THE STANDING SENATE COMMITTEE ON FISHERIES AND OCEANS
EVIDENCE
OTTAWA, Thursday, November 24, 2022
The Standing Senate Committee on Fisheries and Oceans met with videoconference this day at 9:02 a.m. [ET] to examine and report on Canada’s seal populations and their effect on Canada’s fisheries.
Senator Bev Busson (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators and guests, I want to let you know that I’m taking the place of Senator Manning this morning, who is not available. I’m looking forward to chairing this meeting, although I won’t be able to do it with the professionalism and flair of Senator Manning. I’ll do my best to conduct the meeting and make sure our witnesses are welcomed and heard.
Once senators take their seats, I’ll ask each person to introduce themselves.
My name is Bev Busson, senator from British Columbia, and I have the pleasure to chair this meeting. We are conducting a meeting of the Standing Senate Committee on Fisheries and Oceans. Should any technical challenges arise, particularly in relation to interpretation, please signal this to the chair or the clerk, and we will work to resolve the issue.
I’d like to take a few moments to introduce the members of the committee participating today.
Senator Kutcher: Stanley Kutcher from Nova Scotia.
Senator McPhedran: Marilou McPhedran from Manitoba.
Senator Francis: Brian Francis, Prince Edward Island.
Senator Cordy: Jane Cordy from Nova Scotia.
Senator Quinn: Jim Quinn from New Brunswick.
The Deputy Chair: Before asking or answering questions, I would like to ask members in the room to please refrain from leaning in too close to the microphone or remove your earpiece when doing so. This will avoid any sound feedback that could negatively impact the committee staff in the room.
On October 4, 2022, the Standing Senate Committee on Fisheries and Oceans was authorized to examine and report on Canada’s seal populations and their effect on Canada’s fisheries.
Today, under this mandate, the committee will be hearing from the following representatives from Global Affairs Canada: Jordan Reeves, Director General, Trade Sectors; Sarah Pye, Executive Director, Agriculture, Ecommerce, IP, Mining, Responsive Sectors and Bureau Coordination; Nigel Neale, Director, Inclusive Trade, FTA Promotion and Trade Missions Division; and Marc-André Savage, Policy Advisor, Trade Sectors.
On behalf of the members of this committee, I thank you for being here today. I understand that Mr. Reeves has opening remarks. Following the presentation, members of the committee will have questions for you.
Jordan Reeves, Director General, Trade Sectors, Global Affairs Canada: Thank you very much, Madam Chair. My name is Jordan Reeves, Director General for Trade Sectors at Global Affairs Canada. I would like to acknowledge that my team and I are joining you today on the traditional and unceded territory of the Algonquin Anishinaabe people.
I would like to focus my remarks on the role that Global Affairs Canada plays in the export of Canadian seal products, in supporting exporters as well as in developing new international markets.
First, please allow me to relay a talking point taken from communications lines prepared for our heads of mission abroad, which summarizes our position:
Canada is supporting trade and market access for Indigenous goods because a strong and sustainable local economy contributes to the health and resilience of the people living there. Indigenous peoples’ sustainable use of Arctic wildlife, including seals, is an essential component to their traditional ways of life, community and economic development.
Generally speaking, Global Affairs Canada supports Canadian companies and associations on a border-out basis.
Global Affairs Canada’s Trade Commissioner Service provides support via a network of now more than 160 points of service located in Canada’s embassies, consulates and trade offices abroad, helping our clients connect with international buyers, make export sales and solve business problems.
The Trade Commissioner Service also maintains six regional offices across Canada.
Trade commissioners in our regional offices are there to help Canadian exporters prepare for international markets and to connect them with our overseas offices.
Global Affairs Canada also works closely with Agriculture and Agri-Food Canada to support the agriculture and food sector internationally.
The two departments signed a memorandum of understanding, or MOU, on international commerce for the agriculture sector in 2003. The MOU was updated in 2022 to include the Canadian Food Inspection Agency.
Notwithstanding market access challenges in certain jurisdictions, the potential for exports of seal products — crafts, clothing, oil for human health and meat products for consumption by people, for pets and for use in aquaculture — appears to be promising, particularly in Asia.
The Trade Commissioner Service has delivered 110 services to Canadian seal products exporters since 2013. Thirty of those services were delivered in the past two years. Twenty-three clients and nine partner organizations made the requests. Compared with other major sectors of the Canadian economy, these numbers are small.
In addition to working directly with individual Canadian exporters abroad, Global Affairs Canada also engages in advocacy activities to support the seal products industry as a whole. Messages are delivered sometimes in public settings, sometimes to foreign media and sometimes in closed-door discussions with foreign governments.
I should note that the only dedicated federal government program focused on market access for seal products is the Certification and Market Access Program for Seals, or CMAPS, administered by the Department of Fisheries and Oceans, or DFO.
I would highlight three programs offered by Global Affairs Canada that could be used to support export-ready Canadian seals products companies.
First, the CanExport program provides eligible Canadian small- and medium-sized enterprises, or SMEs, with funding of up to $50,000 to help break into new international markets.
The program is designed not only to diversify Canadian export markets, but also to diligently foster a more inclusive approach to trade for all Canadians, including Indigenous exporters.
Second, as part of the Government of Canada’s inclusive approach to trade, Global Affairs Canada is pursuing free trade agreement provisions on trade and Indigenous peoples that seek to ensure that Indigenous peoples in Canada have access to the benefits and opportunities that flow from international trade and investment.
Third, the department has dedicated funding in place to support business development activities abroad for Indigenous-led business.
Madam Chair, in closing, I would like to underline that Global Affairs Canada, through our global network of trade commissioners, is committed to helping export-ready Canadian seals products companies explore business opportunities abroad.
Thank you, Madam Chair. Sarah Pye, Nigel Neale, Marc-André Savage and I look forward to answering the committee’s questions.
The Deputy Chair: Thank you very much, Mr. Reeves. That was interesting. I will start the question period by turning to a member of steering, Senator Quinn, for the first question.
Senator Quinn: Thank you to all the witnesses for being here and for the presentation. I have a few questions around the presentation.
