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37th PARLIAMENT, 2nd SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Monday, May 26, 2003

1620

The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.))

The honourable Lyle Vanclief (Minister of Agriculture and Agri-Food)

1625

1630

1635

The Chair

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance)

Hon. Lyle Vanclief

Mr. Howard Hilstrom

Hon. Lyle Vanclief

Mr. Howard Hilstrom

Hon. Lyle Vanclief

Mr. Howard Hilstrom

1640

Hon. Lyle Vanclief

Mr. Howard Hilstrom

Hon. Lyle Vanclief

Mr. Howard Hilstrom

Hon. Lyle Vanclief

The Chair

Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ)

Hon. Lyle Vanclief

1645

The Chair

Mr. Louis Plamondon

The Chair

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.)

1650

Hon. Lyle Vanclief

Mr. Bruce Deacon (Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food)

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

1655

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

Mrs. Rose-Marie Ur

Hon. Lyle Vanclief

The Chair

Mr. Rick Borotsik (Brandon—Souris, PC)

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

1700

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Rick Borotsik

Hon. Lyle Vanclief

Mr. Bruce Deacon

Mr. Rick Borotsik

Mr. Bruce Deacon

The Chair

Mr. Rick Borotsik

The Chair

Mr. Samy Watson (Deputy Minister, Department of Agriculture and Agri-Food)

Mr. Rick Borotsik

Mr. Samy Watson

Mr. Rick Borotsik

The Chair

Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance)

1705

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

Hon. Lyle Vanclief

Mr. Garry Breitkreuz

The Chair

Mr. Mark Eyking (Sydney—Victoria, Lib.)

1710

Hon. Lyle Vanclief

Mr. Mark Eyking

Hon. Lyle Vanclief

Mr. Mark Eyking

Hon. Lyle Vanclief

Mr. Mark Eyking

Hon. Lyle Vanclief

Mr. Mark Eyking

Hon. Lyle Vanclief

Mr. Mark Eyking

The Chair

Ms. Pauline Picard (Drummond, BQ)

Hon. Lyle Vanclief

1715

Ms. Pauline Picard

The Chair

Hon. Lyle Vanclief

The Chair

Hon. Lyle Vanclief

The Chair

Mr. Louis Plamondon

The Chair

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance)

Hon. Lyle Vanclief

Mr. David Anderson

Mr. Howard Migie (Acting Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food)

Mr. David Anderson

Mr. Howard Migie

Mr. David Anderson

Hon. Lyle Vanclief

1720

Mr. David Anderson

Hon. Lyle Vanclief

Mr. David Anderson

Hon. Lyle Vanclief

Mr. David Anderson

Hon. Lyle Vanclief

Mr. David Anderson

Hon. Lyle Vanclief

The Chair

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.)

Hon. Lyle Vanclief

Mr. Larry McCormick

Hon. Lyle Vanclief

1725

Mr. Larry McCormick

Hon. Lyle Vanclief

Mr. Larry McCormick

Hon. Lyle Vanclief

Mr. Larry McCormick

Hon. Lyle Vanclief

Mr. Larry McCormick

Hon. Lyle Vanclief

The Chair

Hon. Lyle Vanclief

The Chair

Mr. Louis Plamondon

The Chair

Mr. Louis Plamondon

Mr. John Maloney (Erie—Lincoln, Lib.)

Hon. Lyle Vanclief

Mr. Richard Fadden (President, Canadian Food Inspection Agency)

1730

The Chair

Mr. Louis Plamondon

Hon. Lyle Vanclief

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 031

2nd SESSION

37th PARLIAMENT

EVIDENCE

Monday, May 26, 2003

[Recorded by Electronic Apparatus]

º (1620)

[English]

The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.)): Ladies and gentlemen, we want to begin our meeting. We apologize for the few minutes' delay, but we realize the circumstances.

Today we're meeting for the purpose of dealing with Standing Order 81(4), consideration of the main estimates for 2003-04, votes 1, 5, 10, 15, 20, 25, 30, 35, and 40, and the report on plans and priorities under the Department of Agriculture and Agri-Food.

The minister is appearing this afternoon and we want to welcome him. We want to welcome Samy Watson, our deputy minister; Bruce Deacon, from the department, from the minister's office; and Richard Fadden, from the Canadian Food Inspection Agency.

Before we get into estimates, perhaps I may have the indulgence of the committee to invite the minister to give us a brief update on the BSE issue before us. We do not want to engage in the debate or the questioning of this issue in terms of the estimates unless it relates directly to the estimates. For the benefit of all of us, because we're meeting on this tomorrow, so we'll have a full picture on that, at least give us an update on where we're at.

Mr. Minister, would you do this now, please?

The honourable Lyle Vanclief (Minister of Agriculture and Agri-Food): Thank you, Mr. Chairman, and please, Mr. Chairman, because we have a number of issues this afternoon, I'll do it as quickly as I can. I would ask for your indulgence to get through all of the issues we have.

I certainly am pleased to be back here to meet with you on the estimates, but as the chairman has said, I do want to give an update on the BSE. You also know, as the chairman has said, that officials from the Canadian Food Inspection Agency and Agriculture and Agri-Food Canada will be appearing before you as a committee tomorrow.

If there are specific questions of me on the issue at the end, Mr. Chairman, I'll do my best to take them. I have answered a number of questions on the issue in the last six days.

As you have heard, the agency announced yesterday the results of the rapid diagnostic tests from the original quarantined herd, which is what we refer to as the case herd. That's the herd the animal came from, and all of that herd has been subsequently destroyed. So the public knows, the only way to test for this disease is in the brain, so the animals have to be destroyed. All of those tests have come back negative.

Again, I say for those who are watching or listening, in this case negative is good. It wasn't when I went to school, and I'm not making light of it, but negative is good, folks. A negative test is what we want.

The results show that the incidence of BSE in Canada remains confined to a single cow and that BSE was not found in any of the other cows in the original quarantined herd. These results are being further validated using additional test methods. To date, the CFIA has placed a total of 17 cattle herds under quarantine in Alberta, Saskatchewan, and British Columbia, as part of its investigation into the incidence of BSE.

The number of quarantines has grown, however, and I would like to emphasize that the increasing number of herds under quarantine is a normal occurrence in an investigation of this type. It demonstrates the thoroughness of our efforts. It does not indicate that the situation is getting worse.

We have one of the best tracking and tracing systems in the world, colleagues, so we are able to trace where the animal came from, where any offspring from that herd went, as well as any of the product from the rendering plant where the carcass went, and where that product from that rendering plant went. So we trace backwards, we trace ahead, and we trace the feed chain as well.

I want to explain at this time what we mean by lines of inquiry. These lines represent, as I just said, the various streams of investigation that we are pursuing to determine the source of origin of the affected cow and the destination of the animal after it was rendered.

We can do it now, Mr. Chairman, or Mr. Bob Carberry does have a chart that he can show you tomorrow on that trace-out.

The Chair: Tomorrow.

Mr. Lyle Vanclief: Okay, we'll do it tomorrow. The visual chart of how the trace-out takes place is very helpful to all of us.

