Thank you, Mr. Chair.

Good afternoon, vice-chairs and members of the committee.

As executive vice-president of Sollio Cooperative Group and CEO of Sollio Agriculture, I thank you for this opportunity to speak to you today. I am accompanied by Patrice Héroux and Marc Poisson, respectively vice-president of finance and director of public and government affairs.

Sollio Cooperative Group has been around for over 100 years. It is the largest pan-Canadian agricultural co‑operative with Quebec roots. Sollio Cooperative Group represents over 123,000 members, agricultural producers and consumers in 48 traditional agricultural and consumer co‑operatives. We have over 15,000 employees in our three divisions, including Olymel, which specializes in pork and poultry processing, as well as BMR, Quebec's leader in the retail trade of construction materials and hardware.

Our Sollio agriculture division supports producers in eastern Canada to help them maximize their yields by specializing in the marketing of agricultural inputs and value-added agronomic services. As a federation of co-operatives, ensuring the supply of inputs required by producers for their various production activities at the farm is both the core of our business and an obligation.

We depend on imports, and the large quantities of fertilizer required by producers for their brief spring period cannot all be stored in advance. This explains the maintenance of some of our supply contracts, which were concluded before the sanctions were imposed, in order to honour past orders and guarantee the availability of fertilizer to producers during the key planting period.

Nevertheless, withdrawing the most favoured nation tariff treatment for imports from Russia and Belarus required the payment of a 35% duty on many of our shipments, amounting in total to $33.5 million. Certainly, the severity of the atrocities committed by Russia—which are ongoing—against the Ukrainian people demanded a strong and severe response from Canada. However, these sanctions must have an effect on Russia, not on Canada. This is why we have undertaken the appeals that bring us here today for three of the shipments, representing seven customs transactions in total, which were in transit to Canada before the sanctions were imposed.

On April 13, 2023, the Canada Border Services Agency approved the modification of the tariff treatment on our first two review requests, which resulted in a refund of $7.8 million. That was then redistributed in the following weeks, in accordance with our commitment to producers. At the beginning of this year, we were notified of a review of the two decisions that led to the $7.8-million refund, only to be told last March, 11 months later, that the agency was reversing its decision and that we had to return this amount—already redistributed to producers—adding interest that represented an amount of $395,000. That is what we did, in order to appeal these seven decisions. To date, there is a burden of $35.3 million that remains unacceptable for producers in eastern Canada.

It is equally unacceptable, from our point of view, that producers in eastern Canada have been at a competitive disadvantage since March 2022 compared with those elsewhere in the world, including in the United States, given our dependence on imports.

Speaking of the United States, I would like to point out that it still sources from Russia, despite its position against the war in Ukraine. Unfortunately, the affordable price, quality and quantity available with Russian fertilizers are difficult to source elsewhere. Canada depends on fertilizer imports. We do not produce enough nitrogen to meet our needs, and we simply do not have any domestic production of phosphorus.

Other countries with similar restrictions compete with us in sourcing from markets where available volumes are lower and located in regions with high geopolitical tensions, such as the Black Sea or the Middle East. We are not immune to a destabilizing event that would force us to reconsider Russia as a supplier, whether we like it or not. What needs to be remembered here is that it will be difficult to guarantee supply—given the restrictions, availability and prices—and that agricultural production and food security in Canada could be weakened as a result.

In conclusion, I thank you for your attention and the interest you give to these issues that closely affect producers across Canada.

Thank you.

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