It’s important, as you’ve indicated, that we are supporting our Indigenous communities because of the direct link of seal products and sales of products coming right back into the benefit of the community. How do you broaden that? There are so many communities, and in particular my region of the country, Atlantic Canada, that are dependent on the fisheries, but also have been very dependent on the seal industry in the past. We’ve heard from Fisheries and Oceans that there are 7.6 million harp seals on the East Coast, and so it seems there’s an abundance of seals. How do you more directly support the communities in Atlantic Canada to help grow their — you’ve mentioned programs, but what are some of the more stringent or stronger efforts that you could be doing to help those people in those small and often remote communities?
Mr. Reeves: Thank you very much for the question. First, I want to make it as clear as possible what we see our mandate as in this area.
First of all, the Trade Commissioner Service, as probably the committee understands well, is there to support our export-ready exporters. Usually the way in which we work with those exporters, including companies that export seal products, is that our missions abroad — our trade commissioners — receive requests from those companies and then action them.
It is true there are different ways to access the Trade Commissioner Service. Across our regional offices — including one in Halifax, for example — our trade commissioners there often engage with our clients, our Canadian companies, and once they have assisted them to prepare for exporting abroad — we call it preparation for international markets — our trade commissioners in the regional offices will connect those companies with our teams abroad.
Generally speaking, Global Affairs Canada is responsible for delivering on the Government of Canada’s foreign policy and supporting other government departments in terms of their international objectives.
When it comes to seal products and seal products companies, we work very closely to support our federal partners, and the mandates of these partners are a little different.
First of all, the Department of Fisheries and Oceans does have a clear mandate to lead on market development and access for seal products. We work closely with Agriculture and Agri-Food Canada, which has a mandate for the market development abroad for products for human consumption — for example, seal meat — or for those products that could be used for pet food or in aquaculture.
Generally, that is the way we work. We do have additional programs, which I touched on in the opening statement, that includes the CanExport program. Ms. Pye, could I turn to you to touch on how the CanExport program can assist communities as well, not just companies?
Sarah Pye, Executive Director, Agriculture, Ecommerce, IP, Mining, Responsive Sectors, and Bureau Coordination, Global Affairs Canada: Thank you very much, Madam Chair. I’ll talk about our CanExport program, which is our flagship program at the Trade Commissioner Service to support Canadian SMEs specifically in diversifying their markets. That’s the objective of the program — to encourage Canadian companies to have a diverse portfolio of exports around the world so it provides more stability. Companies that trade are companies that tend to stick around longer and create jobs and innovation.
The CanExport program has existed since 2016, and it has grown ever since it was developed. It currently has a budget of about $30 million a year. We receive about 2,000 applications a year, and we’re able to fund about 60% of them before our budget runs out.
The program itself has four pillars. It has an SME pillar, which is its most popular or well-funded pillar, and that is where individual SMEs, such as sealing companies or other SMEs, would apply to seek funding. They can get up to $75,000 in grants and contributions. There is a cost share associated with that to make sure we are funding legitimate and export-ready companies that have some skin in the game. That funding can be applied to a number of things, including certification, which can be very market specific, marketing products, translating products into a specific language — for example, German, or whatever market it is you want to engage. You could hire a consultant to produce a market plan for a specific market. We would pay for travel if you wanted to go and meet with potential buyers.
It’s a popular program. It recently received an additional $35 million under Budget 2022 for intellectual property protection, which is an interesting thing in the context of seals because there are quite a few high-value innovative products that are coming out of some of these companies, and the ability to protect their intellectual property in markets abroad, especially in China and other places, will be key to their success.
In addition to SMEs, there are three other pillars. One is small, but it is relevant to our seal product producers, and that’s innovation. It allows you to seek up to $75,000 in funding to develop research and development partnerships with a foreign partner to develop a product that would work in the local market.
We have an associations program, and we will often fund associations to do capacity building among their members — how to export, where are the markets — some very basic things to more high-level things. We have funded a number of Indigenous associations over the years to help many Indigenous small- and medium-sized enterprises to export.
Finally, you asked me to talk about communities. We have an investment pillar, it is the opposite, where we’re attracting investment. That is a community-based program where we fund communities to allow them to try to attract headquarters, for instance. Not precisely what might be supported for our seal companies, but through these programs we are able to support quite a few Canadians in reaching their markets abroad.
Senator Quinn: You’ve mentioned the work you do, or the various mandates, and the departments you’ve mentioned, like Agriculture and Agri-Food Canada and DFO. I am looking to see what strategic discussions occur because within your department you also have the former Canadian International Development Agency and their work with countries and also populations in need. What strategic discussions do you have so that we get beyond the vertical mandates and come to a horizontal discussion that talks about what Canada can do to help feed the world, if you will, with a species we have an abundance of? Is there an opportunity, if those discussions are not occurring, to have a target — forgetting about who has what mandate — but saying that we have what some believe, or argue, is an overpopulation of seals in the East Coast.
We’re told that a critical level is 5 million, so there is 2.6 million above what you’ve been told is the critical level for a sustainable seal population. What discussions take place on how we may be able to use that abundance to feed back into the new mandate for Global Affairs Canada, but also respecting the science that talks about the seal population and what effects it may have on our own fish stocks so that it can create jobs in small communities?
Are those horizontal strategic discussions occurring? Not at conferences, but within departments — sitting down in a focused manner? And, if so, how often?
Mr. Reeves: Thank you very much for the question. I can give a number of examples.
I think I should probably preface the response by saying that, at the moment, as far as we’re aware, Global Affairs Canada has been engaged with a number of our partners in working-level and high-level discussions.
I can think recently, for example, of times where the issue around seal products and how to develop markets to support the exporters and the communities came up between the Atlantic Canada Opportunities Agency and Global Affairs, and between the Government of Newfoundland and Global Affairs at both the working and more senior levels. Certainly, in the last year to two years, there have been discussions with our partners at DFO and Agriculture and Agri-Food Canada. However, I would have to characterize those as sometimes informal, sometimes formal, but more exploratory than anything else, to the best of my knowledge.
Senator Quinn: My final comment is that I’m not talking about market development. I’m talking about Canada becoming a provider of protein in areas that are so lacking in that type of thing.
How do we move from the passive to the more active type of environment where we look to those leaders in our departments who bring the ideas to government? Would it be helpful if this committee were to make a recommendation that would say something like departments are encouraged to come together and proactively develop ideas that will help meet Canada’s international obligations, if you will, with respect to populations that are in need of protein? Something like that so that we can get a more proactive reaction on a multi-departmental basis without everybody worrying about whose mandate is what.
