your eyes. Are you worried about the impact it will have from U.S. producers? Could that, for instance, make us vulnerable to action from U.S. producers as far as our trade obligations go?
Mr. MacAulay: Thank you very much, senator. As I said, from the day I came here, I've been involved. I was only here a few months when I went to the GATT meetings, and I certainly picked up what it's like to be a trade official. It's not an easy task. On the class of milk that you're talking about, that came about, as you're fully aware, between the processors and the farmers. Quite honestly, it's a business decision that has been made by these two groups here in this country, and that would no doubt have something to do with the situation that is in this country. Whether it will help to address it, I think it very well can, but that's part of what can take place. Is it the solution? No. There are other things that must take place, but that's why we have to make sure that everything that can happen to make sure we have this long-term, sustainable solution with the processors, with the farmers, must take place. This is one thing that's happened.
You talk about other countries being concerned, other countries writing letters, other countries threatening, but I was never very big on threats in my life. I'm only part of the government, but I am part of a government. I'm not one bit concerned about the letters or anything else. I think it's great that the processors and the dairy farmers sit down and attempt to resolve part of this issue.
We're all involved, and I thank them for their hard work. It's not easy, but do other countries watch what we're doing? Of course they do. Am I concerned? No. On what could happen, I was just asked on the way in. I answered that it's a hypothetical question because we'll deal with the issues. As you're fully aware, there are plenty of direct issues ahead of us. So what might or might not take place is not very concerning to me, I can assure you, but I appreciate what you say. Everybody involved helps. Everybody discussing the issue helps.
Senator Unger: Thank you, minister, for being here today. My question takes a different approach, but as minister you would have an impact in this decision.
As a senator from Alberta, I'm very concerned about the impact of carbon taxes on the agriculture sector. The recent announcement by Western Feedlots in Alberta that they will be idling operations in part due to the imposition of carbon taxes does bring this very close to home for me.
The Canadian Federation of Agriculture has long argued that a carbon tax will seriously hurt farmers. I quote from their website:
A Carbon tax will significantly increase the cost of doing business for farmers. As price takers, farmers cannot pass the additional cost of a carbon tax on to consumers or the international market. . . . A Carbon tax will create a competitive disadvantage for Canadian farmers.
Do you share these concerns? What steps would be taken to mitigate the cost of a carbon tax on agriculture, especially given the state of Alberta's faltering economy?
Mr. MacAulay: I appreciate what you're saying. I want to make sure we do not do anything that hurts agriculture. I'm here to represent agriculture and make sure their issues are at the cabinet table, and that's what I intend to do.
I know that carbon tax has been mentioned by some people as one of the problems, but we have only got one planet to live on, and we have to make sure we take measures to deal with climate change. This is an issue that's dealt with by the Government of Canada and the provinces. Without a doubt, there's going to be an enormous amount of discussion as to how these issues will be handled, but the bottom line is if we want to live here, we have to make sure we have a place to live.
Every effort I can put forward to protect and help farmers I will do.
Senator Unger: I know that they're concerned, and I'm concerned. It seems that our economy has gone down. You know about the large unemployment numbers, and the further imposition of tax on tax has a truly devastating effect. I appreciate your comment.
It seems that the CETA is imminent between Canada and the European Union. However, according to the Canadian Cattlemen's Association, the elimination of tariffs under the possible ratification of this trade agreement would not create an enabling environment to facilitate exports of Canadian beef because sanitary measures imposed by the EU with respect to carcass treatment in beef processing facilities still need to be resolved in order for the beef sector to fully benefit.
What will the federal government do to harmonize sanitary measures between Canada and the EU?
Mr. MacAulay: I'm on a first-name basis with Commissioner Hogan from the EU, and we have discussed this issue a number of times, but is it totally resolved at the moment? No, it is not.
Of course, there will always be a number of issues, but I'm going to let my official expand on what measures are taking place. It is truly a concern.
Mr. Gorrell: Your point is well understood, and the minister and officials have met, even this week, with the beef industry. The beef industry has made it very clear they need viable, commercial trade.
Senator, you identified carcass washes. This is how the animals are washed and disinfected in Canada. There are two types of washes that need to be approved by the EU to allow for that trade. We have a working group interdepartmentally working with the EU and the industry to ensure that these washes are approved in the EU. We've had two washes approved already. It is a step-by-step process, but it is understood that for the deal to be meaningful for the beef industry, these additional washes need to be approved. The government and the industry are working together very hard and diligently to make sure the EU is aware of this and that these approvals are done as soon as possible.
