AGRI Committee Meeting

     I call our meeting to order. I would just like to remind everyone that our meeting is televised today.

    Mr. Minister, thank you for coming here today.

     Mr. Da Pont and Mr. Knubley, thanks for joining us.

    I'll just remind everyone that we do have votes. An e-mail just came saying they will be at 4:23, so I'm going to adjourn the meeting at 4:15. That will give us eight minutes to walk down the hall. I hope nobody disagrees with that. That should give us lots of time.

    In order to get going, as chair I would like to call vote 1 under Agriculture and Agri-Food and open up the discussion by turning it over to you for your remarks.

    Thank you.

    Thank you, Mr. Chairman.

    Good day, everyone.

    As you well know, Mr. Chair, our government's top priority is the economy, and Canada's agricultural industry plays an important role in that economy by creating jobs and driving growth. Since day one our government has committed to helping farmers earn more money from the marketplace. I am pleased to see that our government's strategy is delivering real results.

    Over the past few years agriculture has truly emerged as a driver of the Canadian economy helping lead us out of this last recession. No longer is agriculture like the kid who couldn't skate, who always got put in goal. Today the agriculture industry is making the plays and supporting the entire team.

    Going forward, the sector can look forward to continuing strength. The medium-term outlook over the next few years is positive, showing high prices for grains and oilseeds, modest growth for cattle and hog production, and stable growth for supply-managed commodities. Net cash income for 2011 is forecast to rise 24%, a new record. Average farm net operating income topped $65,000, up 27% over the previous five-year average. Net worth is expected to come in at $1.7 million by the end of this year, up 10 percentage points over two years for the average farm.

    In 2011 our farmers earned more money from the global marketplace than ever before—over $44 billion in agriculture, food, and seafood exports. That's up over 12%—almost 13%—from 2010. Of course like farmers we are not resting on our laurels. Last month we led trade missions to China and Washington, two of our largest trading partners. A great number of agricultural industry leaders were with Prime Minister Harper and me in China.

    We are working very closely with industry partners in China to get more of our product into that market of 1.3 billion consumers. We came home with almost $1 billion in new sales for our canola, tallow, and genetics, including the first access for our beef tallow to China in almost a decade. This follows on the heels of new beef access to South Korea, our last major Asian customer to reopen its doors to our great Canadian product.

    With population growth and rising demand in emerging economies, our focus has moved towards a more bilateral approach to trade. We're working with all agricultural industries to align our trade priorities, target those markets they need, and make deals that will ultimately strengthen the farm gate. Over the past six years we have concluded nine free trade agreements and have many more in the hopper. Those include, of course, agreements with the European Union, Morocco, and of course India, which is a huge customer for our agricultural products.

    We're also exploring new multilateral opportunities such as the Trans-Pacific Partnership, since we know that increased trade with Japan would be very beneficial to the Canadian agricultural industry. We'll continue to push forward our free trade agreements despite the opposition so we can ensure that farmers are able to compete on a level playing field rooted in fair and science-based rules. Of course we continue to foster the world's largest bilateral trade partnership with our friends in the United States. I had another very good meeting with Secretary of Agriculture Tom Vilsack just ten days or so ago. While we might not always agree on who has the best hockey team, Tom and I always have a good frank discussion on the agricultural issues that matter to our very integrated agriculture industries.

    At this stage of our economic recoveries, we agree that no one can afford a thickening of our border. That's why our two countries are committed to reducing duplication and streamlining regulation through the “Beyond the Border” initiative and the Regulatory Cooperation Council. We also agree that policies must be rooted in sound science. Canada continues to work closely with our like-minded trading partners such as the U.S. to develop a globally accepted science-based approach to low-level presence of GM materials.

    With respect to mandatory country-of-origin labelling, industries on both sides of the border say that COOL is hurting our integrated beef and pork industries. The administration in the U.S. needs to do what is necessary to end the restrictive nature of COOL as soon as possible for industries on both sides of the border. We know that when something is not broke, don't fix it. That's why the Harper government continues to state very clearly in every platform and Speech from the Throne that we strongly support Canada's supply-managed system.

    Time and time again we continue to stand up for our industries on the world stage. After all, the dairy industry is a vital part of the Canadian economy, generating $5.3 billion in farm-gate revenue and 160,000 jobs for Canadians in 2008, all the while not taking a penny in support payments from Canadian taxpayers.

     We're proud to support the supply-managed industries. We'll continue to support them as they continue to help drive our economy.

    Farmers are heading into the new crop year with more new opportunities than ever before, thanks to the passage of the Marketing Freedom for Grain Farmers Act on December 15—and I'm glad Wayne got here in time for that. A big part of our government's strategy for long-term prosperity for Canadian farmers has been to bring marketing freedom to western Canadian farmers. As we work through the transition to the open market we're doing all we can to ensure certainty and clarity for western Canadian farmers.

    That's why western Canadian farmers are pleased that the recent Manitoba Court of Queen's Bench threw out the frivolous injunction motion of the former directors. It gives them the clarity and certainty they need to move forward with their business plans and rightfully market their own wheat and barley.

    Farmers are now forward-contracting their wheat and barley with buyers of their choice for delivery beginning the next crop year, August 1, 2012. We're already seeing buyers competing for farmers' grain and new contracts, new alliances, and new risk-management tools coming on stream.

    The CWB remains a viable voluntary marketing option for farmers of all commodities in all parts of Canada. Come August 1, the CWB will be able to source and market any grains from anywhere in this great country. It will have the flexibility to adapt its business structure to meet supply and demand domestically and globally. It goes into the open market with government backing for its borrowing, which is more than what any other company has.

    The CWB is exploring new partnerships in negotiating grain-handling arrangements. In fact, it recently announced its first handling agreement with Cargill, giving it access to 34 inland terminals and four port facilities. This is further proof that the CWB will be a viable and competitive marketing option for farmers.

    As the global population rises, consumers are increasingly demanding more food of a higher quality, and of course food produced with a smaller environmental footprint. Innovative science-based technology is becoming more critical than ever. This new dynamic is driving our discussions around the next round of agricultural policy. I applaud the great work going on at this table and the work going on in our science clusters and value-chain round tables.

