A discussion with Ward Toma, General Manager, Alberta Canola
Alberta Canola: Perhaps one of the best trade arrangements Canada has ever made was the North American Free Trade Agreement (NAFTA,) with the United States and Mexico. This agreement laid new ground rules for trade in multiple agricultural sectors including the canola industry.
Has it been positive for the canola industry in Canada?
Toma: Canola has gotten huge positive returns from NAFTA. The U.S. market alone is the canola farmers’ top market, worth $3.6 billion in 2016. Mexico is its fourth at $826 million and it imported virtually no canola products before NAFTA.
What canola product do we ship to the US?
The U.S. is a critical market for canola value-added products, roughly 90% of our Canadian canola meal goes to the US as well as 60% of canola oil exports. We also export about 6% for seed to plants in the North Dakota and the Pacific Northwest regions. The economic activity generated from processing seed in Canada and exporting oil and meal is an integral component of canola’s $26.7 billion contribution to the Canadian economy and the 250,000 jobs it creates.
Much of agriculture in North America is very integrated, especially the beef and pork sectors. Is the canola sector similarly integrated?
Together, the Canadian and American markets bolster both Canadian and American farmers’ competitiveness. Canola meal is a good example, it’s an important part of the Canadian and American dairy feed rations. This helps the dairy industries stay competitive against competing products in their respective markets.
What result could the canola industry expect from a do-over of NAFTA?
Today, canola seed, oil and meal currently face little trade barriers, either tariffs or regulatory barriers, to the U.S. and Mexico. This forms the base of our trading relationship, and must be non-negotiable in the discussions. Imposing tariffs or additional taxes does little to promote trade or expand market access for Canadian, Mexican or American farmers. The re-negotiation can provide a platform to further streamline and align the regulatory processes between Canada and the United States. Farmers in Alberta have benefited from joint Canada-U.S. reviews of pesticides and collaboration on re-evaluations. Harmonization of biotech approvals and working towards the development of a North American low-level presence policy would provide greater predictability for biotech crops into two of canola’s top markets.
Are we concerned with the Government’s ability to secure an enhanced agreement?
As with the economy and commerce in the mid-nineties, the canola market was starkly different when NAFTA was first implemented and, so were the challenges farmers faced. The Government of Canada has successfully concluded negotiations to modernize the Canada-Israel FTA, and is currently looking at the modernization of the Canada-Costa Rica Agreement. Also, the Chief negotiator, Steve Verheul, has years of experience with the agriculture file and is very well acquainted with what our needs are. We are confident in their ability to secure a good deal for Canada.
What about the impacts of re-negotiations on the supply managed sectors? Are you concerned?
NAFTA covers far more than agriculture, and the government’s role will be to find a suitable balance that maximizes the overall benefit for Canada. Each country will have its trade sensitivities, and we have confidence in the Government of Canada can achieve the best deal for canola farmers and Canadians.
Alberta Canola Connects is your window into the activities of the Alberta Canola Producers Commission as we work both locally and globally to help contribute to the long term success of canola farmers in Alberta.