Mr. Reeves: I think what I’d like to say is that, first of all, we are very much focused in terms of supporting Canadian exporters abroad. That’s our raison d’être in Canada’s Trade Commissioner Service. I think it might be helpful background for the committee to understand that we really are organized, and we organize ourselves to maximize the economic benefit for Canada. We work very hard at that, and we’re very proud of our numbers.
For example, in 2021, the Trade Commissioner Service supported export sales directly of about $4 billion and we served over 10,000 clients. We survey our clients. There are regular quarterly surveys that go out that are triggered after we enter services into our system. There’s also another more in-depth survey that takes place. We know that our client satisfaction rate over the last four years has been just over 90%. As an organization, we work very hard to look at how to improve that incrementally every year.
It’s important to note that we look at where client demand around the world is highest. We even have an exercise each year that looks at Trade Commissioner positions that become vacant. At those particular times, if someone leaves a service, we think about whether we shall move a position to somewhere where client demand is higher. It’s all about maximizing the return to Canada.
For example, our information communications technology sector delivered 8,500 services last year and 620 successes. In terms of the seal products sector, it’s important for the committee to know that, at the current time, has been averaging over the last eight years about 12 to 13 service requests per year, a very small number. We have to think about that as an organization when we plan how we’re going to support a particular sector or the resources we put toward any particular sector.
That having been said, there’s no question, we are there to serve any export-ready Canadian company that comes to us. I think we provide a very good service around the world, and that includes seal products companies. In addition to that, we also provide additional programs for support. Ms. Pye just talked about one, the CanExport program. We have additional programs, and we can talk about ways in which we can specifically support under-represented groups, which include Indigenous-led businesses. We work very hard in these areas as well.
In terms of the second part of your question, if I could add a little bit around the seal protein side, I am aware that there’s been interest from the committee in terms of how to make better use of protein from the seal industry and whether that could be exported to areas of the world in need. I can underline to you that, certainly, Canada recognizes the urgent need to address global food insecurity around the world. We work closely with the World Food Programme to meet nutritional needs in various parts of the world.
At the moment, we are addressing global food insecurity in two different ways, in particular. One is short-term humanitarian assistance — immediate needs — and the other is, of course, a longer-term approach to development assistance.
Global Affairs Canada is currently coordinating with Agriculture and Agri-Food Canada on a whole-of-government response to this question, so there is some discussion going on. At the moment, where the Trade Commissioner Service absolutely can make a difference, if there are exporters and suppliers in Canada who do want to connect with non-governmental organizations overseas or governments overseas that are providing this food or nutritional assistance abroad, I am sure that the Trade Commissioner Service can play a role in connecting those interested exporters to the players, wherever they may be around the world. That is definitely something that we can currently do.
Senator Kutcher: Thank you to you all for being here this morning. I heard you discussing the sad state of our footballers yesterday before we started. I note that we won statistically, but we lost on the field. C’est la vie. Better luck next time.
Your testimony has been very helpful. It helped me to understand a bit more of these complex pathways. If I understand correctly, Global Affairs Canada services facilitate access, but they don’t drive market development in particular. Would that be fair? Or do you do a bit of both?
Mr. Reeves: I can tell you that I think the way we would describe it is we have a client-facing role. We’re very proud of that, and we work very hard with export-ready companies that are coming to overseas markets, are ready to export and have selected their markets. We work with them.
Very briefly — and I can talk in much greater detail, if you would like — we divide our services into four areas. One is preparation for international markets. That’s where we most typically work with a company or exporter, very often in Canada, and we ensure that they have the information they need to plan and target specific markets that they would like to develop for their products abroad. If that company is not ready for export, there are domestic programs that the Government of Canada offers, and we would typically refer a company that’s not export-ready to a program like Export Development Canada’s Trade Accelerator Program.
When it comes to seal products companies, if it’s to do with the certification in the EU market, for example, it could be CMAPS. It could be the Canadian Fish and Seafood Opportunities Fund under DFO. Agriculture and Agri-Food Canada also has their Indigenous Pathfinder service, so there are a variety of options there.
The second area is what we call market potential assessment. That is where we work with the company in their target markets to undertake market research to determine to what extent the product or service is marketable and if it would be profitable in that market. There are many different factors involved in that process, but it can be a fairly lengthy process as well.
We also provide advice to Canadian companies as to how to best market in that particular part of the world. Which trade shows are best suited to it? Which retail channels, depending on your needs? For seal products companies, for example, if there’s a real need to change consumer perceptions, which channels would be best suited to doing that? Would it be duty-free in airports? How can you get the word out? What connections can we help the company make in order to help change those perceptions? That could just be a list of some PR firms that could help, for example, if it were an industry association. That’s all part of market potential assessment.
The third area would be what we call qualified contacts. That is where the trade commissioner, with a very specific set of criteria, will identify potential buyers and distributors in those foreign markets, and will often undertake to contact each one and discuss. For those that are interested, we will then put them in contact with the prospective Canadian exporter.
The other category would be problem solving. Things don’t always work according to plan, and there are issues out there, so our folks get involved working with, in this case, the seal products exporter to resolve any issues that may come up.
Senator Kutcher: Thank you for that. That’s very helpful.
In your discussions earlier, you talked about the relationships you have with the agri-food industry. Are there similar relationships with DFO because you mentioned DFO? And are they for fin fish, crustaceans, et cetera? Do seals fit into that? I want to understand that relationship. What is DFO doing in those discussions to promote this?
Mr. Reeves: We would most often have specific interactions with DFO around supporting our communities of exporters where there may be market access issues or where our missions are looking for public speaking points to address some of the misinformation that is put out there in markets abroad by animal rights activists, for example.
Because DFO has the lead in this area, our missions would usually go back to our department, which would then defer to the Department of Fisheries and Oceans Canada for lines as to what we should say publicly and how we respond to misinformation or allegations in the local market.
It can work the other way, also. There might be communities, provincial partners or others that are looking to work to operationalize or take better advantage of the Indigenous exemption offered by the EU. How do we put that into practice? They may come to us for assistance, for example, with the EU. I know our embassy to the EU in Brussels has been quite active and has raised on a number of occasions in formal settings — formal Canada-EU discussions — issues to do with market access for seal products. That’s the other way it would work.