I want to assure members of the committee that all precautionary steps are being followed and that answers to our questions will come as a result of the ongoing investigation. The trace-back investigation is now focusing on confirmation of the cow's birthplace and the history of the feeding practices and sources of animal feed, and the trace-forward investigation is focusing on where the feed has been distributed from the affected cow. All necessary resources are being deployed to address the BSE situation, and I want to make it clear that money is not in any way limiting this investigation. The Secretary of the Treasury Board has indicated their support to this work in that way.

I want to add that I greatly appreciate the suggestions and the input I have received from members of the committee.

I appreciated the comments and inputs in the conference call we had with members of Parliament and senators last week. I have continued to try to do my best and to be as straightforward and upfront with the public as I can. They have inquiries, and I've tried to do my best and I will continue to do that.

Your help and guidance as well is a very good example of how we can work together to deal with an issue of great concern.

So you can see, colleagues, that we are moving swiftly and diligently to protect the Canadian food supply and to prove to the world that our system has done the job. Our beef is certainly still amongst the safest in the world.

The question has come up about the United States and the countries that have put temporary bans in place. I'll repeat here, as I did in question period, a quote from Secretary Anne Veneman when she said, “Lyle, I want this border opened as quickly as you do.” They know this industry is an integrated industry between our two countries.

I pointed out in my first conversation last Tuesday morning--before I could reach Secretary Veneman I spoke to Ambassador Cellucci, stating there were over half a million Canadian cattle in the United States in feedlots and in breeding herds. It's an integrated industry across Canada and it's integrated in North America. But of course we all want to get as many answers as we possibly can so that we can have renewed confidence.

Now, colleagues, I want to discuss with you the business at hand, which is the 2003-2004 main estimates and the report on plans and priorities for Agriculture and Agri-Food Canada. I think you'll discover in my report that the course we are charting for the coming year will provide greater stability for our producers and further enhance, among other things, our food safety system.

I want to take the remaining time to highlight some of the important points of the report on plans and priorities, and then I'll give you a status report on the progress made in implementing the agriculture policy framework. In reality, colleagues, the two go hand in hand. Both are fueled by the federal investment of $5.2 billion that the Prime Minister and I announced last June. This money has now been approved by Treasury Board. It's locked in and ready to go to work for Canadian agriculture. When you add to the federal investment of $5.2 billion the amount that will be contributed by our provincial and territorial partners, we're looking at a total new investment that exceeds $7 billion over the next five years for this important sector.

Since we last met, a lot of work has been done. There have been extensive discussions with the provinces and we have been able to get down to more specific details. Therefore, I want to discuss more precisely where the federal money will be spent.

Of the $5.2 billion provided by the federal government, about $290 million will be for food safety and food quality; $175 million will be for the international market development; more than $600 million for environment; more than $320 million for science innovation and renewal; $75 million for rural and cooperatives; and $3.7 billion for business risk management.

The investments I just outlined are built into the department's planned spending, the first three years of which are reflected in the RP and P. For the current fiscal year, 2003-2004, planned expenditures by my department total $2.7 billion. That includes $1.3 billion in main estimates and $1.4 billion that is coming to the department later this year through supplementary estimates. This $2.7 billion, which includes the second year of the $1.2 billion of bridge financing, is comparable to what we had last year and is roughly double what it was in 1998-99.

What is important is that we have stabilized the amount of money devoted to the agriculture sector at a permanent base level of more than $2 billion per year. This allows the industry and government to more effectively plan for the future within a reasonable envelope.

Of the 2003-2004 dollars, $1.1 billion is specifically earmarked to support business risk management programming. This is almost double the $600 million that has been in the permanent base for safety net programming since 1998. To that federal base of $1.1 billion, the provinces will contribute their 40% share. This adds up to more than $600 million a year, for a total of more than $1.7 billion dedicated to business risk management.

Furthermore, this funding is statutory. It wasn't statutory in the past, folks. Much of that was ad hoc money. In other words, there is a legal commitment to meet farmers' needs each year, whether it is higher or lower than the amount in the permanent base. For the new program, there will be no prorating of the federal contribution.

º (1625)

What does all this mean to producers? It means that there is now a stable funding base from which to deliver programs to meet farmers' needs in any particular year. It means that farmers can plan their enterprises with confidence based on a solid funding foundation and secure programming. It means that farmers can have disaster coverage as a permanent feature of their business risk management. And should there be a requirement for additional funding in the future, it means we have the framework in place that allows us to respond through existing programs. In short, it means greater stability and greater security for this sector.

During the initial period when we are phasing out old programs and phasing in new programs, there will be a temporary increase in departmental resources to ensure a smooth transition. As you have probably noted in the RP and P, there's a significant increase forecast in full-time equivalents. These forecasts have now been revised. At the time the RP and P went into publication, this forecast was a place marker based on preliminary estimates. Since then, we have moved to the stage where the negotiations with the provinces, along with program details, are being finalized. We have gone to Treasury Board with those program details, and we have developed more specific details of human resource requirements.

We are working with the provinces to gain efficiencies in all program delivery. For example, we have already started to train Canadian farm income program, or CFIP, staff to deliver the new program. We anticipate the cost of the delivery of the new program will not be more than $70 million per year. The old program was costing close to $65 million per year.

I'd now like to update you on the progress we've made on the APF since the last time we met. There are three areas I want to highlight. First the provincial dimension. Two more provinces have signed on to the framework agreement. This means that all provinces, with the exception of Quebec, have signed on. We are continuing to have very positive discussions with Quebec on this front.

I have secured the authorities for the $5.2 billion so that I may sign implementation agreements in most provinces. Discussions are very advanced with the remaining provinces. Most provinces are in various stages of their provincial process to secure the authorities they need to sign the implementation agreements. In fact, one province, Newfoundland and Labrador, has already signed its implementation agreement.

I now want to turn to certain aspects of business risk management. We continue to work through the details of the program with industry. As you know, the details of the independent third-party review, of which the terms of reference were agreed to by both parties, have been released. The review concluded that the proposed new programs better achieve the six objectives of business risk management as agreed to by ministers in Whitehorse.

The third area I want to update you on is the delivery of the second installment of the $1.2 billion in bridge funding. You will recall that bridge funding was part of the announcement last June. It was intended to help producers deal with short-term pressures and to make the transition to new programs. The first $600 million of this bridge was distributed through producers' NISA accounts last year. I recently wrote to the Canadian Federation of Agriculture regarding the second installment. I asked them to consult with producers' representatives across Canada and to forward a detailed proposal on how best to direct the remaining $600 million in bridge funding to individual producers.

The CFA, however, suggested to me that we work with the national safety nets advisory committee on this matter. I followed up with that committee and that work is moving forward. We are moving forward in other areas as well. Expanding markets for Canadian agriculture and agrifood products is key to the prosperity of our industry. In 1992 we exported about $13 million in agriculture and agrifood products. In 2001 that was $26 million. APF will help to ensure that we can continue to see this kind of growth in the coming decade.

Under the APF, we are doubling our commitment to market development with an investment of $175 million over the next five years. This investment will fund the Canadian agriculture and food international program, which I announced in March, providing $26 million for the year 2003 for a loan, which is twice what was available in the old agrifood trade program last year. The goal is to help Canadian agrifood exporters respond to global competition and increasing consumer demands while building strategies for success today and in the long term.