    Our partnerships with industry, provinces, and academia continue to provide the results that Canadian producers and processors are looking for. The time is now for farmers to capitalize on past achievements and take advantage of world-class research, market access, and more efficient regulatory systems.

    Of course, food safety remains a top concern for Canadians and this government. Working with the Canadian Food Inspection Agency we're delivering a stronger, more efficient and transparent inspection and protection regime for Canadians. Rapid changes in global trade and technology are challenging the agency to review and update its legislative and regulatory foundation and modernize its inspection regime. The CFIA is taking concrete steps to be more effective, responsive, transparent, and accountable to all Canadians. The objective of this government is to strengthen our ability to protect Canada's food supply, while not creating barriers to trade and unnecessary red tape that slows down the speed of commerce.

    The government has addressed all 57 recommendations of the Weatherill report, and new food safety legislation was part of that commitment. In terms of regulation, the CFIA is engaging with Canadians to discuss its regulatory modernization strategies. This strategy will build on the government's commitment to reduce red tape and overall regulatory burden. Our objective in all of this is to reduce overlaps, bridge gaps, and make regulations more straightforward for all concerned.

    Beyond legislative and regulatory renewal we're also taking a look at CFIA's service delivery. Mr. Chair, I'm sure you'll agree that Canadians are best served when the CFIA and industry are able to work together cooperatively, constructively, and proactively. That's why our government recently unveiled a new statement of rights and services for the Canadian Food Inspection Agency. This will ensure that consumers, producers, and other businesses know what services they should expect from CFIA, and what rights and responsibilities they have when dealing with CFIA.

    Beginning April 1 this year there will be a new single office where Canadians can go with any questions, complaints, or disagreements about a regulatory decision or its application. We will benefit from a safe and efficient food industry, so this government is doing everything we can to ensure that the coordination and relationship between industry and CFIA supports this common goal.

    The agency is also well along in its multi-year process to implement an inspection modernization plan. This plan is supported by the government's 2011 budget investment of $100 million to strengthen front-line inspection and science within the agency.

    To close, everyone agrees that yesterday's solutions can't meet the challenges of tomorrow. We need new approaches for a new generation of agriculture. A revitalized CWB along with our focus on innovation and trade are all part of a comprehensive plan to strengthen our overall economy.

     We want to help entrepreneurs harness innovation, add value, and create jobs right across this great country.

    I look forward to working with you over the coming years to grow new opportunities for our farmers and our food processors.

    Thank you for all you do, Mr. Chair. I look forward to your questions.

    Okay, thanks very much, Mr. Minister.

    Before we move to questions, I want to remind all committee members that when it comes to public servants, they are not mandated to comment on government policy but simply on its administration and implementation.

    With that, Mr. Allen, you have five minutes.

    Thank you, Chair.

    Thank you, Minister, for being here.

    Looking through the main estimates, we can see a number of cuts happening in the department. At this point it looks like there could be a decrease of nearly 6% over last year's previous estimates. One of the major ones is the Canadian Grain Commission, which is facing a cut of almost 85%. There are other things in the business risk management area, but let me look at the piece around the Canadian Grain Commission.

    We're hearing from farmers about issues with contracts. They are not understanding the contracts because they're opaque, not quite understanding the transition from the Wheat Board, whether it be voluntary or not. It is difficult for them. There's a whole slew of issues around those, and now we see the Grain Commission with a major cut.

    Now we hear today through Viterra that they are being looked at as a potential takeover target by Glencore, which will be a foreign-based multinational.

    With all this uncertainty in the market for grain farmers—and now the one major Canadian player might actually evaporate, get taken over by a multinational corporation whose headquarters, quite frankly, are not in this country—do we see that as a major issue? Where do we think that's going to take grain farmers, and where it will end up? First, could you look at that question?

    Let me ask the second question, because I know, Minister, we have a limited amount of time. The second question concerns the CFIA. We also see that at present there's a budget cut anticipated of $33.5 million on top of the already $18 million that sunsets due to the listeriosis crisis. Notwithstanding your comments, Minister, we don't have a sense of how we can do things differently to protect the Canadian public from another outbreak of listeriosis that we witnessed a number of years ago. We know—we absolutely, unequivocally know—that only 2% of imported products into this country are actually inspected when they come across the border. It's not an equivalency; it's not the same as in Canada, where we do what we have to do for export. We don't do the same thing for imports. It's not the same.

    Based on that, Minister, can you explain to us why we see these targeted cuts to these two areas, when indeed perhaps what we ought to see is at least a flat-line budget, if not an increase?

    Of course a lot of what you say is not true, Mr. Allen. There are no pending cuts. I mean, that's the job of the budget, should that come forward. Actually, we have that coming on March 29, as I understand.

    The main estimates are just that. That's the first and foremost benchmark of what the government plans to do. If you look at last year's, rather than in isolation, then there are other programs that are added through the supplemental A, B, C, and so on, so that it actually goes beyond.

    When you talk about business risk management, and your idea of cuts there, I would point out two things. The marketplace is delivering for farmers in this country as it's never done before, which is a good thing. The business risk programs are demand-driven, and at this point there is no demand. So there are actually no moneys allocated other than the main line item, such as $125 million for AgriRecovery. Should it be required, it will be there, and it will be there in a bigger way. Last year's floods were over $400 million, so the line item of $125 million, then, through the supplementaries and so on, becomes a lot bigger number.

    I will not begin to speculate on what will happen in the Viterra situation. It's way too premature to do anything like that. Certainly farmers are beginning to understand the ability to market to whomever they like. Viterra is a major player, and we'll discuss those issues as they come forward, but I would not speculate on any takeover at this point.

    You also point to a supposed cut at CFIA. You know the difference between a pilot project that is ending and a line item in the main estimates, I would hope. Having said that, the vast majority of that $33.5 million was the $30 million coming out of the Weatherill report. It was a three-year program specifically on listeria. That has gone exceptionally well, and we intend in every way possible to maintain that work, moving forward.

    As I said, these are mains, and then you build on them with the supplementals through the rest of the year. I would hope that the NDP, if you're concerned about potential cuts, would actually support the budget this time around.

     You are always concerned about food safety. Let me tell you—

    Your time is up, Mr. Allen.

    Mr. Lemieux.

    Thank you very much, Chair.

    Minister, thank you for being here today to talk about the estimates in front of committee.

