Talking Agriculture with Lawrence MacAulay

Prior to Trudeau’s cabinet shuffle earlier this March that saw Honourable Minister Lawrence MacAulay appointed Minister of Veteran Affairs, and Quebec MP Marie-Claude Bibeau assuming the desk of Minister of Agriculture and Agri-food, we had the chance to interview MacAulay, and get his take on agriculture for 2019.

by Cam Patterson – Canadian Meat Business

Few would argue that MacAulay has made his mark in Ottawa. He has served in the House of Commons since 1988 and in that time has held no less than five cabinet appointments, two of which were Solicitor General of Canada, and Minister of Labour before he became Minister of Agriculture and Agri-food. The latter could be the appointment closer to his heart since he came from a farming background in P.E.I.

The 2019 election will mark his 10th term if elected, and since 2019 could prove a pivotal year for agriculture with three major trade deals on the table for ratification, it seemed appropriate to have a Q&A with the minister.

“We want Canada to be a world leader in the production and export of food – and we have an ambitious agenda to support the sustainable growth of our farmers and food processors”

 

CMB:Congratulations on running in this year’s election for what could be your 10th term. What would you say is the paramount issue for this campaign with respect to Agriculture and Trade?

LM: Thank you. Let me just say that when I’m on trade missions around the world, I make sure to sit down with our trading partners to address barriers to trade. That is why it is paramount that we ensure that global trade is based on rules and sound science. Our producers and processors can compete with the best – they just need a level playing field to do so.

We work hard to prevent, monitor and mitigate non-tariff barriers to trade in order to ensure that level playing field so our farmers can take full advantage of new trade agreements that we are signing with key markets around the world.

Over the past 18 months, we have signed an agreement with the European Union and the Trans-Pacific counties. This is significant because these two agreements are giving our farmers and food processors a competitive edge in some of the largest and fastest-growing markets for food in the world. The Canadian Meat Council estimates that the CPTPP has the potential to increase Canadian beef and pork sales by at least $500 million, while supporting an additional 5,800 agriculture jobs here in Canada. Once all of our deals are in place, Canadian producers and processors will have a competitive advantage in two-thirds of the global marketplace.

As well in November we signed the new NAFTA, securing our $4.4-billion in live animal and meat trade with the U.S. and we’re not stopping there. We have set an ambitious goal of $75 billion in Canadian agri-food exports by 2025; a $10-billion increase over the next six years. We’ll be counting on our world-class meat industry to help us reach that target, and we’ll continue to work with our industry stakeholders to keep our trade firmly based in rules and science.

CMB: As a farmer yourself, what do you see being the biggest challenges for farmers in 2019? And what is your goal to help industry meet those challenges?

LM: As someone who used to be in the seed potato business, I know first hand that Canadian farmers depend on trade. On average, half of their production by value is exported. For example Canadian pork producers depend on export markets for close to 70 per cent of their sales. That said our agriculture and agri-food sector has always been an important engine of Canada’s economy, but we must continue to innovate and stay competitive in growing global markets.

I am also committed to supporting our Agriculture industry while pursuing a strong trade agenda to increase opportunities for farmers and food processors. Canada is making good progress towards our target of $75 billion in agri-food exports by 2025. Trade missions to key markets like the U.S., Europe, Vietnam, India, China, Japan, South Korea, Mexico, Argentina and Chile are key to that success.

Our 2018 Fall Economic Statement also includes significant funding to implement an Export Diversification Strategy to increase Canada’s overseas agricultural exports by 50 per cent by 2025. Together, these investments and initiatives will continue to help our agricultural sector grow, innovate and prosper.

CMB: What do you see being the primary issues and concerns for the meat and poultry industries specifically?

LM: Well meat supplies in North America are expected to rise further in 2019. At this moment, the China and Mexico tariffs on U.S. pork remain in place. There will be much attention on African Swine Fever (ASF), where the herd liquation in China is putting significant volumes of pork into the Chinese market, but shortfalls are expected. These are all factors that will impact the Canadian pork industry and potentially could have impacts on the demand for other meat products.

With the changes to the access levels for imports under the CPTPP and the new NAFTA, the primary issues for the poultry industry will be ensuring import predictability, adjusting to the new quantities of imported products entering the domestic market, and, for processors, continuing to improve their competitiveness.

Agriculture and Agri-Food Canada (AAFC) is working with the industry through the poultry and egg-working group, which was announced in October 2018. The working group is collaborating to develop strategies to fully and fairly support farmers and processors to help them adjust to the new NAFTA, and is also discussing support to reflect the impact of the CPTPP.

