:
Thank you Mr. Chair. We greatly appreciate your invitation to be here.
Given that there's another group that is not here, we will try to keep you entertained for as long as we reasonably can.
My name is Dennis Prouse. I'm vice-president of government affairs. Seated with me is Dr. Steven Yarrow, who is vice-president of biotechnology.
CropLife Canada is the trade association representing the manufacturers, developers, and distributors of plant sciences innovations, including pest control products and plant biotechnology, for use in agriculture, urban, and public health settings. We're committed to protecting human health and the environment, and providing a safe, abundant food supply for Canadians. We believe in driving innovation through continuous research. CropLife Canada is a member of CropLife International, a global federation representing the plant sciences industry in 91 countries.
Our mission is to enable the plant science industry to bring the benefits of its technologies to farmers and the public. Those benefits manifest themselves in many different forms, including driving agricultural exports, job creation, strengthening the rural economy, and increased tax revenue for governments.
The increased yields that farmers get when they use crop protection and plant biotechnology products do more than improve the bottom line for farmers. They also stimulate economic activity that flows throughout the entire Canadian economy.
Crop protection products and plant biotechnology lead to quality and yield enhancements that have led to 97,000 additional full-time Canadian jobs in more than 20 different sectors. Increased crop production due to plant science technology generates $7.9 billion in value for farmers of field, fruit, and vegetable crops, and creates $385 million in tax revenue for federal, provincial, and municipal governments. Plant science technologies also enhance Canada's standing as a net exporter of food. About 65% of Canada's food surplus can be attributed to increased yields because farmers had access to our technologies.
As you can see, Mr. Chair, our members are strong free traders. We know that trade and innovation are the two key pillars of growth and prosperity in Canada, and CETA supports both of those pillars. The grower groups that are members of the GrowCanada partnership also see export growth as a key to prosperity for Canadian farmers, which is why you will see strong support for CETA amongst every major grower group in Canada.
Current agrifood exports to the European Union are $2.4 billion a year. When completely implemented, CETA will eliminate tariffs on virtually all of Canada's agriculture and food products. The Canadian Agri-Food Trade Alliance believes that CETA could increase total agrifood exports to the EU by an additional $1.5 billion per year.
Across Canada, nine out of every ten farms are dependent on exports. This represents 210,000 farms and includes a majority of farms in every province. Canada's food processing sector employs a further 290,000 Canadians. Together these industries support over $44 billion in annual exports and account for 11% of Canada's gross domestic product. The fact that Canada was able to secure such broad and meaningful access to an export market as large as the European Union is a significant achievement. The fact that we did so ahead of our major competitors is even better.
There are two key issues that we would like to bring to the attention of the committee regarding our trading relationship with Europe.
The first is the inclusion within CETA of a vehicle for cooperation on issues relating to biotechnology and trade. A biotechnology working group is tasked under the agreement to address the timelines for approvals of genetically engineered products and science-based policy and regulation. The agreement also includes new mechanisms for preventing and resolving trade challenges relating to plant health and food safety issues.
For our industry and Canadian farmers, this is an important breakthrough. I don't think we have to belabour the fact that issues around biotechnology and science-based regulation have been extremely difficult when it comes to our trading relationship with the European Union. To put it plainly, we believe that European opposition to biotech crops has been used as a non-tariff trade barrier, to the detriment of Canadian exports. The fact that the words biotechnology and science-based regulation are part of CETA is very important to our sector and will allow our respective governments to have meaningful and substantive discussions to improve regulatory impediments. Canadian farmers planted close to 29 million acres of biotech crops in 2012, and adoption continues to grow in Canada and around the world. The commitment to science-based regulation ensures that Canadian agriculture will remain competitive.
However, there are storm clouds on the horizon. The global crop protection industry has serious concerns about the European Union's regulatory framework for plant protection products, in particular the European hazard-based approach to pesticide registration articulated by regulation 1107/2009. In our view, this has the potential to be a significant non-tariff trade barrier for Canadian agriculture and agrifood products.