Senator Kutcher: That’s good.
Could I just follow up because I’m trying to understand a bit better?
Would it be reasonable to say — and please don’t let me put words in your mouth at all — that the relationship you have with Agriculture and Agri-food is more mature than the DFO relationship? I’m aware of the changes in canola marketing, for example — a huge shift in changes to canola marketing. A lot of that led to a lovely collaboration between Agriculture and Agri-Food and Global Affairs Canada, but I don’t see the same kind of activity with DFO and Global Affairs Canada. Am I missing it?
Mr. Reeves: I think that view is correct, but I think it’s natural, in a way, because Agriculture and Agri-Food Canada, like the Trade Commissioner Service, is very much focused on market development. Agriculture and Agri-Food Canada has a number of trade commissioners that they place in our markets abroad who work seamlessly with us.
Senator Kutcher: DFO doesn’t have that?
Mr. Reeves: DFO doesn’t have that, to the best of my knowledge.
Senator Kutcher: I’m completely out of my wheelhouse here, so I’m trying to understand this stuff.
It might be helpful — I’m just thinking out loud — if DFO had that.
We have heard quite a bit of recent discussion, appropriately so, about Canada reallocating its foreign affairs interests into the Indo-Pacific region. We’ve had the ACM conference. I was head of mission for the Asian-Pacific Parliamentary Forum meetings. We’ve had a lot of focus — ministers are sailing through the straits. There has been a lot of activity, a lot of discussions and a lot of new money being announced by the Prime Minister. That’s good, I think we need to move in there.
I notice that Cambodia was one of the largest markets for seal products, which I found interesting. I had no idea. I don’t know what they use it for. I’d like to find out.
Does Global Affairs talk with DFO and say, “Look, we see there is a new Indo-Pacific strategy emerging — Cambodia, China and Hong Kong are already the largest markets for these kinds of products.” Do you have those kinds of discussions to point out an emerging area and to see what DFO can actually do within it as a marketing opportunity?
Mr. Reeves: Thank you very much for the question.
To the best of my knowledge regarding that sort of strategic discussion on the Indo-Pacific region with DFO, I’m not aware that there have been those kinds of conversations. I do very much agree — it’s also our assessment — that markets in Asia currently appear to be fairly promising for this sector. We have seen some recent indications that exports could continue to increase to that region.
Senator Kutcher: I have a bunch of other things, but I think maybe I should step back and let others go.
Senator McPhedran: This will be a good segue from those questions.
I’d like to better understand the interconnection, if there is one, between the Certification and Market Access Program for Seals, which was launched back in 2015 and has funding. I have a bunch of questions related to that, but probably the first important question is this: Do you have a relationship or a place within that program? It is a funding source. It has a number of key priorities, including to build capacity, improve market access and establish a tracking system for certified Indigenous seal products.
It looks like Ms. Pye is familiar with this, but first of all, is there a relationship? Then I have a number of questions if there is a relationship.
Mr. Reeves: Maybe I can begin with the first response, and Ms. Pye is free to add. I’ll do my best to answer this question.
As the committee well knows and appreciates, Canada has long been the world’s largest exporter of seal products. As we all know, negative media reports and anti-sealing messaging from animal rights groups had major impacts. Just to recap, between 2005 and 2017, according to our statistics, Canada exported about $69 million worth of seal and seal-related products to 49 countries.
However, uncertainty in global markets and market access restrictions in both the EU in 2010 and in other jurisdictions negatively impacted our exports.
Between 2017 and 2021, for example, Canada exported, in terms of seal skins, just over $6,000 worth to only two countries. As we know, the European Commission banned the import of seal products in 2009. Canada challenged in 2011 and 2014. This was done in close consultation, of course, with DFO. The EU successfully defended against Canada and Norway at that time.
Of course, throughout this period, we have had close discussion and interaction with Fisheries and Oceans Canada. When Canada secured an exemption for Canadian Indigenous communities, that cooperation was evident. I think it continued when Canada and the EU signed a joint statement in 2014 providing the framework to operationalize that exemption.
Also, there has been discussion, and we have absolutely noted the work being done by the Northwest Territories and Nunavut as certification bodies as well as some of their efforts to operationalize this exemption. Discussions with DFO have been part of that. Under CMAPS, I’m also aware that there has been participation from Global Affairs Canada in discussions around CMAPS in terms of including a valuation of how that program has worked, and some discussion or input from Global Affairs Canada has been sought by DFO in terms of how that program has worked.
That is what I can tell you. There has certainly been a history of discussion and cooperation back and forth.
Senator McPhedran: Thank you.
Anything to add, Ms. Pye?
Ms. Pye: No, I was just going to add that to my knowledge we’re not actively involved. Although there would have been strategic discussions, probably, on program design, and we all do that, “Oh, your CanExport works. Tell me what your lessons learned were, so we can learn from each other.” But we’re not involved on the day-to-day adjudication of the various proposals that come in or by providing our opinion.
Whereas on the CanExport side, for example, should an agriculture association, such as the Seals and Sealing Network, make an application, the CanExport team would consult my team as the lead on agriculture, and we would take a look at that and provide our thoughts.
Senator McPhedran: In the review of CMAPS, DFO identified a number of areas for considerable improvement. The funding that comes into the CMAPS program, is any of your funding part of that? For example, the increase that you just announced for your program, that’s not related in any way to the funding that is sitting in CMAPS?
Ms. Pye: No, it’s not. That funding would come straight to our department into our A-base for the CanExport program.
Senator McPhedran: We have some potential for improvements here. It looks like we have some resources to work with. You can appreciate that part of what we’re trying to do as a committee is to come up with achievable recommendations for improvement to address, I think, what we would all agree is a significant underperformance of the potential.
In that assessment by Fisheries and Oceans Canada, they really zeroed in on some of the perception issues, and I think that you have also identified this in some of your responses.
I have a two-part question. My first part is: Do you work only with responding to individual companies — exporters — or do you develop a whole of group strategy as well? In particular, are you or would you be able to do that in relation to this industry?
Mr. Reeves: Thank you, again, Madam Chair, for the question, and I will attempt an answer as follows.
