[Recorded by Electronic Apparatus]

Thursday, October 1, 1998

• 0904


The Chairman (Mr. Joe McGuire (Egmont, Lib.)): Good morning, everyone. We'll call the meeting to order pursuant to Standing Order 106(3), consideration of a request by four members of the committee.

Maybe we'll ask the member who signed the request, Mr. Borotsik, if he wants to lay out the ground rules of what he's requesting.

As well, we have a group of witnesses we'll introduce in a moment.

• 0905

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman—


Mr. Odina Desrochers (Lotbinière, BQ): Mr. Chairman, could we table an emergency motion before we begin? My colleague will read the text of the motion. I have prepared copies for everyone.

Ms. Hélène Alarie (Louis-Hébert, BQ): Good morning, Mr. Chairman. I will read the text of the motion in French, as this is easier for me.


The Chairman: We'll accept this motion and we'll present it to the new committee next week. The new committee will be formed, I believe, early next week. The announcement should be made today, actually, on the new committee, and the formation committee meeting should take place next Tuesday.

So I'll pass this on to the new chair when that person is selected, and we'll deal with it at that time.


Mr. Odina Desrochers: Mr. Chairman, are you saying that the committee will be voting on this motion next Tuesday?


The Chairman: Yes.


Mr. Odina Desrochers: And it will be given priority consideration?


The Chairman: It should be a priority. We've been dealing with it since last spring, early summer, so I think everybody on the committee knows that it's been discussed almost daily in the Question Period and at meetings with the department. So I think there's no question that it's a priority, and I think the committee will probably deal with this as soon as possible. That was your request, for as soon as possible, and I think as soon as possible will be next week.


Mr. Odina Desrochers: Thank you, Mr. Chairman.

Ms. Hélène Alarie: Thank you, Mr. Chairman.


The Chairman: Thank you.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

You're so very right in indicating that a special meeting was called by me as well as three other members of this committee, and I do thank the other members who have identified a very serious issue. In fact, one would almost consider it to be a crisis at this point in time in western Canadian agriculture with respect to the non-tariff barriers that seem to be popping up in the border states, the states bordering Saskatchewan, Alberta and Manitoba.

What I would like to achieve today, Mr. Chairman, as identified by the presence of Mr. Gifford, is first of all to receive a status report as to the type of actions that have been taken, by trade, in this particular issue, this very serious issue, I might add.

For the members of government who sit across, perhaps not having as close ties with western Canadian agriculture, I can assure you that there are substantial impacts currently in place with our agricultural producers, particularly those of livestock, both cattle and pork livestock currently, as well as grain that has been transported south of the border.

As you're aware, Mr. Chairman, the trade minister has identified one of the opportunities as being an appeal to the NAFTA and WTO, which I believe is very time-consuming, not only with the timeline as to how long these issues will take to appear before the boards but also for final resolution when they do in fact get to the board.

• 0910

I would like through this emergency session to perhaps brainstorm a bit and discuss with the members of the department what other options are available to us at this time. I cannot stress enough the urgency of this issue.

I have been in contact with not only producers but also those people who transport livestock into the southern states. The members must be aware of the fact that in South Dakota right now it is almost impossible to transport livestock through that state for the simple reason that there are claims being made with respect to pharmaceuticals being used in our livestock. They are false claims, quite frankly. They are totally without guidelines, and are not within the law of trade that we have currently with the United States.

It's been my hope, not only from a department's perspective but also from a political perspective, that there would be other ways to solve this issue. As a matter of fact, I will be mentioning that just recently the governors of those states affected said they would like to sit down on a one-on-one basis with officials and politicians from Canada to try to resolve some of these disputes.

There is also, Mr. Chairman, a deeper root to this problem, and that obviously is commodity prices currently in the agricultural sector. I don't think the problem there is something that's going to be rationalized in the very near future. Therefore, as well, the government of this country, the Canadian government, must look at—and this ag committee, Mr. Chairman, must have a position that goes forward to this government with respect to this—some type of a safety net program that in fact is going to assist individuals right now in the production of agriculture that may well not be there next year if we don't get off our duffs and do something.

I don't know how the translator is going to say “get off our duffs”, but that's exactly what we have to do right now.

Mr. Chairman, I would like to hear from the illustrious group that's been assembled before us right now, the people who have all the answers with respect to trade. I would like them to say today that all the trade disputes have been resolved and we can go back to business.

The Chairman: Thank you very much.

I think we should probably go to the witnesses, then.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): I have one question for clarification, just very quickly.

You said that there are some very serious consequences. I've heard somewhat the same thing, but I'm trying to nail down actual farmers. I'm wondering if you could provide us with some names of actual farmers you've talked to.

Mr. Rick Borotsik: I do have names. I don't prefer to put them on the record now. I will talk to you later, individually.

Mr. Bob Speller: Sure.

Mr. Rick Borotsik: Absolutely I've been talking to producers. One in particular produces 400,000 weanlings. That's 400,000 weanlings per year. He has nursery barns in South Dakota. If those South Dakota nursery barns are not open up to trade to Canada, those weanlings have no place to go. They're 14-day-old pigs and they may well end up on the lawn of the Parliament building because they have no home.

I will give you the names of those individuals. Absolutely. I have no difficulty with that, but not on the record, if you don't mind, because I have not checked with the individual to see if he would like to have it on the record.

Mr. Bob Speller: That's fine.

The Chairman: We'll go to Mr. Hilstrom for a few remarks and then we'll go to the witnesses.

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Thank you, Mr. Chairman.

I think it's very important right off the bat here to recognize that this is not simply a western Canada issue. The Americans have currently before the WTO an attack, if I might call it that, on our dairy, along with the New Zealand government. The supply management issues are possibly at the root of this action by some of the governors in the various states. The various governors are taking this action, in my opinion, with the concurrence of Washington itself. We've seen this in western Canada before, where U.S. farmers object to things at the border, but we haven't seen the governors taking action like this.

So I would like to see the comments from our guests here to cover that area. Is this simply a western/midwest U.S.-Canada issue in the western provinces, or is it, as I believe it is, a larger issue of the total agriculture trade between Canada and the U.S.? And if it is, then I'm certainly suggesting that it runs right from Nova Scotia through to British Columbia.

• 0915

I would also like them to comment in I guess that same area on the idea that has been put forward by the Minister of Natural Resources, that in fact this is just a big election issue down in the States when we've had various governors, including our consul general down in the midwest states, saying that it is not an election issue, it is more than that.

Those are my general comments, Mr. Chairman.

The Chairman: Thank you, Mr. Hilstrom.

I'm sure if there was a total news blackout between Canada and the U.S. we'd always know when there was an election in the U.S. because of the border harassing.

This is something that's not unfamiliar to eastern Canada. We had Senator Mitchell in Maine, the most powerful Senator in the U.S. Senate at the time. Every time there was an election, our potato trucks would be stopped at the Maine border and backed up and harassed. So we're not unfamiliar with what is going on out west at all.

Be that as it may, we'll go now to our witnesses: Mr. John Klassen, director general of the general trade policy bureau; Claude Carrière, director, tariffs and market access division; and from Agriculture and Agri-Food Canada, Mike Gifford, director general, international trade policy.

Mr. Klassen is not here. Who is taking Mr. Klassen's place?

Mr. Mike Gifford (Director General, International Trade Policy Directorate, Market and Industry Services Branch, Department of Agriculture and Agri-Food): Mr. Chairman, Mr. Phil Douglas from Agriculture and Agri-Food Canada and Mr. Klassen unfortunately had time conflicts, but Mr. Carrière from the Department of Foreign Affairs and International Trade will be representing DFAIT.

The Chairman: Okay, Mr. Gifford, go ahead.

Mr. Mike Gifford: Thank you, Mr. Chairman. I'm going to try to give the committee a very brief, up-to-date situation report on what has happened and what is proposed to be happening, and Mr. Carrière will then follow on with a brief summary of what we've done to date and what we intend to be doing.

Basically, just to give the committee a common backdrop, let me indicate very briefly what has transpired since September 16, when the state of South Dakota started first of all to turn trucks away from Canada that were carrying live hogs, live cattle, and grain.

It's important for the committee to recognize that the actions taken by the state of South Dakota are the most severe. The actions by the other states by and large have tended to be inspections, checking load weights, checking documentation. It's only in the state of South Dakota that state troopers and other governmental officials are turning back Canadian trucks entering the state of south Dakota.

As has already been indicated, we export about 500,000 hogs to South Dakota—there's one big packing plant down there—and we export about 20,000 head of live cattle. There is very little grain being shipped by truck to or through South Dakota, so primarily the effect of the South Dakota action has been on live hogs and live cattle, and one load of sheep.

Clearly the actions of the state government are spurious. They've basically refused to indicate precisely what it is they're looking for in terms of documentation. The state governor has basically alleged that there are certain drugs that have been used in Canada that aren't used in the States. Most of the drugs he's identified are in fact either used in the States or not used in Canada or used in both countries. The bottom line is that the alleged concern about human or animal health is completely fictitious, and the action of the state government is clearly designed to disrupt and to block international trade.

Subsequently, following the action by the state government of South Dakota, other states followed quickly. The states of North Dakota and Montana both started to instruct their highway patrol officers and their department of transportation officers to start checking all trucks moving south, both Canadian and non-Canadian, for documentation—checking safety conditions on the trucks, checking the weights of the trucks. Similarly, in the last few days the states of Idaho and Wyoming have announced measures very similar to those of North Dakota and Montana.

• 0920

Clearly there is a major qualitative difference between the action taken by the state of South Dakota and the actions taken by the other great plains states.

