At a panel titled Sustainability Disclosure in Canada: Overcoming the Headwinds, hosted by the Canadian Sustainability Standards Board (CSSB), speakers discussed the challenges and opportunities for Canadian businesses as international trading partners increasingly look for environmental, social and governance (ESG) transparency.

Eight out of Canada’s 10 biggest trading partners either have or will soon have mandatory disclosure rules — including those in the Indo-Pacific region, an emerging market for Canada’s agri-food sector, said Canadian Sustainability Standards Board chair Wendy Berman.

She called Canadian Sustainability Standards the “ticket to play” in a global market which may also be moving toward sustainability disclosure practices.

Canadian standards in the global market

Companies do not need to be perfect, only rigorous, Berman said.

“If you communicate that rigour, and you put sunlight around the main assumptions, which our standards tell you to, then that is what you’re communicating to the market.”

Berman said the standards board is helping Canadian companies address the market’s needs by looking at global reporting baselines and adding changes to reflect the uniqueness of the Canadian market.

“What we also have is a Canadian version of proportionality mechanisms,” she said. “What we’re saying to the market is ‘It’s okay, build capacity on these items and continue to do that so that you’re ready to enter the global market’.”

Ontario Securities Commission CEO Grant Vingoe said Canada will need to follow a global baseline if it wishes to continue on the path of market diversification. He said he hears many investors express frustration at a lack of a consistent global framework, forcing them to rely on private sources.

Disclosure fatigue

Canada is in a “pivotal moment for sustainability in Canada,” one “full of complexity and uncertainty and also real possibility,” said Elizabeth Dove, executive director of the UN Global Compact Network Canada.

“Over the last few years, Canadian companies have stepped up,” Dove said. “They’ve adopted climate action strategies. They’ve incorporated ESG into governance and risk. They’ve built systems to measure, disclose and manage sustainability performance. But let’s be honest, it hasn’t been easy.”

There has been fatigue around disclosure, and some businesses are now asking if the measures are necessary — particularly if they seem to hamper the company’s ambitions.

“We cannot allow ambition to be the casualty of uncertainty,” Dove said.

“Climate change is not waiting for regulatory clarity.”

Adoption of ESG will likely increase as the means of measuring climate risks improve, said Peter Routledge, superintendent of the Office of the Superintendent of Financial Institutions.

“Guess what? As you measure the risk more effectively, boards of directors and senior management teams will make really smart decisions about how to invest to counteract that risk,” Routledge said.

“That’s the beauty of market capitalism at work.”

“It is not a regulatory burden for the sake of increasing costs to in pursuit of some abstract virtue,” Routledge said. “That’s the last thing we’re interested in. What we’re interested in is creating management and risk measurement discipline to elevate and improve and sustain shareholder value.”

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“This trip is about promoting these products, advancing trade discussions, and building relationships that will create new opportunities for our hardworking producers back home,” MacDonald said in a July 28 news release.

While in the region, MacDonald will meet with senior government government officials, local and Canadian business leaders and other stakeholders. The minister leaves this week and will be in the Indo-Pacific for about a week, a spokesperson for his office said.

The Indo-Pacific is the world’s fastest growing region and home to six of Canada’s top 13 trading partners, the release said.

Canada opened an Indo-Pacific trade office in Manila, Philippines in early 2024 as part of a plan to increase Canadian agri-food exports to the region.

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“This initiative reflects our commitment to strengthening global partnerships and expanding market access for Canadian pork producers,” said CPC chair Rene Roy in a news release.

The Indo-Pacific Agriculture and Agri-Food Office (IPAAO) is a joint effort between Agriculture Agri-food Canada (AAFC) and the Canadian Food Inspection Agency (CFIA) is part of a plan to “increase and diversify Canada’s agriculture and agri-food exports to the Indo-Pacific,” Prime Minister Justin Trudeau said in a November 2022 news release announcing the initiative.

China, Japan and the Philippines are among Canada’s top pork buyers, StatCan data shows. Korea and Taiwan are also hefty customers. In recent years, efforts have been also been made to increase sales to Vietnam.

Other Canadian producer groups also expressed hopes the office would further their sectors’ exports to the region.

