OTTAWA — Canola farmers whose livelihoods have been targeted by China in its feud with Canada say it’s time for the federal government to be aggressive at the political level in its fight against a growing number of agricultural trade barriers around the world.
Several producers told two parliamentary committees Tuesday that China’s recent rejection of Canadian canola-seed shipments is only the latest trade disruption that’s hurt the country’s agriculture sector.
They reminded MPs in Ottawa about a number of major trade obstacles faced by Canadian agricultural exporters in faraway markets like India, Italy, Vietnam and Saudi Arabia.
“Canada can feed the world but not if our government does not act strongly on our behalf, removing non-tariff trade barriers, enforcing existing trade agreements and removing political roadblocks,” Alberta canola farmer Stephen Vandervalk told the House of Commons agriculture committee.
Citing concerns about pests, China has rejected canola-seed imports from Canada and has suspended the licences of two major Canadian exporters.
The moves to cut off the critical Canadian export have been widely viewed as China applying economic pressure on Canada in response to the December arrest of senior Huawei executive Meng Wanzhou in Vancouver at the behest of the United States.
Any extended canola dispute with China, which imported $2.7 billion worth of canola seed from Canada last year, would deliver a painful economic blow to producers, the supply chain and the wider Canadian economy.
The price of canola has fallen since the dispute started last month. The late-winter timing of the disruption has been particularly difficult because it’s forced many farmers to suddenly rethink the planting decisions vital to their businesses.
On Tuesday, producers made it clear to MPs at the committees that even with the urgency around the China conflict, the pain is not only about canola. Canadian farmers, they said, are staring at other big trade hurdles in world markets.
Several of the witnesses mentioned issues that have affected Canada’s durum wheat exports to Italy, wheat sales to Vietnam, pulse exports to India and feed-barley shipments to Saudi Arabia.
Saskatchewan grain farmer Mehgin Reynolds (who is seeking a Conservative party nomination) told MPs that, for instance, her four-year crop rotation includes lentils, barley, canola and durum wheat — all products that face obstacles on foreign markets.
“The frightening reality is that almost every crop being grown in Canada is currently struggling with one trade barrier or another,” Reynolds said.
The Liberal government has insisted it wants to find a scientific solution to the canola dispute, in keeping with China’s insistence that the problem is tainted seeds.
The Liberals have established a working group that includes officials from Richardson International Ltd. and Viterra Inc. — the two exporters that have had their licences to sell canola revoked by China — and representatives from the governments of Alberta, Manitoba and Saskatchewan. Agriculture Minister Marie-Claude Bibeau has requested to send a delegation of experts to China to examine the issue. She’s said officials are exploring options to support farmers by expanding existing programs.
Canola producer Mark Kaun told the committee it’s time for the Canadian government to start playing “hardball.”
“There’s a pile of imports that come into this country from China — and maybe some of their ships should sit and wait in the water,” Kaun said. “Canadian canola is contaminated — it’s contaminated with political dirt and bureaucracy.”
“This is a political issue plain and simple. Political problems need political solutions,” agreed Vandervalk, who’s also vice-president representing Alberta with the Western Canadian Wheat Growers Association.
“If we must play the game of grain inspections, so be it. But in the meantime Canadian grain farmers are the ones paying the price for the political failings.”
Andy Blatchford, The Canadian Press
Governments earned $186M in pot taxes in 5 1/2 months of legalization: StatCan
Federal and provincial governments earned $186 million in cannabis-related revenue in the first five-and-a-half months since legalization in October, Statistics Canada said Wednesday.
The Ottawa-based agency said revenue came from product-specific excise taxes and general taxes on goods and services, such as the Harmonized Sales Tax, directly related to the sale of cannabis.
The federal government drew $19 million in excise taxes, while provincial governments got $79 million from excise taxes and related adjustments.
Statistics Canada says revenues from general taxes on goods and services brought in an additional $36 million at the federal level and $53 million via direct provincial general taxes on goods and services.
It added that excise taxes increased by 12.4 per cent in the first quarter of 2019 compared with the fourth quarter of 2018 on higher sales by licensed producers to distributors.
During the same time frame, general taxes on goods and services from the sale of cannabis were up 68.1 per cent from increased purchases made by households.
“Federal and provincial government revenue from general taxes on goods and services as well as excise taxes may rise further in the second half of the year, as additional cannabis retail outlets are scheduled to open,” Statistics Canada said in a release.
These figures are the first glimpse into pot-related government revenues since Canada legalized cannabis for recreational use on October 17.
Due to the “bumpy” rollout of legalization last fall, these first-ever government tax figures are lower than expected, said the Conference Board of Canada’s economist Robyn Gibbard.