I'll speed up and talk about what transpired on Monday, when Secretary Glickman had a meeting face to face with two of the state governors concerned and on a conference call with all the great plains governors, together with, as we understand it, probably most of the congressional delegation from the great plains states. The outcome of this meeting in Washington on Monday, as we understand it, was that Secretary Glickman has asked the governors basically to document and substantiate the allegations regarding unfairness in terms of the entry conditions into Canada for agricultural products relative to the entry conditions into the United States.

As a generalization, I think it would appear that the state governors by and large are concentrating their complaints on the alleged inequities between the entry conditions into Canada for agricultural products as compared with the entry of Canadian products going into the United States. Unlike some of the congressional delegations, they have not been arguing about concerns about imports of Canadian products.

We understand that Secretary Glickman has requested the state governors to submit their documentation substantiating any claims they have made to him and to the U.S. government by the end of this week. Following receipt of whatever documentation might be available, we expect the United States government to formally ask Canada for consultations on the list of the issues that have been identified by the state governors.

We've already communicated to the United States that while we're always prepared to discuss issues of mutual interest, the bottom line is that we will not discuss these issues until the states in the U.S. that are currently restricting movement of Canadian products are terminated. Basically, we're prepared to consult, but only following termination of the state actions.

Mr. Chairman, that basically is where we stand in terms of the actions of the states. Again, to repeat, so far the only really adverse economic consequences are originating from the actions of the state of South Dakota. It's primarily on live cattle and live hogs, with little or no impact on grain so far.

With that background, Mr. Chairman, I would suggest that you allow Mr. Carrière to bring you up to date on the actions the Government of Canada has taken to address these problems.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): Mr. Chairman, could I get clarification on one question?

Could you clarify for me, Mr. Gifford, where the livestock that's being stopped at the border of South Dakota is going?

Mr. Mike Gifford: Fortunately, there is a nearby hog-packing plant, and as a consequence of the actions of the state of South Dakota, Canadian shippers are simply diverting to a nearby state the hogs that otherwise would have gone to South Dakota. As a consequence, there has been no halt to the movement of live slaughterhogs, although, as Mr. Borotsik has just mentioned, obviously there are consequences for other Canadian livestock producers. Certainly in the case of live slaughterhogs, of which we ship about 500,000 to South Dakota usually, most of which originate in Manitoba, most of those live slaughterhogs have simply been diverted to another hog slaughter plant close by in a neighbouring state.

• 0925

Mr. Rick Borotsik: Just as a clarification on that comment, a lot of the cattle and hogs that normally go through South Dakota go to a neighbouring state south. In order to get there now, there are some impacts on transportation in order to get to those markets, are there not, Mr. Gifford?

Mr. Mike Gifford: Indeed. The effects of the actions of the state of South Dakota is basically to add mileage and a lot of extra hassle to the movement of live slaughterhogs to the U.S.

The Chairman: Mr. Carrière, please.

Mr. Claude Carrière (Director, Tariffs and Market Access Division, Department of Foreign Affairs and International Trade): Thank you very much.

Mr. Klassen was unavoidably detained, Mr. Chairman.

Once the South Dakota measures were implemented, the embassy immediately made representations orally and in writing to the United States Department of Agriculture, the State Department, the United States trade representative, and subsequently the White House, to draw their attention to these South Dakota measures and the impact they would have, and subsequently did have, on Canadian exports.

It has taken some time for the United States administration to react to these representations, which resulted in the meeting that Secretary Glickman did have with governors and congressional delegations earlier this week, aiming to come to a resolution of the matter.

We, however, decided that we needed to put on record the seriousness with which we saw these actions and the absence of actual action by the United States federal government, and requested last Thursday immediate consultations under the NAFTA, and Friday under the WTO. It is unprecedented to request consultations under both agreements, and it was a deliberate action designed to signal to the United States administration the seriousness of the matter.

We anticipate that consultations will take place between 10 and 15 days from the date of request, which brings us to next week. We anticipate consultations, should the state measures not be lifted, to be taking place under dispute settlement procedures of both NAFTA and the WTO.

Before that happens, we hope the measures will be lifted by the state governors, South Dakota and the other states, so that a different kind of consultation can take place that will involve the problems that both sides identify with irritants regarding measures taken by either government.

At this point—and the exact day is not confirmed—we do expect that this will take place next week.

The Chairman: So the timeframe for this is...?

Mr. Claude Carrière: By next Friday.

The Chairman: What happens then?

Mr. Rick Borotsik: Mr. Chairman, a clarification.

Are you saying that the actions taken by the governors may well stop by next Friday?

Mr. Claude Carrière: We would want them to stop before that, yes.

Mr. Rick Borotsik: Okay. I'll have questions on that—and more.

The Chairman: Mr. Benoit.

Mr. Leon E. Benoit (Lakeland, Ref.): Thank you, Mr. Chairman.

Mr. Carrière, you said that the Government of Canada initiated consultations under NAFTA. Could you explain what that is, exactly?

Mr. Claude Carrière: Under the NAFTA and under the WTO.

Mr. Leon Benoit: The NAFTA on Thursday and the WTO on Friday.

Mr. Claude Carrière: Right.

There are procedures involving the settlement of disputes and differences between the parties to the agreements.

Mr. Leon Benoit: The process would lead to a panel being established.

Mr. Claude Carrière: Yes.

Mr. Leon Benoit: Okay.

Mr. Claude Carrière: And consultations is the first step in that process; eventually, a panel.

The Chairman: Your presentations are now concluded?

Mr. Mike Gifford: Perhaps, Mr. Chairman, I could respond directly to the question raised by Mr. Hilstrom—that is, is this a broader Canada-U.S. agricultural trade problem or is it basically focused on the great plains states?

I think it's fair to say that certainly the issues that have been raised by the states that have taken actions to date are concentrated exclusively on the red meat and grain sectors.

• 0930

Unfortunately, there appears to be a chronic lack of information about what the hell is going on by the U.S. federal government to the state governments or from the state governments to their constituents. On many of the issues that have been identified already by various state governors, in fact progress has been made, or is in the process of being made.

For example, in the case of live feeder cattle, particularly from the states of Washington and Montana, at the request of the Canadian Cattlemen's Association and the U.S. cattlemen's association, the Canadian Food Inspection Agency and the corresponding U.S. agency have over the last year developed what we've called the North West Project, which is aimed at facilitating the two-way flow of feeder cattle, basically reducing the amount of paperwork and testing that's required.

As a consequence of a revision to that agreement, which was just announced several weeks ago, we anticipate that this fall at least 10,000 head of Montana cattle will probably enter Alberta feedlots.

Similarly, there's a perception in the United States that somehow, while we can export wheat and barley into the U.S., the U.S. cannot export wheat and barley to Canada. The reality is that this fall we're seeing a record movement of feed barley from Montana and North Dakota into prairie feedlots.

Similarly in the past, certainly when Ontario had a crop of wheat badly affected by fusarium, over 100,000 tonnes of wheat from the U.S., primarily from the great plains states and the Pacific northwest, entered Ontario basically for making pastry and biscuits.

So part of our problem in this whole exercise is the fact that there's an awful lot of myths and misconceptions, and people, when they're faced with the facts, simply don't believe the facts. The trouble is, this has now become so politicized, and as has been noted has become such a part of people's election platforms, that the situation has become extremely serious because of the irresponsibility of some officials in the U.S.

The Chairman: So Canada doesn't have any friends in this election.

Mr. Mike Gifford: We don't vote in the United States, Mr. Chairman.

The Chairman: No, but the Republicans and the Democrats can't be seen to be sympathizing with Canada's—

Mr. Mike Gifford: Well, most of these governors are Republicans, and the administration, as you're aware, is Democrat.

The Chairman: Have we lost any trade to the U.S. or is trade just delayed?

Mr. Mike Gifford: I think it's trade disruption. I think the example Mr. Borotsik cited is probably the exception rather than the rule. So far, in broad terms, I think we've managed to in effect circumvent most of the actions taken by South Dakota by diverting traffic around that state. But certainly it's not a situation that we want to see continued.

The Chairman: We'll go to questions now, to the Reform Party.

Seven minutes, please, Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you.

You touched, Mr. Gifford—and I appreciate that—on the idea that this is larger than just a midwest issue. You've indicated that you believe it kind of is just a midwest issue.

I think the U.S. trade officials were quoted in the papers—and I don't know how accurate the quotes are—as saying they have not been as aggressive as they should have been in targeting Canada. And they certainly have been aggressive, as I said before, on supply management, the dairy. They have an anti-dumping tribunal that was going ahead with cattle. Now, it was a year ago that they started that, as I recall, and they certainly have been questioning regarding the transparency and the operations of the Canadian Wheat Board.

So I guess I beg to differ a bit. You can make additional comment in regard to what I'm saying now, but this is bigger than the midwest states, as far as my analysis goes.

• 0935

The second thing I'd like to cover briefly here is that they're going to be supplying us with a list of inequities of entry rules, both ways. I believe on this list of inequities some of these inequities have been identified previously, and I'd like to know how long ago that was, and I guess what action was taken at that time to prevent what we're seeing now happening. This is my concern, that we knew about this—or we possibly knew, as perhaps you can tell me—a long time ago, and should have been doing something.

So perhaps you can comment on those. If I have a minute or two left, I can have my colleague, MP Benoit, comment.

Would you like to comment on that, Mr. Gifford, then, please?

Mr. Mike Gifford: Mr. Chairman, we have been talking to the United States over the last year or year and a half, and one of the problems that they have identified, and that we recognize, is that while a large American grain company can ship a unit train of wheat into eastern Canada, and can easily access the Canadian transportation system and ship wheat through Canada, in bond, to, say, Vancouver, or Seattle, for export to a third country, the reality has been that an individual U.S. producer, or a small co-op, a small grain company, has extreme difficulty accessing the western Canadian elevator system.