I mentioned that the Trade Commissioner Service does provide what we call advocacy services to our export-ready companies abroad. There are a couple of ways in which we do advocate for Canada and Canadian economic interest. One is advice to our companies, sometimes to counter disinformation, and we help those companies, for example, find platforms where they can express in a public forum and get those opinions out. There are trade shows. We can connect companies with media, PR firms and provide advice working as a consortium. Even in the case of Indigenous-led seals products companies, there can be occasions where our cultural diplomacy programs abroad, which are there to support Indigenous artists and Indigenous performers, could be used and leveraged in some cases.
Senator McPhedran: Good point.
Mr. Reeves: The other way is advocacy, which Global Affairs Canada provides abroad, normally at the request of industry and government stakeholders, and there are many examples. I can think of the work we do in the United States around softwood lumber, or, for example, I was very involved in Asia, advocating in a number of markets on behalf of Canadian beef following the discovery of BSE, again, to change perceptions and to correct perceptions as well.
We do that, and it often would involve, again, organizing seminars, conferences, bringing key Canadian or other officials through the market for a speaking role, trade missions and local media coverage to cover these events.
It also includes, as I mentioned, advocating directly to foreign governments. For example, right now, I know that our mission in London has engaged in advocacy around a proposed U.K. legislative ban for fur that has been discussed. It sometimes includes discussions around — in the EU context — people-to-people linkages between European and Canadian Inuit communities. There’s been an interest in forging those relationships. I know that a number of our heads of mission, past and present, have had discussions with the EU on addressing the socio-economic dimension as well within our existing dialogues. There are a number of ways in which we can do this.
In most cases where our organization has engaged in advocacy, there are — that I can recall — usually a significant number of stakeholders — both industry and government departments — involved, and usually we’re talking about where there’s a significant benefit or impact on the Canadian economy as well.
Senator McPhedran: One of the other findings in the assessment of CMAPS was that there is still a lot of uncertainty about the way in which this exemption for Indigenous products actually operates, and there was a finding that Indigenous exporters don’t have access to the EU markets, partly because that gateway or certification process is just not clear, fully implemented or operationalized, shall we say.
Is this being addressed by you, and if it’s not, is it being addressed by someone else in the government? Are we partly challenged by silos here? Is there potential here for much more cross-departmental cooperation to try and deal with this gateway issue?
Mr. Reeves: Thank you for the question. What I am aware of, and I did allude to it earlier, is that our mission in Brussels, including our head of mission there and other Canadian diplomats who are working there, have regularly engaged with our European colleagues and the European Commission on this issue.
We have put these issues on the agenda. I know our team is aware of some of these issues in terms of, if we can call it, operationalizing the EU Indigenous exemption. I know there’s awareness there, and I know that discussions have been taking place. That’s probably as much detail as I can offer you at the moment.
Senator McPhedran: One quick point of clarification, if I may. It seems to me that you’ve described one part of a communication process that is really important, and that is toward the EU. My question also contains asking for information about the producers themselves. This uncertainty around certification is not only on the EU or trade relationship side, but it would also appear to be among the producers themselves, and it would appear to be a very significant barrier. There’s a need for clarification or information sharing, probably for barrier removal.
Are you involved in that, and could you be involved with that if you’re not currently?
Mr. Reeves: Currently, the way the Trade Commissioner Service gets involved in those issues is that it’s brought to us most often by an export-ready company or association in the seals products area that has targeted and specified a market where they see significant potential, but where there are some barriers. They come to our teams abroad, to their regional office or sometimes it’s going through another partner.
I can give you a fairly positive and recent example of how this has worked. We became aware of this in the last month. Canada, Newfoundland and Labrador and Taiwan have now agreed in principle on a formula that will facilitate export to Taiwan of seal oil products harvested by Canadian Indigenous people. The Taiwanese government is currently reviewing a revised — we hope final — version of an import certificate. Once approved, the Taiwanese companies that are interested will be able to import seal oil harvested by Indigenous peoples in Newfoundland and Labrador.
This success, I should note, was the culmination of a long, 8-year advocacy campaign — if we want to call it — by both our mission in Taipei, by DFO, by Agriculture and Agri-Food Canada and by the Province of Newfoundland and Labrador. It was originally Newfoundland that brought this to the attention of our mission in Taipei. Our trade commissioners in Taipei estimate that once the market there is fully developed, this could be worth about $2 million in exports a year.
The certificate is being finalized right now. It’s interesting in that Taiwan banned imports of Canadian seal products in 2011, but adopted an Indigenous exemption following the EU example.
Here is an example of another market outside the EU that had a similar exemption opportunity. It did take some time to come to an agreement, but this is how it worked. Our post in Taiwan has shared this news with us recently, and is quite confident that this will be put into practice very soon.
Senator McPhedran: Thank you. That is very positive.
I’m going to try to hone my questions to one question, and I think it can be a yes or no answer.
Does Global Affairs Canada have a role to play in clarifying the requirements to certification that would appear to be a barrier to the Indigenous producers?
Mr. Reeves: I think I would have to say yes.
Senator McPhedran: Great. Thank you.
Senator Cordy: Thank you very much. I’ve found that it’s been very helpful today. We’ve heard from so many government departments, and you’re sort of thinking, well, how is this all going to fit together? You’ve certainly helped us to do that.
Our committee is studying the seal population and the effect on the fisheries. We didn’t have to hear from witnesses from the fisheries to know this. Being from Atlantic Canada, we all know that the seal population is exploding and that hungry seals eat lots of fish, so it creates a problem. Our questions have all been leading to how can we find markets for seal products so that we can have a win-win situation.
I was interested to hear about the cultural diplomacy aspect of some of the things your department does. Certainly, when we look at the seal hunt and the amount of misinformation that’s been out there — the rock stars and movie stars all going out to take their pictures. If they only knew that this was hurting the seals, and particularly the pups, which they all seem to want to have pictures taken with.
How do we counter this misinformation? A friend of mine was once Minister of Fisheries. He said that his staff noticed an article in the Boston newspaper about the seal fishery in Atlantic Canada. Of course, there was blood on the snow, which creates a very graphic picture. The staff person said that what the people in Boston didn’t realize was that the seal hunt had been delayed by a day. In fact, there had not been a seal hunt. But that graphic picture would be what would stay in people’s minds, not the coverage the next day that this was all misinformation.