º (1630)

To retain existing markets and capture new ones we will need strong resources on the ground, which is why we are increasing the number of trade specialists we have in posts and key markets around the world. Those specialists are not only the eyes and ears of the marketplace, but they are essential in helping our industry to make the connections by offering the kind of expertise that only people on the front lines can.

Through initiatives like our pilot red meat project in Japan, we are working to increase the recognition of Canadian products in key markets. To make sure we are maximizing our success, we have created value chain round tables, bringing all aspects of industry and government together in major sectors. The pork round table, the beef round table, and the special crops round table are already up and running.

I'm actually meeting with the beef value chain round table this Wednesday. At this important meeting with the beef industry I will be working with those industry leaders right from the primary producer, to the retailers, to the processors, to the exporters, to develop an action plan to move forward with the industry.

To summarize, Mr. Chairman, we have begun to move beyond the development phase and into the implementation of the APF. Two years of development and planning by governments and industry are becoming real programs supported by real budgets delivering real benefits for farmers, for Canadians, and for consumers everywhere.

Mr. Chairman, I want to thank you for the opportunity to be with you again today.

º (1635)

The Chair: Thank you, Mr. Minister. In your absence tomorrow, and not being able to say this, I'm going to say it now. I want to thank you and your departmental people who made themselves available last week on our conference calls and for all the members who made it possible to make this conference call a success. I think the questions were able to be answered that way. I know it detracted from many of our activities, but it was a worthwhile exercise. I thank you very much, Mr. Minister, and all members of this committee and all others who participated in those conference calls.

We'll begin our questioning now of the minister on the estimates. We'll start with Mr. Hilstrom. I'm going to be very rigid with my timing today because we have a lot of members who want on, so please, seven minutes.

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Thank you, Mr. Chairman.

I would ask the minister to also be succinct. I also want to express, from the Canadian Alliance, that the CFIA and the minister and others have been doing a good job on this BSE business to this point, but we do have some questions with regard to the spending estimates.

The agriculture policy framework, as it pertains to the safety nets, has more holes in it from a farmer's point of view than a combine sieve. The contribution levels are one example. But let's deal with the disaster coverage. The BSE is one of those major diseases. I asked your departmental officials if the agriculture policy framework had enough money in it to take care of a major disease outbreak, and I used the example of foot-and-mouth disease in committee. Your departmental officials said, black and white, that there was not enough money in there to deal with a major disease outbreak.

Now we have a major disease outbreak, and God forbid that it should go any further than another week or two. But if it did, where would the money come from to mitigate the financial harm that's in the tens of millions or hundreds of millions already? Where would that money come from?

Hon. Lyle Vanclief: Thank you for your comments, Howard, but I caution you not to use the word “outbreak”. We have one cow and we found that cow. I don't think you want to send the word to the world, because I'm sure not, that we have an outbreak on this.

I said in my comments a few minutes ago that the way the program is set out, whatever is needed will be there. We have that assurance that it will be there. If you go back and read the Hansard and my comments I just made to you, it will say that if we need more there will be more.

Mr. Howard Hilstrom: The livestock feeding industry, the feedlots, I don't believe, are covered under the APF. If they are, is there enough money to cover the tens of millions of dollars that have already occurred in lost value to their inventory?

Hon. Lyle Vanclief: I have to check on that. I don't know where we draw the line, Howard, on whether a commercial feedlot is a producer or not. The APF is there for producers, but I think we would have to take a look at whether a commercial feedlot, with 5,000, 10,000, 25,000, where they buy the animals for a commercial operation of feeding cattle, would be covered or not.

Mr. Howard Hilstrom: At $30 million a day, the country is looking at mammoth dollars. I fully believe that with the job the department is doing, this BSE business is going to be over in a very short time.

In order to meet the criteria that the U.S. is probably going to set out to us — and we'll delve into that either later tonight in emergency debate or tomorrow — is there money in here to ensure the BSE tests that have to be done on the brain tissues of animals that are run through the slaughter plants and those animals that are condemned will be done within a 10-day period?

Hon. Lyle Vanclief: I answered that as well in my opening comments. We do not have a shortage of money. The Treasury Board Secretariat has recognized that, and their support is there fully for us.

Mr. Howard Hilstrom: Thank you.

My last question is with regard to the green cover conservation program. My understanding is that under the APF in fact you're going to seed down marginal land into grass. It's also my understanding that you're going to allow hay to be taken off that land and you're going to allow cattle to graze on that land.

That, Mr. Minister, is a subsidy to the beef industry that the beef industry does not want. It distorts the market because it gets producers to produce beef because of government subsidies, instead of the reason that the marketplace sent a message that said, sow it down to grass because you can produce beef the market wants.

What do you say to distorting the market, and is that in fact the way the plan works, the way I just described it?

º (1640)

Hon. Lyle Vanclief: The main goal of that, Howard, is to get some of the marginal land out of production, a lot of it at the present time likely in grains and oilseeds. There are some criteria, yes, that will allow people to cut hay and to pasture on that.

I guess it all depends on whether you look at it as a subsidy. I certainly don't see it as a subsidy.

Mr. Howard Hilstrom: If you take that land out of production of grain, wheat, and oilseeds, where is the grain going to come from for the ethanol plants you're promoting?

Hon. Lyle Vanclief: The marginal land isn't producing very much at the present time.

Mr. Howard Hilstrom: Tell that to a Saskatchewan farmer.

Thank you, Mr. Minister.

Hon. Lyle Vanclief: There are only certain classes of land that will qualify. Certainly the only classes of land that will qualify will be the very marginal classes of land.

The Chair: Mr. Plamondon, for seven minutes.

If you want to share with Ms. Picard, that's fine.

[Translation]

Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ): Thank you, Mr. Chair.

Yes, I do believe that we should congratulate all those who have done some work in the mad cow disease issue. However, I believe there are lessons to be learned as well and that there will be an impact on agricultural budgets.

There is no doubt that some regions of Canada were better prepared than others to deal with such an event; I refer in particular to Quebec, with the system that was put in place in that province. Mr. Pellerin, who is president of the Union des producteurs agricoles du Québec, said on May 21, so that was recently:

If we had a system that was fragmented by provinces, with distinct inspection systems and regionalized mechanisms for marketing our products, only one province today, namely Alberta, would have to deal with this problem.

We have put in place national systems with national norms, but we forgot to put in some flexibility. Quebec had put in place a system that could have prevented this and under which it would have been possible for each region of Canada to be dealt with separately by countries to which we export our products.

Let me compare, for example, the labelling system in Quebec and in the rest of Canada. You have a centralized databank, just as we have in Quebec. However, in Quebec, we collect the information on all movements of all cattle heads, from birth to death, including taking part in an agricultural fair and being sold to a cattleman, while in Canada, the information is collected only when the animal is born and when it dies.

Have you considered, Minister, putting in place in the rest of Canada the same system that Quebec has put in place, which would provide an extremely good protection in case of an epidemic?

[English]

Hon. Lyle Vanclief: Over two and a half years ago, Mr. Plamondon, the Canadian beef industry started encouraging a national ID program for cattle in Canada. That became law on July 1, 2002.