Now, that's been recognized, and for the last year we've been developing, in conjunction and collaboration with the United States, what we've called a pilot project for wheat whereby certain elevators in western Canada will be designated as eligible to receive U.S. wheat. Of course, our major concern is that in Canada we have a quality control system for wheat that's based on visual distinguishability, and therefore, of course, the concern of the Canada Grain Commission is to ensure that we don't mix up U.S. wheat and Canadian wheat in our elevator system.

But given that as an essential precondition, that we would not do anything to undermine the integrity of our quality control system, we have developed this pilot project. This pilot project could have been up and running many months ago, except that the United States at the last minute said, well, before we get the pilot project up and running, we want to settle some of these phytosanitary issues. One of their concerns is the fact that now the United States has kernel bunt, a disease of wheat.

The Canadian Food Inspection Agency has established certain conditions for the entry of U.S. wheat into Canada. Now, certain regions of the United States, such as the great plains states, are eligible to ship wheat to Canada, except it must be tested and certified by USDA that before the load arrives in Canada it's free of kernel bunt. We don't think that's an unreasonable requirement. In other states, it's prohibited to receive wheat from Arizona, where kernel bunt was first identified in the United States.

The bottom line, Mr. Chairman, is that after extensive discussions between the phytosanitary authorities in both countries, it's anticipated that the United States will shortly be giving the Canadian Food Inspection Agency their latest survey results, and I think both parties are hopeful that as a result of this latest work done by the U.S. authorities, it will be possible to make further revisions to the Canadian import controls relating to kernel bunt.

I mean, there's been a systematic identification and a systematic attempt to address these problems, and it's just very unfortunate that certain state governors have decided to act precipitously and to take action into their own hands.

The Chairman: Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

I don't have too many more questions other than the fact that in Manitoba, I know, we have a lot of U.S. corn coming up on a pretty regular basis. Down in the States I think it's something like $1.37 a bushel or whatever. I mean, the value of the dollar...and the trade, it's going to flow back and forth. It's incumbent upon this government to make sure that this trade is kept free and moving by market forces and not under any other artificial rules, as we see the U.S. states trying to do at this time.

• 0940

At the end of the meeting, Mr. Chairman, I'd ask that I have a chance to put in a couple of motions.

Thank you.

The Chairman: Mr. Benoit.

Mr. Leon Benoit: I'd just like Mr. Gifford and maybe the other gentleman there to respond to another part of Mr. Hilstrom's question, which was on the connection, even if it may not be a direct connection, between the tough action the United States has taken against supply management—the possible connection between these actions and supply management.

Mr. Mike Gifford: I don't think there's any link. These states basically grow grains, cattle and hogs. They're not in the dairy and poultry business.

To some extent, I think the complaints of the states are as much directed against Washington as they are against Canada. They feel frustrated that, in their view, some of the issues they've identified as priorities have not been addressed by the administration in Washington, and therefore they've been critical of the U.S. federal government.

I think the bottom line is that since the coming into force of the Canada-U.S. Free Trade Agreement in 1989, two-way trade between the United States and Canada, including agricultural products, has been skyrocketing.

For example, in the first seven months of this year, U.S. exports to Canada are up 13%, and Canadian exports to the U.S. are up by 12%. This is in comparison with our respective exports to offshore markets, which are down substantially from earlier years.

In Canada's case, our exports of agricultural products to the States have been increasing by at least 10% a year every year since 1989, but the upshot of that is that a lot of the trade that used to flow east-west and west-east is now moving north-south, south-north. Therefore, if you're a farmer in, say, North Dakota or South Dakota, all of a sudden, relative to ten years ago, you're seeing a lot of Canadian cattle trucks and hog trucks passing by your front door. Similarly, if you're in North Dakota you know that the local elevator has a lot of Canadian grain there as well as a lot of U.S. grain. And when you superimpose on top of that low commodity prices, as we currently have for hogs, cattle and grains, then that's just a recipe for some people to blame all of their problems on imports, and that's the bottom line.

Mr. Leon Benoit: When I asked about the connection between supply management and this action, I recognized that those particular states wouldn't have that, but it's the way the federal government, Washington, deals with these states and whether they might try to connect the two.

Mr. Mike Gifford: Well, Mr. Chairman, I can't help recalling, as you yourself mentioned, that back in the early 1980s the State of Maine started unilateral inspections of Canadian trucks carrying potatoes from New Brunswick and P.E.I. My recollection of that time period that it took the U.S. federal government just a matter of days to seek and obtain a court injunction prohibiting that state from harassing international trade.

Unfortunately, that occurred in a period that was not immediately preceding the U.S. election, back in the early eighties.


Ms. Hélène Alarie: Mr. Chairman, if I may interject briefly, I have a few comments to make.

I'm concerned about the time we are taking to resolve this issue. I can understand that there is an election going on, but the fact is that we're dealing with livestock, not with canned goods. This is an urgent problem and I don't think we're anywhere close to resolving it. People do not seem to be particularly perturbed though about the urgency of the situation. You mentioned Maine, but it isn't the only state disrupting trade.

That's all I wanted to say. As my colleagues noted, the problem is localized in the Midwest, but it could spread to all of Canada, including Quebec. However, since they are much more concerned today about this particular issue, I will let them speak.

Thank you, Mr. Chairman.

• 0945


The Chairman: Mr. Borotsik, you're on.

Mr. Rick Borotsik: You mean I get Madame Alarie's time?

The Chairman: It's between you and Mr. Proctor.

Mr. Rick Borotsik: Perfect. I have questions coming out of my wazoo.

Mr. Gifford, I'd like you to expand on the next Friday deadline you had mentioned to this committee, where in fact you believe there may well be resolution to this issue by Friday. Can you expand on that and perhaps give me some assurances that next Friday may well be a deadline that we can look forward to?

Mr. Mike Gifford: As I think I indicated, it's our understanding that by this Friday, the U.S. government hopes to receive substantiated, documented information from each of the states about what their preoccupations and concerns are. We anticipate that following receipt of this information, the U.S. federal government will ask the Canadian government for consultations.

We've already told the United States government that a precondition for entering into consultations on this list of U.S. concerns is termination of the states' actions. So if the U.S. wants to have early and expeditious consultations, then the U.S. states will have to terminate their actions early and expeditiously.

Mr. Rick Borotsik: I'd like to touch on that, Mr. Chairman. It was reported yesterday in a newspaper that the Montana governor said that the U.S. governors would back off their crackdown on inspections of trucks if in fact the two sides got together immediately to talk about this issue as well as other pressing trade issues between the midwestern states. That means a face-to-face meeting.

What you're saying right now is that your department, and the Government of Canada, has said there will be no meetings until... It's like a standoff at the OK Corral.

Mr. Mike Gifford: No, no.

Mr. Rick Borotsik: Why would you not sit down and have those discussions with a governor who obviously wants to make some restitution here?

Mr. Mike Gifford: The discussions of the Government of Canada would be with the federal government of the United States. We are certainly prepared to meet expeditiously. If the Americans want to meet tomorrow, we're quite prepared to meet tomorrow. All we're saying is that tomorrow, the U.S. state actions had better be suspended before we start sitting down and talking.

Mr. Rick Borotsik: We have, Mr. Gifford, an opening here in the door where in fact the governors are saying, “We want to resolve this issue”. You're saying, “We won't resolve it until you've obviously put to bed any of your actions at the present time”.

Mr. Mike Gifford: Are you suggesting that we negotiate under duress, Mr. Borotsik?

Mr. Rick Borotsik: I think we're under duress, Mr. Gifford. If you don't believe that right now, then we have some difficulty. I believe we are under duress. Right now with South Dakota and the actions they've taken, you're absolutely correct, but with the other states, it's simply trucking harassment.

If that should escalate, Mr. Gifford, we cannot get product south of South Dakota and Minnesota. That is duress.

Mr. Mike Gifford: We certainly recognize the potential seriousness of the situation, but I think the reality is that to a large extent we're a pawn in the U.S. political process. None of these actions are necessary, and can be terminated. The amount of understanding and knowledge by the respective state officials appears to be abysmal in terms of knowing exactly what has been going on, what is being done, and what is being planned.

Mr. Rick Borotsik: Mr. Gifford, would it not be best to meet with those officials and those state politicians to explain to them exactly what the facts are?

Mr. Mike Gifford: We expect we will be meeting with the U.S. federal officials, including the cabinet-level officials, and we expect the U.S. federal government will be dealing with their state governors.

Mr. Rick Borotsik: I have some difficulty about that, Mr. Gifford.

By the way, I appreciate your position, and this isn't to be antagonistic. I'm trying to find out why it is we have our negotiations in this fashion.

Mr. Gifford, industry in the United States depends on Canadian product quite substantially, to keep their plants running.

Mr. Mike Gifford: Yes, indeed.

Mr. Rick Borotsik: Has there been any discussion with industry at this point in time as to how they're being affected in the United States? There is a cost effect, let's be very blunt and clear right now.

Albeit I do appreciate your position, Mr. Gifford, your comment was that there are problems but they aren't serious. There is a cost effect right now in transportation. That cost effect goes back to producers, make no mistake about that.

Is industry in the United States being affected to the degree where in fact they may well become an ally of Canadian producers?

Mr. Claude Carrière: Mr. Chairman, if I may.

In terms of some elements to your questions, I should have prefaced my remarks earlier with this. The measures of South Dakota are not without cost to South Dakota industry. Canada is South Dakota's number one export market by a significant proportion. Almost 40% of their exports come to Canada. Their next-largest supplier is Japan, and the percentage is less than 10%. So there is a very large proportion of their exports coming to Canada.

