Thank you, and good afternoon.
My name is Jack Chaffe. I'm chair of the foreign trade committee with the Canadian Cattle Association and a beef producer from southwestern Ontario. With me today is Dennis Laycraft, the executive vice-president of CCA.
We're grateful to have the opportunity to contribute to today's committee study on non-tariff barriers and how these barriers prevent the Canadian beef industry from growing our exports.
CCA represents 60,000 beef producers from coast to coast. The beef industry is a significant driver of economic growth. It's the second-largest single source of farm income in Canada, contributing $22 billion in sales to the gross domestic product and supporting over 350,000 full-time equivalent jobs.
Trade is essential to the beef industry's long-term sustainability and profitability. The beef industry exports close to 50% of the beef produced here in Canada, and approximately 40% of the value of each animal comes from international trade. In 2022, Canada exported $6 billion in beef products and live cattle sales.
Our industry provides high-quality, nutritious and sustainable protein, and with the global demand for protein, the world needs more Canadian beef; however, our industry faces non-tariff barriers that add cost to our products and at times prevent us from reaching certain markets altogether. These barriers are both domestic and international in nature, and we appreciate any recommendations this committee can bring forth to address these trade irritants.
Many of our non-trade barriers are rooted in restrictions implemented during the discovery of BSE back in 2003. In 2021, Canada obtained the BSE negligible risk status from the World Organisation for Animal Health, which acknowledges Canada as having the lowest risk of BSE, similar to the U.S., yet some of these restrictions still remain and have impacted export opportunities for the Canadian beef industry.
In Canada, the BSE-era regulation requirements remain in place. Despite having the BSE negligible risk status, processors need to remove specified risk materials, better known as SRMs, in packing plants. The difference between Canada and the U.S. on SRM regulations increases costs for the Canadian beef industry, adding over $30 million a year to these costs. This puts the Canadian beef industry at an unnecessary competitive disadvantage compared to other countries.
Similarly, Canadian beef producers are negatively impacted by segregation requirements in the U.S. for Canadian live cattle at processing facilities, due to the differences in Canadian and American requirements to ship beef into South Korea, which are based on our BSE regulations.
Internationally, one of our main non-tariff barriers is the rejection of peroxyacetic acid, or PAA, during beef processing for the European Union and the United Kingdom. PAA is a commonly used food safety intervention around the world and is designed to exceed food safety expectations and meet hygiene standards.
Canada has a world-renowned food safety and meat inspection system that is recognized in most of the countries we export to. We need a full systems approval between Canada and the U.K. and Canada and the EU for Canadian beef producers to have the opportunity to grow these markets.
While we do not have time to explain all the non-tariff barriers in my opening remarks, CCA would like to submit to the committee a list of all the non-tariff barriers affecting the beef industry.
CCA appreciates the opportunity to provide input and would be pleased to provide further information to the committee.
Thank you.