And I must say that it's with disappointment to me that the system in Quebec is not yet connected to the national ID program. They may very well have a program in Quebec, but they have not agreed to connect to the national ID program. So, unfortunately, that could create some difficulty for us. There may be ID of cattle within the province of Quebec, but if any of those cattle move to another part of Canada they are not connected to that system.

On your comment about national standards versus a fragmented system, our system is somewhat fragmented at the present time, and that is why the ministers in the Whitehorse agreement in June 2001 agreed that we need national standards. At the present time there are provincially inspected slaughterhouses. Any testing that's done by them is done, in most cases, by the province. Some have the federal laboratories do that testing.

The meat from those provincially inspected slaughterhouses can only be marketed within that province. If you are going to ship meat out of the province or out of the country, it must be a federally inspected system. The ministers, the Food Inspection Agency, and the provinces have been working, and they are continuing to work, so that we have one system in Canada, so when the international buyers look at Canada they know it's the same system of inspection of all meat in Canada; it's not different from province to province.

If Quebec wants to sell beef out of Quebec, Mr. Plamondon, they must have it inspected in a federal inspection plant. So national standards stand us in much better stead than provincial standards.

Going back to the ID program, it's important that the national system and the Quebec system all get on the same system, and I know it's hopefully moving to there. We know, as I said earlier, that livestock does move from province to province and it moves out of the country as well.

º (1645)

The Chair: Mr. Plamondon, two more minutes.

[Translation]

Mr. Louis Plamondon: Funnily enough, every time I ask you questions and every time I make a reference to leading edge programs in Quebec, as is the case, for example, of the Financière agricole du Québec, which is a program that I believe is well regarded throughout the world, a state of the art program and which has some difficulty finding its place in your great strategic framework, you always find a way of saying that it is Quebec that is wrong.

Quebec is at the leading edge in the area of labelling and registration of cattle, and you are telling us that it is Quebec that is wrong because you are putting in place your own program. Why do you not align your own program to the very best, rather than asking Quebec to go down on its knees or to reduce the quality of services that Quebecers have provided with their money and their hard work?

The answer that you gave me earlier is just as if you were telling Mr. Pellerin, the president of the UPA, who is a very knowledgeable man, who has worked enormously to put in place, together with Quebec producers, the best and safest system possible, that he is just plain wrong. I quoted him a moment ago and you are telling that it is a lot of bullshit, that it does not make any sense.

I believe that you should discuss this again with your advisors. Perhaps you should sit down and listen or examine carefully the system that exists in Quebec and learn some lessons that you could apply in creating national systems, if it is still your goal to do so.

I will wait for the second round to ask more specific questions about your policy framework.

[English]

The Chair: Mr. Plamondon, your time is up. There's no time for an answer. Perhaps sometime later you might want to...but we must move on.

We have seven minutes, and I want everybody to be able to speak today. If you're going to use it up in questioning, then we don't get answers.

Ms. Ur.

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

A while ago the finance minister put out a request to all departments that every department had to look at their budgets to see where they could perhaps find some dollars.

So with you being here today, my question to you, Lyle, is, where have you looked at this within your department? What programs may we see being affected on this? And what kinds of dollars will be involved?

º (1650)

Hon. Lyle Vanclief: There was certainly a request to both the department and the CFIA in this case. Following my comments on the fact that there is no lack of resources to do what we need to do right now, the Treasury Board and the CFIA have recognized that. Any contribution they were going to have to make now does not have to be made.

I'll ask Bruce Deacon to give us the gist or a very quick answer from the department.

Mr. Bruce Deacon (Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food): We looked at a number of programs across the department, and the main criterion was to not have a disruption in terms of the impact on producers, etc., and to look at those programs that would be less relevant given the new APF funding coming onstream. As a result of that, we've identified a number of programs where the current focus will be overtaken by APF. We are now working with the Treasury Board to actually finalize those numbers and to make the necessary adjustments.

Mrs. Rose-Marie Ur: Will we get to see those when they are actually finalized, and will we have any input on that, Mr. Minister?

Hon. Lyle Vanclief: A lot of those decisions are ongoing and are certainly based on the comments Mr. Deacon has just made. I can assure you that I'll be looking at them very carefully.

Mrs. Rose-Marie Ur: [Inaudible—Editor...of course, and I know there are many good programs.There are always rumours within our communities, and I hope some of the rumours I'm hearing are wrong. I'm just very, very concerned that programs that are working very, very well in Ontario not be cut. I hope we get a chance to speak on those issues before anything is finalized.

Hon. Lyle Vanclief: I'm very confident that any.... Ag Canada was only asked to make a $13 million contribution out of $2.7 billion, which is very little in percentage terms compared to what some other ministries were apparently asked for. As you know, the finance minister asked for a billion dollars. At Ag Canada we were only asked for $13 million--$13 million is $13 million, but I can assure you it will not affect the programs in the province of Ontario. They've asked for the continuation of some of their companion programs, etc. They didn't ask until the very last minute, but the programs are there for them, as we said. All they had to do was ask, and they are there.

Mrs. Rose-Marie Ur: I'm pleased to see that the finance minister has recognized the importance of agriculture to all Canadians. There are very few basics we need--but food, water, and air are vital.

Moving on that, in your breakdown of the $5.2 billion, you indicated that $600 million was for the environment envelope. How is the environment envelope broken down?

Hon. Lyle Vanclief: I haven't got that right now, but perhaps it's in the chart in my briefing book here.

Mrs. Rose-Marie Ur: My question is whether the ethanol package is within that envelope.

Hon. Lyle Vanclief: I think support for ethanol will very likely come from the climate change money, which I believe was $2 billion in the budget over the next three years. Included in that are such things as the decision to be made on ethanol. Other than for some research on ethanol within our department, the contribution does not come from Agriculture Canada.

Mrs. Rose-Marie Ur: In your presentation, Mr. Minister, you had indicated the necessity of human resources. The numbers of people within the department were going up, and the numbers ended up being much higher than the predicted 5,319 for 2002-03. In which area are you needing the extra personnel to carry out your departmental work?

Hon. Lyle Vanclief: I commented on that without using numbers in my speech. When the report on plans and priorities was first done, I think I referred to the numbers as a place marker. There was a considerable number over 800. When we move forward with the provinces on all of this, and given that we're now training CFIP people to do the new program, etc., we're now looking at only about 120 more than we presently have in the department.

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Mrs. Rose-Marie Ur: Why are we needing more people if...?

Hon. Lyle Vanclief: They are for market access development. There is the new money in the APF for that. We have $175 million more over the next five years for market access and for science and innovation. So those are the types of areas where new people will be added.

Mrs. Rose-Marie Ur: You had indicated that the cost of putting in those programs would be around $70 million and down, but then you went on to say the old program cost $65 million.

Hon. Lyle Vanclief: That was just for NISA.

Mrs. Rose-Marie Ur: NISA, okay.

Hon. Lyle Vanclief: With the new program, $5 million or $6 million is a significant amount of money, but there are those out there who are trying to say the new program will be a lot more expensive than the old program. It won't be.

Mrs. Rose-Marie Ur: You said in your speech that you were going to expand bridge financing. Are you going to expand it, and how are you going to do it?

