AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 1, 2001

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[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Pursuant to Standing Order 108(2), we'd like to call our meeting to order.

Today we'd like to welcome to our meeting the Minister of Agriculture and Agri-Food. Mr. Vanclief, the floor is yours. I also welcome the members from the department, and you can introduce them as you continue with your presentation.

Thank you.

Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food): Thank you very much, Mr. Chairman. It is a pleasure to be back here again for some comments and a discussion with the committee members. I look forward to their input and comments today.

With me is Samy Watson, Deputy Minister of Agriculture and Agri-Food Canada; Diane Vincent, Associate Deputy Minister of Agriculture and Agri-Food Canada; Ron Doering, President of the Canadian Food Inspection Agency; and Dr. André Gravel, Vice-President of the Canadian Food Inspection Agency.

A number of other officials are here in the room as well, Mr. Chairman. I won't introduce them. If we need to ask one of them to come forward on a specific issue...but I do understand that many of them will be meeting with you in the days and weeks ahead, so there may be more specific questions they can answer—some today—at that time.

Again, thank you for the opportunity of joining with you today. Colleagues, today I'm here to talk about the future, to take an intense and hard look at what needs to be done to make Canadian agriculture the best in the world, and to keep it that way for generations to come.

I'm a roll-up-your-sleeves pragmatist. I'm a very pragmatic person. I'm a realist, and when I look at things I look at them and try to analyse them the way they are. I may not always agree with the way things are at the present time, certainly, but I like to take a look at things and say, okay, this is the reality we're dealing with; now how are we going to deal with it.

The truth is that a unified national strategy to make Canada a world leader in agriculture is no longer a luxury. It's a national imperative. And I want to tell you why.

We all agree on what we want for the sector: we want a healthy, strong sector where farmers and rural communities have a bright future and can depend on stable incomes, recognizing the fact that agriculture is always a high-risk business. We want consumers around the globe to have unflinching confidence that Canadian agricultural products are the safest and the best quality in the world, and we want fair and competitive access to markets so that we can capture new opportunities. This is what all of us who care about Canadian agriculture have always wanted. The destination hasn't changed. What must change is the path we take to get there. In fact, to be a world leader, we'll have to do more than take a different path; we'll have to be a trailblazer.

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Let me be clear: it's not like we're headed in the wrong direction. Governments and industry are working hard to empower and equip the sector for success. We have risk management and income stabilization programs that help farmers to weather the storms of low prices and poor yields. We make investments in science and innovation, and they have dramatically increased productivity, which in turn has given consumers a secure supply of high-quality food. On trade, we've been working hard to access new markets and reduce unfair subsidies to help Canadians compete and win internationally.

We are doing the right things. But to be the best in the 21st century world of agriculture, doing the right things isn't enough. We have to do them better than anyone else. That means focusing on the future and responding to new realities. Let's face it, agriculture today is being shaped by powerful intertwined forces of change. New concerns about food safety are changing markets. Just look at what the mad cow disease has done to the European beef industry. Citizens are increasingly concerned about the environmental impact of agriculture.

Innovation in science and technology, borderless economies, these are changing the definition of products and markets and have led to intense efforts to develop new rules for global trade and commerce.

To meet these new challenges, we need integrated national approaches aimed at the future. We cannot allow ourselves, in our debates in our sector, to be slaves to the past, doing what we do just because we've done it before. We must position Canada to seize every opportunity that change is presenting to us. More than ever before, agriculture is consumer driven, and consumers have high expectations; they thirst for new products, and demand heightened sensitivity to food safety and environmental issues.

Canadian agriculture can grow and thrive in this new reality if we consistently meet and exceed those expectations. We cannot afford to entertain the idea that doing so is optional. Failure is not an option. We are going to have to ensure the sector, and particularly farmers, that they have the tools. We need to broaden our understanding of risk to include the entire food chain, from the farm gate to the dinner plate, to include not only price and yield risk but also environmental and food safety concerns. This will help the agriculture and agrifood sector manage all of the risks it faces and respond to the growing expectations of citizens and consumers.

Our science policies and programs will need to look beyond just improving productivity to include seizing the many benefits of innovation. Just look at the impact of responding to a growing world for pulses and look at the impact that has had on the industry, particularly in western Canada.

We have to be out ahead of our competitors and understand what new markets for food products are on the horizon, and use science to ensure Canadian products fill these markets. We also need to use scientific discovery to create new products, never before imagined, from agricultural raw materials, and equip our farmers with the skills and the knowledge they need to succeed in a technology-driven economy.

In international trade, our policies and tactics must be broader than just our traditional focus on the abolition of trade-distorting subsidies and on better market access through fewer tariffs and quota barriers. We need to link our domestic efforts to improve safety and environmental stewardship with our international agenda.

As we work to beat down unfair subsidies, other trade barriers, based on food safety and environment, are becoming increasingly the focus of international competitive positioning and will determine access to markets. We must be ahead of this curve for Canada to succeed. We cannot be successful in our fight against subsidies, only to be shut out of markets by technical trade barriers. We must move forward aggressively on all fronts at the same time and in an integrated way.

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We have to take a national approach. The rest of the world sees a single Canada. For too long, within our own borders we have been competing among ourselves, among commodities and among regions. We must come together in the common purpose of making the Canadian brand stand above all others, reaping benefits across all commodities and in every region. We have that capacity, but it requires governments working together with all players in the chain—farmers, suppliers, processors, distributors, retailers, and consumers—to develop unified national responses.

I have taken this challenge to my provincial colleagues, and they support this direction and understand that we need to work together to deliver comprehensive, long-term approaches to position this sector to be the master of its own opportunity-filled destiny. They know that if we don't address these emerging realities, we are selling short one of Canada's most significant sectors, an integrated, complex, $130 billion chain, the second-largest manufacturing sector in Canada, and the employer for one out of every seven jobs in Canada.

I am not content to have any Canadians continue to hold the inaccurate view that Canadian agriculture is a drain on the economy. I will not simply prop up the past as our sector hurtles into the future. We have the creativity, the clarity of purpose, and the courage to do things differently. These are issues that are confronting every country, but by acting on them first, and in a comprehensive manner, we will brand Canada as the best at meeting consumer expectations. Our farmers will have the tools they need to produce products that are the number one choice of Canadian citizens and our consumers and customers around the world. Consumers will choose Canada because it sets the standard for food safety, for environmental responsibility, and for innovation, and because a Canadian product is one they can trust and believe in.

In turn, our producers and rural communities will reap the benefits of the new markets, of the economic growth and investment that are rightfully theirs. This will provide them with a legacy and a future that's a source of national pride and an unbeatable national advantage that will support generations to come. But we have to get going and we have to get real. We have to do that right away. We need to set specific, ambitious goals to guide our journey on the road ahead.

For example, every farm should have an environmental plan implemented within five years. Every commodity needs a tracking and tracing system. We need to start confronting the issue of commodity segregation in a serious way. We need to coordinate our efforts in international fora to get a level playing field for Canadians. Our investments in science, both public and private, must be focused on new markets and new opportunities. The income support we provide farmers must come with tools to help them meet these new challenges. We need targets around efforts to help farmers manage change and make the transition to a better and brighter future. Our approach must be consistent across the country, because a patchwork won't deliver a strong Canadian brand.

I began the speech by talking about what we want for agriculture: a healthy, strong sector, consumers with confidence in our agricultural products, and fair access to international markets. Nothing short of the kind of inspired national resolve that helped create and shape this country will achieve these goals. I am resolute in the conviction that Canada will be the world leader in agriculture in the 21st century. I will be looking forward, and looking to this committee, for ideas and assistance in order to help make that happen.

