REGINA — Governments and industry continue to discuss how best to deal with Chinese tariffs on Canadian agricultural products, particularly canola.
Canola leaders met with prime minister Mark Carney, federal agriculture minister Heath MacDonald, Saskatchewan premier Scott Moe and other top politicians last week in Ottawa after Moe and Carney’s parliamentary secretary, Kody Blois, returned from a trip to China.
Carney did not speak to reporters after the meeting, but in a readout from his office, he said Canada is united in its support of and for Canadian farmers and businesses affected by the tariffs.
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Industry has said that support, including $370 million for new biofuel production incentives, higher limits for interest-free loans to canola producers and amendments to the Clean Fuel Regulations, do not go far enough.
Canadian Canola Growers Association president Rick White said the meeting was the latest of many with the government, but he appreciated that the prime minister is personally engaging in the issue and is aware of its seriousness.
He said the main message to government continues to be that the market must be open.
Both he and Moe said that requires a meeting between Carney and Chinese president Xi Jinping.
“This isn’t about dumping,” said White.
“This is a political problem … so it needs a political fix. Those two need to agree that they’re going to work to get it resolved.”
Many say removing Canada’s 100 per cent tariff on Chinese electric vehicles is the key to ending China’s 100 per cent tariffs on Canada’s canola oil and meal and 75.8 per cent duty on canola seed, but Moe said it isn’t that simple. It would put Canada offside with its largest trading partner, the United States.
“Prime minister Carney is well aware of the high-wire balancing act that needs to be done on this,” added White.
In China, Moe and Blois met with the two agencies that imposed the tariffs. One imposed the duties on canola seed and the other imposed tariffs on canola oil, meal, peas, pork and seafood. The canola industry said the two together effectively close the Chinese market to Canadian canola.
Moe told reporters there are signals that talks may move forward. One of those is the reactivation of the Joint Economic and Trade Commission between the two countries after it had been dormant for six years.
“There is real opportunity for us to move forward in engagement with a number of different organizations and government agencies in China to recalibrate the trade relationship that we have … and to take a pragmatic and constructive path forward that is not only good for Saskatchewan but also Canada,” he said.
He pledged to work alongside the federal government and encouraged the agriculture community to engage at every opportunity.
“We need to represent Canada boldly and without apology,” Moe said.
“My advice to farmers is to continue to do what you do. Your government of Saskatchewan is working alongside the government Canada to ensure that in this very unstable trading environment and market access environment that we’re doing our level best to fight like hell and represent you.”
White said farmers are worried because five million tonnes of market demand is no longer there.
They know this will only get worse unless the situation is sorted out and the market re-opened, he said.
“That’s challenging, of course, but that is their first inclination, and ask and push from the grassroots,” he said.
At the same time, they have to be ready for the worst.
“They’re feeling the pinch. They’re feeling the stress and they’re feeling the uncertainty. They have enough on their plate with harvest, weather and other markets without having this to add to their pile of worries,” White said.
Prices have been fluctuating, more down than up, and harvest usually pressures prices, too, he added.
“The market will start to react if this lasts very long, and we’ll be watching what kind of economic negative impact this will have on farmers,” he said.
White said the pressure is on Carney, and he saw the worry from stakeholders during the Sept. 16 meeting. Farmers will have to store a lot of canola this fall if the worst case comes to pass, but he said they shouldn’t have to do that. Instead, they should be selling it to pay their bills.
Diversification to different markets and biofuel production will help and should be done quickly to mitigate exposure to constant issues with China.
“We need a better way of dealing with this because it becomes repetitive. It happened in 2019 and it will happen again in the future. We know it will, and that’s just what happens when you are dealing with China.”
Moe said he’d prefer tariff-free market access to every country around the world to create wealth and food security. Saskatchewan is the highest per capita exporting region in North America, he said, and sells to 160 countries. It produces more than half of the country’s canola.
“That’s what I want. Do I think we’re going to get that? I doubt it, but we need to have the market access at at least as low a tariff or no tariff to as many countries as we can,” he said.