• 0950

It also so happens that those exports were transported to Canada by trucks, trucks that used to deliver products in South Dakota from Canada and would return full. Now these products are not being shipped to Canada on the same trucks. If they are being shipped, they have to find alternatives. They are facing the same problem our people are.

But we also have some anecdotal evidence—it has taken time to develop—that in terms of business that used to take place between Canada and South Dakota, firms have shifted their supply base and are no longer purchasing, for example, soy meal from South Dakota. They are purchasing it from a neighbouring state. So this is not costless for South Dakota.

Mr. Rick Borotsik: And that's the point I'm trying to make right now, Mr. Carrière. We all recognize that there are impacts on both the Canadian and American sides. If industry in South Dakota particularly is being affected, has your department considered at any time collaborating with that industry with respect to a court injunction with what I consider to be totally fabricated instruments being put in place by South Dakota right now?

Mr. Claude Carrière: The short answer? Yes.

Mr. Rick Borotsik: Why did you not do it?

Mr. Claude Carrière: Well, we have.

Mr. Rick Borotsik: A court injunction?

Mr. Claude Carrière: No. We need to find an interested party in South Dakota that can demonstrate irreparable harm in South Dakota from the measures. This is more difficult than it appears at this point in time.

Mr. Rick Borotsik: I do appreciate the fact that you've even looked at that aspect of it. I guess my next question is, what has to take place in order to trigger a court injunction, and would you in your department in fact have them file that court injunction if in fact the Friday deadline doesn't materialize?

Mr. Claude Carrière: If we can find someone who is prepared to file, we will work with them. We have been attempting that from the beginning.

Mr. Rick Borotsik: So you haven't been successful.

Mr. Claude Carrière: No. We are working with Canadian industry, who are working with their buyers and their suppliers in South Dakota, to identify someone who would be prepared to participate. We the federal government cannot file an injunction.

Mr. Rick Borotsik: That's not what I asked.

Mr. Claude Carrière: No, but we have been working with them to identify...

Mr. Rick Borotsik: So you have not been successful in finding that individual.

Mr. Claude Carrière: We would assist and work with them as much as we can from a legal standpoint.

Mr. Rick Borotsik: How active are you in that particular area? Are you seriously considering this as being the next arrow in our quiver, so to speak?

Mr. Claude Carrière: The problem with that arrow is that we don't have the bow, which is the person to deliver it. If we can find it, yes, it could be effective, but we cannot give you a time when we can find it.

Mr. Rick Borotsik: I guess my question, Mr. Carrière, very simplistically, is, are you actively seeking that industry and individual? That's a priority?

Mr. Claude Carrière: Yes.

Mr. Rick Borotsik: Thank you.

The Chairman: Denis.


Mr. Denis Coderre (Bourassa, Lib.): To illustrate my point, Mr. Carrière, it's as if we were in Montreal and in order to get to Ottawa, we travelled through Mont-Laurier, instead of taking the highway. I'm not an expert on international trade, but I get the feeling that we're trying so hard to play by the book that we are getting lost in procedural matters when instead we could be speaking directly to the parties concerned.

What role does our ambassador have to play in all this? What has Raymond Chrétien done thus far? Has he attended any meetings? Has he spoken to the Governor? What action has there been on this front?

Mr. Claude Carrière: The ambassador's role is to represent the Canadian government. He has spoken and written to the federal representatives involved and even to White House officials. He has also been in touch on several occasions with the Governor of North Dakota with whom he is acquainted. However, Mr. Janklow is not the easiest person to reach. Efforts have been made to contact him but calls from our ambassador and from our Consul General in Minnesota have not been returned.

We're dealing with a combination of circumstances. As Mr. Gifford mentioned, our low prices on basic commodities have had a significant impact on producers on both sides of the border, in eastern as well as in western Canada.

• 0955

We mustn't forget that the United States are in the midst of an election. The people are slated to go to the polls in early November. Historically, this region of the United States has been critical of Washington's inability to deal with complaints over Canadian imports. These people believe, albeit wrongly, that we are the source of their problems. This circumstances are further complicated by Washington's focus on election issues. Our administration has been unable to respond to the situation in North Dakota as quickly as it would have liked to. Our response time has been much slower. However, we are lobbying the government in Washington to take action to stop these measures. We want to avoid a situation where the US government acts without forethought and initiates measures which could have negative consequences for us.

Mr. Denis Coderre: Given the urgency of the situation, has our Prime Minister spoken directly to the President about this problem?

Mr. Claude Carrière: To my knowledge, they have not discussed this matter.

Mr. Denis Coderre: Then he hasn't discussed this with Bill. I see.

I'm concerned about another matter and if you can give me some assurances, than so much the better. I suspect that the US elections are merely being used as an excuse. In light of what Mr. Gifford said, I have the feeling—and you can correct me if I'm wrong and if so, so much the better—that the real reason for the trade disruptions is the perceived slackening of our public health standards. Given that we are not allowing US wheat to enter the country because of certain standards, the US is using the elections to try and play around with the standard somewhat. Are our public health standards negotiable?

Mr. Claude Carrière: Our public health standards? No.

Mr. Denis Coderre: Can you guarantee that in the event of an out-of-court settlement, health standards will not be affected?

Mr. Claude Carrière: As far as I know, public health standards are not on the agenda.

Mr. Denis Coderre: Therefore, you can guarantee to the committee that at no time will these standards be on the table.

Mr. Claude Carrière: I'm not in a position to guarantee anything.

Mr. Denis Coderre: Mr. Gifford?


Mr. Mike Gifford: I think for both countries, obviously one of their fundamental concerns is protecting human, plant and animal health, but they have to do that on a scientific basis. They just can't use these concerns about health and safety as a disguised barrier to trade.

Both of us have subscribed to the agreement on sanitary and phytosanitary measures that was negotiated in the WTO. One of the things this agreement provides for is that in the future, you should be willing to explore the possibility of regional certification as opposed to national.

Let me give an example. Just because we have a disease in apples in the Nova Scotia valley doesn't mean the importing country should prohibit imports of apples from the Okanagan in British Columbia just because they come from Canada. There should be a differentiation by region.


Mr. Denis Coderre: I agree. The issue is not where the apples come from, but rather the disease itself. We need assurances that the same public health regulations are enforced everywhere. If we Canadians enjoy the best public health standards in the world, I want some assurances that the standards will not be on the table when the next round of talks takes place. There are other issues that need to be addressed, and I'm sure we'll invite you back when we discuss STBr. All kinds of strange things are happening. If I can be certain that my negotiators are safeguarding public health and not using health standards as a bargaining chip, then I will be satisfied. That's why I'm asking you if you can give me any guarantees.


Mr. Mike Gifford: Yes, you can be assured that the Canadian health and safety regulations are second to none in the world.

The Chairman: Mr. McCormick and then Mr. Proctor.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair.

Thank you, gentlemen, for being here. I'm glad to hear your educated remarks.

• 1000

My colleagues opposite brought up the tie-in with supply management. Heading into the next couple of years, I guess anyone around the table could try to make something of something—but not a lot of supply management in those states, as we have acknowledged.

This is a very serious situation, but I wanted my colleagues from Manitoba to acknowledge the efforts of our minister. Actually, it's your friends and my friends in the west who have reported so well about what the minister has been doing on this, and talking to, phoning, Mr. Glickman incessantly and repeatedly.

I think when we go this route to solve this to the best of our ability, at least to the next election, we had better go through the normal channels—the federal governments. I mean, if we start jumping off to one governor and then we're going to have someone else protesting, I mean, I think we have to look at tradition and what's been successful for this country.

It sure wouldn't be the time, Mr. Chair, to talk about how important it has been and will be now that we've had an excellent wheat board behind there, which we're going to need more and more.

And of course our people in the west are finally realizing now—my friend, Rick, if you listen to them—the control they do have and will have.

Thank you, Mr. Chair.

Mr. Rick Borotsik: I'd like to see Mr. Gifford answer those political points.

The Chairman: Mr. Proctor, please.

Mr. Dick Proctor (Palliser, NDP): Thank you very much.

Before I applaud too loudly in support of the Minister of Agriculture on this issue, Mr. Carrière, you told us what happened after South Dakota began its checking, but as we all know, South Dakota announced I think about 16 days in advance of actually doing anything that the governor said they were going to be doing it. I would like to know what happened, what the Canadian government was doing in those 16 days before they started stopping the trucks at the South Dakota border.

Mr. Claude Carrière: Mr. Chairman, as Mr. Gifford or I indicated earlier, we have been working with the U.S. administration for quite some years to manage some of the irritants that have been identified by both the United States and ourselves when it comes to agricultural trade. Specifically, I've been personally involved in working on the wheat pilot project to address concerns in the United States without having a negative impact on our quality control system and our phytosanitary requirements for kernel bunt.

We have been very close to concluding that project, and it's unfortunate that the South Dakota actions have in fact put a stop to that kind of work, which could continue.

We had been working with cattle industries on both sides of the borders to put in place the North West cattle project, which in fact was gazetted in August and has been implemented as of today, I believe, October 1.

On these concerns South Dakota has had, they have been and were being addressed at the time before they announced their measures and when they announced their measures. So we were working to resolve problems and to prevent this kind of action from being taken.

Mr. Dick Proctor: I guess what I'm really asking is, what did the ambassador to the United States do when Governor Janklow announced that on September 16 they were going to start inspecting trucks? What was done between September 1 and September 16 or thereabouts?

Mr. Claude Carrière: I'd have to search for the information on that. I don't have it.