Senator Gagné: Good morning and welcome. Thank you for being here this morning.
Last June the committee members heard about the challenges of transporting grain to access export markets, and coming from the Prairies, I know that the grain producers have challenges moving the grain to the ports so that it can be transported.
I know that a lot of the stakeholders are asking for changes to the Canada Transportation Act, and I was wondering if you could comment on the measures the federal government intends to take to overcome these issues of transporting grain from the prairies to the ports so that we can access the markets.
Mr. MacAulay: Thank you, senator, for the excellent question. I think we learned a lesson a couple of years ago when the grain was piled up on the prairies and was not going to market. I'm not the Minister of Transport, but I'm certainly involved in this for sure.
Senator Gagné: Yes.
Mr. MacAulay: The railways have indicated they're ready. A number of things that have taken place. There will be a response to the Emerson report by the Minister of Transport, and it's up to him to do that.
I've indicated clearly that the interswitch chain is valuable. We hear that interswitching is not used as much, but the threat of what it can do could be a good asset to making sure the product moves. That's one of the things we've heard a number of times, and then there are reciprocal penalties. That's something else that comes up. I'm not saying this will be in the response, but this is what I have heard quite clearly. They were pushing strong for that, and I could understand that, too.
I visited the port in Vancouver and toured their facilities. I visited G3 Terminal Vancouver and saw the investment they're making there. It's truly amazing for anybody that has never been there to look at what takes place there, the billions of dollars that go through this area.
It's part of my responsibility to make sure that the farmers can grow an excellent crop. It's the government's responsibility to make sure that gets to the export point. Has it been a concern of mine? It certainly has. I believe we're addressing the issue as quickly as we can. But, again, for me to respond as to what we're going to do would be inappropriate because it needs to be the Minister of Transport that deals with that, and he will. But I want you to fully understand what I'm hearing.
We've had great discussions across the country. On the Prairies, we met with provincial ministers, and they attended round tables with me. It was a learning experience for sure, but I also hope it will be a help in order to make sure that we put a proper mechanism in place. As I always said, we have to make sure that what system and what measures are taking place are not for this year or next year.
What we're producing now in the grains and what we will produce a number of years down the road will be entirely different because another part of my mandate is research, and I'm very strong on finance and research. Just one example is the canola. We developed that here. There are billions of dollars coming into the country because of that. But we're also developing grains, seeds that produce better crops, use less moisture to produce a better crop, which means it's a bigger problem for the railroads than for government. But we have to make sure to understand that this is what's taking place, and we have to have the transportation system in place that will deal with this. The farmers can certainly do it. We have a job to do, and, hopefully, we do it. We know the problem, which is a big start on any problem, and we will address it.
[Translation]
The Chair: I am going to ask the senators to shorten their questions a bit, and ask the minister to give somewhat shorter answers also, so that all the senators are able to ask questions.
[English]
Senator Oh: Welcome, minister, to the committee. It is certainly nice to hear that you are going to China to sell agricultural products for the second time this year. I have two questions for you. First, I have been approached by the Chinese rice association about possible investments in Canada in creating rice plantations here in Canada for export to the Asian market. You know that our climate is very similar to the rice growing conditions in China. Rice is always a big, big export. I think it could be second to canola to China and the Asian market.
Do we have any special welcome policy to welcome this kind of investment in joint ventures to transfer this kind of technology over here to our farmers?
Mr. MacAulay: Thank you, Senator Oh, and I'm pleased to hear from you. You've helped me a lot.
Senator Oh: Thank you.
Mr. MacAulay: And I appreciate it. You've helped me a lot in the China issue, and it's very much appreciated.
Without any question, if somebody is interested — and particularly China — and we can produce the product, we are interested. I think you and I know each other well enough that we can sit down and have the details of the issue that you're talking about. I suspect you'll have a few more issues too, knowing you, and that's good. That's what we want. Without a doubt, if we can come up with something that does for the country what canola did for this country, our ears are wide open, and we want to do it. I think it's fair to say that we're having a better rapport with China, and it's a massive market. The Asian market is so big. We want to be part of filling that market, and, if this is one of the issues that we can deal with, that's exactly what we want to do. I don't want to take too long, but we certainly do want to hear the issue. We want to get the details from you. Anything we can do to help it, we will do. Thank you.
Senator Oh: Minister, I have one more question.
Mr. MacAulay: Yes, senator.
