Indeed, the European Union and Canada are privileged partners. We have a long history in information exchange but also in trade. The EU as such, with a market of 500 million consumers, is a significant market for Canada.
The EU is the world's largest importer of agriculture and agrifood products. In 2016 we imported products worth 163 billion euros, 16% of the world's total agriculture and agrifood imports.
This provides reasonable opportunities for Canada. We are Canada's fourth-largest export market for agriculture and agrifood, with opportunities for further growth for your farming industries and your agriculture sectors. There is already important trade ongoing between the two parties. In 2016 Canada was our ninth top destination for agrifood. You are the 16th exporter/supplier of food to the EU, and there was already important trade ongoing before CETA entered into force.
We are both veterinarians. We are working in the SPS area, the sanitary and phytosanitary area, and we have as a basis there the WTO SPS agreement, which indeed forms the basis for our requirements. It applies to us in the EU, but also to our colleagues in Canada. This agreement has been in force since 1995. CETA again affirmed the obligations and the rights under the SPS agreement.
We already have had really good historical co-operation. There has been a veterinary agreement between Canada and the EU since 1999. That has been beneficial for both sides.
There are quite a number of areas in the SPS field for which we have recognized equivalence. This means that both sides' requirements allow for the same level of SPS protection, and the production of food should in that case be in accordance and compliance with the exporting country. If your industries export products to the EU in areas for which we have recognized equivalence, they only have to comply with Canadian rules and not the EU rules, because they provide the same level of protection. This is really beneficial for our industries. This concerns meats, but also bovine semen and fishery products.
Also, under the vet agreement, we apply a recognition of each other's regionalization decisions in times of disease outbreaks. In times of such outbreaks, we design certain areas for which restrictive measures apply. By recognizing these measures, we allow the continuation of trade from the free areas, which is again extremely beneficial for industries.
Under CETA we will be further building on those agreements and achievements, but now, with CETA, we have also included plant elements, phytosanitary elements, and also other food aspects. This is excellent timing, because the first meeting of the joint management committee on SPS will take place next week. We will be with you in Ottawa next week, where the meeting will be hosted by our counterpart, the Canadian Food Inspection Agency.
I hope I have some minutes left to give you a very short introduction to this food safety system. We had a major overhaul of our regulations early this century after significant food crises hit the EU in the 1990s, notably on BSE and dioxin. At that time, the EU adopted the “General Food Law”, by regulation 178/2022. That sets a number of basic principles that are reflected in all the food regulations established since the general food law.
I was really pleased to hear last year in Geneva that when Canada presented its “safe food for Canadians” regulations they had also been making use of the principles of our general food law, so we are helpful for both sides.
After these food crises in the 1990s, we were facing EU consumers who had lost confidence in the safety of EU food, but also in the industries producing this food and in the public authorities overseeing the food production. There was really a loss of trust among our consumers. With the general food law we set some basic principles, including the following ones.
We apply an integrated approach from farm to fork, from stable to table, animal origin or not, and we include all food, including animal feed. It means that food products have to be controlled and have to be safe throughout the production process. We do not believe in cleaning up the final product when it gets contaminated during the production process. It should be safe and controlled throughout the food production process at all stages.
Another important element is that food business operators are primarily responsible for the safety of their food. Food business operators must have a dedicated control system in place. We call them hazard plans. They need to know where contaminations may occur, and they have to control these. Further, they have to apply full traceability. They must have a system in place that makes it possible to follow food products throughout the production chain, backwards and forwards. If they are confronted with a contamination, they have to know where they got their raw products from, but they also have to inform their customers that there might be a problem with the products they have received. That is full traceability.
Another very important element is that SPS measures in the EU—measures in the sanitary and phytosanitary area—are fully science-based. To that end, we established the independent European Food Safety Authority back in 2002. EFSA produces risk assessments by making use of scientists all over the world and all the relevant scientific information that is available, and it conducts this work in full transparency. Any opinion is published, and it's known which scientists have contributed to the opinion and also which information has been used to be able to issue that opinion.
Further, risk management, the taking and enforcing of measures, lies with the European Commission together with the European Parliament and the authorities of the 28 member states. They are politically responsible and accountable.
Also, we've have recognized the precautionary principle, already established by the Montreal protocol at that time and by others, in order to prevent risks to the safety of consumers in case scientific evidence is lacking.
As well, a very important element also countries outside the EU is that products exported outside the EU at least have to meet the requirements applicable in the EU; they may not be of a lower standard. Every product produced in the EU and exported has to at least meet the requirements applicable in the EU.