Mr. Dick Proctor: You see, the underlying premise of this entire conversation is that this is all election posturing. That's what we've heard. Organizations like the Saskatchewan Wheat Pool say that you're treating the symptom and not the disease; that the Americans are increasingly protectionist, looking at everything that's coming in.

I wonder if anybody here could tell us about allegations that on all red meat products imported from Canada or anywhere else, the Americans want that to be stamped as imported product. Can you tell us about that?

• 1005

Mr. Claude Carrière: In fact on Monday or Tuesday a conference of the House of Representatives and Senators defeated that clause, and the meat labelling requirement has been removed from the appropriations bill. Now, they have put in a requirement for study, and we are trying to find out exactly what the conditions or the terms of reference for the study are. But in terms of this appropriations bill, the labelling requirement has been removed.

We don't claim that there may not be other things that may come in the future. There is a group in the United States looking for this. We had been working with the processing industry in both Canada and the United States to defeat that clause. At this time, we can say that the collectivity has been successful in doing that. So that requirement has been removed at this point.

Mr. Dick Proctor: I have no further questions.

The Chairman: Mrs. Ur, please.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you, Mr. Chair.

I'll continue along Mr. Proctor's vein. I'm not looking even at the 16 days about which he was perhaps wondering what we had done. My viewpoint, as it was stated earlier, is that this is not a new phenomenon in U.S. election history, that this is a usual pattern that occurs when election time comes up in the United States. So I'm not even looking at the 16-day pattern. As a Canadian government, what are we doing to prepare for such incidents? They happen in these cycles, or it appears to happen in these kinds of cycles.

As you have stated, there are a lot of misconceptions. Why aren't we being proactive rather than always reactive? This is the part that really bothers me. We know this is going to happen, so why do we always have to wait for a red flag to come up before we move forward?

That's my one question that I'd like answered.

Secondly, U.S. wants access to Canadian elevators. As a point of clarification, they do the test to see if there's any disease or whatever else. Can you tell me, do we accept their test results without doing a test as Canadians receiving that product once it comes across the border?

You said the U.S. had a list of inequities. Do we as a Canadian government have a list as well? I'm not saying you battle on inequities, but how are we protecting ourselves as well?

As a last question, you say someone is assigned to working or lobbying South Dakota. How long has that person or persons been on the job, and what is their activity on that?

Those are my questions.

Mr. Mike Gifford: Mr. Chairman, we'll split the replies, I guess, to the hon. member's questions.

With respect to the entry of wheat into Canada, currently from states that are not identified as having kernel bunt—for example, South Dakota or North Dakota—they are free to export wheat to Canada, but the shipment must be accompanied by a phytosanitary certificate issued by USDA certifying that the product in question is free of kernel bunt.

By and large, as a generalization, Canadian and U.S. sanitary and phytosanitary authorities will accept the documentation of each country. Therefore, if the Government of the United States—i.e., the U.S. Department of Agriculture—is prepared to put its reputation and its professionalism on the line by issuing a phyto certificate, that will be accepted by us as proof that the product is free of kernel bunt, just as we expect the United States to respect our certificates of assurance of quality and safety.

So I think that's what we have to do more of. Clearly there are a number of issues of mutual interest.

I'm getting now to one of Mrs. Ur's other questions.

Mrs. Rose-Marie Ur: Excuse me, but before you move on to that next answer, just in relation to that, if we're saying—and I'm playing the devil's advocate here a bit—that we accept U.S. information documentation that indeed that product is disease free, etc.—and this is a different vein—then why don't we as the Canadian government accept U.S. information when it comes to pesticide registration?

• 1010

Mr. Mike Gifford: That was exactly what I was leading to, because I think we have a mutual interest in clarifying the whole question of basically moving toward a more harmonized approach.

We do have disparities on the question of pesticide registration and pesticide residues. We do have disparities in the veterinary drugs that are approved for use in both countries. And it works both ways. In Canada, for potatoes and canola, we have far more herbicides registered for use than in the U.S. But when it comes to some of the smaller crops, particularly for fruits and vegetables, we have far fewer herbicides.

So clearly there is a mutual interest in both countries toward speeding up a process that's already going on, but I think everybody will freely acknowledge it needs to be speeded up to encourage a greater harmonization of pesticides and veterinary drugs in North America.

I think that will certainly be on the agenda for these upcoming meetings. If we can get something more positive moving in that direction, then something good is going to come out of a bad situation.

In terms of how we can anticipate these things, I think this is the first time we have seen a U.S. action taken immediately prior to a U.S. election. I don't think we have ever seen a situation that has been quite so political before as this one has been. It seems to me that the way to start to work on these problems is to do exactly what we have been encouraging our industry to do.

Prairie Pools has been meeting on a regular basis with their U.S. counterparts. The Western Canadian Wheat Growers and the Alberta Barley Commission have recently organized a very successful conference in Banff, where producers from both sides of the border sat down and freely discussed these issues.

Certainly the Government of Canada subscribes to the recommendation made by the joint commission on Canada-U.S. grains a couple of years ago to establish an industry-led, Canada-U.S. consultative committee on trade in grain—and for that matter, if they want to expand it to any other agricultural product, we are quite open to it—but so far, the U.S. administration has been reluctant to basically get into that situation.

I think we need to encourage more dialogue at the producer level. I mean, presumably U.S. politicians respond to what they perceive to be grassroots concerns, and I guess we have to start to focus more of our attempts at basically getting more factual information to U.S. grassroots. Clearly, the best way to do that is through the U.S. farm organizations. Certainly we've indicated to farm groups consistently over the last several years that part of their job is basically to open up a dialogue with their American counterparts.

Basically, governments, whether it's federal or provincial, can't do all the work. The best dialogue is producer to producer on these issues.

So we don't disagree with the thrust of your comment that there needs to be more work by both the federal government and the provincial governments, because clearly the provincial governments have good contacts with their counterpart states, and certainly, above all, by Canadian producer groups to get the facts. They're better on the table so that these misconceptions and myths can be slowly dissipated.

The trouble is, and the reality is, it's going to be a long, sustained battle. It's not going to done overnight.

The Chairman: Mr. Hilstrom, please.

Mr. Howard Hilstrom: Mr. Chairman, about Mr. Janklow down in the States, in about 1985 he did much the same thing. As I said earlier on, this is not new.

In dealing with trade issues—and it's been expanded a little bit by Mr. McCormick—with Bill C-4 western farmers have been told once again what exactly is good for them out there.

With regard to the Canadian Wheat Board and international trade, the Americans have made various kinds of allegations over the years with regard to the Wheat Board. Now, that's an old issue. What specifically, right now, is being done in negotiations with the U.S. to clear up those issues that are still there? Is there something ongoing, and can you tell us exactly what it is?

• 1015

Mr. Mike Gifford: Basically we've told the Americans to put up or shut up. They keep on making these allegations about unfair trade practices by the Canadian Wheat Board, by the Australian Wheat Board, by the New Zealand Dairy Board. I think everybody agrees that if there are concerns about single-desk selling organizations, the best place to discuss this is in Geneva, in the World Trade Organization.

There are currently certain rules governing the operation of single-desk selling agencies that Canada fully respects. So far, all the United States has managed to do is to say, well, in theory, this could happen, or in theory, that could happen. But they have not yet to demonstrate any concrete examples of what the practical trade problems are.

We've indicated time and time again we're quite prepared to sit down and discuss with the United States concrete trade problems, but we're not prepared to discuss differing market philosophies.

They have their system, we have our system. They're different, but just because they're different it doesn't mean they're unfair.

So the onus is squarely on the United States to sit down and figure out exactly what their problem is, because so far they have not been able to communicate it.

Mr. Howard Hilstrom: I guess just one example that seems to have come up in the past year or so here is that the Americans have alleged that, for instance, wheat that is being delivered into our elevators there as number 3 feed ends up going down to the States, ends up as milling wheat, and the U.S. calls that dumping wheat in on them at below the market price, really, for the quality of wheat that went down there.

It's those kinds of things that absolutely have to be cleared up. It's not enough to give them an ultimatum. I mean, you have to actually work with them on that. So maybe you could comment just a little bit about that.

Mr. Chairman, before he answers, should I put my motions forward at this time or are you going to reserve that for a little later?

The Chairman: I'll reserve it for a little later.

Mr. Howard Hilstrom: Because it may give an opportunity for the members of the committee to look at that and possibly—I don't know if it's appropriate—to hear some comments from the witnesses here.

The Chairman: If the committee wishes, I'd like to finish with the questioning first and then we'll go to the motions.

Mr. Howard Hilstrom: Okay.

So could you just comment on that? And it's not only the wheat board. I mean, we have the Ontario Wheat Board down there too. All the grain issues are what I'm talking about, more than just the Canadian Wheat Board.

Mr. Mike Gifford: I think the report of the Canada-U.S. commission on grains really documented the problem that arose back in 1993-94 when a lot of our wheat went down by truck into local U.S. elevators in the nearby states. U.S. farmers found they were stuck in lines for five or six hours waiting to unload their truck at the elevator. Basically the reason for the delay was all these Canadian trucks coming in.

And it is true that in some cases, because the quality of the Canadian wheat was down those years because of adverse weather conditions, some wheat basically got sold as what in Canada would be a feed grade but what the local U.S. elevator blended with U.S. products for milling purposes.

I think with the benefit of hindsight, a lot of people in Canada, the grain companies who were involved in the trade, realized that was not the right way to sell wheat into the United States. So today, my understanding is that over 95% of the wheat that's sold into the United States from western Canada is shipped by rail. It's shipped directly to the end user. So the big mills in Minneapolis and St. Louis are receiving unit trains coming in from Canada.