CMB: What have you seen as feed back from producers and associations regarding CETA, USMCA, or CPTPP, and from your standpoint what are the pros and cons for Canadian livestock producers?

LM: That’s a good question. To start with CETA, the new NAFTA, and CPTPP are comprehensive trade agreements that achieved numerous beneficial outcomes for Canadian livestock producers.

As you know CETA entered into provisional application on September 21, 2017, allowing Canadian exporters to begin accessing these opportunities. With that Canada obtained improved market access opportunities in the European Union across a broad range of products, particularly for beef and pork.

For instance Canadian beef producers benefit from the EU establishing annual duty-free quotas for fresh/chilled (35,000 MT) and frozen (15,000 MT) beef and veal being phased in over 5 years.

As well Canadian bison producers benefit from a duty-free quota (3000 MT) that was made available upon provisional application of CETA. Subsequently Beef and bison producers also have duty-free access under the EU’s existing “Hilton” high-quality beef quota (11,500 MT, shared with the U.S.), compared to the pre-CETA 20% in-quota duty.
As for the new NAFTA, Canada will continue to maintain duty free access in the North American market for meat and meat products, which should bring back important stability and predictability for Canadian livestock producers.

In addition, the agreement recognizes that the industry has changed significantly in the past 25 years, with the establishment of a modernized Sanitary and Phytosanitary Measures (SPS) Chapter, a Technical Barriers to Trade (TBT) Chapter, together with the Good Regulatory Practices Chapter. The Agreement brings in new methods for parties to work together, including a new committee on agricultural trade and recognizing existing bilateral Consultative Committees on Agriculture as venues for further collaboration.

With the CPTPP, Canada was among the first six countries to bring the deal into force. This secured a first-mover advantage for our meat and meat product exporters and has put them on a level playing field with competitors.

The CPTPP will also help diversify Canada’s trade profile by creating new commercial opportunities with up to seven new FTA partners, including Japan and Vietnam. For example, in Japan, tariffs on Canadian fresh, chilled and frozen beef were reduced from 38.5% to 27.5% on December 30, 2018 with a further reduction to 26.6% on April 1, 2019.

Japan’s tariffs will eventually be reduced to 9% within 15 years. In Vietnam, tariffs of up to 27% on Canadian fresh, chilled and frozen pork will be eliminated by January 2027.

CMB: China is a bit of hot topic right now. However, from your personal experience coupled with the success of your trade missions, and the fact the demand for beef and pork has never been higher in Asia, how do you see Agriculture relations with China playing out this year?

LM: As the Minister of Agriculture and Agri-Food, I have travelled to China five times since 2016 to meet with my Chinese counterparts to advance key trade issues, and promote Canada’s safe and superior quality food products, including meat.

We continue to have a strong and positive agricultural trading relationship that maintains a sustained and strategic engagement to advance our agricultural interests in the Chinese market.

As a result China remains Canada’s second largest export market for agriculture, agri-food and seafood products. Opening, maintaining and expanding market access to fast growing economies like China is a priority for us and important for the success of Canadian agricultural trade.

And let’s not overlook the fact that China’s middle class is growing, and subsequently the demand for animal protein will continue to grow and provide strong opportunities for the Canadian meat sector.

So while this is a sensitive time, the Canada-China relationship is strong and resilient. We’re confident that this strength will allow for the long term continuation of positive relationships in the business, people-to-people, institutional and cultural realms.

CMB: What missions and industry events would you like to highlight this year. And what would be the benefit for Canadian Agriculture?

LM: Well, since we’re talking about China, I’d like to highlight three trade show events taking place there this year that continue to have excellent return on investment for us:

SIAL China is Asia’s largest food & beverage exhibition, taking place in Shanghai from May 17-19. Nearly 3,400 exhibitors and over 110,000 visitors attended last year. The exhibition is an excellent platform to showcase innovative food products and seize new opportunities. We encourage Canadian food manufacturers and meat processors to attend SIAL China where they set up exhibits under the Canadian pavilions located in the International Food Hall as well as the Meat hall.

We also have two Agriculture and Agri-Food Canada (AAFC) flagship events that will be taking place in China this year.

The China Fisheries and Seafood Expo (CFSE) from October 30 to November 1, and Food and Hotel China (FHC) from November 12 to14. Last year these two tradeshows were attended by over 120,000 people and expected to have generated over $285 million in new sales for Canada’s agriculture, food and seafood sectors. CFSE is the world’s second largest fish and seafood show, featuring 1,400 exhibitors from over 46 countries, while FHC is the largest show for international food and beverage, with 3,000 international food and beverage exhibitors from more than 48 countries promoting products to 118,000 trade buyers from all over China.