“However, we think that as the kinks are worked out, governments can expect strong growth in revenues from cannabis sales going forward,” she said in a statement.
Legalization on Oct. 17 was met with brisk demand from Canadian consumers and supply shortages at government and private retailers, prompting some to reduce their hours of operation or provincial governments to cap the number of retail licences.
The supply situation has improved in recent months, and Alberta has lifted the moratorium on new retail licenses and Quebec cannabis outlets have resumed more normal hours.
Still, household spending figures from Statistics Canada for the first-quarter of this year show that most non-medical cannabis is purchased from the illicit market, at $1.1 billion, compared to $377 million bought through legal channels.
Armina Ligaya, The Canadian Press
PM worries China could target more Canadian goods as fears about soybeans rise
OTTAWA — Prime Minister Justin Trudeau says he’s worried an ongoing diplomatic dispute could see China target imports of other Canadian agricultural products as concerns grow about soybean shipments in particular.
One industry leader said Thursday that, without a clear explanation, Canadian soybean exports to China plunged suddenly from 3.2 million tons over the final four months of 2018 to just 3,700 tons through the first four months of this year.
Relations between Canada and China have deteriorated since the December arrest in Vancouver of Huawei senior executive Meng Wanzhou at the behest of the United States.
China was outraged by Meng’s arrest and has since detained two Canadians on allegations of espionage and sentenced two other Canadians to death for drug-related convictions.
Chinese authorities have also blocked imports of Canadian canola seeds, alleging they found pests in shipments, and have increased inspections and paperwork related to pork.
“When it comes to China, obviously, our top concern is the release of Canadians who are detained in an arbitrary way by the Chinese for political reasons,” Trudeau said in French on Thursday during a visit to France, where he marked the 75th anniversary of D-Day. “We are also concerned by their actions on canola and the potential of other actions on other products.”
Trudeau told reporters that he will see if it’s “appropriate or desirable” to have a conversation directly with Chinese President Xi Jinping about a number of bilateral difficulties later this month at the G20 summit in Japan.
Later Thursday, Agriculture Minister Marie-Claude Bibeau told a parliamentary committee that she’s heard concerns about shipments of Canadian soybeans to China.
Ron Davidson, executive director of Soy Canada, said in an interview that China’s purchases of Canadian soybeans collapsed at the end of last year following a run of very strong exports.
“It’s not a slowdown — it’s a virtual halt,” said Davidson, whose members have reported the drop to Bibeau. “We can see what’s happening, but we aren’t certain why.”
He said it’s not unusual to see soybean exports decrease during winter months, but the speed, magnitude and timing of the crash this time around has alarmed the industry.
Davidson said he’s received reports of Canadian soybean containers held up in Chinese ports for longer than usual as authorities there conduct additional tests. It’s possible, he added, that the drop is partly due to an increased reliance by China on soybeans from other parts of the world.
Soybeans are Canada’s third-most valuable agricultural export after canola and wheat, he said.
Any prolonged crackdown by Canada’s second-biggest trading partner on shipments of key products like soybeans and canola could deliver a blow to the national economy.
New data released Thursday from Statistics Canada showed overall exports of canola fell 14.7 per cent in April after China started turning away Canadian canola seed.
Conservative Leader Andrew Scheer’s spokesman said it’s not enough for Trudeau to be concerned because he’s not a casual observer when it comes to the dispute with China.
“He needs to actually do something,” Brock Harrison wrote in an email Thursday.
“Mr. Scheer has on several occasions urged him to take concrete steps to respond to China’s actions against Canada and send a message that Canada won’t be pushed around. He has refused to act.”
The federal government says it has tried unsuccessfully to send a delegation of inspectors to China to examine Chinese evidence of pests in canola shipments. Canada has also been unable to schedule high-level engagements on the matter despite multiple efforts.
Bibeau told MPs Thursday that Canadian scientists finally had a conversation Wednesday night with Chinese customs officials about their canola concerns.
“They agreed to have more sustained discussions, telephone conferences on the subject — and they did not close the door to the delegation,” she said. “We are still asking for that, but the conversation has been re-activated and yesterday we could feel that we were at a different level … This is encouraging.”
Earlier this week, China’s ambassador to Canada said in an interview that Chinese officials investigated Canadian canola based on regulatory and scientific principles, and provided “concrete” documents to Canada to justify their concerns.
Lu Shaye added that the relevant Chinese departments no longer maintained contact with their Canadian counterparts, suggesting the matter was closed.
—Follow @AndyBlatchford on Twitter
Andy Blatchford, The Canadian Press
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