The kind of problem you described did in fact occur, at least in some instances, in 1993-94, but is not taking place today.

Mr. Howard Hilstrom: So just—

The Chairman: We have to go to our next questioner.

Mr. Howard Hilstrom: Okay.

The Chairman: Mr. Steckle, Mr. Borotsik, Mr. Harvard and Madame Alarie.


Mr. Paul Steckle (Huron—Bruce, Lib.): I wonder if I could direct our thinking for a moment. My question would follow the lines of agreements made in the past.

Ten years ago we entered into NAFTA. More recently we entered into WTO. In entering into those agreements there is an incumbency upon governments to live to certain conditions agreed upon by all parties, all signatories.

• 1020

Following Mr. Proctor's question about the 16-day period—and his question had to do with we did in that 16-day period—my question is, what did Mr. Glickman do in that 16-day period? Because clearly, as I understand it in information I have, there are conditions of non-discrimination, of free transit, that are presupposed upon us in the agreement of NAFTA.

If we have met all the federal requirements, was it not incumbent upon Mr. Glickman to go to the governors of the various states, particularly of South Dakota, in that 16-day period, and say, listen, you cannot unilaterally do this? There should have been a period of stay until that area of question of duress was dealt with.

I mean, why is it incumbent upon us to have to fight this? Is there not some responsibility on the U.S. government to make sure that the member states—and there are 50 or 51 of them in the U.S.; we have 10—live by the rules agreed upon? It's incumbent upon them. If it isn't, then there is no point, and it really gives us all pause as to whether or not we ought to be entering into other further agreements.

As I understand NAFTA and WTO, it is so that we have freer access to product coming in and for product moving into other areas of the world so that there's a greater harmonization of trade in the world. I guess I need to have that understood.

Is Mr. Glickman negligent in his responsibilities or is it incumbent upon us to listen to every state of the United States of America every time they have a grievance if there's an election? Let's put the politics aside for a moment and assume there is no political interference. Let's deal with the real facts. Why has Mr. Glickman not acted in this case?

Mr. Mike Gifford: It is the responsibility of the U.S. federal government, just as it is the responsibility of the federal government in Ottawa, to ensure that the subsidiary levels of government basically respect the provisions the federal government has entered into in terms of an international trade agreement.

Yes, there is an onus on the federal government in Washington to ensure that its states do not breach the provisions of NAFTA and of the WTO, just as it's Ottawa's responsibility to ensure that provinces and municipalities in Canada do not breach the obligations of Canada's international trade agreements.

Certainly over the course of the last several weeks ministers Vanclief, Marchi, and Axworthy and Ambassador Chrétien have all been making that point very vigorously to their American counterparts, that this is an extremely dangerous precedent to allow to go unchallenged and that it is incumbent on the United States government to ensure that its own subsidiary governments respect the provisions of NAFTA and the WTO.

Unfortunately, the response has been, well, we're in a difficult political situation. That seems to colour everything.

Mr. Paul Steckle: My closing comment would then be that if this is a political issue, are we in agreement that this is a political issue more than it is an issue of violation of principle or rules?

Mr. Claude Carrière: Well, you can argue, sir, that the South Dakota measures are inconsistent with the United States' obligations under both the WTO and the NAFTA. The United States government has an obligation to us to ensure that the states observe those obligations, and that is what we want to talk to them about under the WTO and the NAFTA. We prefer that the measures be lifted immediately, but if they are not, then we will insist that the United States take those actions to ensure these measures are lifted.

Mr. Paul Steckle: Clearly it's a state issue, because if the product is not being deferred back into Canada, from which it came, its source of origin, but is allowed to remain in the U.S., then obviously it's not a violation of rule but a violation of a political principle.

Mr. Claude Carrière: There is a violation of rule, in our view.

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

The politics and the economy, I think, sort of dovetail here, which is what Mr. Steckle's trying to allude to. The economy, obviously, is the deep-rooted source as to what's happening right now in the midwestern states. There are statistics that farm incomes have dropped substantially, and in fact, one would say, dropped dramatically in North Dakota and South Dakota.

If you look at the markets today and if you look at Asia, look at Russia, look at the globalized trade that we have going on right now, we don't anticipate that there's going to be a major upturn in those particular markets.

• 1025

Mr. Gifford, based on that presumption, knowing full well that there is sort of an economic turmoil out there, do you believe that this is going to be rectified very quickly? We're a scapegoat. Canadians farmers right now are scapegoats, and you seem to simply throw your hands up in the air and say, no, we have God on our side, we have the trade rules on our side, and if these people want to continue to play these silly games, then I guess there's not much we can do about it.

I'm a little concerned about that, Mr. Gifford. We talk about reactive, proactive. Right now we know, proactively, there's going to be some serious trade concerns out there in the next 6 to 12 or perhaps 18 months. What is your department doing to be proactive with respect to not having this happen again?

It may not be simply political. It may well be the producers out there who are going to put the blockades up the next time. What are we going to do? Simply say, well, no, it's a province to state, it's a state to state?

We can't simply let our producers hang out there in the wind, Mr. Gifford. What can we do proactively?

Mr. Mike Gifford: Mr. Chairman, I think we've already indicated that the federal government and the U.S. government have been systematically addressing a number of problems. In some cases, we already have solutions in place, such as the North West Project on cattle. Canada unilaterally suspended its tariff rate quota on barley to allow U.S. barley to enter more freely.

We were quite prepared to get this wheat pilot project up and running several months ago. It was only because the United States insisted on delaying that pilot project in order to settle some of these outstanding phytosanitary issues that we don't have this pilot project up and running. I think there is a consistent history of proactive attempts with the U.S. government to address some of the problems that have been identified.

Mr. Rick Borotsik: If Minnesota and Montana decide to go the same route as South Dakota in the next week or six months or month, what is our position going to be as the federal government of Canada with respect to those issues? Now, if Minnesota and Montana go the same way as South Dakota, we're in deep, deep trouble. What would you do, Mr. Gifford?

Mr. Mike Gifford: Clearly, I would not disagree with that at all.

Mr. Rick Borotsik: What would you do, Mr. Gifford?

Mr. Mike Gifford: It seems to me that this really would result in severe economic disruption. You would have impacts on Canadian price levels. Right now, you don't have impacts on prices.

Mr. Rick Borotsik: We know all that. What would you do, Mr. Gifford? That's my concern. I need a level of comfort here.

By the way, let's hope beyond hope that this doesn't happen, but what would you do if in fact Minnesota and Montana went the same way as South Dakota?

Mr. Mike Gifford: It's clear that this would be regarded as an extremely urgent matter that needed to be addressed at the highest political level.

Mr. Rick Borotsik: And that's where you and I disagree. I believe it's a highly urgent matter right now, Mr. Gifford, that has to be dealt at the highest political level. That's what I have a difficulty with.

Mr. Mike Gifford: I think we've already indicated that it's our hope and our expectation that once the American federal government gets its act together, they'll be prepared to enter into consultations as early as next week. We're ready to meet tomorrow, to meet tonight.

Mr. Rick Borotsik: But if they don't want to meet with us, Mr. Gifford, we have difficulties. We can sit back and say, yes, we are right, but to have a producer sitting in western Canada right now who can't deliver product, being right doesn't matter very much.

The Chairman: Does it go beyond Mr. Gifford's responsibility?

Mr. Rick Borotsik: I appreciate that, but as a matter of fact, we brought politics in, and Mr. McCormick decided that everything was rosy out there—

Mr. Larry McCormick:

[Editor's Note: Inaudible]

The Chairman: Mr. Harvard.

Mr. John Harvard: I think we're going to have to put two or three points into context, and then I have one or two questions for Mr. Gifford.

First of all, I think it was Mr. Proctor, or perhaps both Mr. Borotsik and Mr. Proctor, who mentioned this 16-day period. Apparently the Governor of South Dakota had made some threats 16 days before he actually announced what he was going to do.

It's my understanding that when Mr. Janklow made that statement around September 1, he wasn't definitive. He simply said he was going to stop trucks, stop traffic at the border, but he said nothing else. He didn't lay out any plan. In fact, I understand he even delayed for one day his announcement on what he was actually going to do. I guess he didn't know himself what he was going to do. So I think it's important for members opposite to understand that Mr. Janklow was very vague—very vague—around September 1.

• 1030

I want to also say that I think this session has been good, and I appreciate the officials coming today, because I think all of us have a better understanding of the issues before us now than we did before this meeting happened. I think we have a good understanding of how the government is coping with this vexing problem.

It's been mentioned that there are members here from Manitoba. I'm from Manitoba as well. Agriculture Minister Vanclief and ministers Marchi and Axworthy have been working very closely together on this file, and I know they're frustrated. I'm frustrated. I think everyone is frustrated.

I think we all have to remind ourselves that you can have the best rules in the world—and I am not suggesting that the free trade agreement rules are all perfect—but there always has to be a spirit of cooperation. If one party to an agreement wants to frustrate you and play around with the rules, in a spirit of non-cooperation, they're not going to work very well. I don't think there's any doubt here that most of what the Americans are alleging, these state officials, is sheer, unadulterated bunk. It's spurious and it's specious, but they can get away with it because all they're doing is alleging certain things within the ambit or scope of the rules, and then a process has to be followed up to determine what in the world we're going to do with these phoney allegations.

In so far as consultations leading up to or taking place after any cease and desist order by the Americans to these silly actions, I cannot see any other way it can be.

There has to be a quid pro quo, Mr. Borotsik. To somehow suggest that we're going to do it all on our own is just not realistic. The Americans have to realize that this is a two-way street. If they want to make allegations, if they want us to sit down and talk with them, fine. We'll talk until the cows come home. But by God, we want you to stop this harassment. And that's what it is. It's nothing but harassment based on phoney allegations.