“The Indo-Pacific provides a unique opportunity for growth and diversification for Canadian pulses,” said Pulse Canada chair Kevin Auch in the federal news release. ” This office demonstrates the Government of Canada’s support for our sector proactively breaking down market access barriers and playing a direct role in expanding exports of high-quality, sustainable pulses across the region.”

“The Indo-Pacific region represents both key established markets as well as diversification opportunities for Canadian canola,” said Chris Davison, president of the Canola Council of Canada in the release.

“Additional resources and an enhanced and sustained presence in the region are important to advancing both market access and market development efforts to support the growth and competitiveness of our industry and the broader sector,” he added.

Long-time Canadian diplomat Diedrah Kelly was appointed as the office’s first executive director, MacAulay announced in December.

IPAAO staff are already in Manila, “working with partners to advance shared priorities, such as food security, create mutually beneficial opportunities, build on strong relationships and enhance technical cooperation, market access and trade,” a federal news release said today.

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Federal ag minister Lawrence MacAulay announced that Diedrah Kelly had been appointed to the post. Kelly is a long-time representative of Global Affairs Canada and recently was Canada’s consul general in Mumbai, India.

The IPAAO, a joint effort between Agriculture Agri-food Canada (AAFC) and the Canadian Food Inspection Agency (CFIA) is part of a plan to “increase and diversify Canada’s agriculture and agri-food exports to the Indo-Pacific,” Prime Minister Justin Trudeau said in a November 2022 news release announcing the initiative.

“By engaging with stakeholders, regulators, and policy decision makers, it will deepen partnerships with Indo-Pacific partners to diversify export markets and products, create new opportunities, and position Canada as a long-term, reliable trading partner of choice for the Indo-Pacific,” the release said.

This June, then federal ag minister Marie-Claude Bibeau announced the government had chosen Manila as the location for the IPAAO.

“The Philippines is an important partner under the Indo-Pacific Strategy. Hosting this new Office is an opportunity to build on our economic relationship, and enrich people-to-people ties,” Bibeau said in a news release.

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Canada’s Trade Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau announced the move Friday, saying Taiwan’s decision “will offer an opportunity to expand Canadian beef exports to Taiwan and diversify export markets in the Indo-Pacific region.”

“Expanding our trade relationships in the Indo-Pacific region is a top priority for the Government of Canada, and Taiwan presents many opportunities for Canada’s beef sector,” Bibeau said Friday in a release.

Ng had telegraphed Taiwan’s pending decision late last month during the Asia Pacific Economic Cooperation (APEC) trade ministers’ meeting in Detroit, noting ongoing negotiations between Canada and Taiwan on a foreign investment promotion and protection arrangement.

Taiwan, among many other countries, had blocked imports of Canadian beef in 2003 following the discovery of Canada’s first domestic case of bovine spongiform encephalopathy (BSE). It began accepting boneless Canadian beef from animals under age 30 months (UTMs) in 2007, though it paused those imports in 2015-16 on the discovery of Canada’s 19th BSE case, the first to be born after Canada’s “enhanced feed ban” was imposed in 2007.

The 30-month cutoff has been based on a safeguard imposed in Britain in the 1990s during that country’s BSE crisis. UTM cattle are believed to pose a lower risk of BSE infectivity even if those animals carry the agent that causes the disease.

Since then, however, Canada’s BSE-related beef safety cred has reached its highest possible ranking internationally. It was officially recognized in 2021 by the World Organization of Animal Health (WOAH) as having “negligible risk” status for BSE.

Canada last year was the seventh-largest supplier of beef and beef products to Taiwan, valued at almost $14 million out of Taiwan’s $1.9 billion total beef import market that year.

The Canadian Cattle Association said last month it’s “grateful for Taiwan’s decision to adhere to science-based trade,” noting the Indo-Pacific region “holds the greatest potential for beef export diversification.” — Glacier FarmMedia Network

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Federal Agriculture Minister Marie-Claude Bibeau announced the office’s location Wednesday in Ottawa during a meeting with the Canadian Agri-Food Trade Alliance (CAFTA), which represents Canada’s export-dependent ag commodity groups on international trade matters.

Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency will man the office as a joint-venture base for a mobile Indo-Pacific team, the government said.

