This Is The Time At SDA When We Refresh Our Memories

Ian Cumming: Before there is too much admiration, the real background story of Kingston Chinese plant

Originally published May 21, 2021 in Ontario Dairy Farmer. Reprinted with permission.

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AN APRIL 28, 2016 meeting in Gustine, California changed the landscape of the Canadian dairy industry.

The meeting was between several top people representing the Chinese-owned Feihe dairy processor, and Wang Pei from the Canadian Dairy Commission (CDC) to explore the possibility of Feihe building a processing plant in Canada.

According to about 1,000 documents received under Access to Information, Pei is referred to as the ‘International Advisor to CEO’. Many documents were not made available or were redacted to some degree.

Minutes of that April meeting show that when the CDC was asked about potential limitations on production, it provided assurances that “there were no problems for cow milk infant formula.”

Feihe said if it had a Canadian plant “we can also import milk from U.S. processors and export but the made products cannot be sold in Canada.” The minutes state “butter and SMP produced by Feihe can be sold to the CDC, committed.” Later documentation shows Feihe estimated that five per cent of its production would be butter, all being sold to the CDC.

In May 2016, Health Canada provided information to Feihe that “clinical trials are required to support the safety and efficacy of new infant formula. The clinical trials, at the current time, can only be carried out abroad.”

“China, or any other country, can be the location,” documents state.

On June 28, 2016 in the Frontenac Room at the Delta Hotel in Ottawa, a letter of intent was signed between Jacques Laforge, CEO of the CDC and Leng Youbin, Chairman of Feihe. The signing was termed “a business agreement on our investment in infant formula manufacturing in Canada.”

Top officials from Agriculture Canada, Health Canada and CFIA were issued invitations to the signing. There was a strong warning issued that there should be “no media report on signing.”


On July 21, 2016, Ontario Farmer paid a repeat visit to the CEFC China and the Shenzeng Dasheng Ag Group mansion along the Ottawa River on Grandview Avenue in Ottawa, for an interview updating their agriculture investments in and from Canada. At that time, CEFC was listed as China’s third largest company with $35 billion in worldwide assets, mainly in energy and financial services. It had teamed with the $10-billion Shenzeng Dasheng Ag company to invest in Canadian agriculture. There were several large Canadian Chinese investments being highlighted that day, including beer, lamb, oats, and honey.

Of particular excitement for Louise Jiang Birch and Hanz Zhang from the company, was sharing the announcement made the night before to them in the Chinese embassy by Ambassador Luo Zhaohui and allegedly by Canadian Deputy Minister of Agriculture Andrea Lyon. It was concerning Feihe wanting to build a powder and baby formula plant in Canada. The location still had not been determined, but Ontario was favoured.

In the hundreds of documents recently obtained by Ontario Farmer under Access to Information from the federal government regarding Feihe, it shows four locations being considered.

Locations in Ontario were Cornwall and Kingston. In Quebec the locations were Drummondville and Valleyfield. Feihe visited these locations and was lobbied by both provincial governments and the respective cities.

When George Borovilos, Director Business Development Branch, OMA-FRA threw out the possibility of $13.4 million in a potential grant to Feihe, Judy Tu from the company replied that, “it is about half of our initial understanding of the support.”

Borovilos, in later emails, made the point that they were “available and eager” and that “subsequent funding can often exceed what the company first received. Longer term funding support would be available to Feihe.”

A proposed agenda the CDC organized for a September meeting between the Feihe chairman and then Ontario Minister of Agriculture Jeff Leal and Premier Kathleen Wynne, showed eight hours were set aside for their meeting, although there is no indication how long it lasted. There were similar meetings of the same length set up in Quebec with the Minister of Agriculture.

Kingston was the location announced on Dec. 1. The Ontario government gave $24 million, the CDC $15 million, and it is unclear from the redacted documents whether or not OMAFRA provided an additional $5 million that was under negotiation.

The first mention of this plant was an Aug. 2, 2016 article in Ontario Farmer after the Ottawa interview, picturing both Jiang Birch and Zhang. They emphasized in the article how they were the main facilitators for massive projects such as this between the two countries.
Ontario Farmer had been invited to that mansion six times over the course of a little over a year. Two were for large public functions with Canadian government officials, including Agriculture Canada, and wealthy Canadians, as well as professional lobbyists on retainer for the company, such as retired officials from Foreign Affairs and Agriculture Canada.

The other four visits were for interviews on their activities.

On Oct. 31, 2016, Ontario Farmer attended once again, with the focus of an article (which appeared on Nov. 8, 2016) whereby the company was giving millions of dollars to a Dr. Will Spence to develop his business of manufacturing gluten-free bread. Dr. Denis Petitclerc, Director General, Science and Technology Branch, Agriculture Canada, and recently retired Dr Yvon Martel, former Head of Research for Agriculture Canada, were present.

Martel had been responsible for opening up many joint research projects with China.

The subsequent Dec. 1 announcement of the Feihe plant in Kingston was well organized to give great publicity. Documents show that the planning even involved seating arrangements during the announcement and subsequent celebratory dinner.

There was preparation put into controlling the media narrative and documents stated that if any reporter brought up the question that might there be a problem securing milk supply, ‘PLEASE DO NOT ANSWER THIS QUESTION’. Questions like this were to be referred to “the communications team at the CDC.”

