Madam Speaker, the Conservative Party is the party of free trade and free markets. We recognize the importance of the U.S. and Mexican markets for Canadian exporters, which is why the Conservatives have been clear that we will support the swift passage of the new NAFTA deal. However, while a deal is better than no deal, Canadian industries are bracing for the impact of the changes to come.
Ironically enough, the Liberal government's economic impact report compares CUSMA to not having a NAFTA deal at all. This is baffling, since almost any trade deal, no matter how lopsided, would have been better than having nothing at all.
The C.D. Howe Institute discovered that CUSMA would reduce Canada's GDP by $14.2 billion. Its recent report found that after the implementation of CUSMA, Canada's exports to the U.S. will fall by $3.2 billion, while our imports from the U.S. will increase by $8.6 billion, with the worst impacts being felt in our agriculture and dairy sectors.
I have heard from many farmers in my riding who operate businesses in supply-managed industries, and they feel that the Liberal government has literally sold the family farm. The Conservatives are committed to Canada's supply management system, but the Liberal government's weak leadership and ineffective negotiation tactics have continued to erode the system's integrity. Concessions have been made to the U.S. without our receiving anything meaningful in return, and stakeholders are speaking up.
Last week, I had the opportunity to meet with turkey farmers in British Columbia. They indicated that market access concessions made as the result of CUSMA are going to hurt turkey farm families across the country. Not only that, this change would greatly hinder Canadian consumer access to locally farmed products.
What would this impact look like? Under CUSMA, the market access commitment calculation for turkey will be modified to a 29% increase in new market access for the U.S. into Canada. It will allow the U.S. to export an additional 1,000 metric tons of turkey products each year for the next 10 years above current access levels, with potentially more in the future.
Canadian dairy farmers and processors are also set to lose market access to the Americans. Before the international trade committee, the Dairy Processors Association of Canada shared that at full implementation, the access granted under CUSMA, in addition to the existing concessions from other agreements, namely CETA and CPTPP, represent about 18% of the Canadian market. When considering the three latest trade agreements, Canadian dairy processors will lose $320 million per year.
On top of the market access concessions, CUSMA includes a concerning and unprecedented clause that will impose export caps on worldwide Canadian shipments of milk powder, protein concentrates and infant formula. For example, for skim milk powder and milk protein concentrates, a cap of 55,000 tonnes will be imposed for the first year and 35,000 tonnes for the second year.
The Canadian Federation of Agriculture is also sounding the alarm. In addition to the market access concessions, supply-managed industries are anxiously waiting for government to fulfill its commitment to quickly and fully mitigate the impacts of these trade agreements, action that is necessary, though insulting to many of my constituents who work in these industries.
Before the international trade committee, Mr. Dykstra, a New Brunswick dairy farmer, stated:
I now want to touch on the compensation package promised, and partly delivered, for CETA and CPTPP. I haven't heard anything about the remaining years and how it will be paid out. That in itself concerns me. The compensation package is bittersweet. Most farmers, including me, received a payment in December of last year for those previous trade agreement concessions. As far as I am aware, no concrete timeline has been set for the next payments. We, as dairy farmers, have always prided ourselves on getting all our money from the marketplace. This is how the system is supposed to work. This is how it did work. The government trading away excess and then offering compensation is not what we want.
In addition to the previously mentioned market access concessions, the Canadian Federation of Agriculture has raised two other issues causing serious industry concern.
First, the Liberals have relinquished Canadian sovereignty on critical internal policy development and export control functions. CUSMA commits Canada to consult with the United States before making changes to Canadian dairy policies. This should have never been surrendered.
Second, as mentioned previously, the Liberal government also agreed to cap dairy-sector exports of milk protein concentrates, skim milk and infant formula to CUSMA and non-CUSMA countries, and approved an export charge on exports over the cap. This is disturbing on several fronts. Canada has long argued against the use of export tariffs to regulate trade. It also sets a dangerous precedent by allowing a regional trade agreement and a party in that agreement to control the trade of another party to countries outside of that agreement.
This is why the Conservative Party is standing up for these Canadian businesses and calling on the Deputy Prime Minister and the Liberal government to amend the agreement. Export thresholds for milk protein concentrates, skim milk powder and infant formula should only be subject to trade between the CUSMA signatories, not to other countries that are not party to the agreement.
I will give a real-world example of this from a company that employs hundreds of people in my riding, Vitalus Nutrition, whose CEO, Phil Vanderpol, presented at the trade committee.
Vitalus processes milk supplied by Canadian farmers into high-quality cream and butter, milk protein concentrates and milk protein isolates that have superior quality, nutritional value and functionality. It planned and anticipated demand and, up to this point, was capitalizing on the growth in the global market for nutritional value-added dairy ingredients. The federal government, or at least Western Economic Diversification Canada and Agriculture and Agri-Food Canada, recognized Vitalus' economic promise and even invested significant funds in the company in the previous Parliament. However, that same federal government is now pulling the rug out from under the company and, ironically, its own previous investments. The Liberal government has managed, in this case, to simultaneously shrink the opportunity for Canadian dairy producers in the Fraser Valley while limiting their ability to grow by exporting.
Turning to forestry, Canada's forestry industry is also disappointed in the Liberal government's inability to protect its sector, since CUSMA does not prevent the United States from applying anti-dumping and countervailing duties to Canadian softwood lumber. Yes, Canadian forest product producers want a speedy ratification of CUSMA, even though it will provide no relief for their uncertainty. They want this in the hope that the federal government will start providing their industry the attention it requires. Businesses are going under, families are hurting and more than 20,000 forestry workers have suffered layoffs. The Liberal government must take immediate action to solve the softwood lumber dispute. It is unconscionable that a sector so significant was not part of the agreement.
I do not have time to address all of the shortcomings I have outlined that are in this new trade agreement, but I note that I would have liked to see the list of professionals admitted under temporary entry for business persons expanded to include the jobs of the 21st century. There are a lot of problematic issues regarding the rules of origin for automobiles and the new quotas in place. Also, buy America was not addressed.
When I was a graduate student, I participated in the North American forum for young leaders in North America. I had the opportunity to work with American and Mexican students at some of the top universities in our continent. On a personal note, we have so much untapped potential between our three countries, and I look forward to seeing labour mobility provisions changed during my lifetime, of course with strict immigration protocols, to meet the untapped potential we have with our trading partners.
With that, I would say that the new NAFTA deal put forward for ratification by the government is, overall, a disappointment, which I know because I represent the supply-managed industries in Mission—Matsqui—Fraser Canyon. It would leave Canadians worse off than they were under the prior agreement and would relinquish our sovereignty. Our economy depends on free trade, and we need a federal government that signs agreements for the benefit of Canadians. It seems in this case that Canadians were sold out on so many fronts. We need ministers like my old boss, the member for Abbotsford, at the helm of international trade.