Feds pressed by opposition MPs to help beef producers
Federal Conservatives pressed the federal government for action to help Canadian beef producers recently, and Lethbridge MP Rachael Harder was leading the charge.
Harder and 32 other Conservative MPs wrote to the finance minister urging the government to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership as soon as possible, and to request the feds consult the industry and prepare a package of broad-based tax cuts and industry supports for the agriculture sector.
Harder said she was approached by a number of beef producers in the Lethbridge area with concerns about the U.S. tariffs on steel and aluminum, along with the retaliatory measures taken by Canada.
The worry is Canadian tariffs on frozen dinners containing beef could result in counter-retaliatory tariffs harming Canadian producers.
Beyond that, she said there are concerns about getting product to market in the U.S. and NAFTA negotiations – highlighting the need to secure other markets.
John Masswohl, director of Government and International Relations for the Canadian Cattlemen’s Association, said the uncertainty in the marketplace is beginning to work its way into the beef industry
He said while it is possible there could be more tariffs coming that impact the beef industry, it is also feasible the issues between the two countries are resolved. This is where the uncertainty lies for many beef producers.
“I wish we could give people some certainty, but you can’t,” Masswohl said, adding the current environment is precisely what the Western Livestock Price Insurance Program was designed for.
“This is exactly the scenario that program exists for,” he said.
Masswohl said ratifying the CPTPP could have a mitigating effect on any trade issues with the U.S.
“It can be one positive element in a bigger puzzle,” he said.
A big piece of that puzzle is tariff-free access to markets in Japan.
Japan imported nearly $4.5 billion in beef in 2017. Canada supplied Japan with $133 million, behind the U.S. ($2.1 billion), Australia ($1.9 billion), and New Zealand ($152 million). Canada, New Zealand and the U.S. paid a tariff on those exports amounting to 38.5 per cent.
Australia enjoyed a preferential tariff and the CPTPP will allow Canada to import at the same rate as Australia.
Estimates regarding the benefit of the CPTPP for beef producers is it could increase Canadian beef exports by about $380 million.
The CPTPP was signed in March and will enter into force 60 days after it is ratified by six countries.
With the current environment around countries ratifying the CPTPP, it is unclear whether Canada’s signature would create a situation where the agreement came into force before the end of the year. Several of the 11 countries involved in the CPTPP are on pace to ratify the agreement next year.
“Does Canada coming back in the summer help us get to that situation?” Masswohl asked. “It could help us get to five. But we still don’t get to six until November or December.
“I really like the Conservatives keeping the pressure on the Liberals, as we are doing, but I think this is all speculation on how this plays out. I think we’re on track to be part of that first group, and it being in the November-to-December time frame.”
Harder said the tax breaks being pushed by the Conservative party largely concern relief from carbon taxation.
She also said producers have been harmed by overall increases to business taxes, including rising Canada Pension Plan rates and changes to income-splitting rules, along with taxation on passive income.
Masswohl said the CCA has not formally requested tax breaks or industry supports the Conservative Party has asked for, but the issue could be brought up during upcoming policy meetings.
“We may come up with something similar to that,” he said. “But, as of yet, we have not had that discussion.”
In terms of industry supports, Harder said it starts with open dialogue.
“I think the most basic industry support would be for the current federal government to sit down with producers and talk to them,” she said.