Senator Oh: Between Equestrian Canada and the Chinese horse association, earlier this year an MOU was signed in Beijing about exporting Canadian horses to China. Our horses have been exported to the U.S. for many years. The U.S. exports to China, and they become American horses. The trade value goes through the U.S. for their export. Since you are travelling to China at the end of next month, that would be a good question for you to raise in China, how to get our horses directly to China.
Mr. MacAulay: Thank you, Senator Oh. I do not want our Canadian horses to become American horses before they become Chinese horses. I can assure you of that. You mentioned that when I entered the room. I must say I have an excellent rapport with Senator Oh, and he knows very well that we'll sit down and discuss these issues. If there's something we can do in order to facilitate this, I'm all ears because we want to deal with it. Particularly, I don't want Canadian horses to become Americans to get to China.
Senator Ataullahjan: I'm not a regular on this committee, but I wanted to bring something to your attention. Travelling through the Middle East, we realize that there's a huge halal food market, which has totally been cornered by Australia and New Zealand. I think there's great potential for Canada, so I was wondering if that was on the horizon or something that you could look at.
Mr. MacAulay: Thank you very much, and I certainly appreciate your question and understand what you're saying. I've seen it. Of course, they are a bit handier, and that makes it a little easier for Australia and other areas. But we certainly want part of that market. That's why I think it's so important that we get to not only China but also Vietnam and other areas around the world. I think the population of Vietnam is 70 million people, and a lot of people are entering the middle class. Am I interested in that? I certainly am. What you're saying is absolutely true. We've got the people. We've got the farmers that can provide the product. I know other countries, including the United States, are moving in these areas, and I want to be sure that we move in these areas as quickly as we can. In all fairness, we have gained access to a number of countries, North Korea and Taiwan. I'm going to Mexico in a few days to hopefully finalize the deal on the beef.
Look, it's good to brag and say we're doing these things, but there's no end to what you can do and no end to what I want to do. With the help of all the senators and members of Parliament, cooperating together with industry, it's amazing what we can do. Your question is right. The concern is correct, and we're trying to deal with it.
Senator Enverga: Thank you, minister, for being here today. I understand that the U.S. is a big trade partner for us. There's no doubt about it. But then, apparently, on the news, the presidential candidates have been telling us not really favourable things about NAFTA, about trade.
Do you think there will be an effect on our agricultural industry on this? Do you have any plans or contingencies, just in case something happens?
Mr. MacAulay: Of course. Thank you very much, senator. I must admit that what you're talking about has captured the world and its interest. I do not intend to comment on it and what will take place, but, whoever wins the election, we will be dealing with them. What we will do when the election is over is deal with the issues that come forward. Sometimes there's some talk before elections. It might not be the reality when the election is over. I understand your concern fully, and we hear it too, for sure, as well as you do. But quite honestly, we've got enough of these issues on our plate without looking at what might be ahead. So it could be somewhat different when it is over. I don't know. But, again, it's very important. We fully understand that whoever wins the election, they are our biggest trading partner, and we very much must deal with them and want to.
Senator Enverga: Are you ready for it, minister?
Mr. MacAulay: I could say, "Ready for what?'' Again, I want to be careful, number one; I don't want to deal with perception and what somebody might do. It's like letters written by countries; it's not really a legal problem. What has taken place in the campaign, let's leave it and see what takes place after. Let's see who wins the election. I think we've always had a very decent rapport with the United States of America. We must have a good rapport with the United States, and I'm pretty sure we will.
Senator Martin: Good morning, minister. My apologies for being late. I, too, am not a regular member of this committee, but I'm aware that during the study Mr. Glen Lucas, General Manager of the B.C. Fruit Growers Association, appeared before this committee and argued that growers have to deal with consumers' perception of genetically modified produce, given that consumers lack adequate information about GM food. I have a question from the perspective of just educating the Canadian consumers and the public, just informing and making sure that the public is aware of the facts versus certain perceptions or misperceptions of information and in the education systems, which are provincially governed.
There is curriculum, and certain teachers use film or resources that may give a one-sided perspective. It could happen. I've seen it happen. I'm just wondering about your government's approach in educating and supporting our agri-food industry, companies and folks so that Canadians are well informed and how you're navigating those challenges.
Mr. MacAulay: I thank you very much. As you know, it's an issue. Any food that's consumed in this country is safe to eat. We have to make sure that people understand that it's science-based. It's not what people think of what it might be. We deal with science-based regulations in this country.
As to your question on how we educate society, governments make great announcements, and if you ask 10 people, there might be three or four who know what it is. It is always a difficulty to make sure that people understand fully, understand at all, just what these issues are.