The approach taken by the European Union changes their pesticides registration process and moves it away from a science-based approach. The European Union approach will impact not only trade in pesticides—current and future—but also in food, feed, and seed products using these pesticides. The import tolerance specified by the European Union for these products is effectively zero, so even trace amounts could prevent the product from entering the European Union.
The use of hazard-based cut-offs, as opposed to Canada's risk-based approach, will expand to include compounds categorized as endocrine disruptors. The use of hazard-based cut-off criteria has the potential for negative and far-reaching impacts on global commerce. We believe this approach is not consistent with the World Trade Organization sanitary and phytosanitary agreement, to which the European Union is a signatory.
We have concerns about the impact of this action on Canadian farmers. Growers of cereals, oilseeds, pulses, horticulture, and many other things destined for European Union markets will potentially be prevented from using a large number of safe, effective pesticides that have been assessed by Health Canada. Growers need all the tools they have as well as future innovations to combat pest problems and to feed a growing world population. Europe's actions in this area could have negative impacts on innovation and the introduction of new technologies.
We know that our American counterparts are pushing aggressively for this issue to be dealt with in their current trade talks with the European Union. We have outlined our concerns previously to Agriculture and Agri-Food Canada and International Trade, and we would ask that the Government of Canada continue to be vigilant in insisting that science-based regulation be respected in our trade relationship with the European Union.
We should remind ourselves that Canadian farmers would lose 30% to 70% of their harvests without access to the latest innovations, such as genetically enhanced seeds and pesticides. Agriculture is a tremendous avenue for future Canadian trade growth and CETA provides an avenue for Canada to both grow its agricultural exports and address regulatory challenges on biotechnology and pest control products. It's a tremendous step forward and a statement of confidence in the future of Canadian agriculture.
We thank the committee for its time, Mr. Chair, and we'd be pleased to answer any questions you might have.
:
I think there's a perception that the EU is very much against genetically modified plants and certainly the extent of cultivation of such plants in the EU is very small. I think there are like 200,000 hectares of genetically modified corn grown in Spain and, actually, that's growing as each year goes by, but it's pretty modest compared to North America.
The reality is the Europeans really embrace biotechnology inasmuch as livestock feed—in other words, quite a large proportion of the corn and soybeans in North America and portions of that come from Canada—is exported to the EU to support their livestock feed industry. They demand it. The problem we have is that from time to time there will be a new corn product or a soybean product that's developed in Canada. Farmers want to access the technology, grow those varieties, but the particular trait, characteristic, however you want to describe it, hasn't yet been approved in the EU.
They have a slightly different system in the EU, where they approve things for like five years and then the approval expires, so sometimes these products sort of expire in terms of their registration. Canadian farmers are getting caught because they want to grow varieties of corn and soybeans, but it's kind of a losing playing field as to which ones they can put in the ground vis-à-vis how they're going to be received in the EU. That speaks to the low-level presence policy.
As you probably well know, the Canadian government is bravely proposing a low-level presence policy—and that's still under development—but, more importantly, they're embracing conversations with other countries, like-minded countries, that also have interests in agriculture and innovation and biotechnology as well. At the moment, it's been difficult to get the EU governments to engage in those conversations. The fact that we have this working group sort of enshrined, so to speak, in CETA gives us, in my view, a very good avenue to be able to start having conversations around lower-level presence with the European Union counterparts.
:
It's a very competitive process.
Also, as you know, for the last 15, 20 years, farmers in Canada have enjoyed to a large extent, with corn, soybeans and canola, traits such as herbicide tolerance and insect resistance, and so on. That has really, in some aspects, revolutionized how farming is done in Canada. That's been a great benefit for Canadian farmers, who then harvest their materials, their grains or whatever, which then can be exported to the EU.
So what's in the pipeline for the future? There are going to be more of those things—different types of tolerances to herbicides and more resistance traits to insects. Reflecting on what my colleague mentioned earlier, between 30% and 70% of crops would just be lost unless we have innovations. It's not just biotech, it's not just pesticides, but innovations such as those are very important.
Our member companies are actively looking into other avenues that will be useful for farmers, drought tolerance, for example. In fact, I think there's going to be a drought-tolerant corn variety that will be available next growing season. There will be more of those sorts of things as well. We're hearing about salt-tolerant crops. Moving further out into five and ten years' time, there may be some characteristics introduced through these modern innovations that will benefit consumers in terms of removal or minimizing the presence of allergens, modifying oil profiles, and those sorts of things.