The Chair: Thank you, Mr. Minister.

With that we'll start our round of questioning. Howard, do you want to start?

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Yes, I'll start. Thank you, Mr. Chairman.

Some of the things you're talking about are already being done. Johnson Seeds are over in Korea right today with indentity-preserved seeds. You're talking about things that are already being done, and I don't know how you can be out front leading on that.

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As farmers and as a country, we have to have faith in your abilities as an agriculture minister. As a result, before we can start talking about the future, we have to see whether or not you're the fellow who's going to lead us into that future. I think a little bit of a report card needs to be done. My colleagues will pick up on some of this in a minute, and they will ask actual questions.

You were the chair of the agriculture committee in 1993 and then the parliamentary secretary. Now you are the agriculture minister. So you have a long history in the agriculture business.

With regard to this whole farm income crisis that was on the go, you even denied it existed until December 1998. AIDA came in in 1998 and 1999. It didn't help the grain and oilseeds people at all. As of April 19 of this year, only 70% of the $1.7 billion had actually gone out to farmers. You were $400 million short of the $900 million needed this spring. We had a vote in the House of Commons, and you voted it down. You've told farmers grossing in the neighbourhood of $75,000 to quit farming and look for other kinds of work. You renamed AIDA to CFIP. If CFIP isn't any better than AIDA, which it isn't, farmers are still going to be upset that it doesn't do the job.

On the P.E.I. potato crisis, you never established a good working relationship with either the Clinton or Bush administrations in the United States in order to work out problems instead of fighting about them. It has been seven months since this problem arose. A month ago when you were meeting in Prince Edward Island, you intentionally misinterpreted a letter from the U.S. to the effect that the border was going to be opened right away. I read that letter, and that's not what it said at all. You didn't even see that it was important, Mister Minister, for you to go to the free trade area of the Americas meeting in Quebec City to meet separately with Secretary Veneman at this crucial time. I know you made a phone call later on, but that was not good enough.

After the cabinet meeting today, you again gave the impression that in fact the potatoes are moving and that it's going to work out. The fact of the matter is you haven't negotiated a good agreement with the United States that will permit that flow to go ahead. The trucks are sitting there for up to 48 hours, and they're still sitting there right now.

Mr. Ivan Noonan of the Prince Edward Island Potato Board had to call your office and the CFIA and say, get these inspectors back down here. They went home to Fredericton. They should have been down at the border here when we're trying to get these trucks through to answer questions from the Americans.

On the hoof-and-mouth issue, you didn't get the CFIA acting very quickly. That was your responsibility. When the British outbreak occurred in February, access to information documents show that it was March 27 before there was any order to step up prevention. It took to the middle of April before I or anyone else was able to get a written plan on the foot-and-mouth issue, and we were just darn lucky that we never had a case arise here.

Your forecasted spending for the year 2003-04 is $1.2 billion, a drop from the present $2.5 billion. Does that give us faith in you in the future?

I've just met with dairy farmers in Ontario, and they are really concerned about what your stand will be on supply management and how strongly you're going to support it in the upcoming WTO talks.

In your speeches you talk about value added, and you've talked about it here again today. The organic wheat farmers and the malt producers of the barley want to be outside of the Canadian Wheat Board. The Wheat Board is standing in the way of value added in this country. That's the very thing you're trying to promote, but you're standing in the way of it with that Wheat Board. It's not your portfolio, but as the agriculture minister you should be telling farmers that we're working on these issues. You should be saying, as your agriculture minister, I am pushing it because I know it's going to make for a good future for organic farmers.

You talk about transportation. Pulses and other non-Wheat Board crops come second to the Canadian Wheat Board's control of the transportation industry.

I will let you respond in what time is left. Mr. Minister, there is a serious lack of faith in your leadership on the part of farmers, and you have to address that. You know very well that western farmers, Ontario farmers, and eastern farmers have a big question mark. I'd like you to clarify right here that in fact you are the man to lead this agriculture community in the future.

Mr. Lyle Vanclief: Thank you very much, Mr. Hilstrom, for that vote of confidence.

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Where do I start? You listed a number of issues. The first one you mentioned was segregation. We do have a little bit of segregation, but we have to accelerate that, Mr. Hilstrom. We do not have a system in Canada today so that we can assure.... There is some segregation by certain sectors and certain buyers and marketers in the industry, but we do not have a system of segregation coast to coast in this country. As I said in my opening comments, what we do has to be done across the country. The provincial ministers agree with me on that.

I don't want to get into technical stuff, but trucks haven't been waiting for 48 hours. The potatoes are moving into the United States at this time.

I might say that when the Prime Minister and the President weren't able to solve the potato issue a couple of weeks ago, there was a Challenger available for me to go when that reality took place. But I'm sure that if I had taken that, you would have said I used taxpayers dollars when a conference call would have done the same thing. I'm sure you were just waiting to see what I did so that you could criticize it.

The last outbreak of foot-and-mouth disease in Canada occurred in 1952. I can show you maps indicating the occurrence of foot-and-mouth disease on every continent in the world, and there has been for decades, with the exception of North America and Australia. The regular monitoring we have had since 1952 has kept it out of Canada. We have stepped that up. Last November the CFIA along with our other partners in North America, Mexico and the United States, saw fit to do a mock outbreak. We learned a tremendous amount from that, because there hadn't been an outbreak in the United States since 1929, for example.

On supply management, the industry has worked very well with the provincial and federal governments. We have defended supply management in the attacks by the United States and New Zealand in the past. I'm confident we can. The industry has said that if they need to make more changes whereby they trade internationally, they will do so. I have said publicly, as has the Prime Minister, that we support supply management 1,000%. That is a long way from destroying supply management, as your political party has said in the past. Maybe you've changed your mind again. I don't know. Lately you've changed your mind quite often on a number of issues.

With regard to organic farmers, the Canadian Alliance says it's a party of the grassroots, and I don't know how you could get a better way of representation than by having the farmers elect 10 of the 15 directors to the Canadian Wheat Board. The farmers elected two-thirds. They can do whatever they wish as far as how they market and the commodities they have within the Wheat Board. To date they've had lots of opportunity. It's my clear understanding that if they want to let the Wheat Board make some changes as to how they supply wheat to a domestic pasta plant, for example, or market organic grains, that decision is in the hands of the Wheat Board. I think what you need to do is to go out to your grassroots and tell them that they should make sure that view gets through to those people who represent them.

The Chair: Thank you, Mr. Minister.

You took a very long time, Howard, to give your statement. It took seven minutes. We went nearly nine minutes on that one, so it was two minutes over.

[Translation]

Ms. Tremblay, please.

Ms. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ): Mr. Chairman, I will try to be brief.

A great deal was done to try to get protection against foot- and-mouth disease. At the end of last week, I attended a seminar on agriculture at Sainte-Croix de Lotbinière, and the theme was “Rethinking agriculture”. A participant told me that we were still importing blood plasma from animals without any guarantee that this imported plasma comes from healthy animals. We do not know whether they were healthy or not. This plasma is often used, among other things, to make gel for pills, to make vaccines, etc. Many of the herds from which we get these supplies are fed with feed that contains meat. This plasma is imported from Switzerland, Germany and England. Plasma and serum are imported from all kinds of places.

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Are you able to reassure us regarding this matter? Can you affirm that you are aware of this and that you will be paying attention to it or that you are already paying attention? What is the real situation, given that pharmaceutical companies use a great deal of this plasma for their products?

[English]

Mr. Lyle Vanclief: On that specific question, Madame Tremblay, I'll ask Dr. André Gravel to comment.

[Translation]

André.