Internally at Agriculture Canada there was celebration. A Dec. 2, 2016 email with a redacted sender to Oliver Beaulieu Charbonneau at Agriculture Canada stated “there may still be hope for Kemptville (closed college) as a training centre or a private school for Chinese. Glad to see it developing though so the Chinese can get the amount of infant formula they need.”

On Dec. 14 Deputy Minister Lyon emailed six Agriculture Canada officials about a ‘strange’ Ontario Farmer article that week, which stated that she had made the original public Feihe announcement at the Chinese embassy to CEFC China back in July. She requested that someone “reach out to Ontario Farmer and clarify the department’s non-involvement in the Feihe investment. I had no involvement in it whatsoever.”

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On Feb. 19, 2017 with Ontario Farmer invited back to the CEFC mansion for the hosting of a delegation of Chinese agriculture officials that day, Feihe’s project was discussed extensively, with CEFC taking pride in how it was moving the project along behind the scenes. The government officials spent a lot of effort designing, in the documents released, what was called “a winning formula” for Minister MacAulay to publicly announce.

An April 5, 2017 email from Charbonneau to fellow Ag Canada officials states, “the plant will need 75 million litres of goat’s milk per year. In 2019 I expect price wars for the milk (current buyers include Saputo, Gay Lea, Hewitts, Mariposa Dairy etc) and an influx of requests for supplementary import permits for frozen goat curds etc.”

He was echoing CDC’s Laforge, who, when providing talking points to government officials some months earlier, stated in these documents the plant would annually process “250 million litres of cow’s milk and 75 million litres of goat’s milk.”

The subsequent CUSMA agreement limits this plant to 13 million litres in year one, climbing to just over 40 million litres of cow’s milk per year.

As of April 2021, there has been no goat milk purchased and processed at Feihe.

On June 30, 2017, an internal Canadian government memo marked ‘secret’detailed a meeting in China between the Canadian Ambassador John McCallum, Canadian Dairy Commission (CDC) CEO Jacques Laforge, a Chinese cabinet minister, and the Feihe chairman.

The document is heavily redacted but it does state that, “the CDC has also signed a confidentiality agreement and a cooperation agreement with Feihe.”

In March 2018, the Chinese government detained CEFC chairman Ye Jianming for suspicion of ‘economic crimes’. Chinese state-owned corporations took control of the CEFC energy and all enterprises in China, Russia, Europe, and elsewhere in the world. About 18,000 employees worldwide lost their jobs and the Ottawa mansion was closed.

The official narrative put out by the Chinese government concerning CEFC was that “the company used a complex web of official companies to facilitate false dealing, inflate trade figures, and obtain bank loans to fuel its aggressive expansion.”

With the Feihe ball now thrown into Agriculture Canada’s court, the internal emails take on a new tone, especially leading up to and just after the CUSMA deal (called USMCA in the emails) came to fruition in the fall of 2018.

The company sought clear answers from the Canadian government, with its promised milk access cut in this trade deal to a mere fraction. Letters from Feihe to the Minister of Agriculture and other federal politicians were passed internally from official to official. Concern was expressed among officials about the loss of Class 6 and 7, which, Feihe pointed out, had been promised to them.

An Oct. 23, 2018 email from Fred Gorrell to three other Agriculture Canada officials states, “this evening I received an invitation to meet with the Chairman of Feihe. I believe I (we) should meet with them to understand where they are coming from as they are directly linked to the Government of China as noted in the ESD.”

An Oct. 26, 2018 email from David MacDonald to fellow officials at Agriculture Canada states, “if we are asking for it (Feihe) to be removed we need to provide the rationale why. Given Canada’s new dairy thresholds agreed to in this USMCA and degree of competition in the industry, Canada cannot commit to facilitating the establishment of a new dairy facility in Canada without additional information.”

The meeting with the chairman and others took place in Ottawa on Oct. 29 with five of the nine people representing Feihe at that meeting having their names and positions redacted.

The subsequent report of the meeting was totally redacted.

There were a series of Agriculture Canada emails that discuss how to answer CBC’s Janyce McGregor’s request for ‘background’ on this USMCA issue. The finely massaged talking points, passed from person to person before being released to her, mention no uncertainties expressed internally, nor that the plant could now only operate at one-sixth its physical capacity for cow’s milk.

The talking points sent from MacAulay’s office stated that everyone was happy with the allowable manufacturing amounts since they and trade officials had consulted with someone, “with direct knowledge of the plant’s operations,” both during and after the CUSMA agreement was reached.

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There’s additional refreshment in this 2021 SDA post: A Winning Formula

13 Replies to “This Is The Time At SDA When We Refresh Our Memories”

  1. I commented on this some time ago. Carry on, as everyone is right except those of us who always seem to be wrong. Ass holes.

  2. Up to $54 million in grants and five years later nothing? Meanwhile Ovino just opened Canada’s largest sheep milk operation just down the road near Acton. Took about 3 years to build the barn.

    https://www.ovino.ca/

    I wonder how much money they got? Probably nothing. They’re in production now.

    1. *
      THERE’S A CLUE IN THERE SOMEWHERE

      “a country that poisoned its children and others with melamine”

      aka… Justin Trudeau’s ‘most admired dictatorship’

      *

  3. Come, come all you critics: This is just another example of how Canada leads with its heart. Surely you can’t oppose a project that will provide wholesome baby formula based on Canadian milk?

  4. Based on Canadian milk? Oh yeah?

    Funny, it feels like it’s based on Canadian tax dollars.

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