Question Period Note: SUPPORTING UKRAINE’S AGRICULTURE SECTOR

Q1 – What is Canada doing to open its economy to Ukrainian exports? Q2 – What is the current situation with regards to supply managed goods such as poultry, dairy, and eggs from Ukraine?

R1 - • The actions taken by Russia – with support from Belarus – have had a significant effect on Ukraine’s economy, including its ability to export its goods to other countries, including Canada.
• To help support Ukraine’s economy, Canada has been temporarily waiving tariffs and trade remedy duties on imports originating from Ukraine since June 9, 2022. R2 - • On June 9, 2023, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, announced Canada’s extension of the Ukraine Goods Remission Order until June 9, 2024, in order to support Ukrainian manufacturing and trade activities in light of the enduring nature of the conflict and its repercussions.
• Taking into account views expressed by the supply-managed sectors, the scope of goods covered by the Order is amended to exclude over-access supply-managed dairy, poultry, and eggs from duty relief after June 9, 2023.
• This re-establishes the status quo of ensuring predictable levels of imports that support production planning and protect Canada’s supply management system.

Canada’s support for grain storage and laboratory equipment
• On June 28, 2022, Prime Minister Trudeau announced $52 million for agricultural solutions to respond to Ukraine’s urgent need to increase grain storage capacity and enable the timely diagnostic testing and monitoring of animal diseases to allow for export certification.
• Canada provided the funding via the Food and Agriculture Organization (FAO), as part of its Rapid Response Plan for Ukraine, for grain storage and lab equipment. Of the $52 million, $50M is allocated for grain storage and $2M for lab equipment. Japan and an Australian non-government organization (NGO) also responded with various levels of funding.
• On July 29, the FAO launched two separate tenders for grain storage solutions in Ukraine and through the process, as of March 2023, 28,108 grain sleeves have been successfully distributed (out of a target of 30,000) to 1600 farmers in 20 oblasts. The remaining grain sleeves have been reallocated to farmers who have indicated a higher need.
• As a result of FAO’s competitive bidding process for PCR equipment, six regional state laboratories in Ukraine have been equipped with diagnostic lab equipment (for testing and monitoring of animal diseases) to facilitate export certification. Staff are currently being trained by FAO in the proper use of the equipment and lab analysis procedures.
Seeds request from Ukraine
• Following a request from Ukraine’s Minister of Agrarian Policy and Food soliciting Canada’s support to help acquire seeds for the 2023 spring harvest, AAFC reached out to relevant Canadian industry groups to make them aware of the request and encourage support, if and when possible. This specific request is also published on the Ukrainian Ministry’s Agrarian Policy and Food website.
EU’s Solidarity Lanes
• On May 23rd, 2022, the Commission launched the EU-Ukraine Solidarity Lanes Business Matchmaking platform to bring EU, Ukrainian and other businesses together quickly so that they can find solutions for the export of agricultural production from Ukraine. The platform is open to companies (including Canadian) for registration until December, 2023.
• Canada sent out a notification to Canadian industry stakeholders in June 2022 to inform them of the launch of the matchmaking platform, and encouraged them to participate. As of August 31, 2023, the website notes 1072 participants, 472 of which are from Ukraine (five from the United States, and seven from Canada).
• According to the European Commission, the EU Solidarity Lanes have facilitated exports of over 45 million tonnes of grain, oilseeds, and related products accounting for 60% of total Ukraine's grain exports since the start of the war. Industry contacts have noted that over 50% of exports through Solidarity Lanes came through Romania.
• The EU Solidarity Lanes are expected to play a more important role in facilitating Ukraine’s grain exports after Russia withdrew from the BSGI in July 2023.
UN’s Black Sea Grain Initiative (BSGI)
• On July 17, 2023, Russia withdrew from the BSGI.
• Canada has strongly condemned Russia’s withdrawal and has joined G7 partners in calling for Russia to fully restore and implement the BSGI.
• According to FAO’s Food Price Index, global food prices rose by 1.3% in July, the first time in fifteen months mainly due to uncertainty over Ukraine’s exports following the termination of the BSGI and Russia’s attacks on Ukrainian port infrastructure in the Black Sea and along the Danube river.
Eliminating tariffs on goods imported from Ukraine
• While most goods from Ukraine enter Canada duty-free as a result of the Canada–Ukraine Free Trade Agreement (CUFTA), the Remission Order provides the ability to import CUFTA-covered goods duty-free with a lesser administrative burden due to simplified conditions relating to rules of origin and shipment documentation.
• From 2019 to 2022, Ukrainian total merchandise exports to Canada averaged $139.2 million annually, and Canada collected about $2.6 million in duties from these goods.
Ukraine Remission Order- dairy and poultry access
• The Remission Order came into effect on June 9, 2022, for an initial one-year period. The Remission Order temporarily remitted customs duties, anti-dumping duties, and countervailing duties applicable to all imports of Ukrainian goods. During the initial one-year period, industry associations of the supply-managed sectors raised concerns about supply-managed goods being included under the Order. On June 9, 2023, Finance Canada announced the Remission Order’s extension to June 9, 2024. The scope of goods coverage was amended to exclude over-access supply-managed goods imported after June 9, 2023, unless such goods were already in transit to Canada.

• Ukraine currently does not have market access to export egg and egg products to Canada. CFIA is still in the process of reviewing Ukraine’s proposed certificate and plans on providing a formal response to Ukraine soon.

Canada’s humanitarian response for Ukraine and other countries
• The Government of Canada has committed $8.9 billion in multifaceted support to Ukraine since January 2022. This includes $352.5 million in humanitarian assistance, $147 million in development assistance, and over $105 million in security and stabilization assistance.

• The Government of Canada remains committed to supporting the Ukrainian agriculture sector as a major contributor to global food security.

• To help Ukraine and its farmers, Canada has provided $50 million for temporary grain storage and $2 million for lab equipment to facilitate export certificates.

• We are also in close contact with our G7 partners to support efforts to restore the Black Sea Grain Initiative, which is critical to allowing Ukrainian grain reach global markets.