I think there are a number of areas that are helping and can help an awful lot. The 4H program — it's a very important program — is now entering into the urban areas of the country. Vitally important. Agriculture in the Classroom is a program that we support. I think it's an area that can be very helpful in these areas.
Again, we have to deal with reality, and we have to deal with making sure, as best we can, that people understand how health regulations are handled in this country and that it's science-based. I think these two areas, plus others. Media can help a lot. But we want to make sure that people understand that if food is certified to be consumed in this country, it's science-based regulations that decide whether it's consumed or not. We're very hopeful and expect help from these areas in particular, and hopefully others, that will make sure that society understands that some things that are said are just said and don't have a science base to them. It's so important.
I think it's very important in this country, and we, as a country, are trying to tell the world to use science-based regulations, and sometimes in our own country people say, "It's not safe,'' but you don't know why. If it's certified to be used and consumed in this country, it is safe. But these are some of the programs that we are using. Possibly, we can find more ways of doing it, but you can only advertise so much. Advertising sometimes only has so much effect.
We need to indicate that if it's certified to be consumed, it's safe. It's research that decides whether it's safe or not.
Senator Martin: There is also a potential growing perception. I was just wondering if you are hearing from growers of their concerns, of fear of not being able to export their products. But I understand.
Mr. MacAulay: Yes. You're talking about the export market?
Senator Martin: I'm talking about the growing perception and, therefore, the growers in Canada wondering about just what they're actually producing for fear of not being able to export their products. If there's the fear of GM —
Mr. MacAulay: There's a fear of GM. But if you had breakfast this morning, you probably had some of it.
Senator Martin: I personally don't, but I'm just asking about the growers.
Mr. MacAulay: I know you don't. I know exactly what you're saying. I'm still not sure if it's export or the country. There are problems in both areas. There are problems within the country because you always have information that might not be scientifically correct. It's sometimes difficult to fight this. The way we're trying to do it is to make sure the young people understand, and the programs that are supported by the Government of Canada put this information into these young people's hands, to make sure that they fully understand that what's done is done appropriately.
On the world scene, it's a battle.
Senator Mercer: Thank you, minister. I want to thank you. I have a comment and a question.
I'll give you my comment first. You told us, in response to a question about spent fowl from my colleague Senator Ogilvie, that five businesses have lost certification because of events at the border. You need to publicize that. As we've talked about it with witnesses before the committee when talking about spent fowl, the drums need to beat loudly here so that people in the industry understand that some people have lost their ability to import because of the spent fowl issue. That's a comment. I encourage you to do that.
My question, though, goes to your statement in your presentation. You said that a couple of weeks ago you were in Swift Current to announce an additional federal investment of over $35 million for the upgrade of our research centre there. Wonderful news, minister, but I want to know if it's isolated to Swift Current because there are research centres across the country. I have visited not all of them but many of them, and I've been on this committee for over 10 years now. I have visited many of these centres that are in need of an influx of dollars to upgrade the centres but also to attract more researchers.
I remember going to a facility in British Columbia, where we went from office to office that was empty because they didn't have the funds to provide for research.
Senator Ogilvie and I represent Nova Scotia, where there is a world-class centre in Kentville. Of course you, being from Prince Edward Island, would be interested in the good work going on in Fredericton on the research on potatoes.
Are you putting more money into all research centres, not just Swift Current?
Mr. MacAulay: Thank you very much, senator.
From the day I arrived, I've certainly promoted research. We added $38 million to the research budget, right after the government was sworn in. My job is to make sure that we can obtain as much money as we possibly can in order to invest in research. Is it one area of the country? No. It's right across the country.
I was in the research station in Charlottetown, and they were showing me work they were doing on the potato industry. It's amazing when you go to these research centres. These people are so dedicated to the task it's unreal, really. It's so heartwarming to go to these research stations and see what takes place. They truly have their heart in it. I think they'd sleep in the building. It's amazing. It's always a job, senator, to make sure that there's enough money, but when you look at what they've done over the years — I always use canola — but when you look at the new seeds they produce, the better crops that we produce because of the investment in research, there's no end to it.
We also have to remember that there are other people in the world at this, too. And if we do not stay in the cutting edge in this area, we're not staying in the game. We have to make sure that we have the appropriate investment. I intend to work as hard as I can to make sure we have the appropriate investment.
Senator Mercer: Thank you, minister. We appreciate that.