That team, the government said, will work directly with Canadian diplomatic missions, Canadian stakeholders, foreign representatives and other decision-makers across the Indo-Pacific region, to “advance mutual trade objectives for the sector.”

The plan for a dedicated ag office in the region was laid out in broad strokes last November during Prime Minister Justin Trudeau’s tour through the region, when he pledged $31.8 million over five years for an AAFC Indo-Pacific office at a then-unspecified location.

Canada’s broader Indo-Pacific strategy, which was telegraphed in Global Affairs Canada’s departmental plan earlier in 2022, was laid out later in November with $2.3 billion pledged in related spending.

The new ag office will work “hand in hand” with Canadian government resources already in place in the Indo-Pacific and help “strengthen partnerships, advance technical co-operation, support Canadian exporters in finding new business opportunities, and help position Canada as a preferred supplier in the region,” the government said Wednesday.

Bibeau on Wednesday hailed the Philippines as “an important partner” under Canada’s Indo-Pacific strategy, and the Manila office as an “opportunity to build on our economic relationship, and enrich people-to-people ties.”

The government, she said, “will continue to help Canadian farmers, food processors and exporters maximize their opportunities, and diversify their markets in the world’s fastest-growing economic zone.”

Trade Minister Mary Ng, in the same release, described the office as “another step forward to reaching our goals” of expanding trade, investment and “supply chain resilience” under the Indo-Pacific strategy.

CAFTA president Dan Darling, in a separate statement Thursday, said the organization is pleased the office will be in the Philippines, a “growing trading partner for Canada and a key member of the Association of Southeast Asian Nations.”

A trade pact with ASEAN “should be one of Canada’s top trade negotiations priorities,” he said, and “putting technical expertise and boots on the ground to help deepen and strengthen trade and investment ties is a major step forward.”

Canada is still in talks toward such a pact with an ASEAN trade bloc that includes the Philippines as well as Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

Canadian Cattle Association president Nathan Phinney, in a separate release Thursday, said producers are “encouraged to see the progress in establishing the (Indo-Pacific ag office) and look forward to seeing the office enhance market access opportunities in the region,” noting the region today takes about 20 per cent of Canada’s beef exports.

Following the 2018 signing of the Trans-Pacific Partnership (CPTPP) trade deal, Phinney said, cattle producers have seen the “tremendous growth potential in the Indo-Pacific region for Canadian beef exports” and are “excited for future export growth opportunities in the region.”

Canada’s beef exports to Japan alone have increased 70 per cent since the CPTPP’s tariff cuts took effect, the CCA said, also noting Vietnam’s purchases of Canadian beef have grown from $8 million in 2019 to $129 million in 2022, and the Philippines’ from $5 million in 2020 to $13 million in 2022.

The CPTPP bloc’s members in the Indo-Pacific include Australia, Japan, Malaysia, New Zealand, Singapore and Vietnam. Canada has also had a free trade deal in force with South Korea since 2015, and is in separate bilateral talks or “exploratory discussions” toward trade pacts with several other Indo-Pacific countries.

Darling said CAFTA is also pleased with the “nimble” concept of a mobile team, which would allow the officials involved to “provide support throughout the vast Indo-Pacific region, which will help agri-food exporters continue to grow their market share in a region that is fiercely competitive.”

Groups including Cereals Canada, Pulse Canada and the Canola Council of Canada previously hailed the plan for an Indo-Pacific ag office, jointly noting in November that while those sectors “enjoy a significant export share within the region and there are great opportunities… the rise of non-tariff barriers may prevent Canada from achieving its full potential in the region.”

Support for resources to deal with sanitary and phytosanitary issues in a “strategic, co-ordinated manner with industry” would help to build, and maintain, market access, they said at the time. — Glacier FarmMedia Network

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Canada’s federal agriculture department announced Monday that Japan has reopened to imports of “processed” Canadian beef — just days ahead of a significant reduction in Japan’s tariffs on imports of Canadian beef under the Trans-Pacific Partnership (CPTPP) trade pact.

“Our members view this as a critical market for their products, including processed beef and beef patties,” Chris White, CEO of the Canadian Meat Council, said in Agriculture and Agri-Food Canada’s release Monday.