Dr. André Gravel (Executive Vice-President, Canadian Food Inspection Agency): Thank you, Mr. Chairman. Obviously, if we have a system to control animal diseases, we must verify every product that comes into Canada and evaluate the risk of their introducing some kind of diseases into Canada.

As far as we are concerned, regardless of whether the product is meant for the food industry, for animal feed or for the pharmaceutical industry, the same strict standards must be applied.

Regarding the blood plasma, it must comply to the standards set by the Agency for making the virus inactive. The product must be sufficiently treated to make the virus inactive, either through high temperature or by lowering the pH or the acidity of the product. As far as we are concerned, as I already said, the final destination of the product is of no importance. The product must meet the standards. There are regulations that allow us to intervene directly with regard to these products.

Ms. Suzanne Tremblay: I thought that the technology used in Canadian slaughterhouses to extract plasma was centrifuge technology. Plasma is often used as bonding material in sausages, but when animals are slaughtered, to avoid any risk, antibiotics are often added in case the animal had been ill. Thus, there is no way of knowing whether or not this came from a sick animal; we should know this before slaughtering it. Once the animal has been slaughtered, we know right away whether or not it was sick, but no one seems to check whether the animal was sick or not to begin with, and it seems that this could present some risk, even though there is new technology for extracting plasma. This technology is available, but the old technology is still being used. The technology has not changed, even though another, better technology is both technically and scientifically available.

Dr. André Gravel: You are right, this technology for extracting blood plasma does exist. The most current method uses a centrifuge, and then the product can be used for all purposes, including human nutrition or pharmaceutical use.

To my knowledge, it would not be a good idea to give antibiotics to an animal before slaughtering it to ensure that the blood is not contaminated, because the presence of antibiotic residues, either in blood or in meat, automatically require that the carcass be condemned. Thus, I do not really see why there would be this kind of pratice.

Ms. Suzanne Tremblay: On another topic...

How much time have we left? Two minutes?

A Voice: Two minutes.

Ms. Suzanne Tremblay: All right. You can go ahead. I will give the floor to my colleague Michel Bellehumeur.

Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): Good day, Mr. Minister. I would like to ask you a very specific question. I want to talk about a problem facing many tobacco growers, both in Quebec and in Ontario. No doubt, you know about this, because Ontario and Quebec growers are in touch with you. As of July 1, 2001, big tobacco companies will no longer buy any tobacco containing nitrosamine. This is a toxic product that develops during the drying of tobacco leaves because of hot air directly striking the leaves. There is, currently, a technique that can be adapted to the kilns. Indirect heat is used, but it costs about $6,000 per kiln to install this new technology.

Growers presented a plan in four parts. Growers would pay 25% of the bill and the vast majority of big tobacco companies are ready to pay 25% of the bill as well. Provinces would pay 25% and we are proposing that the federal government pays 25%. Ontario, Mr. Minister, already accepted to pay $20 million.

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After having discussed this with three important ministers of the Lanaudière region, I know that Quebec is also getting ready to do the same or, at least, they are thinking about it very seriously. But I am being asked what position the federal government took regarding this matter. Will the federal government help tobacco producers to convert their kilns so as to meet the standards set by the tobacco companies? Given the fact that the standards will apply as of July 1, 2001 and that the growers will be planting tobacco very shortly, I think that the growers have a right to know promptly what the federal government's position is regarding this.

[English]

Mr. Lyle Vanclief: I'm aware of the situation and have been approached by the tobacco industry and tobacco growers. I've had discussions on this issue with the Province of Ontario as well. I'm aware that Ontario has made a contribution of money to the Ontario Flue-Cured Tobacco Growers' Marketing Board. The board will make their decision on what they do with that money. It may very well be used to help in this retrofitting of tobacco kilns. The goal with the new drying process is to lower the level of nitrosamines, which is one of the carcinogens in tobacco—it's not the only one. The tobacco buyers say they want that carcinogen lowered.

The government is discussing this amongst a number of different departments, as you're aware. You can well imagine that the Ministry of Health would take a view on what we do either to make tobacco safer or to support the production of tobacco. All being said, it is a legal crop, there's no question of that.

There are a number of views out there. There's also the view that this is a retrofitting in the tobacco industry not unlike the situation of a grain farmer who might be able to buy a corn drier that was far safer for the environment, more energy efficient, etc., or a hog operation that could do something far more environmentally friendly. It's not necessarily the same type of thing, but the same type of approach. Where do governments get involved in this? We certainly have had discussions in Ontario in particular to date, and maybe in Quebec as well. The Farm Credit Corporation has approached their industry and said they would be willing to sit down and talk about support through specialized loans, probably for this type of thing, as well as the farm improvement loans.

There are a number of approaches that can be taken. The federal government has not made a decision on whether we get involved in the retrofitting for this sector.

The Chair: Thanks.

I'm encountering some problems with times. Again we're more than two minutes over. I'm going to have to cut you off. At least try in your questions to keep it so the minister has time to reply.

Murray, can I go to you then for five minutes as your allocation?

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Sure, cut me off two minutes.

I have two questions I want to focus on. Minister, you said you have a problem with propping up the past as we hurdle to the future. That tells me right off the bat that definitely the department has to take a look at what the vision is for agriculture. We know you can chop the farming sector into three, farms that earn up to $100,000 gross, next those from $100,000 to $500,000, and last $500,000 and over. So the question is, given that we've just survived the Walkerton issue here in Ontario, so we know the Ontario government is probably going to come in with stiffer legislation on the right to farm, does the department have any vision on what a farm is going to be in the future? Is there going to be any size to that operation where it no longer is a farm? Do you have any vision along that line? Because I see legislation heading in that direction.

Mr. Lyle Vanclief: I don't think it's the role of government to dictate what the size of the farm is, Mr. Calder. We know there are very successful farming operations in Canada that may be on 10 or 15 acres, very small parcels of land, depending on how specialized they are and what type of farming it is. We also know there are very successful farms in Canada that are 10,000, 12,000, 14,000, 15,000, 20,000 acres, depending on the type of operation that is as well.

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With the concern about water, the one you mention, we have some responsibility, of course, as a federal government, in the water area. As I say, we feel strongly that there need to be environmental farm plans. We have the expertise in Canada, through PFRA and the other ministries, to give complete mapping in the very near future of all the agricultural land in Canada, and we will be moving in that direction. So a municipality or a provincial government will be able to look at the soil types with the overhead mapping, so that they know what the drainage is, so that a determination can be made of setbacks, the receptability, if I could so term it, for the disposal of animal livestock waste, treated sewage waste from cities as well, and all of those types of things. Those are the types of directions we need to move ahead, and we will be moving ahead at Agriculture Canada.

Mr. Murray Calder: That's exactly my point, Minister. Because there are going to be costs attached to exactly what you've explained, would that not take it to the smaller operations, where it's prohibitive for them to come up with that extra money? If you're only grossing $100,000 a year, and all of sudden you find you've got $25,000 for manure storage, for instance, I think that puts you out of business. A larger operation would probably be able to swallow those costs. That's the reason I asked the question.

Mr. Lyle Vanclief: There are three groups of sizes of farms. There are about 270,000 farms in Canada. About 90,000 have a total gross income of $10,000 or less—many refer to those as hobby farms—about 90,000 have a gross income between $10,000 and $100,000, and about 90,000 have a gross income of over $100,000. As I've said before, no matter what business you're in, you look at the gross opportunities you have. Those are business decisions that people are going to have to make on how they change their operation or what they do in their operation. Many of those regulations you're talking about will be provincially legislated or regulated—you refer to the Province of Ontario maybe doing something. But the role of the federal government is to provide things like the mapping of the soil conditions I referred to. Then individuals can better make those decisions on what their potential is and what their opportunities are in the land-base they do have.