    We have two sets of estimates in front of us. We have the supplementary estimates (C), and we have the main estimates. As I was reviewing the main estimates, I had a question about business risk management programming. Business risk management, or BRM programming, is very important to our farmers. Certainly on committee we have done a number of studies, and the subject comes up in a number of different studies. There are many comments about it. I think we have a fairly good understanding of business risk management programming. I'm wondering if you might be able to explain, for example, to my colleagues on the other side why, in the main estimates, on page 38, we might see a decrease in BRM spending in this next fiscal year. Often I find, Minister, that we're criticized when there's a decrease that's noted in the estimates. There's always a reason for that. I'm wondering if you could explain to the committee why there might be a reduction forecast for the next year.

    Mr. Lemieux, you have the mains in front of you. You also have the supplementary (C)s from last year. That's capitalizing on what was required to finish out the year. Of course the mains are projected ahead for the 2012-13 year. When it comes to business risk, there are two things in the mains. Farmers are receiving record returns for their work and for their product, which is fantastic. We're happy to see that. There hasn't been a demand for anything yet. This time of year there is no demand for the business risk suite of programs—the crop insurance, the AgriStability, the AgriInvest, and AgriRecovery. There hasn't been a demand yet. They are demand-driven programs. Should they be required, they will be there for the farmers. There is a basic line item, and then it goes beyond that if there's demand.

    There's also a second set of programming that goes along with the business risk side. That's the more proactive side—the Growing Forward suite—where we put money into a lot of different industries through science clusters, marketing funds, and so on, in order to help them return more of their income from the marketplace. There is a lot more demand for the proactive side—making sure they are able to build their own business and not be reliant on government payments. There's nothing more bankable and predictable than a good solid marketplace. That's what we were striving to make sure of—having access to that marketplace.

    Minister, what you are saying is that at the beginning of a year—for example, in last year's mains—the government looks ahead to the year. They basically peg a value of what they think business risk management programs may pay out. Of course there are a lot on unknowns in the year ahead. When they reach the following year, they assess the market that just occurred—whether the prices are good, whether we anticipate them being good in the future year—and then they adjust that budgeted amount.

    It's somewhat of an unfair criticism, then, to say that there's a negative amount against BRM lines in the mains, and that farmers aren't getting what they should be getting. You're saying that if it's been a good year for farmers, they don't need that type of support from the government. In fact, it's actually a good-news story, and the mains are simply reflecting the good news. Would that be a good summary?

    Sure, that's a simplified summary of it.

     In my speech I talked about the debt-to-assets ratio in farms across Canada. It has never been as good as it looks now. Certainly they are carrying a lot of debt, but their assets are climbing even more, which is fantastic. It allows them to make business decisions based on a solid future and a solid bottom line we haven't seen for a number of years.

    There's a growing demand for quality food around the world. Canadian farmers can supply it. They continue to do more than they are asked to do. Our quality and consistency of supply is well recognized in some of the premium markets, such as Japan. We are working on free trade agreements with the European Union. A lot if it is predicated on their ability to import a lot of our agricultural products. It's a good time to be in agriculture. It's a good time for anyone who has been on the edges looking in to take another serious look at getting back in or building their businesses.

    Thank you, Minister.

    We will now move to Mr. Easter.

     Thank you, Mr. Chair.

    Welcome, Minister.

    I have a couple of specific questions, but first, Mr. Minister, while I have both you and the deputy here, I have a question on process. Mr. Knubley will know of what I speak because I wrote a letter to the Clerk of the Privy Council complaining about the policy that seems to exist.

     A member of Parliament, regardless of the party, I believe should be able to talk to a departmental official without having somebody from the minister's staff on the phone. I have never made it a policy of calling a deputy minister or an ADM unless there's a serious issue that relates to a constituent or a farmer somewhere in Canada. However, when I call the deputy minister or somebody in your department on risk management programs—Danny Foster, for instance—I'm told we're not allowed to talk directly to that individual.

    In fact with Mr. Foster at one point in time I did have a conversation with him with two officials on the phone—

    There's a point of order.

    Mr. Storseth.

    Mr. Chair, we're here to discuss the estimates, both supplementary (C)s and the mains. We have a lot of work to do.

     If Mr. Easter has a personal complaint, there are TV cameras outside. He can go talk to them about that.

    Mr. Chair, this is an issue of process, of the ability of a member of Parliament to do their job. It's a serious issue.

     Mr. Minister, what I'm trying to determine is if there is a policy in place whereby we are only allowed to talk to your departmental officials if it is through your office, and with people from your office on the phone.

    Have you been denied in any way, shape, or form the information you've been requesting, Mr. Easter?

    Yes. I've been denied from talking to an official without having your office on the phone.

    But I'm saying you've taken advantage of that ability to talk to the official regardless of who's on the phone. Have you been denied the information you're seeking?

    What I have been unable to do is to talk.... I've talked to people in your office. In fact I talked to your people in the office about the issue you and I talked about in the House today.

    And there was nobody with us when we did that.

    Pardon?

    There was nobody with us when we did that.

    No, no. That was a conversation between you and me.

    Okay, so we let that one slip.

    However, I was not allowed to talk to officials on their own when I felt I was getting unsatisfactory answers from staff within your office.

    You know, Minister, when I was president of the National Farmers Union, you could pick up the phone and call an official. As an MP, I can't get a call back from an official, and I think that's wrong. If that is the policy, I do think it has to be changed. It's nothing to do with partisanship. I think it hampers the ability of MPs to do their job for Canadians.

    So what is the policy?

    I have never said to either George or John not to return calls--never.

    Okay.

    John, you're well aware of the issue because I wrote a letter to the Clerk of the Privy Council. We'll see where we go from here, and we'll see if we get answers.

    On the specifics, we're hearing mixed opinions and mixed information on the CFIA budget. As I understand it, after the listeriosis crisis—there were moneys that were put in, and that money is now sunsetting—the budget did go up considerably. But with the 10% cut in CFIA's budget that I understand is coming, that will actually put the Canadian Food Inspection Agency's budget considerably below where it was before the listeriosis crisis. Is that correct or incorrect?

    And while you're at it, can you give us any numbers in terms of the people who are actually involved in the inspection field to keep food safe, versus where they were five years ago?