Another huge achievement in the EU with our 28 countries is that we have one single open market, which allows free trade of goods, people, and services within but also between the 28 member states. All agriculture products are produced and controlled in accordance with harmonized rules set at the EU level, and the same standards apply in every EU member state. Also, national authorities are performing their controls in compliance with EU-established control rules. When a product leaves the member state and arrives at another member state, it's not again controlled; it is already meeting the EU requirements, and member states trust each other.
I have some words about the legislative process. I think it's particularly important and relevant for you.
The EU legislative process is based on two principal treaties, those being the Treaty on European Union and the Treaty on the Functioning of the European Union, as amended most recently by the Lisbon treaty.
These three treaties are binding agreements between member states and determine that secondary sources of law such as the general food law, but also the newly established official controls regulation as well as the newly established animal and plant health law, are directly applicable and enforceable in all member states, and that further transposition into national law is not a requirement. If we establish EU regulations in Brussels at the EU level, they are directly applicable in every single member state.
Our legislative procedures lay the initiative for new legislation or amendments to existing rules with the commission. Only the European Commission has the right of initiative. The adoption of legislation, however, takes place in coordination with the European Parliament and the Council of the EU, in which the ministers of the member states come together.
As a next step, we then have delegated and implementing acts that amend, supplement, or implement secondary legislation, which the commission can take themselves in cases of non-essential rules or after endorsement by the member states by voting via comitology procedure: for instance, in the case of the authorization of GMOs, but also if we would be allowing pathogen reduction treatments.
With respect to trade of agriculture products between the EU and Canada and the SPS measures that apply to these, it's good to emphasize that also with CETA both sides maintain their standard-setting rights. CETA is not forcing us to lower our food safety standards. That obviously applies to both sides of the ocean.
However, the information exchange that takes place under CETA—the regular meetings of experts and scientists and our future co-operation in international fora like the OIE and Codex Alimentarius—should make the agreement, CETA, an additional tool to overcome non-tariff measures there where possible.
Our system of one internal market also means that the EU applies one single set of import rules. All import requirements are set at the EU level, which means that any Canadian product that meets these rules undergoes only one import check and then may be freely traded throughout the 28 member states, so the internal market is also a major advantage for our trading partners and for your industries.
For the EU, the implementation of CETA is the opportune moment to apply a reciprocal system via vice versa, meaning that EU products that meet Canadian requirements should also be allowed into the Canadian market regardless of where they are produced. We are requesting Canada to refrain from authorizations at the member state level. Under CETA, it should no longer be acceptable that some parts of the EU would remain excluded from the advantages and benefits the agreement provides and delivers. A political agreement to this end was made some years ago with respect to meat and CETA articles foresee this in its imminent application, and also for phytosanitary products. Therefore, the EU has high expectations from CETA, and we look forward to our first meeting next week.
I hope this short presentation will gave you a bit of an overview into the EU food safety system and the way it is applied and controlled throughout 28 member states to the benefit of not only our own consumers but also the many consumers outside the EU, including those in Canada. Again, I cannot stress enough the excellent relations we already have with Canada in the SPS area with our long shared history and the eagerness with which we look forward to our upcoming work. On our side, we think that our corporations should be an example for other countries, too, and a proof of how mutual trust and co-operation may benefit both sides' consumers and industries.
Again, thank you very much for the attention. We are happy to try to address questions you may have.
Thank you very much, Mr. Chair. I'll be splitting my time with my colleague Mr. Dreeshen.
I want to echo my colleagues' sentiments in thanking you for taking the time out of your evening to explain some of the issues and participate with us in this process.
My colleague Mr. Longfield knows these things very well, as he also has a large meat-processing plant in his riding, as I do, and I just want to make sure that we're clear. They're not washing carcasses with chlorine. It's chlorinated water and citric acid and those kinds of things. I don't want our colleagues in the EU to think we're bathing our carcasses in chlorine before we send them over.
You spoke in your comments about there being one set of rules for the 28 countries in the EU and how if our products meet those rules, the benefit is that we're not having to meet 28 different sets of rules, which I think makes a lot of sense and is why the CETA is beneficial. However, a lot of our stakeholders, as Mr. Longfield touched on with the beef carcasses, who are having some difficulty with non-tariff trade barriers that have arisen, and I want to see if there is something that we are missing on our end.