How do we overcome that type of thing? When those types of incidents were happening, the seal industry started to go into decline. Maybe I’m wrong about that, but as somebody who doesn’t know that much about the fishery, that seemed to be what happened.
How do we overcome that? I’m really glad you spoke about cultural diplomacy. It takes a lot longer to have cultural diplomacy than it does when you have a snapshot.
Mr. Reeves: Thank you very much for the question. It is a very important point and key to this discussion. There are a number of ways I could answer the question and by which this issue could be addressed.
Through the programs we offer and the financial support to our companies, in order to undertake some of those activities, public relations activities in target markets abroad have to be part of it and would be key. That is one piece.
There may be additional ways that we could suggest. I’m thinking in terms of our own experiences abroad as trade commissioners.
For example, in the EU case, we know that for EU consumers, animal rights activists and some of the misinformation around our sustainable and humane, Indigenous-led seal hunt or harvest in Canada had a lasting impact. We also know that in the EU, generally speaking, the population and consumers have a high regard and great interest in Indigenous culture and art. That is why I think there are possibly ways that one could leverage the cultural diplomacy programming to start to help change perceptions and focus people on the issue that we’re talking about here today.
I also note that there may be a role for us in building Indigenous networks abroad for our exporters as well. There are some interesting things happening at the moment.
I might defer to my colleague Mr. Neale, who I know is very knowledgeable about how we work with Indigenous companies and determine what their needs are.
I would also flag that there are some new developments in this space. For example, under the Indigenous Peoples Economic and Trade Cooperation Arrangement initiative that Canada signed last year — this is with a number of other APEC economies — Canada and others have committed to helping Indigenous companies take full advantage of trade agreements and establish networks across countries that Indigenous-led businesses can use to support themselves and access markets abroad. I think these are some of the ideas that could be helpful around this issue.
Nigel Neale, Director, Inclusive Trade, FTA Promotion and Trade Missions Division, Global Affairs Canada: Good morning, senators. If I may open with one quote from the Minister of International Trade, who is in fact our minister, during Small Business Week last month, when she said:
We also know that . . . Indigenous people face systemic barriers when trying to start and grow their business—but when we help them succeed, we help grow local economies for everyone.
That is the premise with which we do our work. I’ll take a moment to mention that Global Affairs Canada is in the process of finalizing a very broad — if not the broadest — study of Indigenous businesses in Canada, in cooperation with the Canadian Council for Aboriginal Business, or CCAB, and a number of other partners.
If I may take a moment to explain some of the preliminary findings, we found them very interesting. This was run in 2021 for experiences over 2020 — of course, the year of the pandemic. There were 2,600 Indigenous companies that responded. Of those, almost 1,700 were small- and medium-sized enterprises, and 111 of them are active exporters.
Some statistics that are worth mentioning: There’s a larger percentage of women-owned Indigenous SMEs than the Canadian average, 39% versus 17%. Smaller SMEs tend to export more than larger SMEs, which goes counter to economic theory. Very interestingly for this committee, SMEs in the natural resource sector, which includes fisheries, agriculture, forestry and mining, have a lower propensity to export, but this might be explained by the fact that many of those sales are going into other Canadian companies therefore building their value chain. There was a reference earlier in this conversation about a lack of traceability. These inputs could, in fact, be going into export markets. Lastly, Indigenous companies have an outsized propensity to want to start exporting compared to the Canadian average, 16% versus 4%.
We operate under the principle that you can’t manage what you can’t measure. These data are important to inform our work.
If I can turn to some of the work we are doing to help our Indigenous companies, there was reference made earlier by my colleague Mr. Reeves. We have Indigenous champions that are placed in our regional offices across Canada. There are six of them. They offer a number of dedicated services to help Indigenous companies.
They can be summarized in four vectors. One is helping recruit Indigenous companies to participate in trade missions and delegations abroad. One is helping to support accelerators to help them build their business. Another is participating in events internationally, and lastly, on certification — perhaps not the certification that Senator McPhedran is referring to, but certification as an Indigenous business to participate in supplier diversity largely with American companies.
If I may give you an example of each of those, in business delegations, we worked as a team and recruited 25 Indigenous businesses to the Reservation Economic Summit in Las Vegas last summer. In terms of events and visits, we recruited 15 Inuit artists to go to our embassy in Warsaw to participate in a commercial art exhibit. As an example, at June, over half of those works of art had been sold. These are examples of the work we’re doing.
In terms of the accelerator, our regional office in Calgary has pulled together an e-commerce accelerator, and a number of Indigenous companies had participated in that to build their capacity.
I might leave it there in terms of some of the dedicated services that we are providing to Indigenous companies.
Mr. Reeves: Madam Chair, does that answer the question? There are a lot of pieces there. What we’re saying is we’re confident that Global Affairs Canada, through the Trade Commissioner Service, can assist with advocacy and changing perceptions abroad. We work closely with export-ready companies that, when they’re export-ready, we have programs within our own department that can assist and provide some of the funding to help those companies with those programs to deliver on the advice that’s given by our trade commissioners abroad. Of course, there are other programs across the Government of Canada, as you’re aware, that can also support those companies, in this case, the seal products exporters.
For us, it is key. We work with export-ready companies. That’s what we need. We would look to other partners — federal partners here and at all levels of government — to assist the industry to become export-ready. We’ve always said that in the Trade Commissioner Service there are three factors we need to see success in any sector of the economy.
One is export-readiness among the companies. There are a lot of factors that go into that. We need the market opportunity, obviously. We also need the interest among the exporters to do so, or the supply has to be there. It sounds a little bit strange perhaps, but we have many examples where our trade commissioners will find a great lead, a great sales opportunity. We come back, we knock on the doors of a number of companies and companies don’t take us up on it here in Canada because, perhaps, they’re exporting 100% of what they produce — not seal products, but something else — to the United States, and their margins are higher because the transportation costs are lower, so they don’t want to take advantage. Those three factors always need to be true for us to engage fully and to make a difference.
Senator Cordy: Thank you very much. I’ll get the transcript and get all those specifics later on.
You did say the markets in Asia seem to be promising. You spoke about Cambodia being the largest market for seal products. Does anybody look at Cambodia, look at the Asian markets to ask why it is successful in Cambodia and whether that can be transferred to other markets? How do we sell it to other markets outside of Asia or even more within Asia?