     In the last three to four years, we have 733 net new inspectors on the front lines. We have now a ratio of the 6,500 employees in total.... For roughly 7,500 employees, total, we have roughly one administrator, one inspection staff, like a one-to-one ratio, whereas it used to be as high as two to one at one point, with the administration side. We have a far better ratio of inspector and inspector staff than straight administration staff, so that's a good-news story.

    There are a number of other issues. Last year $100 million was added into CFIA's budget. There are things like that. So there are always programs that were three-year programs, and they sunset in order to be assessed, adjudicated, and so on.

    We've had great success with the moneys that were dedicated to listeria prevention. There has been a great partnership between industry and CFIA to make sure that those tests are done in a more fulsome way and the accounting is there for all to see. I think the money was well spent.

    At this point, then, we reassess that, adjudicate that, and make our asks back into budget, and of course that budget will come down on March 29. I know that when food safety is at stake, you folks will all line up to support that budget, simply because of the food safety moneys that will be there.

    Thank you very much.

    Mr. Easter, I have a comment on your first question. I can tell you that when I was in opposition, and I've even had it happen in government.... It seems to be dependent on some ministries, with some managers, that they don't allow the people under them to talk. What I do in that case, as I'm sure you have—I think you said it today—is go directly to the minister. It's nothing new. I'm not sure it's an official policy—

    It's a quite new policy, Mr. Chair, quite new.

    Anyway, Mr. Hoback, for five minutes.

    Thank you, Mr. Chair.

    Thank you, Minister. As a member of the agriculture committee, I must say that the amount of time you've given to this committee, as far as showing up to give a consultation is concerned.... I remember that we actually had public officials in front of this committee for a meeting not even two weeks ago, to go through some of the new programming, so I know your officials are definitely available for answering questions. I guess Mr. Easter wasn't aware of the meeting or decided not to show.

    But I must say that when I talk to farm groups.... I remember, Minister, that when I was the chair of the Western Canadian Wheat Growers we came down to Ottawa to meet with Andy Mitchell, who was then the minister. I flew down from Saskatoon, supposedly to have a meeting with him, and of course it got cancelled at the last minute. I know that there were many frustrations for farm groups at that time with that Liberal government and how they would not be accessible.

    Yet I can honestly say, Minister—and I say this to your credit—that when I talk to the farm groups, they're so happy and impressed with how inclusive you are: when you go on trade missions abroad, you include them, and how you work with them, and how you're available to talk, and not only you but also your staff.... So I want to compliment you on that, and I hope you keep it up, because that's making our ag industry in Canada that much stronger.

    Minister, that kind of ties into research, because a lot of the groups we're working with are talking about research and how important research is, and I think this committee gets it. If you talk to members around this committee...I think we understand that research is very important. I know that at the University of Saskatchewan we've seen some great agriculture sector research out of Innovation Place.

    In the main estimates, you're indicating that basically there's going to be another $38.4 million spent on an agriculture innovation program. Maybe you could help to educate the committee about what that program is and about just how it's going to impact the agriculture sector.

    Well, there's nobody better to decide on research than the end user. For so many years, a lot of research was done without consultation with industry as to the result they hoped to have or could make use of. We changed that around about two or three years ago when we started science clusters, working with industry, with academia, with the provinces and ourselves, and with the private sector as well, in making sure that for any amount of money there were not overlaps and gaps and that we were focused on a result. We've been having great success with that. We've been able to make a lot more use of our scarce dollars.

    Having said that, I know that there has been a lot of talk of going back to 1994 levels of spending on research. I'm happy to tell you that when we do the comparison, even taking inflation into play and so on, we're actually spending about 15% more now than we were in 1994, even with inflated dollars and so on. So there's a little bit of miscommunication as to what all that research funding does. We've committed even more to that. As you rightly point out on the numbers you talked about in the main estimates, there are a lot of points where the innovative idea has been put to bed, and then how do you commercialize it? How do you put that into practice so that farmers, processors, and so on can actually make use of it? That's what we're trying to target: it's that next step.

    Researchers are fantastic in Canada. They do tremendous research. They get it done. They crack the egg and then they put it on the shelf. Now, how do you make use of that? It takes an extra step in between for the commercialization of that innovative new process to make sure that it actually hits the field, or the farm, or the processing sector and is made use of. That's what we're targeting.

     We've had some great ideas come forward already this year. There are some applications that we're just in the process of reviewing, so I won't get into them because we're still working on them. But there are some tremendous ideas that will actually return dollar value back to the farm gate.

    Actually, we did a biotech study this last session before the election. We talked to a lot of the biotech sector, where there's a lot of research going on.

    You mentioned funding from innovation to the marketplace, and kind of filling that hole. I know they identified in that study just how much was lacking and needed. I know there are millions of dollars we're putting in there.

    Farmers have been excellent at doing that on the equipment side. A lot of innovations have come out of the farm shop and then turned into a small-town industry that has just gotten huge, such as Bourgault in Saskatchewan, and others, of course. They've gone global. It's tremendous what can be done when you can take that innovative idea and commercialize it.

    Yes, that's exactly right.

    When we look at research, is there anything you look at that you find particularly interesting? Is there anything new or earth-shattering that you'd like to share with this committee, or do you want to stay more general?

    A tremendous amount of work has been done on canola and special crops because farmers had control over them. Last year the average in canola was over 50% oil content, which is fantastic. It's the same amount of crush time and cost, but you ended up with 10% more oil last year over what we had the year before.

    There's a tremendous new interest, I'll call it, in the coarse grains: wheat, durum, and barley, and new varieties that are going to be required. There's a lot of work being done on what I'll call feed-wheat varieties, which are millable, so it keeps the costs down and the return higher. The farmer is looking at 100 bushels an acre rather than the 40 or 50 we're used to with the hard red. In the end, those types of innovations are going to help drive the farm gate.

    Thank you, Minister.

    Thanks very much.

    Mr. Rousseau, you have five minutes.

    Thank you, Mr. Chair.

    Thank you, Minister Ritz, for attending.

    It is a pleasure to see you and I am sure that all my colleagues are also pleased to welcome you. You should come more often. We often talk about serious matters and it would be interesting to have discussions with you more frequently.