How those things will play out in terms of the EU market, we don't know at this point. What we're seeking is sort of a level playing field in terms of how these things are regulated in Europe versus Canada, science-based regulations, those sorts of things.
:
Thank you for coming here today.
You people may realize right now the Europeans are banning our seal products over there and now we have to go to the WTO to get them back into the EU. We just hope as we go down this road with the trade agreement that with all of our agricultural products we're hopefully going to sell over there we're not going to be hit with those. We've given up quite a bit with this trade agreement. We've given up cheese, and some of our pharmaceutical prices, and some of the local content and infrastructure.
My question is on dealing with the negotiators when they were hammering out this deal. You stated there was an assessment process the Europeans have and that we're going to be working more in conjunction with them, but when they're assessing whether our food is compatible or safe, they could throw up pesticides, hormones, or plant pathology, and we mentioned GMOs. When this deal was being hammered out—and in every deal you're giving up something, you're getting something—do you think the negotiators should have had something a little stronger in there?
You mentioned this five-year revolving door, and the worst thing that can happen is we send products over there and they're rejected by consumers, or farmers, or whatever. And they might be safe and they might be part of the agreement but that's not going to help our product when it's sent back. My question is do you think the negotiators should have hammered out a more ironclad system so that we're not going to be discouraged from everything we send over there?
:
I started working for CropLife Canada about two and a half years ago, and I had a career with the government on the regulatory side before then.
I asked my members, what do you think about the Canadian regulatory system, what are the issues, and so on? Without any hesitation, exception, they all said Canada's regulatory system is world class; it's the best in the world, the most science-based, the most predictable, and they're very happy operating in Canada.
What they're talking about are regulatory regimes in the Canadian Food Inspection Agency that cover the environmental safety assessment of these new crops and the livestock feed safety assessments. Then at Health Canada, there's the food safety assessment that takes place.
The three streams of regulations, as I understand it, work very closely together, and not one of them will make a final decision until the other two have as well. We have a “no split approval process” in Canada. Until all three are satisfied, a product would not be authorized for cultivation and marketing in Canada. I think we have a very good and robust regulatory system in Canada, to be proud of.
:
I think I can attempt to answer. Something we haven't talked about today is: what do we mean by biotechnology anyway?
If I can backtrack, the products that we've been talking about, the insect-resistant corn, herbicide-tolerant soya beans, and so on, those were all developed in the 1980s, early 1990s, and came to the marketplace sort of in the late 1990s and so on. The additional varieties or new traits that have come along have been sort of similar, or they've been repackaged, combined, and so on to create new varieties. Those types of technologies are getting a little old now. They're like 20 years old. They're almost antiques in a way, relatively speaking.
Again, as I mentioned, we don't have the details, our members don't tell us the specifics, and there's a reading of the tea leaves so to speak around this, but coming down the pipeline there's going to be a whole slew of new genetic enhancement-type techniques coming along that I would predict within five or 10 years' time will translate into additional new products, new innovations in varieties, and so on.
My point in raising this in the context of CETA is that the European Union regulatory system is anticipating these new products as well. The regulators are asking themselves if they are GM or not, how do they fall within the respective legislation in the EU, and similar conversations are happening here in the Canadian Food Inspection Agency and Health Canada, as I understand it.
So the really important thing about this agreement and the element around biotech is that it allows the regulators under this banner of CETA to have a healthy conversation around how our respective regulatory systems are going to handle these products down the road. That doesn't mean to say that the European countries dictate to Canada how we regulate them, nor vice versa, but it provides a venue for a good conversation for scientists in the regulatory regimes to have those discussions. So I'd be—
I'm sure the questions that I'll ask are the same ones that my colleague just across the way was going to ask.
Voices: Oh, oh!
Mr. Alex Atamanenko: Thank you, gentlemen, for being here.