The question I have for you, Mr. Gifford, is this. I am as frustrated as anybody. I've just said that there has to be a spirit of negotiation for any set of rules to work. Can the Americans carry out these actions with impunity, with virtual impunity? After consultation has taken place and after there has been, say, a finding, as it were, and it is found that all these allegations are just what we believe them to be—that is, pure, unadulterated bunk—is there anything under the rules that we can do? Or do we just say, well, you've been proven wrong again, so be good boys and good girls and please don't do that again? Of course, we all know that when there is another election or there's some other opportune moment, guess what? They'll come up with some other round of allegations.

Can they do it with impunity?

Mr. Mike Gifford: The best thing that could happen would be that both countries sit down and continue to get on with the work they've already started and basically systematically address any of the issues that have substance and need to be addressed. The sooner we sit down and the sooner the states stop screwing around, the better for everybody.

I think that's where the U.S. administration is. Clearly one option, which we've already initiated, is to start dispute settlement, but obviously in dispute settlement it takes months before a panel report will come out. Rather than try to pursue that avenue, clearly the much more preferable and much speedier avenue is for both governments to sort out the differences.

• 1035

In a trade relationship as large as the Canada-U.S. trade relationship, which is the largest in the world, there will be problems from time to time in both agriculture and non-agriculture. We have to come to grips with the problems, recognize that there are a lot of perceptions that need to be addressed, and we have to speed up some of the discussions we've been having.

In terms of pesticide residues and veterinary drug differences, for example, there is ongoing work occurring in those areas, but progress has been occurring slowly, over years. Clearly that kind of progress needs to be speeded up.

So I think it's basically up to the state governments to back off and let the two federal governments get on with the job. That's the bottom line.

Mr. John Harvard: I want to say in closing that my guess is that most thinking Americans who are familiar with these issues realize that these allegations, or most of them, are bunk. But they show solidarity on that side of the border, and I think we have to do the same. We can't politicize this; we have to show a common front and work together. If we start bickering amongst ourselves, that only weakens our position.

So I would ask everyone around this table to demonstrate some solidarity.

The Chairman: We've been longer rather than shorter, and we still have a motion to consider.

Madame Alarie and Rose-Marie Ur.


Ms. Hélène Alarie: The more I hear, the more concerned I become. We're talking about the United States, our biggest trading partner, and about the host of diplomatic efforts that have been made by the Prime Minister and our ambassador, all of which appear to have been for naught. I'm tempted to think that relatively speaking, we carry very little weight where this matter is concerned.

Following Mr. Carrière's statement, mention was made of initiating a process within the framework of the WTO. That also concerns me. Out of curiosity, I looked into the dispute resolution process used by the WTO. If we were to go this route—and I think we have no alternative—the matter would not be resolved for many months to come, because there is the reference to 60 days, 30 days, 22 weeks, and so forth. I have no idea when we could expect a settlement. Like everyone else, I have to wonder if there is some way of speeding things up. Who should we be talking to? Are there any shortcuts that we can take?

Mr. Claude Carrière: We pointed out that invoking the provisions of NAFTA and of the WTO would be one way for us to wake up the US administration and to get it to assume its responsibilities. We want the measures imposed by the states lifted before we ask a special panel to resolve this dispute. We don't want a special panel to decide that we were right six months down the road. That's not the solution. We want these sanctions lifted now.

The mere fact that we've requested these consultations within the framework of these two forums seems to have jolted the US administration into paying us some attention, according to our information. Some of the governors involved have felt compelled to explain their position to Washington. A meeting was held with Mr. Glickman and with representatives of the USTR in an attempt to resolve this problem.

Obviously, the US states felt that they had good reason for taking these actions. We believe they were wrong and that the reasons they invoked were wrong and unfounded. However, they believed they were acting properly. Therefore, we need to work with the Americans to dispel these myths and to come to some sort of agreement.

To begin with, the US government must put some pressure on the states to lift these measures. We believe that the government's efforts will prove successful and that we will see some results by next week.

• 1040

We have indicated to the US government that if these measures are lifted, we would be willing, as we have been for years, to sit down with them at the same table and to discuss trade irritants. We want matters to move forward, but first, these measures must be lifted.

Ms. Hélène Alarie: If that doesn't happen, what then?

Mr. Claude Carrière: We are confident that our efforts will prove successful.

Ms. Hélène Alarie: We wish you all the best.


The Chairman: Mrs. Ur.

Mrs. Rose-Marie Ur: My one question was not answered. We ran out of time.

I believe you know the question I'm referring to, about person or persons involved down in negotiating or working on the situation with producers.

Last but not least, as Mr. Gifford has said, the best solution is to have both parties sit down, but would you consider having at least one meeting and see where you can go from that without the bargaining chips being there? At least sit down face to face at one meeting and see what happens at that meeting. If you're not satisfied, then go to plan B. Give them that one option.

I'm not caving in. I read this morning that the Canadian sectors affected by these disputes have often preferred to sign appeasement settlements. Well, it's all right to be a lover, but it's also good to be a fighter. I think we really have to ensure that our Canadian values are being met south of the border as well.

Mr. Mike Gifford: You can be assured that, for example, senators Conrad and Dorgan would dearly love to limit Canadian exports of wheat to the United States, and you can be assured that under no circumstances will Canada agree to any limits on our exports to the United States.

Mr. Claude Carrière: Your question concerned several issues. Your first question involved proactive preparations. We had, prior to the actions of North Dakota and since the actions of North Dakota, prepared communications material to explain our side of the story, the fact that our wheat is fairly traded and the like.

The difficulty we have is that the material can be prepared. It can be disseminated. It can be put in front of the eyes of the people in South Dakota. But if they refuse to read it, or they refuse to accept the story, then there's nothing we can do about that.

Mrs. Rose-Marie Ur: But who's the messenger?

Mr. Claude Carrière: The messenger varies. It includes our people in the consulate general in Minneapolis, who covers the territories of the Dakotas. It includes the embassy in Washington. It includes members of the industry. As Mr. Gifford has mentioned, we have supported and worked with the industry for it to meet with its counterparts in the United States and to improve understanding of the situation on both sides.

This we have attempted for years. There has been a less-than-welcome reception on those attempts in that region for a variety of reasons, some of them being entirely political.

So we have done that. We have been less than effective. We will analyse what we've done and try to determine what we could have done better. In the future, we'll do that. But it takes two to tango, and if the other side is not willing to listen, it's very difficult to convince them or to have a rational discussion about solving the problem at a table as opposed to behind blockades.

The Chairman: Mr. Proctor and then Mr. Calder.

Mr. Dick Proctor: Thanks. I appreciate that we don't have much time, and I'm glad to get on.

I accept what Mr. Harvard said about team work, and I say as an aside that had this committee had the opportunity to go to Washington last spring, which was talked about but we never did—and there was at least one news report that Minister Vanclief was invited to go to Washington on September 28 and was going to bring along ag critics from the other parties—I think that might have gone some distance and helped in this cause.

The other thing Mr. Harvard said—and this is more or less a direct quote—is that most of what the Americans are saying is pure, unadulterated bunk.

• 1045

I would like to ask the panel here this morning, is Canada concerned about any aspect of this? Do you feel we're vulnerable in any particular area of trading in terms of live pork and cattle and grain into the United States? Because it's not just Governor Janklow; respected senators like Tom Daschle are saying that Canadians have a lot to answer for here.

I would appreciate your insight as to what the Americans will be coming at us on.

Mr. Mike Gifford: With all due respect to the members of the U.S. Congress, a lot of them simply don't know the facts, or don't want to know the facts. The embassy in Washington has made numerous attempts to basically give them factual information on what is the situation, but basically a number of congressmen, although certainly not all of them, simply choose to interpret the world as they would like to see it interpreted. Certainly Senator Dorgan and Senator Conrad, in particular, from North Dakota, have made it very clear to everybody in Washington that their purpose, their objective in life, is basically to see limits placed on imports of wheat from Canada. I mean, they're very forthright, very straightforward, in saying that.

At the same time, a number of other congressmen, and certainly governors, take the position that their objective is not to seek limits on imports of agricultural products coming in from Canada; their genuine preoccupation is to achieve the perception that the border is just as easy to access into Canada as it is into the United States. That is a reasonable position, and where the Americans have identified reasonable problems, we've sat down and tried to work out reasonable solutions. We're prepared to continue to do that.

In some areas, for example, the ministers of agriculture on both sides are not responsible for the area. For example, in pesticide registration and veterinary drugs in the United States, it's the ETA and the FDA, and in Canada it's the health department. Somehow we have to encourage an increased intensity of dialogue to move toward greater equivalence in harmonization.

As I say, on the pilot project, we're ready to go. It could have been announced four or five months ago. It wasn't, because the Americans wanted to sort out some other issues, but hopefully those issues have now been sorted out. We're ready to go any day. If Senator Conrad wants to drive a semi-trailer across the border, hopefully in a couple of weeks' or a couple or months' time he can do it, no problem, going from North Dakota into Saskatchewan.

But certainly the way in which some of the state politicians and their congressional representatives are acting is not conducive to a harmonious relationship. On all of these problems, we just hope that calmer heads will prevail. We know there are a lot of people at both the state level and Washington who genuinely want to get this problem behind us and basically get back to a normal life. Those are the kinds of people we're prepared to work with.

The Chairman: Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman.

I agree with Mr. Proctor; we should have gone down to Washington. I think this is something we should still be looking at.

