Saskatchewan Premier Scott Moe says he's going on a trade mission to discuss market access for canola, his province's most important export to China.Liam Richards/The Canadian Press
Saskatchewan Premier Scott Moe is heading to China to discuss market access for Canadian canola – and he wants Prime Minister Mark Carney to join him.
The Premier says his trade mission will focus on market access for the province’s most important export to China, but his powers to persuade Beijing to drop a preliminary 75.8-per-cent duty on canola are limited.
Beijing announced that it would bring in the hefty duty on canola seed last Tuesday, toward the end of a year-long anti-dumping probe. The tariff came into force last week; canola meal and oil already have tariffs.
China’s Ministry of Commerce said Canada’s canola sector had benefited from extensive government subsidies and preferential policies that distorted markets.
The Premier stressed that canola is traded fairly, and Beijing’s actions require intervention from the federal government.
“It isn’t going to be Premier Moe and President Xi that stand up and say we’ve come to a trade deal here and everything is good moving forward,” Mr. Moe told a press conference on Thursday afternoon at the University of Saskatchewan.
“It is going to be the Prime Minister of Canada, Prime Minister Carney, and President Xi that ultimately are going to speak on behalf of the countries.”
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Mr. Moe did not provide an exact date for the trip, but said he hoped to travel to China in the next few weeks.
The Prime Minister’s Office declined to comment.
The Premier, federal agricultural officials and a number of provincial ministers spoke with industry groups throughout the morning on Thursday. Federal Agriculture Minister Heath MacDonald joined the meetings remotely.
In the press conference, Parliamentary Secretary Kody Blois stressed the “nuanced” nature of the trade dispute, which has put Canadian canola squarely in the centre of a two-front trade war with its largest markets: China and the U.S.
Many in Canada’s canola industry say China’s action is a political response to Canadian tariffs in other sectors.
Beijing’s duties were levied shortly after Ottawa imposed steel tariffs on China as a way to protect Canada’s industry after the U.S. imposed steel duties on this country in July. Previously, Ottawa’s decision last year to impose 100-per-cent tariffs on Chinese-made electric vehicles, and 25-per-cent duties on steel and aluminum, resulted in Beijing imposing 100-per-retaliatory tariffs on canola meal and oil in March.
This is a “political issue that needs a political resolution,” said Chris Davison, president and chief officer at the Canola Council of Canada, in an interview last week.
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When asked whether Ottawa was reconsidering the tariff on Chinese-made electric vehicles as a way to appease China, Ms. Blois did not comment on the policy. Mr. Moe stressed the importance of the canola industry to Western Canada.
“I would just point to the scope and the size of the canola industry versus the size of the EV industry,” he said, noting that the $43-billion canola sector employs more than 200,000 people.
Some representatives from the canola industry who were in the meetings said they felt like the provincial and federal governments had heard their concerns.
“This was a very, very good meeting,” said Andre Harpe, chair of the Canadian Canola Growers Association. “The government is here, they’re listening and they’re trying to get a handle on what they should be doing.”
For others, more action is needed.
“I feel like we’ve been heard,” said Tracy Broughton, executive director of SaskOilseeds. “But actions speak louder than words. I feel like this will be a priority for the Prime Minister when he makes a trip to China.”
Ms. Broughton said farmers are upset and frustrated, and don’t feel like the Prime Minister is giving this sector the attention afforded other industries facing trade issues.
Canada’s steel sector has faced tariffs from the U.S., its largest export market. The federal government responded by strengthening import controls for steel, changing federal procurement processes so companies contracted by the government will be required – where possible – to source from Canadian companies and by making available sizable federal aid. For example, $1-billion under the Strategic Innovation Fund to help the industry transition and become more competitive, and $70-million for steel workers retraining under labour market development agreements with provinces and territories.
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In comparison, no emergency financial aid has been offered to canola farmers.
In the press conference, Mr. Blois referenced existing provincial support tools for farmers facing a market crisis.
The emergency funding available to farmers in this circumstance comes under the AgriStability insurance program. This program pays out farmers for some of their losses should incomes fall more than 30 per cent below recent averages.
This year, the federal government announced changes to the advanced payments available to specific sectors in crisis. These changes mean that producers could get faster payments of up to 75 per cent of their estimated final payment.
However, this program is unpopular, said Ryan Kitchen, an accountant at Baker Tilly International who specializes in agriculture.
Producers are forced to guess how much money will be lost. This is hard when commodity prices, harvest and numerous other factors are constantly in flux. A number of producers have had to pay back the money given, while also covering the costs of enrolling in the program and hiring an accountant to complete complex paperwork. AgriStability can cost more more than it pays out, said Alberta farmer Roger Chevraux.
Mr. Chevraux said he is frustrated by how slowly the federal government is reacting to Beijing’s actions.
Beijing announced the anti-dumping probe almost one year ago. The outcome was fairly predictable, he said. China has a track record for targeting agricultural imports when it disagrees with the actions of its trading partners.
“They have known since September that tariffs were coming and they have no plan figured out,” Mr. Chevraux said.
“This shouldn’t have been an unknown entity.”
With a report from Ian Bailey