Mr. Murray Calder: You mentioned the tracking system in your speech, and this is a question I put to Mr. Doering. The poultry industry right now is trying to come in with HACCP, where we want to be able to track the chicken from the day it's hatched to the day it goes to the processing plant, so we have a total tracking system, gate to the plate. Right now, though, we're having some problems with the Canadian Food Inspection Agency. We thought at first maybe it was a financial problem, but we find maybe it's more a legal problem. I'm wondering, Ron, how things are progressing with that. Is there any way we could work in partnership, the poultry industry and CFIA, in a tracking system, so that chickens could lead the way in this?

Mr. Lyle Vanclief: Before Mr. Doering comments, I think, Mr. Calder, you're mixing a couple of things. The modernized poultry inspection program is a HACCP-like program for the processing of chicken, which would have a tracking back to the farm source. The other issue I think you're raising is the on-farm food safety program that a couple of the industries, the poultry industry and the pork industry, had to basically develop manuals for and we are working on. I can assure you that we will be finding a way for the food inspection agency and the Government of Canada to give accreditation to those types of programs on farms.

The Chair: Thank you, Mr. Minister.

I'll move now to Dick.

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Mr. Dick Proctor (Palliser, NDP): Thanks very much, Mr. Chair.

Minister, welcome.

I also wanted to stay with HACCP and talk a bit about slaughterhouses. There's a recent story out of British Columbia that suggests that inspectors in slaughterhouses are being phased out. You spent time, Minister, in your speech talking about the need for food safety and about consumers demanding assurances. Apparently the critics of this policy to phase out inspectors are suggesting that it's not only a way to save money but that it will inevitably lead to more cruelty to animals. When you're killing 1200 pigs an hour, you can't guarantee that they're all going to be killed humanely. I'd like to know what the government's policy is on inspectors in slaughterhouses.

Mr. Lyle Vanclief: There are two levels of inspection, Mr. Proctor. A slaughterhouse may be a provincially regulated slaughterhouse. I think the story you're referring to concerns a provincially inspected slaughterhouse. That being the case, there are federally inspected slaughterhouses as well.

Any slaughterhouse that wants to export meat, be it pork, beef, or whatever, to the United States at the present time has to be HACCP-approved. HACCP is an internationally accepted system that uses higher levels of science to ensure that our food is safe, such as checking water temperature and the bacterial count, than just visual inspection, as was often the case in the past. The Food Inspection Agency will continue to operate in federally regulated plants.

If you've had the opportunity—and I'm sure you have—to see the documentation that a plant has to follow every moment of every day to meet HACCP, one can be nothing but impressed. This also means that when we have products coming into Canada—which we do import into Canada from HACCP-approved.... The HACCP program is similar to an ISO-type program for safety and cleanliness in a manufacturing plant, for product safety, and so forth. When you see that, you know that the product has gone through a system that had that set of internationally accepted standards.

As for the humane treatment in the slaughterhouse you mentioned, the federal government's role in humane treatment of animals lies in the transportation of animals. The provincial government has jurisdiction over the animals, I believe, in the slaughterhouse and on the farm. The federal government plays a role only in transportation.

Mr. Dick Proctor: Thank you.

I have one other question in a different vein. You talked about the need to go forward, and “diversification” and “value-added” were buzzwords in the throne speech delivered in January. How in your view would grain and oilseed producers be eligible for this new exciting future that awaits?

Mr. Lyle Vanclief: I give a lot of credit to a lot of producers who are out there right now. If we take the oilseed industry, for example, a number of producers in western Canada have seen the opportunity in pulse crops. I believe that since 1980 or 1990—and I know that's 10 years apart—the acreage and production of pulse crops has increased phenomenally in western Canada. The Canadian pulse industry has done a tremendous job, and we have supported them in finding new markets.

The grains industry is doing the same type of thing. We know that in your province, for example, the acreage of wheat has decreased tremendously in the last eight or ten years because producers have seen the realities of the grain market in the world and have switched to some other crops.

The switch to greater livestock production is as well causing producers to convert. As my father used to say, they try to find ways to feed what they grow, not only grow what they feed.

Producers are trying to take many of these products to the next step as much as possible. As I said before, that doesn't mean you have to have your own flour mill, for example. However, with the opportunities that are out there in segregation now for special wheats, special barleys, special pulse crops, and special ways of growing them, organic or otherwise, there are tremendous growing opportunities.v By far the majority of producers are looking at these and trying to take advantage of them.

The Chair: Thank you, Dick.

Paul.

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Mr. Paul Steckle (Huron—Bruce, Lib.): Yes.

It's been a long time perhaps since we've had an issue that has grasped the attention of Canadians as has the foot-and-mouth issue. I want to pose this question to you, Mr. Doering, as I posed it to Mr. Gravel a number of weeks ago.

Even though we have been given assurances that every precaution is being exercised at our points of entry for people who are coming from Europe, we have reason to believe, because of incidents that have occurred.... And I've cited an incident most recently to your office—not to you personally but to one of your staff. I gave names, and I believe there was to be a follow-up with those people. I haven't followed up, but I expect that you people have.

I think it would be in the interest of all Canadians if we could again give assurances concerning security measures taken at points of entry. Was there error on the part of some person coming in—that is, was it determined that he had not actually gone through a splash pad? If he hadn't, why not? Please tell us whether those areas have been corrected so we can give assurances to the public.

I realize you've done a great job. I think Canadians have become cognizant of the impending dangers of that coming into this country. Can we once again give the assurance that we have taken every precaution? I think that's important.

Mr. Ron Doering (President, Canadian Food Inspection Agency): Thank you, Mr. Steckle. I appreciate very much your saying we've done a great job.

We've worked really hard at it. We're not perfect. No one thinks there's zero risk in the business we're in, but we have taken, so far as I know, every reasonable precaution and have actually gradually increased surveillance as the situation in the U.K. has grown.

We do get cases where people say their cousin's nephew went through an airport, and as far as they know he didn't go through a pad. There are two possible explanations for that. One is that they did but didn't notice it. Perhaps they didn't see the signs, and we've had examples of that. The other is that maybe we didn't have perfect coverage, particularly with the customs inspectors.

We have 6,000 people a week coming into Canada from Europe. That's a lot of people to keep track of, but I'm pleased to say that we've continued to enhance our surveillance as opportunities presented themselves and insofar as we could meet the challenge. We've had over eighty town hall meetings across the country with our veterinarians, including ones who have served in Europe and have come back.

On May 3 and 4 there's a major meeting of all stakeholders so we can reach out. It's not just our responsibility, then, but this involves veterinarians, animal health people, the Canadian Cattlemen's Association, and those kinds of groups. The minister will actually be at that meeting on May 3, and it could carry on into May 4. A large number of stakeholders are invited to that.

In addition to that, on May 9 we will be having a launch with the minister at the Ottawa airport, where we'll be launching a series of television videos. We've now negotiated to show these for free to add to the ads we've put in the papers and to various other means in order to further enhance Canadians' appreciation of the threat this represents.

If someone monitors the media on this, they'll see there are dozens of stories every day, so we're certainly getting the message out. If we followed up every case someone told us about, we'd be lucky. The farm community represents thousands of what we might call auditors out there, and we're lucky to have these people keeping an eye on what's happening. We follow up on all these, sir.

Mr. Paul Steckle: My next question is to the Deputy Minister and to the minister, perhaps.

In Canada we have a method whereby we can assure Canadians and foreign customers of safe food, yet recently we've had an incident with the Americans forbidding the shipment of potatoes across the border. A year and a half ago we had an incident where Americans forbade the transportation of beef by using a countervail. This had to do with an election that took place about two years ago.