In the last round of talks, Mr. Gifford, we agreed to reduce tariffs and subsidies by 15%. In other words, we agreed to a flatline of 85%. Supposedly everything should be just great now. Commodity prices should be great, all this stuff.

That tells me right off the bat that not all countries out there, including the United States, are playing by the rules we negotiated. Their commodities prices are still low, therefore they still must be being supported by some sort of a subsidy, because we have overproduction.

What I'm worried about right now—and Mrs. Ur alluded to it—is the fact that every time we get into these types of deals with the United States, there's an appeasement factor. That's accumulative, because each time we have a dispute with the United States, we basically negotiate an appeasement, and over the long term, it weakens our position.

Now, in the United States at the present time about 32% of the Senate borders Canada and about 38% of the Congress borders Canada. If the last round of talks has not improved commodity prices the way they should have, I think their strategy is very simply this: they're going to put us into a bind, we're going to historically come up with an appeasement-type deal for them, which weakens our position, and then when we go to the talks in 2000 we've already started the negotiation process and already given away part of the country store.

• 1050

I'd like your comment.

Mr. Mike Gifford: International trade agreements are about establishing the terms of market access. For the vast bulk of agricultural agrifood products between Canada and the United States we have duty-free access. That security of access and that quality of access has allowed the Canadian agrifood sector to increase its exports to the United States, year in and year out since the FTA was negotiated, by over 10% a year. The same is true for the United States. Their exports to Canada have increased far greater and far faster than their exports to offshore markets.

Commodity prices in North America for cattle and hogs traditionally have been largely determined by total North American supply and demand. In both the hog and cattle sector this year you have a cyclical high in supplies of cattle and hogs. This situation has been compounded by the economic situation in Asia, where increasingly over the last decade both U.S. hog and cattle producers and Canadian hog and cattle producers are producing more and more for the international market. Therefore, clearly red meat prices are low, but they're not low because of, or in spite of, the trade agreements; they're low because of the economic fundamentals. Supplies are up and demand is weakened.

In the case of wheat, the Canadian acreage of wheat is down. The U.S. acreage of wheat is about stable, but the yields are up because of exceptionally good weather. In Europe, acreage is up substantially and so are yields. Therefore, what we have is a global oversupply of wheat relative to demand, and that's depressing prices.

I mean, these are basic economic fundamentals, and are not related to the terms of the trade agreement, but certainly I would agree that we expect the United States to live up to the terms of the FTA and the WTO, which they freely entered into, just as they expect Canada to live up to its obligations. Clearly, unless both countries do take these agreements seriously, you're going to end up with more problems like this rather than less.

The moral of the story for both countries is that they should respect the international trade agreements they both entered into. If you revert back to the law of the jungle, where people ignore the rule of law, then you really are going to get back into the thirties, when each country basically adopted beggar-thy-neighbour policies and we all got worse and worse and worse off.

Mr. Murray Calder: I'll cut to the chase on this one, then. Three years ago when I was down in Washington and debated Pat Roberts on this, I asked him the question about export enhancement policy, EEP. We were told at that point in time that it was on the back shelves and it was going to collect dust, etc. But it was never done away with. That was the point.

When you talk about overproduction in Europe right now, I know full well that their subsidy system over there is still alive and active, and the United States at the present time has dusted off EEP. They're using it again. So nothing has changed here.

The chase question I'm going to put to you is very simply this. We obviously have to get to the table with these guys fast. They're breaking the rules, we're not breaking the rules. Are we going to give them a little trade treat to get everything going again or are we just going to be hard line in this and tell them to smarten up?

Mr. Mike Gifford: Clearly, the action that the states have taken in the U.S. are in contravention of the United States' obligations under NAFTA and WTO; certainly the actions of South Dakota in particular. We do expect the United States government to live up to its international trade obligations.

The consequences of they or any other country not living up to these international agreements is anarchy that will adversely affect everybody. I think people in Washington recognize that, and that's why saner heads are beginning to say, okay, let's sit down and sort out these issues.

• 1055

We certainly don't have to pay the Americans anything. We want the Americans to bring their actions into conformity with the current trade agreements. We have areas of mutual interest where it's in both our countries' interests to resolve certain border irritants. If it's a fair problem that needs to be addressed, we're prepared to sit down and work out a pragmatic solution.

We're not prepared to limit our exports to the United States in any way, and if there are other outstanding questions, many of those questions will need to be addressed in the World Trade Organization, because they are multilateral in context rather than bilateral.

For example, in the case of supply management—access into the Canadian market for dairy and poultry, to be very specific—if the United States wants to talk about access in the Canadian market for those products, the venue is the World Trade Organization, not NAFTA.

The Chairman: We'll hear from Rick and then we'll go to Mr. Hilstrom.

Mr. Rick Borotsik: The question I wanted to ask is a very simple question, and it's one that I hope I already know the answer to.

We seem to be the agricultural doormat when it comes to the trade going on right now in South Dakota, North Dakota, Minnesota and Montana. I hate to even ask the question, but it bears being asked. Are we prepared at some point in time, Mr. Gifford, to look at a quid pro quo? We do have substantial trade coming from the States into Canada. We know how successful they have been to identify the problem in South Dakota, particularly with the deep-rooted problem in agriculture.

I know, Mr. Gifford, because you are such an accomplished trade negotiator, that what I'm about to say is going to strike fear in your heart, but at some point in time we can't be a doormat. Is there a quid pro quo? Is there going to be a time where in fact we may at the border say to the Americans, no, you cannot bring product into this country until you are prepared to sit down and negotiate?

Mr. Mike Gifford: I think some of the problem relates to the fact that some people in the United States think we've been far too successful. We have turned ourselves from being a net importer of agricultural products for one hundred years into being a net exporter of agriculture products to the United States. Ever since 1992 we've been a net exporter.

Our performance basically demonstrates that we have not been a doormat. We have been very aggressive. We have exploited the opportunities provided to the Canadian agrifood sector by the negotiation of the Canada-U.S. Free Trade Agreement.

Regarding the question you've asked, we've canvassed the industry and the provinces for their advice. Their advice is basically, look, let's get sensible. Let's sit down and tell the Americans to shove off in terms of the state action, but once the state actions are terminated we should sit down and try to resolve these issues. I think the views of the industry, the provinces and the federal government converge on that.

Mr. Rick Borotsik: The answer, I take it, is “no”, Mr. Gifford.

Mr. Mike Gifford: To what?

Mr. Rick Borotsik: To a quid pro quo, that there would not be any similar-type actions in Canada as to what is going on in the United States right now.

Mr. Mike Gifford: That's a hypothetical question. It would depend on how circumstances evolved over the next week or so.

Mr. Rick Borotsik: Thank you.

The Chairman: Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

None of us wants to sit around and do nothing while this blockade goes on, and you've indicated that there is a possibility of some resolution. We've heard around here today that there are two issues there—MP Ur brought it up—with regard to what can be done in the future in regard to having some proactive work done, this type of thing. We also had it brought up that in fact there were questions that couldn't be answered by our panel here today, and that's very true.

As a result, I have two motions I would like to bring forward. As we had cooperated at the start with Mr. Borotsik's motion, or his getting us all together on this special committee meeting, and I've heard from the other side on the same issues I'm bringing forward, I would like to move that these two motions be put to a vote here.

I don't know if you want me to read them in particular. I can just describe the motions.

The first one is to have the ministers responsible for these areas—that is, the Minister of Agriculture, the Minister of International Trade and the Minister of Natural Resources—appear before this committee in regard to the unilateral blockade of Canadian livestock and grain by the U.S. states.

That's dealing specifically with that.

• 1100

Mr. Rick Borotsik: Do wish you a seconder to that motion?

Mr. Howard Hilstrom: Yes, please.

Mr. Rick Borotsik: I would be more than happy to second that motion.

The Chairman: That is motion two?

Mr. Howard Hilstrom: Well, I didn't number them. That's motion one.

The Chairman: On the blockade?

Mr. Howard Hilstrom: Yes.

Motion two is dealing with the idea that there should be some type of early warning system to anticipate and deal with unilateral trade actions before they become a crisis and have something more in the area of firm policy on the part of the government and instruction to our trade negotiators.

I would also ask that this motion be considered and seconded, please.

Mr. Rick Borotsik: I would also second that motion, Mr. Chairman.

The Chairman: Do you want these motions to be dealt with by this committee today or by the new committee next week?

Mr. Howard Hilstrom: Get them seconded, and I believe the motions could be dealt with next week.

The Chairman: Okay. So you don't want a decision today. You want them discussed and then tabled until the new committee is formed, when we'll deal with them.

Mr. Howard Hilstrom: I believe the new committee would be the appropriate one to have these tabled for.

The Chairman: Mr. Harvard.

Mr. John Harvard: Mr. Chairman, I think these motions properly belong to the new committee, whenever it's constituted. I assume it will be constituted sometime next week. It'll be that committee that will have to deal with these proposed motions.

I would suggest that we simply put this business over to the new committee when it meets.

The Chairman: Okay.

Is that agreeable?

(Motions allowed to stand—See Minutes of Proceedings)

The Chairman: Is there any other business for this morning?

Mr. Proctor.

Mr. Dick Proctor: I guess this is probably the last time this committee will be presided over by you, Mr. McGuire. I wanted to recognize that and to congratulate you.

Some hon. members: Hear, hear.

Mr. Dick Proctor: I think we've had a good committee, and you've treated all of us very fairly.

You were probably the third-most famous McGuire in North America this summer.

The Chairman: I've changed the spelling of my name; I use a “w” now.

Mr. Dick Proctor: Thank you very much.

The Chairman: Thank you.

Any further business?

Thank you very much to the witnesses.

The meeting is adjourned.