Hon. Lyle Vanclief: As I said, I've asked the safety nets advisory committee to get back to me. I read the letter quickly, but with everything else on my mind today, I have to say that I didn't read it as thoroughly as I wanted to.

Even though I asked the CFIA to come back with a recommendation, because they were somewhat critical of what we did last year, they chose not to do so. They chose to take it to my safety nets advisory committee, which I approved and said do it. When I had a quick look at the letter today, they did not make any conclusive recommendation. They said, “We'd like this, and maybe you could do it this way”, etc. So a quick look at the letter indicates that they're maybe still not going to take the initiative I had hoped they would.

I guess they don't like being minister.

The Chair: We now move to Mr. Borotsik.

Today, I recognize you first, Mr. Borotsik, as Mr. Proctor has deferred to you.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Steckle. I appreciate that.

Mr. Minister, I too echo the comments made. I have to say that your department, particularly CFIA, has been terribly transparent and forthcoming. The communication lines have been absolutely excellent.

I must commend Mr. Fletcher from your department. He and I have talked probably more than my wife and I do, which I'm not necessarily happy about, but your staff has done--

Hon. Lyle Vanclief: She might be hearing you.

Some hon. members: Oh, oh!

Mr. Rick Borotsik: Your staff has done an excellent job in keeping the lines of communications open.

Hon. Lyle Vanclief: Is that what that note from your wife said?

Mr. Rick Borotsik: Probably so.

I'd just like that to be on the record, that the transparency and communications have been great. Perhaps we can continue like that.

Hon. Lyle Vanclief: They've done a great job.

Mr. Rick Borotsik: Perhaps in our relationship we can continue with that open line of communications.

I have a couple of questions. Just for my information, I understand the amount for CFIP in previous budget years was around $600 million. Is that correct?

Hon. Lyle Vanclief: It's $500 million.

Mr. Rick Borotsik: I knew it was expended, but I think the original cost was more.

Hon. Lyle Vanclief: No, it was allocated $500 million. We had $600 million for crop insurance and NISA, and the last ad hoc amount for CFIP was $500 million.

Mr. Rick Borotsik: So CFIP was $500 million and the companion programs of NISA and crop insurance were $600 million. That adds up to...?

Hon. Lyle Vanclief: That was the federal.

Mr. Rick Borotsik: That was the federal. So if you add the two, $500 million and $600 million, it's $1.1 billion. It that correct?

Hon. Lyle Vanclief: Yes.

Mr. Rick Borotsik: Our budget estimates now show $1.1 billion for risk management. So when you say there's more money in business risk management, there really isn't, because if you look at the CFIP and at the companion programs and at the NISA--which is going to be rolled in--it's really the same amount, isn't it?

Hon. Lyle Vanclief: It's the same amount of money, but only $600 million of it was sure before. All the rest was--

Mr. Rick Borotsik: No, you said there is going to be substantially more money. I appreciate the fact it's now going to be legislated.

Hon. Lyle Vanclief: That's right. The last time, it was up to $500 million, and now if we need more, there's more there, which is significant.

Mr. Rick Borotsik: But it's smoke and mirrors, Mr. Minister. Really, the $1.1 billion from today is $1.1 billion from yesterday.

Hon. Lyle Vanclief: No, it's not smoke and mirrors as far as I'm concerned, and it shouldn't be as far as you're concerned.

Mr. Rick Borotsik: Well, it is.

Hon. Lyle Vanclief: We don't have to go back every year to get ad hoc money. We have it, and we know what we have.

Mr. Rick Borotsik: You said there's substantially more money this year, but I'm suggesting there is the same money this year as there was last year. Yes, we don't have to go back and, yes, it's going to be by statute, but the fact is that it isn't more money; it's equal, if not less.

Now let's talk about less and about the estimated premiums for crop insurance in Saskatchewan and Manitoba. There's about a 52% request for increased premiums for crop insurance in Saskatchewan. They lost in excess of $500,000 in the program last year, as you're well aware. Manitoba is looking at about a 23% increase in their premiums.

I have two issues. Number one, is the federal government prepared at some point to assist those provinces, not just in a reinsurance program, but to actually assist them with financial aid for their crop insurance programs? I ask this because the premiums are not going to be sustainable to the producers, Mr. Minister.

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Hon. Lyle Vanclief: We pay a percentage of the premiums the producers have, not a maximum dollar. We pay 60% of the premium. We go to 60% if their premiums go up. Prior to the APF we paid 50% and with the APF we pay 60%.

You raised the point that there is reinsurance, and the federal government has been there with a considerable amount of money--

Mr. Rick Borotsik: But that reinsurance is paid back, Mr. Minister. I'm saying is there is any possibility, through a policy shift, that the federal government could forgive some of that reinsurance dollar so that the insurance premiums are affordable to producers? At this level they won't be affordable to producers.

Hon. Lyle Vanclief: Well, it's paid back over many years.

Mr. Rick Borotsik: In the last case it was 15 years. If there's another one, Mr. Minister, I doubt whether 15 years will cover it.

The APF is really interesting. I've been looking at it, and it's changed a bit. The original five pillars were business risk management, food safety, science and innovation, environment, and renewal. In this one, I find the fifth one has changed. You have renewal tied into innovation, and then there's the international. When did this other criterion or component for the APF get slotted in, and is it such a revelation now that trade is important whereas it wasn't when you first entered into the APF?

Hon. Lyle Vanclief: No, that shows the breakdown of the money, how the money will be used to do the other things.

Mr. Rick Borotsik: But there's another level. It's called expanding international opportunities for the Canadian agrifood sector. That is more trade and international. That wasn't in the first five pillars that were put together in Whitehorse.

Did you just come to the revelation that trade was really that important to agriculture?

Hon. Lyle Vanclief: No, we've said that all along. We made the announcement when we were there, that all of these are important factors. The branding of Canadian products, the tracking and tracing, leads to how we can tell other countries we have that, in market development, and from the environmental aspect, from the food safety aspect, all of that is part of the APF. In order to build upon that in the APF, you have to do the international marketing as well.

Mr. Rick Borotsik: The five pillars have changed in definition, as I see in this document here, from the original document that came out in Whitehorse.

Hon. Lyle Vanclief: Maybe in the specific way of how we're funding, but the five pillars haven't changed.

Mr. Rick Borotsik: I beg to differ. We can have this argument at a later time.

My last question, if I can, deals with the FTEs. You've explained it, and I understand there are some other FTEs required. Are you going to adjust the estimates to reflect that?

Right now in the estimates the FTEs are substantially higher than what they were in previous years. Are you going to adjust this?

Hon. Lyle Vanclief: Bruce, do you want to comment on how that's done in the plan?

Mr. Bruce Deacon: There currently isn't a process for making an amendment or adjustment to the RPP. That information can be made available, and as the minister has said, the adjustments have been revised now. They are significantly lower. We now have the details on which to actually calculate what the FTEs will be.

Mr. Rick Borotsik: Under these estimates, then, you could reach those levels of FTEs if you wanted to?

Mr. Bruce Deacon: No, the FTEs are put in there as a notional indication of what the requirement will be to deliver the program, and as I said, the numbers have now come down significantly.