How are we going to deal with that in the future? We're always going to have the Americans as our neighbours. We have given every assurance, we have taken every precaution, and we are known to have the safest food supply in the world. When are we going to take the initiative and stand up to the Americans, to perhaps show them that as Canadians we're not going to take this without a fight? We can't continue to go on being good boy scouts, so every time there's an issue and we get turned back, we say that's all right.

I think that Canadian farmers are asking when we will be standing up to these people and basically challenging them about some of the things we allow in across our borders every day.

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I'm sure that the pilots are safe. We would probably have had an incident if they weren't. But we need to let them know that we're not here to be pushed over on every incident.

The Chair: Thank you, Paul.

I'll go now to Rick.

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Minister, thank you for being here. I appreciate it very much.

These will be short questions and short answers. I don't have as much time as everybody else.

You mentioned that you have some fairly defined long-term visions for agriculture, but I think we have to know where we are right now.

Just after the last election, in December 2000, as a matter of fact, we received some information by the Access to Information Act, a transition binder that was prepared by your deputy minister and department. I'd like to read this comment:

Despite perceptions, indicators suggest the average producer is in reasonably good shape.

It goes on to say:

The reality is NISA balances are strong for most producers, arrears are almost non-existent, there is little use of the Farm Debt Mediation Service except in Saskatchewan, and land prices are up.

If you read that in a transition binder, do you believe that is in fact the real picture we have in agriculture today?

Mr. Lyle Vanclief: Mr. Borotsik, those are the facts of the situation out there. But as I've always said, and you know as well as I do, there are individual sectors of agriculture. Those are averages, and you used the word “average”.

We've had discussions before about NISA, about the total amount of money. We know there are many farmers out there with very large NISA accounts, farmers who have used up their NISA accounts, farmers with no NISA account, and so on.

What I do know, and I can give you some continuing facts, is that debt as a percentage of assets was up from 17% to 18% only, 1%, between 1997 and 1999. Farm Credit Corporation arrears as a percentage of principal not due was 0.7%; and only 5% of FCC loans were in arrears in February 2001, which is down from the year 2000. The farmers reported an average net investment of $32,500 in 1999, which is the same level as 1997. Saskatchewan arrears are slightly higher. The Farm Debt Review Board—

Mr. Rick Borotsik: Perhaps I can jump in, Mr. Minister. I appreciate—

Mr. Lyle Vanclief: Bankruptcies are the lowest they've been in two decades.

Mr. Rick Borotsik: So you're saying, essentially, things are rosy on the farm.

Mr. Lyle Vanclief: No, you're putting words in my mouth. I said overall that is the average.

Mr. Rick Borotsik: Okay.

Mr. Lyle Vanclief: But we have a number of farmers out there—

Mr. Rick Borotsik: Absolutely. Grains and oilseeds.

Mr. Lyle Vanclief: Yes, but let me be a little more specific.

A month ago, hog prices were $1.97 in Ontario. Two years ago, they were 17¢.

Mr. Rick Borotsik: Absolutely.

Mr. Lyle Vanclief: There's a different situation.

Mr. Rick Borotsik: It's the same thing in Manitoba and Saskatchewan.

Mr. Lyle Vanclief: It's risky, but—

Mr. Rick Borotsik: Perhaps I can jump in now, please, because the chairman does cut me off.

Also in those notes, it was suggested that the minority of grains and oilseeds farms are facing negative cash margins—the minority. They talk about large farms and small farms. I see your deputy minister would like to justify that as well.

Does that justify why there will be a 20% decrease in actual program spending in your department? It will be $1.8 billion as opposed to $2.3 billion last year. Is that why there's going to be a 20% decrease in your program spending, because things are going so well down on the farm?

Mr. Lyle Vanclief: Do you want to comment on that, Samy?

Mr. Samy Watson (Deputy Minister of Agriculture and Agri-Food): Over the last three years the support for farmers has increased on a crop-year basis from about $1.05 billion in 1998 to over $1.6 billion for the 2000 crop year, including the $500 million that the minister recently announced. That $500 million is not reflected in the RPP document because it wasn't approved at the time the document went to print.

Based on what's currently in the fiscal framework, the ongoing safety net for farmers is over $1.1 billion per crop year.

Mr. Rick Borotsik: $1.1 billion?

Mr. Lyle Vanclief: And then we've added the $500 billion. But the $500 million is not in the documents you have, because it wasn't announced.

Mr. Rick Borotsik: So you're saying we'll have almost identical program spending for the year 2001-02 as there was for 2000-01?

Mr. Samy Watson: There will be more.

Mr. Rick Borotsik: Why would there be more spending when we've just said that everything is great, that “Despite perceptions, indicators suggest the average producer is in reasonably good shape”?

Mr. Lyle Vanclief: So you don't want us to spend more?

Mr. Rick Borotsik: I don't agree with this document.

Mr. Lyle Vanclief: You just asked me the question, why would there be more spending?

Mr. Rick Borotsik: I want to know why you're doing that if in fact you agree with this document.

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Mr. Lyle Vanclief: Because, as I said earlier, there are different situations for different farmers, and we have targeted support.

We target our support to those who are affected by the realities of the day, whether that be a pork producer or a grain producer, whether it be a world price, a weather effect, or whatever. So I'm glad we have the targeted support.

Mr. Rick Borotsik: Would you consider this an ad hoc program?

Mr. Lyle Vanclief: Which program?

Mr. Rick Borotsik: The CFIP, the $500 million that came in after the fact that hasn't been identified in this year's.... Is it an ad hoc program?

Mr. Lyle Vanclief: No. For the first time in history, we've had that in an agreement, and it's a three-year agreement. Ad hoc programs don't usually go for more than one shot.

Mr. Rick Borotsik: Would you consider GRIP an ad hoc program?

Mr. Lyle Vanclief: GRIP is a companion program in one or two provinces at the present time.

Mr. Rick Borotsik: Was it an ad hoc program prior to 1995 when you got rid of it?

Mr. Lyle Vanclief: It was put in as an ongoing program, and as you know as well as I do, it was taken out for a number of reasons, some provincially driven and some federally driven.

The Chair: Rose-Marie.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you, Mr. Chair.

My question will be to the deputy minister, because this is the first time I've been here to pose a question to him—or maybe the first time he has been here.

Mr. Watson, I don't know what your background is, but you are the Deputy Minister of Agriculture, and you're speaking to a few farmers on this side, and on the other side as well. As the Deputy Minister of Agriculture, what would your vision be for agriculture?

I understand when the minister said it's not the government's role to propose a vision; it should be the agricultural sector. But since you're the deputy minister, you should....

Yes, it was said that the role should be with the sector, not necessarily the government dictating the size of farms and farming practices. But in your vision as deputy minister and with your background, can you elaborate?

Mr. Samy Watson: The minister has a vision, which he enunciated in his opening remarks. It's a vision that I clearly support.

If I can reiterate it for you, his vision is that we need to look at agriculture in a comprehensive way. We need to have safety nets, but we also need to look at the environment, at on-farm food safety, and at segregation, and we need to deal with farmers who are in transition issues and give them the tools they need to be able to do it.

On a lot of these issues, farmers are not in a price-setting situation; they're price-takers. So it makes good public policy for the government to assist them in that way so that we can advance and make Canada absolutely the best—not just reputedly the best, but factually the best.

Mrs. Rose-Marie Ur: With that statement, sir, I understand that we are price-takers, and that is the problem. You tell farmers they need the tools, but farmers have gotten the tools, and they've paid for those tools, but they aren't reimbursed at the end. They provide those tools at their own expense for all consumers.