[Translation]
The Chair: Minister, you have seen the interest the senators have expressed in the Agriculture and Forestry Commitee and with regard to your presence here. It has been a great pleasure for the committee members to have a discussion with you this morning on such important subjects. It has been very useful, and we are all appreciative.
Senator Mercer, Senator Ogilvie and I are long-standing members of the Committee on Agriculture, and we spend time with farmers during our travels. We have observed that agricultural farm transfer is still a problem that comes up constantly. Farmers who have reached a certain age are very concerned about it.
This is worth thinking about, because by not solving the problem, we will see traditional farms being taken over by large businesses and we will lose the traditional expertise that makes Canada one of the most prominent agricultural countries in the world. I will leave you with that thought, because many producers, and also young people, are very concerned about it. In fact, it is difficult for young people to acquire farms. This makes them lose interest in the agricultural world, although their involvement is very much needed.
Lastly, we will send you our report as soon as possible after our return from China.
[English]
Mr. MacAulay: I have heard what you've said many times. Of course, you also realize that when farmers work all their lives and their investment is in what they have, it's not an easy situation.
Answering Senator Mercer's question, I don't want to get in trouble with the government. I think I said $38 million. I think we invested around $70 million in agriculture and agri-food, but we still need more. But on the succession, it is a big problem, because you can't give farms to people. I have heard what you've said, and we're certainly looking at that. I do not have an answer for what we can do. On the tax issue, that can help a bit. I certainly understand what you're saying.
It is always a pleasure to be here at the Senate, and I thank you so much.
The Chair: Thank you very much, minister.
[Translation]
I would like to welcome our witnesses from the Department of Agriculture and Agri-Food, Mr. Doug Forsyth, Executive Director, Strategic Trade Policy Division, Market and Industry Services Branch, and Mr. Fred Gorrell, Assistant Deputy Minister, Market and Industry Services Branch. From the Canadian Food Inspection Agency, we welcome Ms. Barbara Jordan, Associate Vice-President, Policy and Programs. They will be with us for the next hour.
The senators will ask you questions relating to the meeting we had with the minister. We will try to have short questions and answers so that all senators have a chance to ask their questions, and so we can have two rounds of questions.
[English]
Senator Mercer: Again the presentation was much appreciated. As you know, we tried to get him in earlier, but he has been travelling, and it's good news that he's been travelling on various subjects.
As you know, this committee is travelling to China in early November, and we're going to visit Beijing and Shanghai. We don't want to complicate things, so it would be appreciated if we could have a briefing from the department so that we might anticipate from that side when we get there. Not that we're taking direction from the department, let's be clear. But we would like to know what's going on before we walk in, if there's anything that you think we should know.
I do want to follow up on a couple of things that came out of the discussion with the minister. One was the issue of the spent fowl and how we are going to publicize the fact that we've actually done something at the border. It was news to me that the five companies' certifications had been suspended. I had not heard that before in talking to all the people I talk to in the industry. It's great news, but it needs to be spread somehow throughout the industry because, as I've said all along, you only need to really spread it to one or two people, and, if everybody knows about it, everybody on the other side who wants to ship illegal spent fowl to Canada will have second thoughts, at least.
A very practical question: Why is the DNA testing not part of the process?
Mr. Gorrell: Thank you for the question.
First of all, on the China one, I just want to respond. The department would be very happy to provide any information to the committee, and we're actually making sure that we have a coordinated approach for your trip to China. Certain provincial agriculture ministers will also be on the trip, so we'll provide all the information and make sure it's an integrated approach to maximize the benefit for everybody on the trip. That will be coming.
Relative to your question on the spent fowl, we are doing the DNA with Trent University, as the senator identified, and it will be. But as to the validation of the process, the actual validation, because it is chicken meat — I'm not a full scientist on it — they are looking at it. It is going to take some time. DNA testing that was put forth by the Chicken Farmers of Canada does have merit, and they are looking at how long and how quickly we can do that, again, as I responded for the minister, in conjunction with validation from the USDA program, as well as other programs. So the DNA program is in play. It is being reviewed, and we do hope that that could be part of the process.
Senator Mercer: When we finish our meeting with you, we're going to be talking about some new studies that we may want to embark on. One of the topics is foreign ownership. You heard me mention earlier the possibility of a farm bill. I'm using that term, but it may not be what we call it in the end. For our terms of reference, it's sort of where we're going.
The issue of foreign ownership I did mention to the minister while he was here. The province with the tightest restrictions on land ownership is Prince Edward Island, where, if you're not a resort, there are certain restrictions on ownership in P.E.I. Would a study on foreign ownership be of any value to planning by the department but also in response to many of the complaints that you hear?