“This agreement will allow our industry to further build on the recent successes they have enjoyed in Japan since the CPTPP was ratified.”

Nathan Phinney, president of the Canadian Cattle Association, said in a separate release Monday producers are “grateful for the re-opening for processed beef in Japan, our second largest export market for beef.”

Japan’s decision concludes another plot thread in the story of Canada’s BSE crisis. Japan had closed its ports entirely to Canadian beef in 2003, upon Canada’s first finding of a domestic cow with bovine spongiform encephalopathy (BSE). Canada in 2021 regained “negligible risk” status for BSE from the World Organization for Animal Health (OIE).

Japan reopened to imports of Canadian beef from cattle 20 months of age or younger in 2005, to beef from cattle 30 months or younger (UTMs) in 2013, and to beef from cattle over 30 months old (OTMs) in 2019.

Under the CPTPP — in force since the end of 2018 for Canada and Japan as well as Australia, Mexico, New Zealand and Singapore, as the first six of the 11 member countries to ratify that deal — Canada has since had preferential market access to Japan that has allowed it to build its eligible beef exports up to an amount the CCA pegged at $518 million in 2022.

Japan levies a 38.5 per cent tariff on beef imports, including on primary processed beef products. For Canada, however, the beef tariff has decreased since the CPTPP came into force and, starting Saturday (April 1), drops again to 23.35 per cent, en route down to nine per cent by 2033.

Tariffs on further-processed beef products “will be reduced even more and in some cases eliminated altogether,” AAFC said Monday, reiterating that the reduction “provides Canadian exporters with a clear tariff advantage over our key competitors.”

The value of beef in Japan has also increased, rising from $6.74 per kilogram in 2020 to $7.76/kg in 2022, the CCA said Monday.

Japan, and the larger Indo-Pacific region, “hold the greatest potential for beef export diversification” for Canada, the CCA added.

The federal government late last year launched its Indo-Pacific strategy, through which it says it plans to boost economic opportunities for Canada by strengthening partnerships in the region such as with Japan.

The strategy also calls for the establishment of Canada’s first dedicated agriculture and agri-food office in the region, at an as-yet unannounced location. — Glacier FarmMedia Network

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The plan detailed in a 26-page document said Canada will tighten foreign investment rules to protect intellectual property and prevent Chinese state-owned enterprises from snapping up critical mineral supplies.

Canada is seeking to deepen ties with a fast-growing Indo-Pacific region of 40 countries accounting for almost $50 trillion in economic activity — countries including Japan, Indonesia, the Philippines, Thailand, Vietnam, Cambodia, Bangladesh and Singapore among others.

But the strategy’s focus is on China, which is mentioned more than 50 times, at a moment when bilateral ties are frosty.

Four cabinet ministers at a news conference in Vancouver took turns detailing the new plan, saying the strategy was crucial for Canada’s national security and climate as well as its economic goals.

“We will engage in diplomacy because we think diplomacy is a strength, at the same time we’ll be firm and that’s why we have now a very transparent plan to engage with China,” Foreign Minister Melanie Joly said.

Prime Minister Justin Trudeau’s Liberal government wants to diversify trade and economic ties that are overwhelmingly reliant on the United States. Official data for September show bilateral trade with China accounted for under seven per cent of the total, compared to 68 per cent for the United States.

Canada’s outreach to Asian allies also comes as Washington has shown signs of becoming increasingly leery of free trade in recent years.

The document underscored Canada’s dilemma in forging ties with China, which offers significant opportunities for Canadian exporters, even as Beijing looks to shape the international order into a more “permissive environment for interests and values that increasingly depart from ours,” it added.

Challenge China

Yet, the document said co-operation with the world’s second-biggest economy was necessary to address some of the “world’s existential pressures,” including climate change, global health and nuclear proliferation.

“China is an increasingly disruptive global power,” said the strategy. “Our approach … is shaped by a realistic and clear-eyed assessment of today’s China. In areas of profound disagreement, we will challenge China.”

Tensions with China soared in late 2018 after Canadian police detained a Huawei Technologies executive and Beijing subsequently arrested two Canadians on spying charges. All three were released last year, but relations remain sour.