The Chair: Your time is expired. We'll move on.

Mr. Rick Borotsik: Does Mr. Watson want to answer?

The Chair: Do you have something quick and short?

Mr. Samy Watson (Deputy Minister, Department of Agriculture and Agri-Food): All it means when you reduce the number of FTEs is that more money goes to program dollars rather than to employee salaries. That's what happens.

Mr. Rick Borotsik: Well, I understand that.

Mr. Samy Watson: It doesn't affect the estimates as such, because it's still the same number.

Mr. Rick Borotsik: I understand that. I'd rather have it go to programs.

The Chair: Mr. Breitkreuz, for five minutes.

Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance): Thank you, Mr. Chairman. I appreciate the conference calls last week and the information coming us to in a very timely fashion. I just want to make sure the minister is properly thanked for that.

On crop insurance premiums in Saskatchewan, isn't there a point at which the government would be pricing itself right out of the risk management market? For example, if it costs the farmers $26,000 to get $100,000 of coverage, those farmers can't afford that insurance any longer. Maybe that's a factor in the farmers being very slow to take up this program.

I wonder if there are any comments on that. It seems the premiums are really a deterrent.

» (1705)

Hon. Lyle Vanclief: Mr. Breitkreuz, is there a specific case you are referring to?

Mr. Garry Breitkreuz: Yes, this is an example a farmer has come to me with. That seems like a horrifically high premium.

Hon. Lyle Vanclief: I don't know...the programs in each province, Garry, are developed between the industry and the provincial government. When those programs are developed, with the APF, the federal government pays 60% of the government portion of the premium. But those programs, and the effectiveness of those programs, are decisions that are made....

I'm not dodging the bullet here. That's the way the system works. They are designed with the industry in the province.

And yes, the producer is going to have to make a decision, there's no question. But it's a risk management decision the producer has to make.

From my personal background, I find it interesting that premiums would be $26,000 for $100,000 in coverage, but I'm not saying it's not true.

Mr. Garry Breitkreuz: That's the information I was given.

Hon. Lyle Vanclief: Would you be so kind as to...? I know it's privacy, but if the individual were willing to share that, I'd like to have a look at it.

Mr. Garry Breitkreuz: If the provinces haven't agreed to the funding...and I'm not sure what's going on behind closed doors here. Has Saskatchewan agreed to the funding for this?

Hon. Lyle Vanclief: They've signed the framework agreement, yes.

Mr. Garry Breitkreuz: Okay, so they've agreed to put in 40%?

Hon. Lyle Vanclief: Yes.

Mr. Garry Breitkreuz: Okay.

I'll move on to another question here, because I don't have much time and I'm raising these issues.

There's a lot of concern that the transition funding really didn't work very well last year, running it through NISA. Can you give us the details on how the $600 million is being paid out this year?

Hon. Lyle Vanclief: I've already answered it twice, sir. I've asked the CFA to tell me how they want it distributed this year. They chose not to. They wanted to take it to my safety nets advisory committee. They wrote a letter, which came to me on Friday, and I haven't had a chance to review it, only very quickly. But I can tell you their recommendation is not very conclusive. It's “maybe it could be done this way, maybe it could be done that way; we'd like to see this, we'd like to see that”. With my first quick look at it, I'd say they did not come back with a very firm recommendation.

So that's where it stands at this time.

Mr. Garry Breitkreuz: So we don't know.

What about the new NISA? What details can you give us on that?

Hon. Lyle Vanclief: I went through it all at the last meeting here. I went through the flip chart. I've sent out a letter to 160,000 NISA holders in Canada explaining the new NISA. I did it all here at the last committee, and it hasn't changed from then.

We'll send a copy of the letter if you didn't get it.

Mr. Garry Breitkreuz: No, I was here for that presentation.

Now, according to the OECD, the calculations show that supply management provides more support to Canadian farmers than American support programs do theirs, and I think in the documents you've had here supply management is being called a risk management tool.

Why is this now being included in the safety net program? I don't think it was asked that supply management be included in the APF safety net programs.

Hon. Lyle Vanclief: Well, it was part of the framework agreement. It's my belief, and it's certainly the belief of the supply management people as well, that if you are in the supply management sector, it's certainly risk management because there's certainly more security in determining what the producer gets for their milk, their chicken, their eggs, or their turkeys.

So it is a risk management tool, without question. And the supply management industry has been very vocal in wanting that recognized in the APF. It was recognized in the framework as well.

Mr. Garry Breitkreuz: Is it now on the--

The Chair: Mr. Breitkreuz, we'll come back to you.

Mr. Eyking for five minutes.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you, Mr. Chair, and thank you for coming today, Minister.

I have two questions.

There was a program on TV this morning about the inspection system in Quebec, and I'm not sure, but I think they said over 90% of all animals slaughtered in Quebec are inspected. But they said 10% are not inspected federally or provincially at all; these animals are just slaughtered and people use them--restaurants, whatever.

Is that true, and is it similar throughout Canada that a certain number of animals are not being inspected?

» (1710)

Hon. Lyle Vanclief: You're the second person, Mr. Eyking, who has spoken to me about that TV program. I did not see it.

I know we have federally inspected plants in Quebec and that before meat can be shipped out of the province of Quebec to another province or another country, it has to be certified by CFIA. But as to whether their provincial inspection system does not cover all meat slaughtered and used within the province of Quebec, I don't know.

Mr. Mark Eyking: I guess my second question is about our new agricultural policy framework and the transition we're going through from the old NISA to the new framework system. I understand that the new system kicks in at the end of this year or at the end of December.

Hon. Lyle Vanclief: We formerly had NISA and CFIP, and the new risk management program will be there to cover the 2003 business year. Of course, nobody will be able to apply for it until the 2003 business year is over. In the same light, nobody could apply for the NISA program or the old CFIP program until January or February of 2003. It's like filing your income tax: you can't file your income tax in the first two or three months of the year, but a year has to go past and then the filing is done.

Mr. Mark Eyking: What if a person has a calendar year to June 30 this year?

Hon. Lyle Vanclief: As far as the end date is concerned, it's all taken into consideration.

Mr. Mark Eyking: Would they go under the new system?

Hon. Lyle Vanclief: Somebody can correct me if I'm wrong, but I think they will continue with the system they had, and then they start into the new system. I can't give you the specifics.

Maybe the officials can answer that better than I can when they come here.

Mr. Mark Eyking: I am just wondering about the transition, but you think the transition starts at the end of December.

Hon. Lyle Vanclief: I do know they won't miss coverage.

Mr. Mark Eyking: Thank you, Mr. Chairman.

The Chair: We'll move to Madame Picard.

[Translation]

Ms. Pauline Picard (Drummond, BQ): Thank you, Mr. Chair.

Minister, I represent a region that is really suffering presently because of this mad cow disease crisis. Let me give you a few examples from people that I have contacted.

There is a large producer in a municipality called Saint-Joachim-de-Courval who has 3,000 heads of cattle for meat production and he is telling me that it costs him $2 to $3 more than usual, per day and per head, to feed his cattle. So these are certainly considerable losses for him.

There is as well a large slaughterhouse where 196 persons will be laid-off within 15 days if the situation is not settled.