Mr. Gorrell: Thank you, senator. As the minister said, I think it is worthwhile. There's a lot of interest in it.
As to foreign ownership, as you know, the jurisdiction of ownership of land is at the provincial level, and there is a patchwork across the country in how that is done. I think there are lots of questions in the media about that, people buying land, not buying land.
I think having a study that outlines what the rules are in Canada, in various jurisdictions, would definitely be worthwhile for everybody.
On the other issue, I just want to make a comment when you make reference to the farm bill. Canada actually has its own farm bill. Currently, it's called Growing Forward 1 and Growing Forward 2. It's called the next policy framework. We have a five-year policy framework that we develop at Agriculture and Agri-food Canada. It's coming into effect in 2018. Right now, the department is doing the consultations with the various provinces. It's multi- jurisdiction, as well as with stakeholders.
We call it the next policy framework. We have a five-year policy framework, which is akin to the U.S. farm bill, sir.
Senator Mercer: The Growing Forward 1 and Growing Forward 2 titles are not necessarily titles that all of us around the table would accept as the same framework as a farm bill. However, that may be semantics. We'll get to that.
I appreciate your answer, and I would appreciate your briefing on the other issue.
Senator Ogilvie: I have two questions that deal with trade issues in general. The first one I'm going to call non-tariff barriers to international trade. It's existed for some time, but there seems to be increasing and selective use of the zero- tolerance regime for specific entities in products entering certain countries.
I can appreciate that in some cases zero tolerance may be absolutely essential. Live organisms, for example, you want to be as close to zero as you can in that area.
I'm referring more to the apparent deliberate use of it in areas where it's not quite the same as living organisms because we know that, with material detection today, we can detect at the parts-per-trillion level of chemical compounds and so on. If you have a zero tolerance and if you're ethically reporting and have so many parts per trillion, it's not zero. The use of that is a barrier.
Can you give us a sense of how serious this issue is, or is it overblown as an issue for Canadian producers?
Mr. Gorrell: That's actually a very good question, and I think you've captured it perfectly.
As you've identified, with the advances of our technology, we're able to detect smaller — trillion and parts per billion. It really gets down. As to zero tolerance, obviously regulations are set to protect against, from a food safety perspective, residue levels. With the onset of trade agreements, the tariffs have been coming down, so, as you've correctively said, non-tariff barriers have been introduced. Zero tolerance is a default, often. That's why we work with the international standard-setting bodies that are referenced under the WTO. We have ones for plant health and animal health, as well as food safety. They set standards, and they would be parts per million or something like that, something that can you measure.
If there is a country that wants to be protectionist and, for example, there are no standards for a certain product, they can say zero. And they can test very low. So the reality of what you're saying is, in fact, a problem, not just for Canada but also, I would say, for all major exporting countries.
So where we're spending our energy is really working with the international standard-setting bodies to establish levels so that we can have a rules-based system and create that predictability. To get to your question, it is a real issue, and some of my gray hair probably has been contributed to by that, senator. A lot of people are looking at that. It comes up in all areas, so it's a valid point. It's a valid issue, but we really do have a mechanism that we're trying to work through with other countries to take a rules-based system across the globe.
Senator Ogilvie: Thank you very much. I won't pursue it further, but I am aware that it is a serious issue the way it's being used.
My second question deals with GMO products. I'd like your observation of the European Union situation. It's my understanding that the European Union has a very interesting, I'll say a bi-functional, approach to GMO products entering the country, particularly in the area of grains, those that go into animal food. I'm of the understanding, perhaps incorrectly — and I want you to help me here — that they have a much more relaxed approach to animal feeds entering the country that are GMO as opposed to those entering directly into the human market so to speak. Could you give us a little bit of clarification on that situation?
Mr. Gorrell: You've done your research very well, senator, because you've captured it again well. The EU obviously has their own dynamic, given the way they are set up with all of their countries and how they have consensus with 25, 27 members. Canada is very well-known as having GM technology. We support it. As the other senator asked, we support all types of technology, whether it's organic or GMO; we consider whatever the output is. That's what we're looking at. Relative to the EU, right now, we would say they have a more understanding or tolerant approach to GMO products that are used for feed as opposed to for human consumption. And that is part of the registration process; we find it is much more difficult to get things registered for human consumption than it is for feed. We have the same type of process in Canada for environmental approvals, human consumption and feed. To put it as you've said, sir, it seems they look at it with a bifurcated approach, but they just seem to take more diligence in one, and the other might be an appropriate way to look at it.