That's the problem out there with our primary producers. They've advanced to the fullest that we've required them to and what they need to survive in this industry, but totally at their own expense.

I think it's important to note with national safety net programs that we have done a good job, but there is room for improvement, as the minister has always stood by, for grains and oil seeds at the present time.

But to say that consumers will choose Canada, I beg to differ. I was a farmer, and they didn't give sweet petunies that I was a Canadian farmer. The bottom line was the price. They didn't care whether I was a Canadian farmer as long as that price was the right price for them. They didn't care if it was U.S. and who inspected it.

Mr. Lyle Vanclief: Along that line, Rose-Marie, as I continue to say, safety nets are there and need to be there as a part of farm income if they are called upon, but there are a lot of other things involved in farm income as well.

I can assure you that as we go forward, whether it be in on-farm food safety programs assurance, whether it be in environmental farm plans, and so on, we recognize that there is a role for the government there. There's a role for the federal government, a role for the provincial government, and certainly a role for the producer themselves. No one party can do this alone. We realize that, and that's why we have to take a look at all of those.

I was very encouraged that at the federal-provincial meeting I chaired in March of this year, the provincial governments agreed with that—as did, quite frankly, the Canadian Federation of Agriculture—and we'll all be working together. I will be having some round tables, as will the Federation of Agriculture, and we will be going forward in that direction of a comprehensive plan. No single thing will do it, and everybody is involved in it, market development, research, etc.

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Mrs. Rose-Marie Ur: Thank you.

The Chair: Thank you, Rose-Marie.

David.

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): I have a number of things, and a comment to begin with. You made a comment about Wheat Board elections, and the fact remains that while 52% of voters voted for pro-choice candidates as their first choice, because of an unusual election process only two out of the ten directors were pro-choice.

But my question has to do again with the estimates. As we look at them, we see that you had $2.4 billion forecast for last year, and $1.8 billion suggested this year. You say we need to add $500 million to that to make it $2.3 million. That maybe works for this year, but it's interesting that your planned spending then drops off 30% for the year after that and another 25% for the year after that, according to your own projections here. That's brutal, 55%. I think it would be fair to tell producers what programs you plan on eliminating when your budget is going to be cut 55% almost overnight.

Mr. Lyle Vanclief: One of the things we have to recognize, colleagues, is that the original estimates are put out, and then there are supplemental estimates as the year goes on. The deputy minister will explain what the difference is in terms of what's in the original, the basic first estimates, and then the money that comes forward and is added to this with programs. I can tell you it's not our intention to cut any programs that are out there, and we will make them as efficient and as effective as we possibly can.

Mr. David Anderson: I've heard the explanation several times. I don't need to hear it again. You've taken $500 million from this year, the year 2000, for farmers. You're a year behind to start with and then you're budgeting it a year ahead so it looks like you're putting more money into the agricultural system.

I have a second question, and it relates to a letter dated April 5, 2001, from Robert Luke of the U.S. mission of the Organization for Economic Co-operation and Development, which stated that Canada reported it was not in a position to accept the text of an agreement they thought they had due in part to concerns regarding coverage of potential activities of the Canadian Wheat Board. Mr. Luke was referring to an OECD agreement that would reduce agricultural export subsidies. I'm wondering, why is the government continuing to sacrifice the rest of Canadian agriculture, including the grain and oilseed sector, to protect the Canadian Wheat Board?

Mr. Lyle Vanclief: There have been discussions about STEs, as they are referred to, at the Organization for Economic Co-operation and Development. Different countries have different views on them. We made our position very clear in our initial negotiations for the World Trade Organization, and it was a position gained by a consultation process with the grassroots, which your party agrees we should do across this country, that took place over two years, longer than two years actually. It was very clear at the conclusion of this that our industry across Canada wanted us to maintain, and we will maintain, those domestic marketing systems such as the Canadian Wheat Board and supply management in the dairy, egg, and poultry industries. And where they participate in international trade, they will participate there in accordance with the international trade agreements we are participants in.

Mr. David Anderson: The Wheat Board isn't the only thing that's hindering agricultural development in western Canada. Currently the agriculture industry is developing far ahead of the process you have for approving chemicals for use on some of those crops. We're lagging behind so much that other countries are approving some of those chemicals ahead of us. I'm wondering, do you have a fast track system in place for approving agricultural chemicals that have been approved in other countries, which farmers need to use in this country for some of those developing agricultural industries?

Mr. Lyle Vanclief: The Pest Management Regulatory Agency is under the Ministry of Health in Canada, and there is a joint system ongoing with the United States. Also, if an industry has a request for special attention being given for—it's a strong word—an emergency or that type of thing, there is a process within the PMRA to address this. The PMRA, for example, will look to us as the Ministry of Agriculture and ask us for our comments on the need, for example, of that. But it is Health Canada, the PMRA under Health Canada, that makes those decisions.

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Mr. David Anderson: They seem comfortable with doing that with medications. Hopefully, they can do that with some of the agricultural chemicals as well.

Do I still have some time?

The Chair: No. Thank you, David.

Marcel.

[Translation]

Mr. Marcel Gagnon (Champlain, BQ): Thank you, Mr. Chairman.

You mentioned in your introduction that Canada must continue to be a world leader in the food sector and that in the future, many products as yet unknown to date will be produced. Thus, things are constantly evolving.

We know that this progress is likely to come from genetically modified food, or GMOs. What is your position regarding GMOs with regard to these new foodstuffs or new products that we will be introduced to?

[English]

Mr. Lyle Vanclief: In the agriculture industry, as in other sectors in our economy, there's always been advancing science. Advancing science in the past has increased the production, the yield, and the characteristics in the quality of foods in Canada, whether that be grains, oilseeds, fruits, vegetables, or whatever. Certainly advancing genetics and changes in breeding practices, etc., have increased the quality of meats, poultry and red meats, in Canada as well.

When we have advancing science, whether it be in agriculture or whether it be in the pharmaceutical industry, the thing we have to do is use the best science we have available today in order to ensure that to the best of our ability and using the best science we have, the results of that science are as safe as we possibly can have them, recognizing that there is no such thing in life as zero risk. We can keep a risk as low as possible, but there is no such thing as zero risk in anything. Even if we're walking across Wellington Street tonight, we can wait for the light, but there's no such thing as zero risk.

In reference to genetically modified, if there's an application as a result of advancing science for a product to be registered, that science is reviewed using World Health Organization standards and FAO standards, internationally peer-tested and accepted standards, in terms of the results of that product on human health. And the Food Inspection Agency does that testing in terms of how that product could affect the environment and might affect animals. The registration for that product is not given unless it passes, positively, all of that examination.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Minister. I would like to ask you another question.

On the one hand, you say that a product must be verified before being approved. On the other hand, we know that an illness can be discovered only 20 years later: for instance, the hazards associated with mad cow disease. The consumer's sense of danger, risk and worry regarding genetically modified organisms can be expressed in the following question: how much time will it take to study GMOs and what kind of security measures will be implemented when they are put on the market?

Also, is it true that the department is currently lending organic researchers to Monsanto Canada Inc. in view of standardizing genetically modified wheat within two years?

[English]

Mr. Lyle Vanclief: Agriculture and Agri-Food Canada has research projects with a lot of companies and a lot of organizations in Canada. We do have one project with Monsanto on work on a Roundup-resistant wheat. That project is at least two years from completion. There has been no application for registration for that Roundup-resistant wheat, and no decision has been made on whether to make an application. As I say, the research is not complete. It is research at this stage that is being done.

• 1640

The Chair: Thank you, Marcel.