There is as well a new laboratory, an investment of several million dollars in the area of Drummondville, where they produce bovine embryos and ovums that they sell in China. At the present time, they cannot export them and they are stuck with 10,000 embryos because China will not have them, will not pay for these embryos.

Given that the Quebec Minister of Agriculture has already announced that her department would examine the needs with regards to compensation, are you able to tell me whether you are presently considering a compensation program for all these people, all these victims who will incur huge loses?

[English]

Hon. Lyle Vanclief: Certainly, the programs for the primary producers are there, Madame Picard, through the proposed business risk management program. It was there in the old program, and the third-party review has said that the new program is even better than the former one.

As the Prime Minister said in question period today, and as I've already said, we will assess this. As I've heard everybody from the beef industry say, I think your key words are that if this is settled in a few days, its effects will not be that serious. Without question, there will be some effects from it, but the effects may not be that serious.

In regard to your specific reference to embryos, Mr. Fadden just mentioned to me that the International Office of Epizootics—the international body—says that embryos should not be covered by the ban. So we are going to each country individually to say they cannot ban embryos. Now, that's specific to embryos, so you might want to have your people follow up with the CFIA on that.

But as far as overall compensation is concerned, whether it's for this industry or the softwood lumber one—though I hate to bring up other industries—the government monitors the effects of it and makes decisions based on that. This does not prevent provincial governments from doing something on their own, if they so desire. Some may or may not, but that's up to the provincial governments.

» (1715)

[Translation]

Ms. Pauline Picard: Thank you. Can I ask another question?

[English]

The Chair: Just a very short question, because I only have one minute left.

Hon. Lyle Vanclief: If Mr. Plamondon has time, could I use mine to answer his previous question?

The Chair: Sure. I apologize, but we're trying to run tight.

Hon. Lyle Vanclief: In fairness to Mr. Plamondon, I do want to answer it.

I think he should remember that around this table before, I very much complimented the Province of Quebec for its stage of advancement, which is pretty well ahead of every other province as far as environmental farm programs are concerned. With the agricultural policy framework, we are not in any way, shape, or form asking the Province of Quebec to lower its standards. What we are doing is providing money to help Quebec build upon the programs it already has. We've already said that with the money we will have, there will be national standards, but we'll ask the financier to deliver, etc.

So, yes, I recognize, and I've done so at this table before, Mr. Chairman, that the Province of Quebec is a leader in many areas.

The Chair: Thank you. The time has expired and you have your answer.

We'll now move to Mr. Anderson.

Mr. Louis Plamondon: I have my answer, but I don't have my question.

Some hon. members: Oh, oh!

The Chair: I apologize, but we're trying to get everybody in today.

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): Thank you, Mr. Chair.

Thanks for coming today, Mr. Minister. I have a couple of questions about a couple of specific organizations, the CGC and the Canadian Wheat Board.

According to subsection 7(3) of the Canadian Wheat Board Act, the Government of Canada has the legal obligation to cover the administrative costs associated with export licences. I hope you're familiar with that. I'd like to know how much is set aside in your budget at the Department of Agriculture to cover those licensing fees; how much you spent this past fiscal year on financing those export licensing fees; and where we can find them in the estimates.

Hon. Lyle Vanclief: I'm not the minister in charge of the Wheat Board.

Howard.

Mr. David Anderson: He doesn't answer those questions either.

Mr. Howard Migie (Acting Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food): There's nothing in the agriculture department's budget to cover the cost of licensing fees for the Canadian Wheat Board.

Mr. David Anderson: That's the answer I expected, because right now the farmers are paying those licensing costs, contrary to the legislation. You're aware of that, and I guess it's time that someone in the Department of Agriculture, or the minister for the Wheat Board, took into account the fact that farmers are paying those fees when legislatively it's the responsibility of the government — and I presume the Department of Agriculture — to pay those fees. So I'd like to see that change.

Mr. Howard Migie: On that question, the minister responsible for the Wheat Board will soon be submitting a reply to Parliament.

Mr. David Anderson: When he comes here, we're told he doesn't have a budget for this.

Another question of mine is on the Wheat Board. Maybe the same answer will be given on this, but it looks like initial payments could be higher than the final income from grain sales. Have you budgeted money to cover that difference, and how much have you budgeted, or is this again an issue of where that money comes from? Where is that money or what budget is it found in?

Hon. Lyle Vanclief: If the initial payments are higher than what's going to be recovered, it is certainly not something that anybody planned for. As I sit here now, I'll be very candid that I don't know where that money would be found and whether we would have to go back to the centre. I don't know if it's covered by the centre, or however it is covered.

» (1720)

Mr. David Anderson: Okay, but the government is responsible for it.

Hon. Lyle Vanclief: Mr. Migie says it's statutory, so it's covered by the centre. It's not out of the Ag Canada budget, but it's covered by the centre.

Mr. David Anderson: Thank you.

The Canadian Grain Commission is looking for a 37% increase in their funding. Can you give us some details on what specifically they're requesting? Is any of that money going into the development of the new VED or variety system, and how much money has been slated for that?

Hon. Lyle Vanclief: A very considerable review has been taking place within the Canadian Grain Commission and the third-party review we put in place a little over a year ago, because of the changes in the whole grain industry out there, including the change in volumes and the change in products — if I could put it that way--and certainly the change in how we've always visually inspected wheat. Some investments have been made into KVD, or kernel visual distinguishability, and into looking at new ways of doing it. Yes, some of their money will be used for that.

Mr. David Anderson: Can I just go back one second to these licensing fees? Do you know where they would be covered? Are you saying that as far as you know, they are not part of the agriculture department's budget?

Hon. Lyle Vanclief: I don't know the answer to that, and Mr. Migie says there is nothing in our budget to cover them, but we'll get back to you on it. Okay?

Mr. David Anderson: Yes, if you wouldn't mind doing that.

I want to talk a little bit about branding and the fact that you're spending a fair amount of money on branding Canadian...and that kind of thing. How much are you putting into that, and are you preparing a plan to work with country-of-origin labelling if we can't get the United States to rescind it? In the last few days there has been some heightened interest on their part in pursuing that. What money has been committed to it, and do you have a plan to work with COOL if we need to do that?

Hon. Lyle Vanclief: One of the reasons certainly, but not the only one, we put in place the round tables with the beef and pork industries was to work with everybody in the industry on how to approach that. You're aware that there certainly have been a lot of ongoing discussions with the Americans, until recently at least, which I hope doesn't change. There's been an increasing voice in the United States that they shouldn't go there.

As of the situation in the last 10 days or week, we don't know whether that will change, but those discussions are taking place with the whole industry. We think it's important to have producers and everybody in the value chain involved in that and in how we brand and promote our products in that kind of market, or in any other situation.

The Chair: We'll now move to Mr. McCormick.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair, and Mr. Minister, and your officials, for being here. I know everyone else has congratulated you and yours, but sincerely, we need to. We are so fortunate in this country to have the highest quality and best tasting food, and I think our tradition will live on.

For example, our Canadian cattlemen have been very instrumental in this identification program they've had. And now, Minister, your APF will add to that. I'm sure you're going to get support from all provinces, because all Canadians now see how important it is that we further this.

