Question Period Note: CANOLA TRADE WITH CHINA

What actions is Canada taking to resolve the canola issue?

1. Restoring full market access for canola seed exports to China is a top priority for the Government of Canada.

2. The Government is engaging the Government of China on multiple fronts to resolve this important issue, including through technical discussions and senior official dialogue with Chinese officials.

3. Canada also initiated consultations with China at the World Trade Organization. This process is ongoing.

4. The recent appointment of Dominic Barton as Canada’s ambassador to China will help support our trade interests.

5. We have also increased financial support to producers through AAFC’s Advance Payment Program.

6. Canada stands by our robust food inspection system and our ability to continue to be a supporter of high-quality canola to China and the world.

Canola seed exports

In 2018, Canadian canola seed exports to China were valued at $2.73 billion (4.77 million tonnes), making China, Canada’s largest canola export market.

Between January and March 2019, the Canadian Food Inspection Agency (CFIA) received notifications of non-compliance from the General Administration of Customs China (Customs China) regarding the detection of alleged quarantine pests in canola seed shipments from Canada.

In March 2019, Canada was informed of China’s decision to suspend the registration and canola imports of two Canadian companies. China also began strengthening its inspection of all Canadian seed imports.

From March to September 2019, Canada worked through all available channels (e.g. World Trade Organization (WTO), G20, bilateral engagement) to resolve this issue, including holding five teleconference calls with Chinese officials.

In April 2019, the Government of Canada established the Industry-Government Canola Working Group to help canola producers navigate through this uncertain time. The Working Group meets regularly to discuss market diversification efforts and support to the sector.

On May 1, 2019, the GOC announced enhanced financial support to producers through the implementation of the new regulations to strengthen the Advance Payments Program (APP). The amendments increase loan limits from $400,000 to $1 million for all producers on a permanent basis and increase the interest-free portion of loans on canola advances from $100,000 to $500,000 in the 2019 program year. Producers of all other commodities can continue to receive up to $100,000 interest-free. In addition, on August 15, 2019, a stay of default was announced for crop producers impacted by the market disruptions. Eligible producers could take advantage of an additional six months to repay 2018 cash advances under APP.

On September 9, 2019, Canada formally requested consultations with China on the canola issue, under the WTO, which was supported by the canola industry. The WTO consultation with China on canola took place on October 28, 2019. If consultations fail to produce a satisfactory solution within 60 days, Canada can request adjudication by a panel. Canada is reviewing additional information provided by China before determining next steps.

On November 21, 2019, Customs China sent a letter to CFIA inviting Canadian officials to travel to China for technical discussions on the canola issue. Canada and China have agreed for the technical discussions to take place during the week of December 16, 2019, in Beijing.

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