Canada earlier this month ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

The document, in a section mentioning China, said Ottawa would review and update legislation enabling it to act “decisively when investments from state-owned enterprises and other foreign entities threaten our national security, including our critical minerals supply chains.”

“Because the region is both large and diverse, one size definitely does not fit all,” Canadian Chamber of Commerce president Perrin Beatty said in a statement, adding that Canada’s priorities will need to be very nuanced both between and within countries.

The document said Canada would boost its naval presence in the region and “increase our military engagement and intelligence capacity as a means of mitigating coercive behavior and threats to regional security.”

That would include annual deployment of three frigates to the region, from two currently, as well as participation of Canadian aviators and soldiers in regional military exercises, Defense Minister Anita Anand said at a separate news conference.

Canada belongs to the Group of Seven major industrialized nations (G7), which wants significant measures in response to North Korean missile launches.

The document said Ottawa was engaging in the region with partners such as the U.S. and the European Union.

Canada needed to keep talking to nations it had fundamental disagreements with, it said, but did not name them.

Sunday’s announcement follows a related funding package laid out Nov. 18 to boost trade ties within the Indo-Pacific region, including $31.8 million over five years for a regional agriculture and agri-food office, to be set up at an as-yet-unnamed location.

— Reporting for Reuters by David Ljunggren and Ismail Shakil.

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Prime Minister Justin Trudeau’s tour through the region last week included a pledge of $31.8 million over five years for a regional agriculture office, to be set up at an as-yet-unnamed location.

The new office is meant to “position Canada as a preferred agriculture and agri-food supplier to the region, strengthening trade on both sides of the Pacific,” the government said Friday in a release.

The new agriculture office will be devoted to “engaging with stakeholders, regulators, and policy decision makers” and “deepen(ing) partnerships with Indo-Pacific partners to diversify export markets and products.”

The announcement comes as the feds work toward development of a comprehensive Indo-Pacific strategy — which was telegraphed in Global Affairs Canada’s departmental plan this spring, and which Foreign Affairs Minister Melanie Joly has said will be released before the end of this year. It’s expected that more details on the ag office will be announced after the overarching strategy is released.

In a joint statement, the Canola Council of Canada, Cereals Canada and Pulse Canada said they were “pleased to see” the support for an agriculture office, noting the Indo-Pacific region “represents a significant opportunity for Canada to diversify its agricultural exports while positively impacting global food security.”

Canada’s cereals, canola and pulse industries “enjoy a significant export share within the region and there are great opportunities,” the groups said, but “the rise of non-tariff barriers may prevent Canada from achieving its full potential in the region.”

Support for resources to deal with sanitary and phytosanitary issues in a “strategic, co-ordinated manner with industry” would help to build, and maintain, market access, they said.

“Nearly every day I get calls asking about Canadian soybeans, to resolve issues, or to do more promotion of our products in Indo-Pacific markets,” Brian Innes, executive director of Soy Canada, said Friday in a separate statement. “We’re ready to work arm in arm with our government partners to make today’s modest investment produce results.”

“It is important for Canada to have a proactive presence in the region to help address market assess barriers and increase Canadian beef exports by maintaining stable and open trade,” Canadian Cattle Association president Reg Schellenberg said of the proposed office in a separate release.

The Indo-Pacific region today takes about 20 per cent of Canada’s beef exports, the CCA said, listing Japan, mainland China, South Korea, Vietnam and Hong Kong as the region’s top five markets.

Funding initiatives Trudeau announced Friday in Bangkok also include $45 million over five years for “Modern Team Canada 3.0” minister-led trade missions; $92.5 million over five years for almost 60 new positions to “significantly expand” capacity at Canada’s missions in the region; and $13.5 million over five years to expand and diversify trade in Canadian natural resources.

“By opening new markets and opportunities for Canadian businesses, innovators, and entrepreneurs, and attracting investment to Canada in sectors like clean energy that will define the global economy, we are building an economy that works for all Canadians,” Trudeau said in a statement.

The Bangkok visit, Trudeau’s first to Thailand as prime minister, was the third and final leg of a tour of the region which also included appearances at the ASEAN (Association of Southeast Asian Nations) summit at Phnom Penh, Cambodia and the G20 summit in Bali, Indonesia. — Glacier FarmMedia Network

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