Just furthering the discussion on GMOs, we were talking about the hope by our industry that our products will be acceptable in Europe as we undergo negotiations and regulations. In Canada we have a concept called “substantial equivalency”, where basically, if a GMO products looks, feels, and smells the same as a non-GMO, it's deemed to be safe, as is a non-GMO product.
Most of our research is industry-based, and often that's basically rubber-stamped by our government. Would it help, do you think, if we want to ensure that our GMOs are accepted in Europe, that we undertake more independent research? In other words, the government or another independent agency, apart from industry, undertakes research to look at the effects of, for example, stacked traits in corn, gene splicing, all of the traits that we currently have that basically make a plant either herbicide-tolerant or insect-resistant.
Should there be more independent research or independent studies to give us more clout when we're negotiating with the Europeans?
:
I understand what you're saying in terms of how the risk assessment information is generated. It is generated by the proponents, be that a private company, a public institution, or a university laboratory and so on. That's the system we have in Canada. It's exactly the same in all parts of the world, actually. The European Union is no exception. But it is the proponent's burden to prove that their products are safe by conducting research to generate information that's more or less dictated, in a sense, by the regulatory guidelines of the regulatory agencies, be it the CFIA or the European Food Safety Authority.
It's expensive to do that. It takes many years. There has been some discussion that, well, perhaps the taxpayer should pay for that in terms of independent research or through grants and so on through universities. From our members' point of view, fine, we have no problem with that. That said, a lot of our members actually do engage with universities and independent scientists to assist them in generating the very information that is delivered to the CFIA and Health Canada.
Currently we have a system where it's a bit of each. There is independent...although it's paid for indirectly by the industry, plus our member companies are also generating this information. So we already have a mixture of those two things.
I'd also submit that because of the interest in biotechnology from all sorts of directions, there's a lot of independent research going on as we speak, more and more now than there has ever been. The conclusion, as far as my reading is concerned, has always been very much the same: there have been no significant risks identified with these products, be it the independent research or be it the research of a company such as Monsanto.
I have two more questions. Hopefully I have a little more time.
Many are concerned that we're discussing this agreement but we haven't actually seen the text. Is there any concern in your organization that we should really have the text, all the details of the text, in front of us? Are you making any overtures to the government to try to get a release of the text so that we can actually see exactly what's involved for your members?
The other questions is to just ask for your opinion. One sector that's been hit by this is the dairy sector, the cheese makers, specifically in Quebec. Is it fair to sign this agreement so that our dairy farmers are competing with farmers who are subsidized? In other words, we have subsidized farmers in Europe sending cheese into Canada, competing with our cheese producers.
Hopefully you have a few seconds to answer.
:
Thanks, everyone, for giving us a chance to be heard today. It's very important to us.
While we have the chance to be in front of you, I will take a minute and a half to introduce us. You have the documentation.
We are a maple syrup cooperative. We belong to 2,000 families. Beyond that, we are a honey co-op and a cranberry co-op as well. We are dedicated to producing 100% pure products. This is very important, and we will talk about the quality of the product out there. We are dedicated to 100% pure products. We do not sell mixed products.
We do $90 million in sales, with 95% of that exported to more than 40 countries and five continents. We've been operating since 1925. It has been quite a long time. There are 350 employees and 2,000 families. There are 2,000 families in the maple industry. Like I said, there are families in the honey business as well, and there are families in the cranberry business.
You will find that a heart is shown on this next page of our presentation, following the three types of production. It's very significant to us and is our brand new signature, because the heart is the passion of our producers. It's the values when we trade. It's the values in the way we behave with our human resources.
In a trade show, everyone in the business sells or shows a product. We show who we are. That's our way of doing business. We've won in “Trends & Innovations” at SIAL in Toronto. We've been named Canadian exporter of the year. We've won the Canada brand award. We've won many awards from the International Maple Syrup Institute.
I've nearly finished going over what we do. We have our own stores, the Canadian Maple Delights stores, where we have a lot of different products. We do our own desserts. We create new packaging and innovation. This is why we say that we're producers of pure innovations.
Also, like I said, we are in the cranberry and the honey business, so I will cover the importance of this agreement between Europe and Canada by talking about more than one product. I will flip over to maple and then to cranberry, because it's the same reality.