The beef carcasses are one. The other—if you go by your logic on one set of rules—is that traditionally we send about 1.2 million to 1.3 million tonnes of durum wheat to Italy on an annual basis. That has now been cut in half, as they are now saying that Canadian durum wheat is not meeting their standards in Italy; a lot of that has to do with glyphosate.
I am wondering what the rules are when it comes to those types of issues, where it appears that we have met all of the CETA regulations and standards, yet one country, which we rely on a great deal when it comes to a specific product, is able to put up some non-tariff trade barriers to block products from Canada going into the EU. Is there something more we need to do on our end to address some of those issues?
Thank you very much, Mr. Chair. On my behalf and that of my colleagues, I want to thank you and the committee for the opportunity to be here this afternoon to talk to you a bit about what we see as some of the more exciting technological developments in the agricultural and agrifood industries in the years ahead. I also want to speak with the committee about how we as a department and the government as a whole try to be a partner in accelerating the innovation process within the sector.
Advancements in technology and research go hand in hand with innovation. Combined, they breed the solutions necessary to increase productivity, sustainability, and growth in the sector, and they help our producers and processors capture new opportunities in the global marketplace. When it comes to science, AAFC uses an approach based on partnerships, working with industry, universities and colleges, and others to provide the science that enhances the sector's resiliency, fosters new areas of opportunity, and supports sector competitiveness. Partnerships and collaboration leverage federal research investments and bring together necessary capacities across institutions to help focus research on areas of benefit and importance to the sector.
As no doubt many of you will be aware, in budget 2017 the Government of Canada announced an ambitious target to grow Canada's agriculture and agrifood exports to $75 billion. Advancements in technology and research, particularly those transformative in nature, such as artificial intelligence, the bioeconomy, and the latest in breeding technologies, will be critical in helping to increase Canada's agrifood exports to meet this new target.
Agriculture is increasingly critical to Canada's economic growth and well-being, and people are noticing. Last year, we hit a new record of $62 billion in agriculture and food exports. That's up 80% over the past decade. Those exports added over $10 billion to our national balance of trade. We're one of the top five agricultural exporters in the world and on a per capita basis, we're the world's largest agricultural trader.
Driving this growth has been an impressive pace of scientific advancement. The strengths of Canada's agriculture sector are its trusted food supply, resource availability, arable land position, and strong research clusters.
In the coming decades we'll see an enormous increase in the demand for safe, nutritious, and high-quality food, with the global population expected to reach a little over 9.5 billion people by the middle of this century from a current base of a little over 7 billion today. Global demand for food is expected to increase by about 60% in the decades ahead, meaning that the world will need to produce in the next 40 years or so an amount of food equivalent to what humanity produced in the preceding 10,000. Promoting advancements in technology and research will ensure that our producers and processors are well-positioned to meet this demand and to grow our presence in the global marketplace in a sustainable way.
Earlier in the week, Minister announced the clean technology program, a $25-million three-year investment that will help agriculture reduce greenhouse gas emissions through the development and adoption of clean technologies. This investment will help Canadian farmers stay on the cutting edge of clean technology by targeting developments in bioproducts and precision agriculture. Our government has made both agriculture and clean technology a priority for growth in our economy. This new program will contribute to Canada's place as a world leader in agricultural clean technology, helping farmers to develop new and efficient uses of energy while also protecting our environmental resources and mitigating climate change.
Transformative technology holds tremendous promise in the agriculture and agrifood sector. AAFC scientists and policy-makers are working in this space. Continued focus on these areas will help to add value to Canada's agricultural sector and have already made impacts on our producers' and processors' ability to meet the $75-billion target.
Innovative technologies are consistently being developed and used across the sector, but there are barriers that continue to inhibit them from attaining their full potential. These barriers include the overall cost of investment, insufficient infrastructure, undeveloped supply chains, and a lack of training or professionals to work through the complexities of adoption, among others.
Ultimately, adoption takes place when those innovations are judged to be worthwhile investments in the respective operation. The adoption of transformative technologies and products is what drives innovation and is key to the sector's continued productivity growth and increased competitiveness.
Biotechnology involves the manipulation of living organisms, or their parts, to produce useful products, such as medicines and pest resistant or herbicide-tolerant crops.
New plant breeding technologies have been developed in recent decades that enhance our understanding of plant and animal genetics, and can be used to address environmental, social and economic goals. The science community worldwide increasingly depends on advanced biotechnologies to understand genes responsible for traits such as high yields, disease and insect resistance and quality, to help meet the world's growing demand for food.