Again, my concern is about compensation. Yes, we're the government side, but I'm ready and willing and will lobby wherever I can. The individual producers, whether in eastern Ontario or cattle producers and ranchers in the west, are the most independent people in the world of agriculture, but they're hurting today. So what compensation do we see for the individual producers? For example, can you assure...? It was interesting yesterday that people in my riding were concerned about whether or not those ranchers were going to get fair compensation, and what will happen if their cattle are purebred, and so on. I'd like to give you an opportunity to respond.

Hon. Lyle Vanclief: Are you referring to the animals that have been put down for testing?

Mr. Larry McCormick: Yes, at this time.

Hon. Lyle Vanclief: I'm glad you raised that, Larry, because some people have said the value of cattle has gone down — though I hope that is only for a brief moment. The compensation for the animals put down will not be based on that. Instead, it has always been based on the situation or the price of those animals, or the market for those animals, over the last period of months. Certainly, if an animal has been put down for a foreign animal disease, we know it isn't worth much on that day. But you can't say it's not worth much and that you're not getting much, because it's based on what the animal was worth before. However, there is a maximum amount of $2,500 for bovine.... So if people have purebred animals, etc., we don't pay for all of the genetics — if I can put it that way. If somebody has a star cow or a star bull, or that type of thing, the market determines that. They know that, so I think the majority of producers will have extra insurance if they're in the real top genetic business.

» (1725)

Mr. Larry McCormick: Thank you, Lyle.

Regarding the $600 million in bridge funding and the national safety nets advisory committee, I've closely followed what you've offered or the opportunity you have given them, but I just want to ask—though I probably should know this —are the beef people well represented with that group?

Hon. Lyle Vanclief: There's a beef component there.

Mr. Larry McCormick: Are there cattlemen on the committee?

Hon. Lyle Vanclief: Yes, there is a member of the Canadian Cattlemen's Association on my national safety nets advisory committee.

Mr. Larry McCormick: Thank you, because as far as I'm concerned, even our supply management people are in the beef business—and not all calves were born to produce milk.

I have a question on the tracking and tracing of the protein we're hearing about—but not StarLink. Again, I had people approach me in the last few days who can't quite understand it. Would this be the time to have more money available to ensure even stricter standards on the tracking, say, of the protein, particularly if we go to mixed farms and that?

Hon. Lyle Vanclief: Well, certainly the regulations have been there, and the monitoring has been done since 1997 to ensure meat meal from any ruminant animal is not fed back to a ruminant animal. It can be fed to a single-stomach animal, because the scientists say they don't get BSE.

That monitoring is there. Our tracking and tracing system is sufficient to know where all of the meat meal from that rendering plant went. Some went to individual farms that were large enough to buy it. We know which farms it went to.

For example, it's been on the news, the three farms under quarantine, small farms in British Columbia, the ones that bought the feed. We know the feed mills they went to, the farms they went to, etc. So the tracking and tracing system is very thorough.

Mr. Larry McCormick: Mr. Minister, when I was working even more closely with you — I had the opportunity for two and a half years — and all your officials, for example, the CFIA and Dr. Brian Evans, who's done a great job and is doing a great job today.... Dr. Evans was on the news channels. I followed the work you, and we, did with the European hoof-and-mouth, and it was reassuring to realize that so many Canadians across this country did have the confidence in your association and your group. I didn't see people panicking. I was at events on the weekend. Things were going on as normal, and we eat it.

Hon. Lyle Vanclief: I must say I'm extremely proud of the work the CFIA officials have done. You talk about burning the midnight oil, folks. It's a well-worn phrase, but the work the CFIA officials and Ag Canada officials have put in and will have to continue to put in on this is phenomenal.

I've had calls...this morning, for example, the Minister of Agriculture from Uruguay called me. He calls me Lil. He said, “Lil, we have confidence in your system. We know your system.”

You'll notice the European Union did not ban our products. We don't sell a lot there, but the reason they didn't ban our products is they have confidence in our system. I certainly hope the good news we've had so far will continue and that we will be able to continue this.

Again, I ask people, as I have many times in the last week, to keep this in perspective. It was one cow. We found it; it didn't get in the food chain. The system works.

The Chair: How much time do you have, Mr. Minister?

Hon. Lyle Vanclief: About 60 seconds.

The Chair: Could I then defer to Mr. Maloney, if you would agree, Mr. Plamondon? Mr. Maloney has a question he wants to ask. Since he has not asked a question, would you...?

Mr. Louis Plamondon: I have a question too.

The Chair: Then I'm coming back to Mr. Plamondon for the last question.

Mr. Louis Plamondon: Okay.

Mr. John Maloney (Erie—Lincoln, Lib.): With regard to bioterrorism, how well are we integrated with the United States? Do we communicate, share data? Do we have contingency plans in place for whatever form this situation may take?

Hon. Lyle Vanclief: There's work going on right now. There's good cooperation with the United States.

I'll ask Rick Fadden to comment.

Mr. Richard Fadden (President, Canadian Food Inspection Agency): Mr. Chairman, cooperation on the bioterrorism or biosecurity front is one of the action items in the Ridge-Manley plan. So from the cabinet office level down, there is a great deal of cooperation.

We're developing plans in Canada. We share those plans and we're going to do more of it. I don't think there's any difficulty in terms of sharing information. We acknowledge that if there's a bioterrorism effort in North America, the border is artificial. We recognize absolutely that we have to cooperate.

» (1730)

The Chair: Mr. Plamondon, for one question. Make it short, please.

[Translation]

Mr. Louis Plamondon: Thank you, Mr. Chair.

My question is somewhat in the same line as John's question concerning our relationship with the United States. I am somewhat surprised by their attitude and I am also somewhat surprised by your attitude, Minister, regarding your reaction to the United States decision. Let me explain.

You know that in the United States, they have the Newcastle disease that is having an enormous impact on poultry. That disease can destroy whole poultry operations, it can kill poultry almost overnight. However, even though they do have this disease in the United States, our inspection agency has decided not to block all American products, but rather to target states where this disease exist, namely California, Nevada, Arizona, and Texas. But the poultry from other American states can enter Canada.

So I ask the question: why are we able to show some discriminating judgment while Americans are not able to make any distinction, especially—and I come back to my earlier question—that Quebec has a much stricter system for managing its cattle and that there would be absolutely no danger in imposing a ban at the border of the affected province or region, and not a ban for the whole country?

[English]

Hon. Lyle Vanclief: Mr. Plamondon, I think the answer is that we're definitely dealing with two different situations here. In Newcastle, we are dealing with disease and we know the cause; therefore, we're able to deal with it in that way. With BSE, we don't know the cause; therefore, we don't know the extent.

When you know the cause, you can find the extent, but when you don't know the cause, you can't. That's why we have to do what we're doing at this time in order to find that cause, to satisfy our international customers.

The Chair: Thank you very much. That concludes our line of questioning.

Thank you, members, for coming, and thank you, Mr. Minister, for being here today.

And to Mr. Watson, Mr. Deacon, and Mr. Fadden, thank you for responding very candidly to our questions.

We look forward to our meeting tomorrow with other departmental officials, CFIA, and others, on this very important issue we have before us at this time.

The meeting is adjourned.