Senator Ogilvie: You've been very careful, but thank you; I understand your answer very well.
Have you detected any significant movement in the willingness to look at these products in Europe, or is there any other part of the world that stands out as becoming much more realistically attuned to the GMO situation?
Mr. Gorrell: It's a good question because at the end of the day the Europeans will need products from around the world. They have to be imported. They export a lot of product. Some member states are quite voracious in their approach to anti-GMO. Obviously democracies can be messy, especially when you have member states. I think though that they do understand that in the long-term they do have to embrace GMO innovation overall to allow us to feed the world. So I think there will be some softening in some areas, but quite frankly, given social media and the way information is shared around the world sometimes, there are certain camps that are very much entrenched, so I think it will be an ongoing debate. I wouldn't like to say battle, sir, but it would be an ongoing engagement to ensure that the benefits and the safety of biotechnology and products derived from biotechnology are really here to stay and that we really need to use it to look at feeding the world, as well as the Europeans.
Senator Ogilvie: Thank you very much.
Senator Pratte: I want to go back to the diafiltered milk situation. There apparently is a very simple solution to the problem, and when you talk to people involved obviously that simple solution is impossible. So let me ask you a very dumb question. I'm very good with dumb questions.
What would happen if the Government of Canada simply stopped the import of diafiltered milk by, for instance, putting a very high tariff on it or whatever — that simple solution to just stop it right now that opposition parties and milk producers want?
Mr. Gorrell: You know the danger of answering a hypothetical question, senator, but I will do my best to give you a straight answer.
First, as we have all learned, there are no dumb questions in the world.
Senator Pratte: You're being very generous; thank you.
Mr. Gorrell: It's a very pointed question. The minister made reference to the fact that diafiltered milk is legally allowed to come into Canada. It comes in with a tariff. It is legal. It's how we negotiate it. Part of the problem is how it is being used in Canada.
So to answer your question, I would say we wouldn't go that route because we have our trade agreements where we've said diafiltered milk can come into Canada as per the tariff line, et cetera. The challenge involves how it's used and having a complete answer to respond to how it's going to protect and make sure we have a viable, long-term supply management.
Senator Pratte: So taking for granted that the simple solution a lot of people say exists in fact doesn't exist, here comes the not-so-dumb question that I'm asking a lot of people and cannot get an answer to: Can you explain in more than 30 seconds but fewer than 2 minutes what is the problem? Why is it so complicated to achieve this long-term solution? What are the obstacles?
Mr. Gorrell: I will refer this to my colleague, who has more expertise on this.
Doug Forsyth, Executive Director, Strategic Trade Policy Division, Market and Industry Services Branch, Agriculture and Agri-Food Canada: Thank you, senator. As you rightly point out, as the minister noted, it is a long-standing problem. There are complicating issues, both internationally and domestically. The product, as Fred pointed out, can enter Canada duty-free, and it is an economical input that processors in Canada have chosen to use instead of milk. That's part of the problem, frankly. It is low cost, and it can be used for the end product, with cheese and yogourt tasting the same and being made in the same manner.
Clearly there are some issues both with the processors and with the producers in terms of helping to manage the situation. Part of the solution we discussed earlier with the national ingredient strategy will help deal with some of it. As the minister said, he met with dairy producers and processors throughout the spring to hear their concerns and hear some of their proposed solutions, and, as he said, he heard what they had to say and will move forward with a decision when he's ready to do that.
Senator Pratte: The agreement between processors and producers is a purely private agreement, and the government is not involved in that.
Mr. Forsyth: Correct.
Senator Pratte: Does the fact that it is a private agreement protect Canada from any action from foreign governments or foreign countries?
Mr. Forsyth: Does it protect Canada? I wouldn't say necessarily. You rightly point out it is an agreement between the producers and processors. We haven't analyzed it. I just point out that I think they were hoping for a November 1 date, but it's my understanding that there are still some i's to dot and t's to cross. We haven't seen a final agreement between the two of them.
Would that protect Canada from a challenge? I think it's up to the other countries to decide if that's the case. It may or may not. We're not sure.
Senator Pratte: I haven't seen the letters by foreign producers. Would it be a challenge according to WTO or NAFTA or both?
Mr. Forsyth: Certainly the letter that we saw from the dairy producers in various countries, the EU, the United States, Australia, New Zealand and Mexico —
Senator Pratte: So it would be the WTO.
Mr. Forsyth: If they were going to go that route, the WTO would be the most likely route to go.