I'm going to go to Kevin now, and then we'll have a few short rounds, probably about two minutes each. Is that fair to all?

Mr. Kevin Sorenson (Crowfoot, Canadian Alliance): Thank you, Mr. Chairman.

Thank you to the minister for coming. It's good to have you here to discuss some of our concerns and our interests in farming. On this side, as well as that, many are farmers.

I want to commend you for allowing the CFIA to come to my constituency for the foot-and-mouth disease. At the first town hall meeting we had over 200 out. The second one was set up in the community of Camrose, and probably close to 350 came out. We appreciate that.

The CFIA is an area of responsibility that is getting a lot of limelight right now because of this outbreak. On page 11 of the estimates it suggests there may be 120 new jobs needed in the CFIA, which would indicate the job isn't being done right now, or maybe there will be an enlarged responsibility somewhere down the road. We go on in the estimates and we see that the budget has been dropped 7%. So $25 million, or close to it, is being taken out of the CFIA. My first question is, how can we say we need to increase jobs, while we lower the budget?

Also, in response to Mr. Borotsik's facts, as he called them, you came back with a bunch of facts. The facts were that NISA is up. The fact is that the average age of the farmer, especially in the west, is up as well, it's up close to 58. You also went on and said you want to target support affected by the realities of the day. One of the huge realities of the day is that young people, the next generation, are not going into farming. I'm wondering how you view targeting, because that is a huge question. I have had people come in 58 years old, 56-year-old farmers weeping, six-foot-three, 280-pound farmers weeping in my office, because they aren't making it, but now their children are walking away from the family farm. Are you saying in the 90-90-90 split, the 90 under $10,000, the 90 under $100,000, the young farmer who would unquestionably have, as it is now, a gross income of under $100,000 when starting doesn't bother coming in?

Mr. Lyle Vanclief: No, I'm not saying that. I'll ask Ron Doering to comment on your other question. What I am saying, and I said it in my opening comment, is that we've got two realities. We've got the reality of what's out there today that we have to continue to deal with, but we also have the reality that the situation of today cannot continue. That's why we have to look at the things we need to do in this industry to change it, help make those changes, and help those young people, so that they do want to come in and they can come into the industry and have a successful business and life and raise their family in rural Canada. We have those two that we have to deal with. I commented on only some of the approaches we have to take in order to help that happen. As I said, if we just say we're not going to change anything in the future, for some that has not been working. We also see that some, because they've been able to, had different circumstances, or whatever, have made some changes, and it's working better.

Mr. Kevin Sorenson: One thing also you mentioned in your speech was your hope that within five years every farm would have an environmental plan. We've seen things come down the pipe, such as the endangered species act, which are going to affect farmers in a huge way. We see things coming out of Agriculture now, like an environmental plan. I understand farming and I understand how farmers are the stewards of the land and how they are committed to environmental issues much more than they were 25 or 30 years ago. Is this plan something wherein the government sees that they must enforce a farm environmental plan, where every farmer would buy into that? Is that enforceable by the federal government?

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Mr. Lyle Vanclief: We will be doing that with the provinces. The provinces are in agreement with this. The provinces would, in all likelihood, have the enforcement capacity on that. And I commented about the ability we have to provide input and information into that. We also have the ability, with the provinces, to assist the farmers in the development of those plans, and we realize that in the development of the plans there will be some expenses for the farmers. But when a farmer has an environmental farm plan, if and when the farmer has the opportunity to make some changes or do some things on the farm, they know the direction in which they need to go and how to do those things. Thousands of farms in the province of Ontario, for example, have environmental farm plans. They have not all completed what the environmental farm plan says they should do, but when they do go to spread animal waste, for example, or to build a new building, or they make some changes to their farm, they know the plan and they know how that should be.

I would like Mr. Doering, however, to address the question about the staffing and the budget of the CFIA.

Mr. Ron Doering: Thank you for the question, sir. I'm pleased to report to you that the 120, as I determine you mean from page 11, does not indicate that we will be having fewer resources. It's actually an indication that we're going to be having more, because there's a process under way to have it cash-managed by Treasury Board ministers to get us more resources.

The facts are that we've got 11% more front-line people, we have over 500 people more working for the agency today than we had in 1998, and with the strong support of the minister and Treasury Board ministers, we expect that by the end of this current resource review, which is noted at the bottom of page 11, we expect to have additional resources there too. It doesn't mean we can't use more. The nature of our work is such that we're trying to be efficient, but we can always use more resources.

The Chair: For short rounds now, Murray, I'll go to you, and then next to Dick.

Mr. Murray Calder: Thanks very much, Mr. Chairman.

Ron, I want to go back to my original question, the auditing protocol the poultry industry is working on right now with HACCP and the fact that there seems to be a financing problem or a legal problem. You wanted to comment on that.

Mr. Ron Doering: Thanks, Mr. Calder. I'm very confident we can work out with the chicken industry, for example, ways for us to do what we've always said we'd do, certify even on-farm HACCP systems for sectors like chickens. But the nature of that certification and what our role would be relative to certifying the actual performance of those are complicated issues you and I have spoken about. There are both financial and legal issues in respect of the liability for the government if we would be taking positions relative to what is happening in places that we're not.

It is ironic that it's the reputation of the food inspection agency that people want. We want to make sure we don't undermine that reputation by having another kind of program. But I'm pleased to report that there have been several meetings in the last month. We've talked to the minister a number of times about this, and there are several meetings, including one next week, working with the provinces at the ADM level to come up with some arrangement that will achieve everyone's objectives here. Part of the plan, perhaps, is to have a pilot with the chicken industry, because they may be more advanced than some of the other sectors.

The Chair: Good. Thank you.

Dick, a short one.

Mr. Dick Proctor: Thank you very much.

Mr. Minister, I think it would be fair to characterize your presentation today as saying that there are a few problems here and there, but basically we've got a robust sector. In that context, then, how do you explain or justify the fact that Statistics Canada is saying that for every dollar of farm income 71 cents is now coming off the farm?

Mr. Lyle Vanclief: I'd have to go back, Mr. Proctor, and see what those figures were in the past and where they were relatively. There's no question that, for example, our large beef sector, as we sit here today, is in a fairly solid financial position, our pork industry is, our poultry industry is, our dairy industry is, a number of our other industries are. There are potholes in this industry because of the cyclical nature of some of those markets. It's a reality of agriculture—not that I like the reality—or any business. If that reality is, as I said, that about 90,000, or one-third, of our farms in Canada have a gross income of less $100,000, that's not a large gross income. The profit margins in very few things in our society are sufficiently high that they could have $40,000, for example, to raise a family from that.

• 1650

Mr. Dick Proctor: By the same token, Mr. Minister, we also have farms in western Canada where $1 million or $2 million wouldn't be excessive in terms of investment, in terms of land. Yet think of other non-agricultural businesses where people would then have to go out of that occupation, widgets perhaps, in order to make a profit, or in order to keep the family together. This is the reality that I think a lot of people are living.

You talk about hurtling to the future. There's a lot of hurt going on right now, let alone hurtling.

The Chair: Thank you. I have to cut you off.

Rick, do you have a short one? And I'd like to get back to Paul.

Mr. Rick Borotsik: I have just a very short one then.

The minister referred to his vision of the future, and I don't disagree with him; I think there's some real opportunity in agriculture. But as part of that vision, we have to have a reality, and the reality is not what I see in this document, where in fact the perception is in fact the reality. There are a lot of people out there in the grains and oilseeds that are hurting, and more than just a minority of those people. I see them every day.