Mr. Reeves: Madam Chair, let me give you a quick snapshot of what we know about Asian markets and our exports of seal products right now. I have to say this is based on data from our own tracking system. We call it TRIO. Because the volumes and the numbers are fairly small, it just gives an indication. We haven’t been able to definitively provide a lot of information about trends or opportunities. But I think there’s enough here that gives a snapshot of some of what is going on, which I think could be of interest.
I did say that over the last eight years, between 2013 and 2021, we’ve delivered our trade commissions 110 services to seal products exporters. Those are 23 clients and 9 partner organizations. The majority of the services were provided by a small number of our missions abroad. In Europe, it was London, Copenhagen, Oslo and Stockholm. In Asia, it was Japan, China, Taiwan and Hong Kong. This is where we worked with Canadian seal products exporters over the last eight-year period.
During that time, we recorded, as an organization, 21 what we call “successes” — where exports happened.
I can tell you what some of them were. Seal oil exports to Norway was very recent, following the Canadian Food Inspection Agency’s completion of an export certificate there in late 2021. We know that there were sales estimated at about $250,000 quite recently to Norway of seal oil products. I cannot say so definitively, but we had some indication that some of those shipments were transshipped from Norway to China. That was one.
Through our regional office in Calgary, working closely with an exporter, we were able to sell into China. This was an e-commerce example, which I think is an interesting area for seal products exporters to pursue as a way of reaching international markets. This was through China’s list of imported commodities for retail and cross-border e-commerce. That was one success.
There has reportedly been some success of seal oil going into Hong Kong. I mentioned the recent progress in Taiwan that has just been made. Also, colleagues at Fisheries and Oceans have noted seal oil sales have been made in Vietnam and Japan.
For seal skins and pelts, the numbers are smaller. There have been exports recorded to Japan and Korea, as well to the EU, but those numbers are very small. The opinions back from some of our posts in the EU are that those exports were probably commercial samples only.
In total, the export values that we know about from 2005 to 2017 was $69 million to 49 countries. The peak was in 2006. That was $18 million, and that was mainly raw seal skin and furs. For 2017 to 2021, the total export of seal skins and pelts to Japan and Korea was just over $6,000, which wasn’t a lot. Most recently, in 2021, we are recording export of a value of approximately $275,000, which was mainly seal oil and fats, to Asian markets. Then we had the recent success recorded for Norway as well.
That is what we know. It’s not a lot of volume, but it does paint a bit of a picture and gives us an idea of where the current markets are and for which kinds of products.
Senator Cordy: Has there been follow up on that? You’ve gotten a crack in the market, basically. Do you follow up to see how you broaden the crack and make it a wider market, or do you just look at the statistics as they come in?
Mr. Reeves: Oh, no, absolutely. Our focus is all about client service. Our trade commissioners each know their numbers individually. We debate internally — whether it’s a good thing or not — but, to some extent, their performance is evaluated based on those statistics. As an organization and for individual missions abroad, they know their numbers for client satisfaction.
It’s all about working closely with our clients to help them achieve their objectives. That’s what our focus is.
Senator Cordy: Trade missions abroad — we all know trade missions in specific areas of the country or for specific products. Are there trade missions specifically for seal products or in conjunction with fisheries overall?
Mr. Reeves: At this time, not that I am aware of. I can’t think of —
Mr. Neale: No. Trade missions — and that’s actually another part of the portfolio that I have in my current capacity — are organized around priority sectors that are developed in consultation with our missions abroad, and also with other geographic colleagues within our department.
I’ll give you an example. In January, we’ll be going to Chile on a clean tech mission led by the Minister of International Trade. Those tend to be, and have been, in the more technologically advanced sectors — clean tech and information and communications technology being two of the big ones.
As Mr. Reeves mentioned earlier, we’re focused on where the best chance is for commercial success for the companies that are part of our network and that we work with.
Mr. Reeves: [Technical difficulties] since 2019, we have been working actively to support trade missions of Indigenous-led business. Usually those would be multi-sector in most cases, but there are opportunities for export-ready, Indigenous-led seal products companies to join these missions to various markets.
The Deputy Chair: We have the luxury of extra time. I’m going to go to a second round for senators who have indicated they would like to ask questions.
Senator Quinn: Mine are pretty short questions.
The lobbying against the seal hunt in Canada goes back many years, and it continues to occur, of course. I’m sure they have been effective and had a major impact on demand for Canadian seal products.
As part of your sensitization of the marketplace, do you meet with those types of organizations, such as the International Fund for Animal Welfare? Do you talk with them so they have an understanding of what the strategy is in terms of how we’re trying to take advantage, in a humane way, of a stock that is in overabundance? Do you meet with those types of organizations?
Mr. Reeves: Thank you for the question. I think I can provide only a partial answer to that. It would be our colleagues in Europe who have likely been the most engaged in that space.
Senator Quinn: You could submit that to the committee, if you wanted to check that out.
Mr. Reeves: I can absolutely do that. We can check with our European colleagues.
If I understand correctly, your question is this: To what extent and do our colleagues proactively engage with some of the animal rights activists in order to explain Canada’s position and to try to correct some of the misperceptions and misinformation?
Senator Quinn: Yes.
Mr. Reeves: I would certainly do that.
I can tell you from my three-year experience posted to The Hague in Europe — not regarding seal products — but there were occasions when we did meet with organizations on different environmental-related files. That does happen, and it happens in a range of situations. There are non-governmental organizations with whom we work closely on climate change, for example, as partners. There are others that are more activists where we have disagreements. From my experience as a diplomat in Europe, we have, on a few occasions, sat down with those organizations, usually when they came to us, for example, to organize a protest outside a Canadian embassy and that sort of thing. But, for the moment, that’s what I can say.
Senator Quinn: I have two quick other topics.
Your officials would work with fish exporters as well to help them develop their markets, reach out and connect them with customers, and things like that to help grow that part of it. As you work with them, do they express concerns with the seal population and the effects of the seal populations on our fish stocks?
Mr. Reeves: I might ask my colleague Ms. Pye, who came back recently from the Seal Summit in St. John’s, if she has any reflections there.
Ms. Pye: Sure. Thank you very much for the question.