    Mr. Minister, today's Globe and Mail mentioned that your colleague Ed Fast is in New York to represent Canada in the negotiations for the trans-Pacific partnership. But it seems that he is ready to sacrifice the supply management system, which shapes agriculture in Quebec and in the entire east of the country. Any good agriculture minister would protect the supply management system, which requires no government support, and he would not let the Minister of International Trade dictate his politics.

    If I understood your remarks correctly earlier, you are committed to protecting the supply management system unconditionally. Mr. Minister, could you tell us more about that?

    I think we've done it by actions, not just by words. We were the only political party in last spring's election to actually have it in our campaign platform. We brought it forward into our throne speech, the direction the new government will take.

     Certainly I am more than happy to meet with my supply-managed colleagues across the country at any time to talk about their issues. We've done a number of things for them, such as cheese compositional standards. The protein levels that were being brought in sort of under the wire, we've shut that down. We work with them every step of the way to make sure they retain the strength and the ability to give Canadians that top-quality product.

    I know there are a lot of discussions. I look at my old friend Garth Whyte with the restaurant association complaining bitterly about dairy, the costs, and all that type of thing. Nothing could be further from the truth. I love to use the example of a glass of milk in a restaurant. It's going to cost you, as a customer, $2.50 to $3.00. A farmer is going to get less than 20¢ of that, and the waiter or waitress is going to want a 10% or 15% tip, which is double what the farmer got. Who's the problem? It's certainly not the farmer. And it's good quality milk. We've never had a melamine problem, and we've never had an issue where we've had to go back.

    We understand the value and validity of Canada's supply-managed system. Mr. Fast, in talking about trade, starts off, as we always do, having everything on the table, and we negotiate our way through. At the end of the day, we now have a free trade deal with Switzerland—the dairy of Europe—and we did not hinder our supply-managed system at all in doing that.

    We look forward to doing those trade deals. We are an exporting nation. In most commodities we export between 50% and 80% of what we produce, and people understand that Canadian quality is of the top.

    If I understand correctly, you are contradicting Minister Fast. If we go by what he has recently said, more specifically today in New York, he is ready to bring that to the table. In 2005, when you were in the opposition, you said you were in favour of a motion protecting supply management in international negotiations. And now you are saying that starting negotiations in this way is classic.

    Who should producers listen to: Minister Fast or the Minister of Agriculture? I have met with dairy, egg and poultry farmers who told me that they are afraid of what will be on the table. They want some reassurance. Could you reassure them right now, yes or no?

     I think I've done just that. I'm not saying anything different from what Minister Fast is saying. When you negotiate these international trade deals, everything is on the table from day one, and as you work your way though the negotiations you pull things off. They know what your defensive positions are and you know what theirs are. You know your offensive positions and you know theirs. You work your way though these systems.

     We have never dropped the ball in supporting supply management. I said judge us by our deeds, not just our words, but we're not shy about saying the words either.

    Does that mean that Minister Fast is going to take supply management off the table right away?

    I didn't say that. I said as you work your way through the negotiations, you make it very well known what your defensive and offensive positions are, and you negotiate your way to an agreement that benefits both. We have not signed, nor do we intend to sign, an agreement that does not benefit Canada.

    Mr. Rousseau, your time has expired.

    We now move to Mr. Payne for five minutes.

    Thank you, Chair.

    Thank you, Minister, for coming today.

     I'm going to touch on a couple of things. In particular, I want to start off talking about food safety, Minister, and if there's enough time I want to go back to some of your comments on the Wheat Board.

    Minister, our government has made some record contributions to the food safety program, including—as you mentioned earlier—adding 733 net front-line inspectors and fulfilling the recommendations of the Weatherill report. In the supplementary estimates (C), on page 23, is a vote appropriation indicating that CFIA will spend almost $7 million to implement a plan to modernize Canada's food safety inspection.

    Could you please explain to the committee how this initiative will build on our government's success in making food safer for Canadians?

    Food safety is a priority for this government. We've never shied away from that. We continue to work with CFIA, and Health Canada, for that matter; again, there's a partnership between public health, federally and provincially, as well as CFIA.

    We learned a number of things through the listeria issue: better communication, so we have checked off that box, making sure that CFIA has the ability to work with their provincial colleagues and their other federal colleagues in a more fulsome way. That's a tremendous opportunity to make sure that communication works well.

    We continue to put money into the budget to make sure they can deliver on a new way of doing things, much more electronic, that is faster, that serves commerce better with speed and accuracy. We've made sure that our food safety action plan was well funded, with $223 million to make sure we can improve the controls on imported foods.

    This fiscal year, to date, we've had 99 border blitzes and 480 enhanced inspections at the border. That means going beyond just the check that we do. We also use a system now where a lot more inspection is done at point of origin—that is, the plant in the U.S., and so on, as the product comes up.

    We no longer run trucks off to the side and hold them. The speed of commerce was not well served with the best-before dates and fresh produce coming in, in that regard. We have a much better system that is doing the job in a much more efficient and effective way than it was ever done before--as I said, 480 enhanced inspections, as well as 99 border blitzes.

    For years we used to phone the exporter and say we're going to check your truck—72 hours' notice, we're going to check your truck. That didn't work really well. We got rid of that, and now we're using a system whereby the U.S. and Canada are working much more hand in hand to make sure that food is safe on both sides of the border.

    You commented earlier, Minister, about “beyond the border” and harmonizing regulations. Is that part of this whole process, then?

    It's an addition to this process. We started working and we put together committees from both the Canadian and American sides working on how we harmonize agriculture better than we do now. Canada has always been held in abeyance, waiting for the newest generic, whether it's a veterinary drug or a chemical or a pesticide. We always started over at zero again.

    We're now looking at recognizing sound science, as we do on other issues—American especially, European science, those types of bodies that are world-known. We'll start from their findings, and then add on the Canadian parameters so we have those available to our processors and our farmers much more quickly than we've had access to before.

    Okay.

    In terms of the Wheat Board, Minister, I know when we passed the new freedom to market for farmers, we did have a number of pro-choice farmers here, and I had some discussions with one of those farmers in terms of ability to market their grains. In fact, that individual said to me that now that the new Wheat Board is able to market, if they can get him a better price he'll use the new Wheat Board.

