Liberals waver on trade deal compensation Tories negotiated with farmers

A $4.3-billion compensation package negotiated with Canadian farm groups before the Trans-Pacific Partnership trade agreement was announced appears to be in jeopardy.

The deal was negotiated under Stephen Harper's former Conservative government, who called it "cabinet approved" last October.

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But shortly after ministerssigned off last Julyamidthe heat of the 12-country Pacific Rim tradetalks an election was called. The $4.3 billion was never approved byTreasury Board.

The new Liberal government's spending estimates and firstbudget don't include even a portionof the previous pledge.

International Trade Minister Chrystia Freeland signed the TPPin February but the Trudeau government is undecided about its ratification.In the meantime, extensive consultations are underway.

"We're going to first wait and see if we ratify the agreement," Freeland's parliamentary secretary, David Lametti, said at aconsultation session in New Brunswick last week. "If we do make a decision to ratify, then we will sit down with these groups."

But the compensation package announced last October wasn't only for the TPP. The measures also intended to mitigate potentiallosses from the Canada-EU Comprehensive Economic Trade Agreement (CETA).

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The Liberals arekeen on CETA, saying they hope the deal will be ratified later this yearwhich is why farmers' eyebrows shotup when last month's budget offered nothing.

Pressed to explain, Agriculture Minister Lawrence MacAulay's office told CBC News that "since CETA is not yet ratified, it would have been premature to have compensation in the budget Discussions on compensation will be part of the process to ratify CETA."

Hundreds of millions inlosses

The farm package announced last October was intended to help Canada's supply-managedsectorscope withcompetition fromnew imports once new deals take hold.

Five commodities in Canada dairy, eggs, chicken, turkey and broiler hatching eggs have marketing-board systems that usestrict production quotas and import controlsto stabilizedomestic prices.

CETA would give European cheeses (both fine cheeses and industrial grades) an additional two per cent of the Canadian market.

The TPP affects all five commodities, allowing foreign importsaccess that ranges from 1.5 per cent of the domestic marketfor broiler hatching eggs, to nearlyfour per cent of the Canadian dairy market, according to industry calculations.

The shares might sound small, but they'redisruptive to a systembuilt onstability.

Figures supplied by the Chicken Farmers of Canadato the Commons trade committee pegged the hit to Canada's GDP from the new chicken imports at about $150 million annually.

The Dairy Farmers of Canada said its combined impactfromboth deals isbetween $282 million and $357 million in annual lost revenue. New export opportunities won't offset this, the group said.

"The TPP trade agreement goes with a mitigation and a compensation package. That was the way it was built and negotiated," the DFC's Caroline Emond told MPs, calling it a "critical" part of Canada'scompromise to get a deal.

Without it, she said, farmers pay the price for the gains other industries hope to achieve.

What comes first?

A chicken-and-egg argument emergesover the Liberalapproach of deciding to ratify before deciding on compensation.

Farm groups say the compensation should be sorted outfirst.

"I understand that you wouldn't [pay]compensation until ratification. I get that," Mike Dungate, from Chicken Farmers of Canada, told CBC News. But starting to debate back and forthafter ratification is too late, he said.

One component of the Conservative-negotiated deal, a $450-million modernization fund for food processors, was already supposed be rolling out to help upgrade aging plants.

Recent job losses resulting from dairy-plant closures could suggest an industry already bracing itself.

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While the Liberal election platform included a $160-million fund forfood processors, that money wasn't in the budget either.

Chicken farmers are also upset thatimport control measures negotiatednearly a year ago not part of TPP per se, but part of the political quid pro quodomestically to mitigateCanada'slosses werealso missing fromthe budget.

Until they're in place, the group says fraudulent labelling and classification lets in millions of kilograms ofextra imports.

Cabinet split?

Sowhat are the Liberals a party that has included prominent voices criticalof supply-managed agriculture in the pastplanning?

MacAulay told reporters in Montreal last week that what he wants his government to do isn't much different fromthe Conservative announcement, but the Liberals would like their own opportunity to discuss it.

"There could be areas in the compensation programs that the sectors would want to be handled a little different," he suggested.

Conservative agriculture critic Chris Warkentinsays it's concerning that the Liberals seem to be throwing everything out and renegotiating. He suggests they could be betraying acommitment made to farmers.

"We heard Chrystia Freeland talk early in their mandate about the fact that this was being reviewed. Obviously the ag minister has tried to pour cold water on those comments to reduce the tensionwithin the dairy community. But then every other minister piles on and reinforces this concern."

The Liberals talked about supporting itduring the election, Warkentin said, but with nothing in the budget,"they've clearly changed their mind."

NDP trade critic Tracey Ramsey called the Liberalsdisingenuous in the face of the party's pledgeto be open and transparent.

"If that deal doesn't exist, then they should be upfront about that. If it does exist, then they should be coming forward with money in the budget," she said.

The Conservative offer arrived as that party facedpotentiallyangry farmers inkey ruralconstituencies. But the Liberals are in a different situation, as next election is years away.

Dairy Farmers of Canada spokesperson Isabelle Bouchardsaid she doesn't know why the Liberals are being so reticent, saying her organization is ready to meet anytime.

"We do expect the government to modify, to put their colours on the compensation package," she said. "It's partisan politics, right?"