In 2016, Canada ranked fourth in the world for total area planted with biotech crops. In 2015, the cumulative economic benefit of biotech crops to farm income in Canada was $1.2 billion. CropLife Canada, an organization representing plant science companies that make plant biotechnology for agriculture use, estimates about 71% of Canada's trade balance in crops is the result of innovations in GM plant and crop protection products.
AAFC has projects that explore gene editing techniques in crops, including advanced genetic technologies for yield improvements and herbicide tolerance of camelina and canola.
It is also looking at controlling fire blight and scab in Canadian apple orchards through management strategies and genetic resistance.
Like biotechnology, the area of agricultural machinery is constantly changing, adapting, and advancing in ways that allow the sector to respond to emerging challenges and opportunities.
Disruptive technologies have found their way into agriculture. These technologies include things such as precision agriculture, artificial intelligence, and blockchain technology and can enable a wide range of activities. Approximately half of Canadian farms have implemented some form of innovation on their farm in the past three years.
Precision agriculture can be broadly defined as a management strategy that uses a wide range of technologies to guide targeted actions. In essence, it tries to take the intuition and guesswork out of farming by allowing producers to harness the power of big data. For example, new precision farming technologies are helping farmers reduce pesticide and fertilizer usage. Farmers are checking their animals from their smartphones and mapping their fields with the power of big data. They're making decisions about harvesting their crops based on satellite imagery.
Technological advancement has also helped Canadian beef producers reduce greenhouse gas emissions significantly. The uptake has already contributed to Canada's ability to be a major player on the global agriculture stage.
AAFC also has significant capacity in precision agriculture. My colleague Dr. Gray is better placed than I to speak in detail about this, but we're working with the industry in experimenting with the use of drones, for example, for precision management of irrigation and sustainable precision livestock farming.
Precision agriculture relies on big data and, of course, humans have a finite capacity to analyze and process data, so we're also excited about the possibilities of applications of artificial intelligence in the agricultural sector. Artificial intelligence combines problem-solving and decision-making to achieve goals that typically rely on some combination of data, software, sensors, the Internet, and cellular networks.
Systems powered by AI are able to perform tasks that normally require human intelligence. In the context of agriculture and food production, AI helps achieve the overarching goals of precision agriculture by analyzing data collected on farm and converting it into information that can be used by farmers to help make better farm management decisions.
Within AAFC, and in the agriculture and agrifood sector more generally, there's increased interest and excitement about blockchain technology. Blockchain can benefit the agriculture and agrifood sector in offering several advantages over traditional methods of transacting, including enhanced transparency, improved traceability, and increased efficiency. Blockchain is a digital database that securely transmits any type of information without a central authority. Recognizing its benefits, the agriculture sector is examining its application to help in the management of supply chains by improving security and traceability.
The bioeconomy is well positioned to boost exports from Canada's agriculture and agrifood sectors. Bioproducts from agricultural crops, residues, and wastes are already helping farmers find new uses for waste products and enter new markets. In 2015 the revenue from non-conventional industrial bioproducts in Canada was estimated at $4.27 million. This helps power the transition to the low-carbon economy, boosts the farmer's bottom line, and helps the sector mitigate climate change. Advancements in research and development and the commercialization of new technologies are needed for the agriculture-based bioeconomy to continue growing.
Mr. Chair, I promise that I'll be as brief as I can.
The agricultural partnership is a five-year framework between the federal government and the provincial and territorial governments. The current framework expires at the end of this month, in a couple of days. It will be replaced by the partnership, which we have negotiated with the provinces and territories over the past year and a half or so.
In terms of support for innovation, marketing, other things, it maintains many of the elements of the preceding partnership, but we have made some important adjustments to the way the risk management features work. We put greater emphasis on the environment and climate change.
Chair, I referenced in my remarks the $25-million clean technology partnership, which, strictly speaking, is outside of the partnership. Nonetheless, it's something that we plan to deliver in tandem with provinces. We also put greater emphasis on inclusion in reaching out to indigenous peoples, women, young people, and other under-represented groups in agriculture. Lastly, we are hoping to promote greater collaboration amongst provinces and territories in this framework than was possible under the one that preceded it.
On the strategy tables, budget 2017 created a series of six strategy tables, one focused on agriculture and agrifood. It brings together industry leaders from across the agriculture and agrifood industries. In essence, it's mandated to advise on how to best remove barriers to growing the sector and and attaining the $75-billion target. The group has been working for several months now. We are anticipating an interim report from them, I believe over the course of the summer, which is their target date, if I'm not mistaken.
Go ahead, Marco.