    I think that is very obvious in terms of what the farmers were looking for. I wonder if you could elaborate a little more on the recent comments you made today on the new Wheat Board and their ability to market.

     We had Ian White, the president and CEO of the CWB, in China with us. COFCO is an agency in China that's been buying directly from the Wheat Board for a number of years. We signed a three-year contract on wheat and barley, I believe, while we were over there for the Olympics in 2010. We were over there to celebrate beef access, but we also celebrated that with a good-sized contract. We wanted to assure them the contract would be honoured, and we also wanted to assure the people at COFCO that the Wheat Board now has the ability to market other commodities as well. I know they're in discussions on canola, which is great. There is a tremendous amount of canola going into China, and if the Wheat Board is able to market canola through COFCO and get us into different marketplaces for some of the crushers or meal sales we have now, that will just ice the cake.

    There's a tremendous opportunity for the CWB to be involved as a broker or as a pool. They have begun their farm meetings. They had the first one in Oak Bluff earlier this week. About 130 or 140 farmers showed up to find out exactly what was going to be available. We're celebrating the fact that they've signed their first logistics agreement with Cargill. As I said in my speech, that will give them access to 34 inland terminals and four different port facilities and the logistics that Cargill has available to them. So that's good news.

    I know they're not stopping there. I know the board and CEO are dealing with other logistics groups as well in order to make as much use of them as they can in getting into markets all around the world. It's a tremendous opportunity for farmers to become reinvigorated.

    There are a number of flooded acres in Manitoba and Saskatchewan, and the easiest or quickest way to bring them back is with a coarse grain, as opposed to with some of the special crops or canola. There are weeds to offset and so on, and barley or wheat is much better on that type of ground to get it back into shape the first year than canola or a special crop would be.

    We know there are going to be extra acres, and we know there's going to be more product to move, and we look forward to those challenges.

    Thank you.

    Mr. Atamanenko, you have five minutes.

    Thank you very much, Minister, Mr. Da Pont, and Mr. Knubley, for being here.

     I'll fire my questions at you, Mr. Minister. I don't have a chance to do this very often.

    Following up on some questions on CFIA, there is some concern that, for example, 79% of the food we import comes from ten countries. Have we done any periodic equivalency audits lately? Since 2010 we know that only 2% of the produce and products coming in are inspected, and not for food safety. The concern is with equivalency.

    I have a specific question in regard to Les Viandes de la Petite Nation. Have any specific changes been instituted at this slaughterhouse since CFIA became aware of investigation evidence showing issues within the plant?

    My third question has to do with low-level presence with regard to GE alfalfa. As you are opening up new markets, Minister, has the department given any thought to looking at the impact of GE alfalfa, if introduced on the market, for farmers currently exporting alfalfa? In other words, are we holding off the registration until we can be sure?

    My next question has to do with the Canadian Grain Commission. There is some concern that the elimination of mandatory requirements for inward inspection and weighing at licensed terminals and transfer elevators could hurt farmers. Is our government prepared to ensure protection for small and mid-sized producers against biased private companies that will issue grain quality...? Will user fees be doubled? Will the Canadian Grain Commission be modernized through changes to the Canada Grain Act prior to any increase in user fees?

    Lastly—

    I think with that number of questions and due to the time, we should let the minister answer them, Alex.

    I'll come back to you.

    I'll be as precise as I can, and then I'll maybe have George add on about CFIA.

    As I understand it, we've done ten audits so far on other countries. As you say, we predominantly buy from ten different countries. We're constantly doing audits. They're in to audit ours, and we're in to audit theirs. There's that reciprocity all the time.

    Regarding the Quebec horse slaughter, yes, there was a change made to that particular facility. I could let George tell you exactly what that is, if you'd like.

    We enhanced our inspection. We enhanced our testing in both facilities. In the last three or four months we have had several corrective actions taken in the facility.

    We took the video seriously, as we always take these things. We up our inspections, and when we find problems we work to correct them.

     We also found that video was eight or nine months old. It's sometimes hard to go back that far, but certainly we go in and look with a keener eye to any facility that comes to us like that. It would be better to have more current information, if at all possible.

    On LLP, Canada is sponsoring an international low-level presence conference in March, and I'll be at it in Vancouver the middle of next week. There are some concerns that with the efficacy of testing now, some trace elements in organic products shipped in the same container as GM canola or GM sugar cane would stop these organic products from being accepted into certain markets. So we want to make sure the zero level that Canada enforces right now.... Zero is no longer zero. With testing you can get down to parts per billion, which makes zero a nonentity.

    We're having discussions with developing nations and developed countries around the world as to what the proper percentage should be in low-level presence, just to make sure that organic and non-GM products aren't caught, simply because they've been in the same container, truck, rail car, or ship as something before that. We're having that discussion, and I think it's a good one.

    I have never, in all of the international trade I have done, had GE alfalfa raised as a concern. I haven't had GE products raised as a concern anywhere. In the European Union we have good, frank discussions with them about the required changes to their levels of GE. They are accepting GE on the industrial side in feed and so on, but not for human consumption. They've gone part-way, and if you recognize that science is safe, then science is safe all across the board. We continue to work with them.

    On the Grain Commission, mandatory inward inspection is a completely different issue from inspecting at the pit as you drop your product. You can have your grain inspected by the Grain Commission before you take the sample around to sell it. When the sample is taken at the elevator, they'll verify that it's the same. That will still be done by the Grain Commission. Some of the elevators use a private sector company to do that, but you still have the right as a farmer to have the Grain Commission do it. If you disagree, you have the right to have the Grain Commission verify it. That's still there.

    Inward inspection is when the elevator company of record, the buyer of record, starts to blend off the grains they have in store to get to a 2% or 3% variance so they can sell it for an increased value. It really doesn't enhance what farmers get. They keep a Grain Commission staffer there as they blend, and ask if it is good enough. We're saying since that does not necessarily turn a direct result back to the farm gate, there should be a cost for it.

    Do you see the distinction I'm getting at, Alex? When it's dropped in the pit you absolutely have the right to a secondary inspection or inspection by CGC. Once it's owned by the grain company, which is easier now, because once I dump my grain in the pit it's no longer mine.... Under the Wheat Board it went to tidewater and it was still mine. I paid freight, elevation, and all those other charges until it got on the boat going to whatever market. That is no longer on. Now when I dump it in in Viterra's pit, Cargill's pit, or my local farmer-owned elevator, it's their commodity and is no longer mine. So the inward grading becomes part of their costs, not mine.

