Industry committee  Yes, I can certainly answer your question, and bonjour, it's nice to see you again. I guess the dairy processors are in the following situation. We have lost a very significant share of our market, which is the food service business, as it has disappeared in large part. We have not been able to recuperate that business entirely from the gross growth in retail, so we end up in a situation of processors losing sales.

Industry committee  I'm Dominique Benoit from Agropur. I can answer your question and add to what Mr. Froment said. Regarding import quotas, I should point out that the demands of the processing industry are also supported by producers. Processors are calling for the vast majority of the import quotas to be granted to the dairy processing sector, because in Canada, that's the sector that will suffer the repercussions of the three agreements that were mentioned earlier.

Industry committee  My name is Dominique Benoit, from Agropur. I will continue in French. Depending on their product and market mix, the majority of dairy processors have seen their revenue decline anywhere between 0% and 50% due to the reduction in the food service market. Furthermore, dairy processors have seen an increase in expenses due to costs related to COVID-19, such as a rise in absenteeism, higher PPE costs, and so on.

International Trade committee  Class 7 has to be put in the context of the strategy for ingredients developed by the Canadian dairy industry to acquire the infrastructures and the means of producing in Canada the ingredients needed for processing. By eliminating class 7, the agreement has moved backwards and, as an industry, we all find ourselves dealing with this issue.

International Trade committee  Each of the companies has its business plan. For Agropur, I can state that we are going to continue to use dairy ingredients that are entirely Canadian. We made that commitment and we are going to stand by it. As for the industry, we have to work together to find solutions. What's going on?

International Trade committee  Our position is very clear. Import TRQs should be allocated to processors. I'll explain why. The why is that we can offer a product to consumers that is complementary to our Canadian offering, instead of offering consumers a product to replace a Canadian product. This is why we've been so insistent to the government to allocate those TRQs to the processing communities, because we're the ones who have skin in the game.

International Trade committee  I think the new CUSMA added three additional impacts to the TPP. In the TPP there was market access given to those countries, but in the CUSMA, not only did we increase the market access, because whatever was given to the TPP, including to the U.S., was maintained in TPP, but now in CUSMA we have conceded more market access.

International Trade committee  Obviously, as a co-operative—I'll speak for Agropur and put on my Agropur hat for few seconds—we are owned by dairy farmers. Our farmers expect that supply management is here to stay. There's no question about it. I think that in every trade negotiation supply management has been put at risk.

International Trade committee  The industry would suffer quite a bit.

International Trade committee  As an industry, we have to comply with the elimination of class 7, and the industry is working on this right now. Then we have to limit our exports of those products to the quantities that were decided. Each and every company is now looking into its business plan to see what can be done.

International Trade committee  We found out at the same time as everybody, because we were not consulted on this notion of putting a cap on exports to all the countries around the world. There was no consultation with us about the fact that Canada could consider limiting its exports to all the countries. That is something we'd never heard about and we were caught off-guard.

International Trade committee  We found out when the agreement was announced.

International Trade committee  In terms of processors, I can speak for our organization. We will not pay the 54¢ duty to export our surplus. We will not because it's not economically profitable to do that business. Therefore, at some point, companies such as our organization will have to make a decision on whether they buy the milk or not, because if we cannot export, we need to find another home for it.

International Trade committee  Obviously that impact varies between processors, depending on their activities. I will talk to you about Agropur's perspective. We're a large player in Canada. We process quite a bit of solid-not-fat into skim milk powder and other products. I'll give you an example. In the last year, our organization exported close to 35,000 tonnes of skim milk powder.

International Trade committee  Last year, recommendations were submitted to the Department of Agriculture and Agri-Food by the mitigation working group—created by the government in October 2018—on programs to address the financial impact of the three trade agreements on the dairy processing sector. We actively participated in this work.