U.S. complaints that Canada discriminates against its wheat will be addressed, if Canadian legislation to ratify the updated North American Free Trade Agreement becomes law.
Bill C-100, the implementing legislation for the United States-Mexico-Canada Agreement (USMCA), received first and second reading in the House of Commons May 29 and last Tuesday (June 11) respectively. It includes amendments to the Canada Grain Act and a long list of other legislation.
“The changes will address American concerns that were raised during the CUSMA negotiations while preserving the integrity of the Canadian grain quality assurance system,” Agriculture and Agri-Food Canada (AAFC) said in an email May 31.
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“Currently, the Canada Grain Act excludes imported grain from receiving statutory Canadian grain grades on the basis of origin rather than quality. This means that a variety of grain that is registered in Canada, but grown in the U.S. and delivered to a primary elevator in Canada, cannot receive a statutory grade for the class that reflects its quality.”
U.S. complaints go further back than the USMCA negotiations. U.S. Wheat Associates, which promotes American wheat exports, says while Canadian farmers can deliver wheat to American elevators without discrimination, but U.S. farmers can’t do the same. Currently U.S. wheat, even if the variety is registered to be grown in Canada, is ineligible for an official grade.
Amendments to the grain act proposed under C-100 will allow American to receive an official grade so long as the variety is registered to be grown in Canada. If it’s not, the grade assigned will be the lowest for the intended class. But the same rule applies to Canadian farmers delivering unregistered wheats.
Several U.S. spring milling wheats, including Faller, Prosper and Elgin ND, are registered in Canada and fall into the Canada Northern Hard Red wheat class.
“These changes will not impact Canadian consumers,” AAFC said. “All U.S. grain that is imported into Canada will need to meet the same rigorous quality standards that are applied domestically. Canadians can continue to expect wheat and milled products that are dependable and safe.”
Several Canadian wheat organizations, including Cereals Canada, have pressed to have the U.S. concerns addressed, noting it’s necessary to ensure Canadian wheat continues to have unimpeded access to the U.S. market.
“Most Canadian grain stakeholders have been supportive of reforms that reflect the complementary grain trading relationships between Canada and the U.S.,” AAFC said. “In fact, many Canadian industry representatives have identified the current situation as an unnecessary barrier to trade.”
There are exceptions, including the National Farmers Union. It warned last September that accommodating U.S. wheat threatens Canada’s reputation for exporting high-quality milling wheat.
According to NFU vice-president Cam Goff, Canada’s grain grading and variety registration systems are never used to block imports of U.S. grain.
“In fact many southern Alberta feedlots regularly import American corn and barley with no restrictions,” he wrote in a 2018 op-ed. “Our system just does not allow American grain to pretend to be Canadian — and there are good reasons for that.”
While U.S. complaints are technically correct, the Canadian government and grain industry have maintained there’s no law preventing U.S. wheat farmers from selling to Canadian elevators. While the wheat was ineligible for an official grade buyers and sellers were free to negotiate a price based on specifications.
“The volume of U.S. producer deliveries to the Canadian grain handling system over the years has been more a function of market conditions — transportation, costs, currency, et cetera — than of any particular Canadian regulation or policy,”AAFC said.
“The agreement will not change how Canadian grain is delivered in the primary elevator system in Canada, and will have minimal impact on the Canadian grain sector. Small volumes of U.S. grain regularly move through the Canadian licensed elevator system, and this agreement is not expected to significantly influence this trend.”
The pressure is on to ratify USMCA in Canada and the United States ahead of a Canadian election Oct. 21 and a U.S. presidential election in 2020.
The House of Commons will adjourn June 21, however, the Liberal government could recall Parliament to deal with the bill, the Canadian Press (CP) quoted a senior government official as saying Thursday.
As much as the government wants to move “in tandem” with the U.S on ratification, it doesn’t want to get too far ahead, CP reported.
Parliament will be dissolved ahead of a federal election Oct. 21.
Meanwhile, U.S. president Donald Trump is pushing Congress to approve USMCA before its month-long recess in August. But the Democrats aren’t keen on giving Trump ‘a win.’
“It would help if [Canada] went ahead of the United States [and] put more pressure on Congress,” Ag Insider reported U.S. Senate finance chairman Chuck Grassley as saying last month.
If C-100 becomes law it would allow Parliament to ratify USMCA while giving the federal cabinet the power to make any changes necessary for implementation, CTV News reported.
— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @allanreporter on Twitter.