Do they raise those issues in discussion with us when they’re seeking market access for fish? This could be anecdotally or informally. However, I’m now quite up-to-date on having had the opportunity to participate in the Seal Summit a few weeks ago, and the challenge there is a domestic one in terms of the departments that would address those concerns, as mentioned. We may flag it in discussions with DFO, for example, but those would primarily be informal.
However, the Seal Summit was a wonderful opportunity for my department, for Global Affairs Canada, to be present and to hear — and I learned quite a bit — from seal producers and fisheries companies, as well as Canadians, Indigenous traditional hunters and academia. Of course, DFO, the Atlantic Canada Opportunities Agency, Innovation, Science and Economic Development Canada and Global Affairs Canada were there. It was an eye-opening summit.
I am somewhat familiar with this issue having been in Geneva and posted to the mission there when the case was brought. I’m not a lawyer and I was not on that team, but I was there when this all went down at the World Trade Organization, where we also advocated heavily across committees and at every opportunity we had during that time on the sustainability and humane nature of our hunt.
In that context, yes, there were lots of opportunities for me to hear from industry about the challenges; that is, about the challenges related to the fisheries, about what’s going on there and about the impact that it was having on our fisheries companies — not only their ability to fish, but also their ability to sell into the States. For example, I heard about seals following their boat, eating from their net and other challenges that they’re facing. That was eye-opening for me. Being familiar with the Indigenous ban, I remember going into St. John’s to buy some seal products and wanting to know if it was a traditional or commercial product but not being able to tell.
That was a wonderful opportunity for our department to get up to speed on the latest and greatest, meet with my colleagues at DFO, build those relationships and then bring that back home and share with both our posts abroad and our colleagues at headquarters some of the issues that the industry is facing right now, as well as some of the opportunities, programs and partnerships available to support companies.
Senator Quinn: I wanted to ask that because eventually the committee is hoping to meet with fishers, people on the ground, people on the boats, things of that nature and hear their views. That’s part of our strategy. Hopefully, we won’t see any seals dragging nets to help ease their feeding habit. In any case, I really appreciate that response. Thank you.
Senator McPhedran: I want to pick up on some points made by you, Mr. Neale, and make a specific request so that we can hopefully have this information as part of the evidence that we have to base our report on.
How soon do you expect this report to be finished? Could we please have it sent here?
Mr. Neale: Absolutely. The report, if I didn’t mention, is being led by our Office of the Chief Economist at Global Affairs Canada. We have the preliminary results. I understand that the final public report is due early next year, but I will commit to ensuring that’s shared with the committee.
Senator McPhedran: Thank you. You referenced certification, and then there seemed to be some hesitancy about whether it was a certification that I identified in my previous questions. I’m going to turn that into a follow up question and ask if the certification could include what’s been described in considerable detail in the CMAPS review by fisheries. Could you turn your minds to that if it’s not already part of that? That’s in relation to the EU.
Ms. Pye: That was another interesting thing about my participation in the Seal Summit. Having previously been director of the CanExport program, which I adore — I adore my current job as well — I took away from that, “Here’s an opportunity. Do we fund certification for access to the EU market? If it’s not clear that we do, then we should make that clear.”
That is an opportunity under CanExport SME. We do support and provide costs covering for certification, and we can even do that with a provincial or federal partner. We could fund it if that service were being provided, for example, by the Province of Newfoundland and Labrador. Again, that was useful information to bring back from the summit and to have a discussion with my colleagues about it. The request has never come in specifically for it, but it was important to ensure that we’re aware of that potential need and to market it as we market the program.
Senator McPhedran: Great. We may not be part of it, but we can know there will be further discussions on this and that the CMAPS report will be taken into consideration. Thank you.
The Deputy Chair: Seeing no other questions from my colleagues, I have a question myself. The advantage of being the chair of a committee is you can listen to all the questions from my esteemed colleagues and the amazing answers you’ve supplied.
My question is perhaps a focus of everything that’s been discussed here today. I’m not sure who would like to comment on this blue sky question, but, as our study suggests, we are looking at the use of whole animal products, including seal meat and oil, of course, and, as a focus of that, specifically on seal meat. That is a very touchy subject, as we talked about, namely, the push back specifically in the EU and other countries. That is in juxtaposition to the fact that around the world there’s no argument that there is an emerging protein emergency, a global food insecurity, that’s looming on the horizon.
What would it take and what departments would be engaged? In your experience, could you comment on how Canada can develop a strategy to address specifically the food insecurity in markets like Asia and Africa, where there is a need for protein products for human consumption? If there is anyone who would like to comment on that?
Mr. Reeves: Thank you, Madam Chair, for the question. As I mentioned, I know, but I don’t know the detail of the conversation that occurred between Global Affairs Canada and Agriculture and Agri-Food Canada on this question. We do know that Agriculture and Agri-Food Canada, within the federal family, has the lead on market development for products for human consumption, and that includes seal meat. Our two departments work closely together and seamlessly abroad in terms of delivering that market development work. That is one aspect of an answer.
I’m not aware of the details of that discussion or what the substance or intent of that is. As I mentioned before, in terms of our role at the Trade Commissioner Service, we’re there to support the exporters 100%, those that are export-ready.
The Deputy Chair: My question is more of a proactively focused question. I’m told there’s an issue with interpretation at the moment. We’ll suspend for a moment or two to see if we can get a thumbs-up.
Thank you for your patience. I’m not sure what the technological problem was, but obviously we’re back on track. I hope you can continue to address my comment.
Mr. Reeves: Thank you very much. The other aspect to this that may be relevant is that within Global Affairs, we are an amalgamated department. We work closely with our international development assistance folks as well, and there has been internal discussion in terms of aligning that trade development nexus, where we see opportunities to achieve some of our international assistance goals while at the same time involving Canadian exporters and supporting economic benefit to Canada, potentially, at the same time. There are crossovers between these two areas.
There is an interest in identifying areas of opportunity. At this point in time, I am not aware if there has been any discussion in supporting our seal products exporters in this way or in this phase.
The Deputy Chair: I appreciate that, and I understand it was a blue sky question.
Thank you, Mr. Reeves, and your colleagues, for taking the time to appear before us today. The extra time we took to pick your brains is evidence that we found your work and testimony incredibly helpful and important to where we are going in our study and recommendations.
Thank you for your indulgence and your in-depth answers to our questions. Good luck with all of your challenges.
(The committee adjourned.)