    Time is up. We have to recess now and go for votes.

    I understand, Mr. Minister, that you're willing to come back for the last ten minutes after the vote.

    Sure.

    I know you have a cabinet meeting later.

    We'll recess now and go to Mr. Lobb after the votes.

    We are resuming our meeting. We'll wait for the minister to get ready. I know he's a busy man.

    We'll continue questioning.

    Mr. Lobb, you have five minutes.

    Thank you, Mr. Chair.

    My question to the minister is on the CFIA service commitment announcement made recently, but first I want to lay a little context behind why I'm asking the question.

    When I got involved seriously in politics over six years ago, or actually closer to seven years ago now, the price of corn was under $3 per bushel. The price of soybeans was under $7 per bushel. We all can remember where the price of beef was. I could go on and on. Since that time, the price of land in my area in Ontario has tripled, and it has doubled since 2008.

     Last week the Huron County Federation of Agriculture had its annual meeting with the MP and the MPP. It was certainly a very positive meeting, much different from the all-candidates debates of six years ago. All sectors were quite pleased. But the one area they had some comments about was the CFIA.

    Certainly the announcement you made on the service commitment was a valued announcement. I wonder if you could elaborate and expand on that point.

    Sure. Thanks, Ben.

    Absolutely, there have been some tremendous changes to the positive when it comes to agriculture and the farm gate in this country in the last five years. Some of it's global. Some of it's because of the quality and consistency of supply that Canadian farmers bring to the table.

    The one thing we as a government identified early on were the regulations that hinder the speed of commerce, whether at the border, or because of our own regulations, within the domestic setting here in Canada.

    You always have a problem when you're the regulatory agency. You're the referee in the hockey game. You're the umpire. You're not going to please everybody, but there are ways to deliver the bad news or to deliver the work you need to do in a way that is constructive, in a way that is helpful, and in a way that builds a rapport between the regulator and the regulated.

    Certainly we have to have regulations. No one says that we should be without regulations. But they have to make sense. We've built a number of silos within government that need to be bridged. There are layers and layers of regulations that no longer make sense that have to be addressed. There is a separate committee for the scrutiny of regulations within government that attempts to look at all of that. But it is a daunting task, in my estimation.

    That being said, under president Carole Swan and now under president George Da Pont, the CFIA is doing its best to modernize itself to make sure that it delivers the work required, the food safety required, and a number of other issues they work on in a way that is commerce-friendly and that delivers without being a hammer every time. Certainly there are personalities at play, in some cases, on the front lines.

    That being said, everybody is allowed to have a bad day, whether you're the regulator or the regulated. But instances have come to light over time that have shown us that we need to have a gentler hand at times.

    CFIA, working with the Canadian Federation of Independent Business and looking at other models within the federal government, has developed an umbrella code of conduct and six separate booklets on different aspects of what it is they deliver. As we add to their workload, they will maybe add some other booklets.

    It's a tremendous piece of work. It's a way to pave the way forward to make sure that people on the front line know exactly what's expected of them and what the parameters are they can work within. In some cases it's just a matter of common sense and making sure that the same rule is levelled here on Thursday that is going to be levelled over there on Tuesday. That used to drive people crazy.

    I think we're on the right track. Certainly there's still work to be done, but it's a tremendous opportunity for CFIA to come of age.

    I have one last quick question.

    Certainly there will be dollars committed in the upcoming budget and included in the estimates here today on the Market Access Secretariat. It's been, in my opinion, a huge success. I wonder if you could tell the committee and the people watching at home about some of the initiatives they have for forwarding our agenda.

     I can't commit on an upcoming budget. Everything is still in flux. But I can tell you that CFIA again plays a very important role on the Market Access Secretariat. We have CFIA personnel dedicated to market access, who are our eyes and ears on the ground. They go in and work on some of the technical issues. We now have veterinarians with CFIA on the ground in Moscow and in Beijing, China, due to the ever-increasing value of those markets and some of the problems we have on certificates and advocacy and so on.

    It's been a tremendous opportunity to showcase what Canada can do. Fred Gorrell, heading up the Market Access Secretariat under Agriculture Canada, works hand in hand with trade, with DFAIT, with other government departments on other issues and so on and has done a tremendous job and put together a crack team.

    They've stood us in good stead. As you well know, just a short time ago we received access for beef back into Korea. A lot of that is the great work of our embassy, our industry, and the Market Access Secretariat. Getting tallow back into China was a triple play by those same players.

    We've proven it works. We've shown that the return on our investment with the Market Access Secretariat is second to none.

    Thank you, Mr. Lobb.

    The minister was gracious enough to come back, and we have about five minutes left. In order to be fair, I'm going to split that time between Ms. Raynault and Mr. Zimmer.

    I suggest you ask one question and I'll go from there. Thank you.

    Thank you, Mr. Chair.

    Mr. Minister, since my time is limited, I am going to ask a quick question. The government is anticipating a $5 million drop in its policy on development of rural areas and cooperatives.

    Could you tell us which programs are affected and what will the impact of those cuts be?

    Well, I'm not going to speak to what the cuts may or may not be at the end of the day. I can assure you that we at Agriculture Canada have looked at the value of every program where we can drive efficiencies, where we feel that industry itself can do a better job than government does.

    When it comes to rural development, of course we share that with the provinces and with the local municipality of record. We will strive to work with them every step of the way. I'm not sure that overlapping or repeating some of the great work they do on the ground is the right way to go, so we'll look at any ways we can to streamline our scarce dollars and make sure we get what I'll call the best bang for our buck when it comes to rural affairs and rural development.

    The government must support rural development in Quebec and in the small communities in the west of the country. In this case, why are there these major cuts?

    As I said, nothing has been completely finalized as of yet. There are ways to proceed in a more efficient manner than some of what we're doing now.

    When we talk about the next suite of Growing Forward programs, GF2, we'll be able to underscore a lot more important work, I think, in rural Canada simply by supporting our farmers at the farm gate and our small businesses that pertain to farmers. Whether it's inputs or processing on the other side, that will actually do more for rural development than having a targeted agency to sort of adjudicate what's good and what's not good.