CMB: The African Swine Flu pandemic in China is a growing concern. What would you like to see as a contingency in the event it reaches Canada?

LM: It is a concern. As a matter of fact this past fall, I took it upon myself to call Secretary Sonny Perdue to confirm my interest in collaboration on efforts to keep the disease out of the Americas.

If African Swine Fever (ASF) is discovered in Canada, it will have significant economic impacts on the entire pork value chain, and so we are working on a full range of prevention and preparedness activities to mitigate the pathways of entry for ASF.

Since the fall of 2018, the Government of Canada has been working closely with the pork industry, including the Canadian Pork Council and major industry players, as well as with processors, provinces, international partners, and government agencies to heighten awareness of the risks and prevention of ASF.

CMB: The New Canadian Food Guide was not well received by the meat industry for its obvious slant from animal based to plant based diet. What is your sense of how the industry is responding?

LM: Health Canada is the lead department on Canada’s Food Guide, and AAFC supports its objective, which is to help make it easier for Canadians to make healthier choices.

We here in Canada are very fortunate to have such a strong agriculture and agri-food infrastructure that provides a variety of safe, healthy foods to Canadians and the world.

We believe that consumers can benefit from clear dietary guidelines on a variety of nutritious foods as part of a healthy diet, such as lower-fat plain milk and yogurt, cheeses that are lower in sodium and fat, as well as lean meat.

We are, however, sensitive to the concerns of the food industry and we continue to communicate and engage with our colleagues in other government departments, as well as with a broad range of industry stakeholders.

Our Government is also developing A Food Policy for Canada, designed to address key opportunities and challenges in our food system.

We want Canada to be a world leader in the production and export of food – and we have an ambitious agenda to support the sustainable growth of our farmers and food processors, including our target to grow food exports to $75 billion by 2025. We want to do so sustainably with the best health, social, environmental, and economic outcomes for all Canadians.

CMB: Lastly, the Ag industry’s impact on the environment remains a controversial topic. What have you seen as our strengths and weaknesses going into 2019.

LM: Canada’s hardworking farmers have been, and continue to be, great stewards of the land. Canadian agriculture has a solid track record of using sound management practices, innovation, and new technologies to reduce greenhouse gases (GHG). In fact, Canadian beef producers have reduced their environmental and carbon footprint by reducing their GHG emissions by 15 per cent, while increasing production by 30 per cent. The Canadian pork industry has also made great strides, as it has today the lowest environmental footprint in the world. The province of Quebec leads the way — with a carbon footprint that is one-third below the world average.

Carbon pricing is an important part of Canada’s plan to transition to a low-carbon, climate-resilient economy, and the Government’s carbon pricing policy reflects the realities of Canada’s agricultural industry.

The federal government is also making significant investments to enable the Canadian agriculture sector to better address priorities such as climate change.

This includes committing $70 million to support scientific research and innovation in agriculture to address emerging priorities related to climate change, such as soil health, and water quality and conservation.

The funds also support a new initiative called Living Laboratories that will help farmers adopt innovative tools and techniques more quickly, resulting in more sustainable, productive, and resilient farming in Canada.

This past year, the Government launched the $3-billion Canadian Agricultural Partnership with provincial and territorial partners to help the agricultural sector grow sustainably, including support for innovation and research. Under the Partnership, a suite of Business Risk Management programs will continue to help producers manage significant risks that threaten the viability of their farm and are beyond their capacity to manage.

The Government also launched the Canadian Agricultural Strategic Priorities Program, an investment of $50.3 million over five years, to help ensure that the sector can respond to new and emerging issues, improve environmental sustainability, develop and build capacity, and pilot potential solutions.

A further $25 million is being invested through the Agricultural Clean Technology Program to help farmers adopt clean technologies such as precision agriculture, and to develop bio-product alternatives to fossil fuel-based products. Agriculture is also one of three priority areas under the $1.4-billion Low Carbon Economy Leadership Fund.

The $5.2 million Agricultural Youth Green Jobs Initiative supports youth internships to do work that benefits the environment on and off the farm.

And twenty new research projects are supported by the $27-million federal Agricultural Greenhouse Gases Program (AGGP), a partnership with universities and conservation groups across Canada, supporting research into GHG mitigation practices and technologies that can be adopted on the farm.

Cam Patterson is a freelance writer and director based out of Winnipeg, Mb.