As part of that vision, Mr. Minister, how do you put the variable of the American and the European subsidies into the pot? Do you see that the Americans and Europeans are not going to subsidize their agricultural producers in the future? Do you see it as being a level playing field with our producers and with Americans and Europeans in the not too distant future? You have an ad hoc program for three years. Beyond that program, are we going to be on that level playing field?

Mr. Lyle Vanclief: We aren't going to be on a level playing field as far as the dollars in subsidies. I don't foresee that we will level there. That's why if you can't meet somebody in the marketplace, you have to find ways of beating them in the marketplace. That's why I think we have to work, as I said in my opening comments, to move our industry to a higher level in other areas where those countries are not, in order to create that demand and that requirement and desire for those Canadian products.

We've gone over this many times, and I think most Canadians recognize that we don't have as deep pockets as the United States has. We do our support and safety nets in a different way, but we need to do other things in a different way as well.

The Chair: Thank you, Rick.

Paul, do you want to finish up?

Mr. Paul Steckle: I would like the minister to respond to the question, do we have what it takes to stand up to the Americans? That's my question.

Mr. Lyle Vanclief: As I said in my comments, Mr. Steckle, one of the biggest challenges we're going to have going forward in the world today is going to shift, in my view, to sanitary and phytosanitary barriers that are going to be thrown up in the face of us or the United States or whatever the case. The United States has faced it and so have we as far as beef going into the European Union. We have faced it recently with potatoes into the United States. What we have to do in those cases is continue to push our science that's there.

As I said when I was before the committee, we have reviewed, in the potatoes, and we have tested, we have checked, we have analysed potatoes coming from the United States to a greater extent than we ever have in the past. We were not able to find anything, thank goodness, for protection to our plant kingdom in Canada and the consumers in Canada that gave us cause to close the border to U.S. potatoes coming into Canada, if that type of example is what you're referring to.

Thank goodness we do have trade agreements now, albeit you can't use them and just go from the start of a process to the end in a matter of just a few weeks. They do take some time. A good example is the challenges to the dairy industry by New Zealand and the United States. They took us to a panel, and we won the panel. They're challenging that. We're confident we'll win again. We have those processes now that just a few years ago we didn't have.

The Chair: Thank you, Mr. Minister.

Marcel.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Chairman.

You do not need me to show you that agriculture is an important matter. As you mentioned earlier, it accounts for $130 billion of revenue each year and one job out of seven. It has tremendous importance.

On last March 14, farmers held demonstrations asking you for money, because they needed it. The sowing season is here now, and this is the time when they need money. According to the UPA, the paltry sum of $500 million that they received is not really sufficient. Do you still think that the $500 million they obtained is enough for an industry as important as agriculture?

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[English]

Mr. Lyle Vanclief: Clearly, Marcel, at that time I wished it could have been more, but cabinet.... There's hardly a day that goes by in the House of Commons when somebody doesn't stand up and want the government to spend more money on something, and then not too many minutes go by before they stand up and say they don't want the government to spend as much money.

Governments have a lot of priorities, whether it be health care, whether it be culture, whether it be agriculture, whether it be the national defence, or whatever. There are only so many dollars to go around.

I wish it had been more than $500 million, but we did get $500 million, and when it's levered up with the 40% from the federal government, it's $830 million. We also increased the spring cash advance, interest-free, to producers from $20,000 to $50,000 each, which we estimate will put probably in excess of $700 million in interest-free money out there to assist farmers this spring as well.

The Chair: Thank you, Mr. Minister.

Howard, for a short one, and then Wayne after.

Mr. Howard Hilstrom: You're familiar with the “super 301”, as it's referred to, which is the section of the U.S. trade law where they target countries they feel have a barrier to agriculture imports and other issues. Canada is being targeted for agriculture barriers that they say are up.

I believe—and you can correct me if I'm wrong—that you should not be looking at the potato issue in P.E.I. in isolation; you should be taking it in the bigger context of these trade issues with the United States. It's clear to me that they are linked. For you to deal with potatoes all by itself is the wrong strategy.

Could you enlighten us on that? Are you in fact dealing with trade issues with the United States in the broad context, or are you dealing with it in isolation, one at a time, in view of this 301 report?

Mr. Lyle Vanclief: No. Indeed, we do deal with them in the United States in the broader context, but when a single issue comes along we have to deal with that issue at that time as well.

I'm sure the Prince Edward Island potato growers will be a little concerned if you're indicating that the government shouldn't have been dealing with the potato issue. If that were an issue that was affecting western Canada, or the province you're from, I'm sure you would want me and the government and the Minister of International Trade and everybody dealing with that issue.

Certainly we deal with that, and certainly it appears that the United States may very well be changing to some extent their approach on these types of things to a more protectionist approach. That is why the meetings between myself and the secretary in the United States are important, the meetings of premiers in the provinces and the governors and the industry people. Our two countries meet on a regular basis in order to try to cut as many of these off as we possibly can.

Mr. Howard Hilstrom: The point is if you solved that issue like the Canadian Wheat Board, you probably wouldn't have the problem with the potatoes in P.E.I. That's as simple as it is.

Mr. Lyle Vanclief: Mr. Easter may comment on that.

The Chair: Wayne, I'll go to you now for a very short question.

Mr. Wayne Easter (Malpeque, Lib.): We've already solved the wheat one. We won that every time we fought it. It's just too bad we couldn't get the Canadian Alliance on side on that issue.

Mr. Minister, in response to a question from Mr. Steckle before, you mentioned we did do greater checks on the U.S. product but we couldn't find anything. The fact of the matter is, the U.S. can't find anything either, but they sure as hell can harass us, and that's what's happening at the border now.

My question really relates to probably Mr. Doering. As of five o'clock this afternoon there are two truckloads in the potato wart situation that have cleared the border. Three basically have been harassed and are having some difficulty getting across.

Mr. Minister, if the U.S. continues to apply measures that are beyond scientific necessity, then we have to do the same. I mean, if they're going to harass our trucks, our producers, then we have to put the ones coming from California and elsewhere under the same restrictions.

Yesterday, Ron, and I don't know why, the CFIA officials left early. They shouldn't have. Can we be assured that the CFIA officials in the future will be there to assist truckers who are running into this kind of difficulty?

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Secondly, we were informed today that border brokers have suggested that there may be additional fees assessed to cover the cost of unloading trucks and pulling samples for the USDA inspections to examine the product. What's going to happen in terms of the costing, those extra costs? Is CFIA going to cover it because it is unnecessary cost?

Mr. Ron Doering: On the fees matter and what the U.S. is doing, Mr. Easter, I'm not sure. You're ahead of me on that one.

On the matter of our people leaving yesterday afternoon before they might have, I apologize for that. These are people who have been working very hard over many days, as you know. I assure you that the minister also spoke to me about this, including last night with his office. I promise you, there'll be people holding the hand of every truck driver going to that border, not just the two who are on I-95 now on their way south, but all the ones who are coming. We will have more people there to try to deal with this harassment situation.

The Chair: Thank you, Mr. Easter.

Mr. Minister, would you like a couple of minutes?

Mr. Lyle Vanclief: Mr. Chairman, I thank you for the opportunity to be here.

I say to you as a committee that I cannot direct the committee, but I will be coming back to the committee in the very near future with a reference to ask the committee to consider some further work and recommendations from this committee as far as how we go forward and the methods by which we can go forward and suggestions from this committee in order to strengthen our agriculture industry in Canada.

The Chair: Thank you, Mr. Minister, to you and your officials, and those who are gathered in the room, for coming today.

I'd like to adjourn the meeting and remind you of a vote tonight on Bill C-25 and hearings beginning on that on Thursday morning. With that, we'll adjourn until Thursday.