[Translation]
The Chair: If I may, I have one additional question concerning diafiltered milk. We see diafiltered milk that enters Canada legally. This product does not pose a problem, it is inspected and there is the traceability file that applies. However, concerning diafiltered milk that enters illegally, what is the control that we could do, or that we are not doing, on the quality and traceability of this product that enters Canada through various products, such as dairy products or yogurt, as you said? How can Canadians be certain that these products are good for their health?
Mr. Gorrell: First of all, that is the responsibility of the Canada Border Services Agency.
[English]
Yes, they do verifications of the product coming in. They would be looking at it as well as taking directions from our colleagues from the Canadian Food Inspection Agency that would be doing it. So the quality of the product relative to food safety and the verification that the product coming in is actually what it says it is are the responsibilities and the jurisdictions of the Canada Border Services Agency and the Canadian Food Inspection Agency, and they do have regular monitoring programs.
I don't know if my colleague from CFIA would add anything else.
Barbara Jordan, Associate Vice-President, Policy and Programs, Canadian Food Inspection Agency: Thank you, Fred. As my colleague has pointed out, certainly from a safety perspective and quality perspective there is oversight at the border. We work with the Canada Border Services Agency to assure that. We are not finding illegal imports at the border. The product that is coming in — diafiltered milk — is coming in as a safe product and according to the standards that we have in place.
[Translation]
The Chair: I have one last question to ask you, Mr. Gorrell. In the last few months, the giant Bayer bought the powerful company Monsanto, whose representatives appeared before our committee on a number of occasions. The majority of senators' comments were not strictly complimentary during those discussions.
What control will the Canadian government exercise over Bayer, which is a multinational with its head office in Germany? And what impact will there be on producers who will most likely have to buy seed from Monsanto? How do you view this problem? I am sure you do not have a solution this morning. But I would like to ask you the question so that you can give us specific clarifications to reassure producers, farmers and the public. It must not be forgotten that Monsanto was thrown out of several American states, because it did not respect the standards required by the departments of agriculture in those states. Monsanto is not a Canadian flagship. How is the government preparing to respond? When an international corporation is involved, it is even more difficult to exercise control than it is in the case of a corporation based in North America.
Mr. Gorrell: Yes, that is indeed an important question.
[English]
Because it really talks about verification of products, ensuring what is being purchased, how do we ensure what is coming into the country is exactly what it is. I believe, if I understand, sir, it is really how do we ensure what is coming into Canada is what it is and we're protecting our producers; is that correct? It really gets into the multidisciplinary action and coordination of the Canada Border Services Agency as well as the Canadian Food Inspection Agency, and I'm assuming perhaps some other organization as well. We'd be happy to follow up in detail with you, but I would ask Barbara if there is anything she would add.
Ms. Jordan: Certainly on the question of imports, regardless of where they're from, they need to meet the laws of Canada regarding safety and quality. It won't matter what country those imports stem from, there is a requirement that all imports meet the requirements of our acts and regulations.
From that perspective, there won't be an issue regarding the sale and the purchase of Monsanto. The laws stand, and there will be equal requirement to meet them in an importation context.
I'm not sure if that's your question, but if it's regarding imports and whether the seed imports will meet our requirements, the requirement will stand no matter which country they're coming in from.
[Translation]
The Chair: It is a delicate situation when farmers are forced to purchase their seeds from Monsanto. This poses a problem, especially in Western Canada, Ontario and Quebec. If they do not purchase the treated seeds and so forth, the farmers are caught in a stranglehold, which is not healthy. In the last few years, Monsanto has proved that it has no respect for farmers, the environment or consumers. In my opinion, the Canadian government, in the coming years or months, should ensure that farmers will not be caught in a vicious circle, where if they do not meet certain conditions, they will not be able to produce. Consumers must be certain that Monsanto's products are not harmful for the health of Canada's population or the populations of the countries to which Canada exports its products. That is the basis of my question.
Mr. Gorrell: As I mentioned earlier, it is a big question, and many people share the responsibility. If you'll allow it, we could discuss it with the other agencies and then inform the senators.
The Chair: That would be much appreciated, Mr. Gorrell. In the coming months, would you please consult the departments concerned? It is probably easier for you to obtain the information, which you could then send to the committee clerk. Not only the committee members, but also Canadians, would be grateful to you.
With that, I thank you very much for your presence. Your presentation was extremely interesting. We will certainly have the occasion to see each other again in the coming year in the course of our work. And we will look forward to receiving your documents.
(The committee continued in camera.)