The importance of the maple sector in 2009 was 13,000 jobs and almost $800 million in assets. In 2012, we were exporting almost $250 million.
Most important, this next slide shows that among the exports of maple syrup, 20% of the exports are represented by the European market already. If we take out the U.S. sales, close to 60% of the sales of maple syrup are in the European market.
This agreement is very important to us, because today we have—unless you give me a great announcement that the fees for selling in Europe are no longer there—fees of 8% for maple and 17.6% for cranberries. It's very important, because there is the U.S., and we call that the U.S. nightmare. I'll explain that to you. In the cranberry industry, there are U.S. businesses that open factories or sell their product through Chile. That has no fees. It does not create a lot of jobs in Canada.
If we let the U.S. sign the agreement before Canada, we will be hit very hard in the cranberry and the maple sectors. On the other slides, I do not want to go too far, because there is a whole lot of data, but another slide shows the growing numbers of taps in the States.
Quebec is still the leader in the system. We work together with the federation. We have a great system. We push on quality; I showed you the exports we already have, but still if the Americans sign an agreement with Europe before we do, they will dig into the volume we already have or the growth we might expect from that kind of agreement. Not that I want to be negative, I just want to give you an example of what happens when we wait until the other country signs onto something.
This shows the level of paperwork we have to fill in if I'm an organic producer-packer: in the States it's about that big, in Canada it's that big, and in Japan it's that big. Unfortunately, a U.S.-Japanese trade agreement on the organic business was signed within the last month—and you all know about that—which means that whatever paperwork we have to fill in, the U.S. and the Japanese organic certifications are becoming the same.
It's very hurtful for Canada because I know we sell maple syrup in Japan. We know that it's very hard and we know that making organic maple syrup in the States is very easy, but now they're equivalent, so that will be pretty challenging for our market. I don't want to say we did not do what we had to do. It's just an example to say we need to move on with this agreement.
I've been talking about this for so many years with our fellows in the federation, why don't we take the chance of having this agreement to protect the name “maple syrup”? If you go to Europe “maple” is written on the shelves, but it doesn't taste like it. A whole bunch of products on the shelves in Europe have been packed with no protection for the name. If they're requesting that we protect some of the names of the products coming from Europe, this agreement is the right time to do it. Maple is the emblematic logo and product of Canada. Are we going to protect it?
Just to let you know, my final word, I am talking as the CEO of Citadelle, but we have an industry association, and I spoke with everyone in the industry to make sure they agree with those statements, so all the Quebec industries are behind this statement and proposal.
:
Good afternoon. Thank you for inviting me to testify.
My name is Serge Beaulieu and I am a maple producer from Ormstown in the Montérégie region of Quebec. I am also the president of the Fédération des producteurs acéricoles du Québec, an organization founded in 1966. Our mission is to support the economic, moral and social interests of the 7,400 maple syrup companies in Quebec. We represent the men and women who work together in order to market their product collectively. Because of the quality of their work, today, Quebec provides 75% of the world’s maple syrup production. Total Canadian production represents 80% of the world’s production.
The Fédération des producteurs acéricoles du Québec welcomes the proposed free-trade agreement between Canada and Europe as a positive development. The agreement means that tariffs on exports of maple syrup and other agricultural products to Europe will be eliminated. This will help the Canadian maple industry to break into new markets, and to set our products apart from, say, American products.
For a number of years, maple producers and processors have invested in research and development in order to develop new products and to promote the health benefits of maple syrup. For the last seven or eight years, we have been investing money we receive from the federal government and money from producers and processors into that kind of research. Each time we have conducted research into the benefits of maple syrup, it has had a positive impact and has allowed us to develop our product around the world.
In 2012, the countries of Europe represented between 18% and 20% of the market share for maple syrup and maple products exported around the world. That had a value of $48 million for a volume of 14 million to 20 million pounds of maple syrup. After the United States, Europe is the second biggest export market for Canadian maple syrup. So Europe is a major market for our industry.
For a long time, our federation has been asking federal authorities to work towards the elimination of European tariffs because their effect was to limit the volume we could export. In recent years, our federation has also held a number of promotional activities there, specifically in France, Germany and England.
Working with la Financière agricole du Québec, we have funded promotional activities in Europe by reimbursing some of the expenses of maple producers in a number of markets. More recently, with the help of the provincial and federal governments, some leading chefs have been named as maple ambassadors. As well as promoting the delights of maple products to people over there, their mission is also to use their creativity and imagination to come up with new taste experiences. This is one of the ways in which we are moving maple products to new frontiers. Simply put, we have to continue our efforts to reach new consumers in that pool of 500 million people.
However, the federation is concerned by some aspects of this agreement. If the present 8% customs tariff disappears, we hope that the savings will result in more maple syrup being sold in Europe and not in more middlemen becoming involved in distributing it. Specifically, in order to promote maple syrup sales in Europe and to fully benefit from the signing of the agreement, it is critical that financial initiatives begin now so that the volume of exports can increase.
In that light, last March, the federation submitted a funding request to Agriculture and Agri-food Canada’s AgriMarketing program. As of now, it seems that a part of the proposal will be rejected. That does not increase our chances of making inroads in this free trade environment. So we hope that the federal government will support the funding request to the AgriMarketing program in its entirety. We can then take full advantage of the lowering of tariffs in European markets. In the past, we have observed that, any time investments have been made in promoting our product, such as by having people taste it, its development has been enhanced.
That is more or less an overview of the federation's position.
Do you have any questions?
My thanks to the witnesses for being with us this afternoon. As you can tell, I speak French. I come from the Lanaudière region of Quebec, and I represent the constituency of Joliette, where we have maple syrup producers.
Maple syrup is a 100% natural product whose flavour and colour vary throughout the season. In 2012, organic maple syrup made up 20% of Quebec's entire production, making it our largest organic product. However, consumers are not well aware of the distinction between organic production and conventional production.
In your opinion, what steps could be taken to allow consumers to become more aware of the distinction between these two production methods? Like everyone else, I always thought that maple syrup was a natural product.
Thanks for coming today. You've stressed it many, many times that we have to fast-track this deal and get it done. With any deal there are winners and losers. Being the largest producer of maple syrup, Quebec is also the largest producer of dairy products, and they're taking a hit. I think to get this deal done we have to make sure that they're taken care of also, the cheese producers. The deal's not done until you see your product and the tariff has dropped off. Then you know the deal is done. It has to be binding for the provinces.
I think your message to the government is, get on with it, get the provinces binding, and get it to Parliament here, and make sure the people are taken care of who are going to be hit.
I have a couple of questions.
Do countries in northern Europe and Russia have maple trees, and do they have maple syrup?
Backing up to your comments about branding maple syrup, I know champagne is no longer around. You simply can't sell it. If it's produced in Canada, you can't call it champagne. You can call it something else, but you can't call it champagne. Hopefully, that works out well for you, because I think it's something we need to protect and keep Canadian.
I have a couple of simple questions for you.
We know that CETA is going to be good for the industry. The 8% tariff coming off is one thing—it's going to give you a benefit of 8%—but do you see it as another spinoff benefit in terms of a best-case scenario? By taking off that 8%, it should give not only the 8% additional opportunity, it should actually give you a lot more opportunity. Do you have numbers? I put down on my paper here, what's your best-case scenario with CETA? As an industry, what do you foresee in the future?
I have to admit that I'm a tried-and-true maple syrup addict. I love it. I've been here for 20 years and anything I've done in Parliament does not hold a candle to the fact that I make the world's finest French toast. You put some butter on that and drizzle some really good maple syrup, a couple of thick slices of bacon, and there is nothing finer that I could create. I did some last weekend, and I had some really good maple syrup that my wife found somewhere. It was delicious.
It's good to hear the passion that you have for the quality of your product and keeping the quality control of the product. I think we have to make every effort that we, as parliamentarians, can make to help secure that country name of “maple” for your products—in the same way as the shiraz people secured it. We can't use the name shiraz or champagne, as Mr. Zimmer mentioned. We have to do that. It could be one of the finest marketing tools we could imagine.
I want to ask you, what would the average-sized or medium-sized maple syrup farm produce? How many litres would it produce in a year?