     I think there's a better way to deliver rural development than just talking about it.

    Thank you very much.

    Now we'll turn it over to Mr. Zimmer.

    Thank you, Mr. Chair.

    Thank you, Minister, for coming.

    The question has already been asked by my colleague, but I want to specifically ask about a B.C. concern as it relates to the CFIA service commitment as well. We have seen that a B.C. cattleman's ranch had been under an unduly long period of quarantine. It begged the question of whether the service of CFIA was adequately serving farmers and cattle producers. I would just like you to possibly restate, for the benefit of my constituents as well, a bit more about that service commitment and how it relates to an issue like this, and that farmers won't be unduly delayed for a minor issue, as well.

     As it turns out, the issue you're talking about on the Douglas Lake Ranch, the anaplas turned out to be not aniplas. But science testing doesn't happen at the speed of CSI events on television. It takes longer than an hour to get all the good stuff back and figure out who dunnit. There are protocols to be followed. CFIA did that. Could they have done it quicker? Possibly.

    We're working with a reportable disease. You go through all of that process, and then all of a sudden you have other people looking over your shoulder. So there are time constraints. Part of what is helping us when it comes to those types of search-outs, which makes things go quicker, is the tremendous job our Canadian cattlemen are doing on traceability.

    Just the other day I was able to announce an enhancement of that. A year ago we put $6 million into the Canadian cattle identification. We are now going on top of that with another $3 million on the BIC's program. This makes it more important for farmers to keep track of what they sold, because packers are going to come back and demand particular products they want more of. It's all part and parcel of food safety, disease traceability, and quality. We're about 90% plus now in tracing our herd, which helps.

    Part of the problem on Douglas Lake is that there are a great number of cattle moving around in the province, within western Canada into the U.S. We need to know where they are and how to track them down. This will help if there's an outbreak of TB, say, which happened there as well.

    It's all a work in progress, and we're getting much better at it because of the traceability.

    We're out of time, Mr. Zimmer.

    Thank you, Minister, for being here and for coming back after the delay.

    Mr. Da Pont and Mr. Knubley, thank you as well.

    We have department staff here, Mr. Corriveau, Mr. Meredith, and Ms. Moritz. And from CFIA we have Mr. Peter Everson.

    We'll suspend for a couple of minutes.

    Okay, we'll call the meeting back to order.

    It was not intentional, but I forgot to include Mr. Mayers and Ms. Jordan.

     I understand there are no statements, so we're going to go right into questioning.

    Mr. Allen.

    Let me talk to the CFIA folks. I want to talk about food imports and equivalencies, the testing equivalent of what we have here over there, wherever the “over there” is. We're going to take out the U.S. We're talking about everywhere but.

    In 2010, how many audits did you do on food importation equivalency testing from those foreign markets?

    Thank you.

    In 2010-11 there were ten audits. None of those were in the United States. We undertook two audits in the European Union. We were in Russia, Peru, Oman.... I'm going to miss some, because I don't have a listing in front of me, but we can provide the list of all ten. These are major markets. China was included.

    You're saying that China was audited?

    That's correct. We did a meat audit in China.

    You said you were willing to provide documentation. You know how this works, Mr. Mayers: you send it to the clerk and the clerk will get it to us. I appreciate that.

    Getting back to the issue of how much we inspect at the border, I have two conflicting statements. I believe, Mr. Mayers, you said when you were here a couple of weeks ago that we inspected exactly the same amount going out as we do coming in. Yet I'm hearing that we actually inspect only 2% of imports at the border, and that we don't have CFIA on a full-time basis at the border.

    I should maybe declare a conflict here. My daughter was a CBSA employee for a number of years. She worked in the commercial sections on the Lewiston Bridge. I asked her if she remembered working with a CFIA inspector, and she said no.

    Do we have CFIA inspectors there on a full-time basis, or is it CBSA? Is 2% representative of the things we inspect at the border, or is there a different number?

     Thank you very much.

    Let me provide some clarification. When I appeared at the committee last, I didn't use the word “inspected”. We talked about the “system”, because it is indeed, of course, a complete system. The Canada Border Services Agency is an important part of that system. In fact, as the committee will know, the responsibility for action directly at the border falls to the CBSA. They refer to the Canadian Food Inspection Agency on the basis of fulfilling that direct-at-the-border responsibility. In fact, last year...on average every year they make 1.7 million referrals to the CFIA.

    In terms of product coming into the country and product going out of the country, we take a risk-based approach. If we look at meat, 100% of meat exported from Canada is exported under CFIA certification, and 100% of meat coming into the country comes into the country under the certification of foreign countries. Every single lot of that product is subject to CFIA oversight. That oversight includes physical inspection of some lots but not physical inspection of every lot.

    The reason we don't have a physical inspection of every single lot is that we operate in a system, and —

    If I could interrupt, the chair is going to tell me I'm out of time. You just said not every lot, and we know that's not the case; I think we all accept that. It's a risk-based system.

     Is it 2%, or a different number? I'm looking for confirmation of either 2% or a different number.

    What I'm trying to explain is that it's dependent on risk and commodity. So if we're talking—

    Mr. Chair, I know it's difficult with the different numbers, so perhaps I could ask Mr. Mayers to provide that particular answer in writing to the committee. I'd appreciate that.

    Certainly. We'll overview the import.

    Mr. Malcolm Allen: Thank you.

    Mr. Storseth, five minutes.

    Thank you very much, Mr. Chair.

    Thank you very much for coming.

     We had a very interesting meeting with the minister, obviously, beforehand, and I'd like to talk a little bit about something the minister mentioned, the “Beyond the Border” initiative and the importance of trade to the agriculture sector, not only in the last couple of years but moving forward. It's one of the reasons why we're able to not have to budget as much, as I understand it, for business risk management.

     What we'd like to see, hopefully, as western Canadians, is our producers being able to get their revenue from the marketplace. That's what they would like to see as well.

    Part of this, and I think an important part, is making sure that we take a science-based approach to trade. That means not only for trade that we're putting out but also on imports coming in. I'd like to ask you gentlemen if you could talk a little bit—because the committee has seen a lot of debate on this—about the importance of a science-based approach when it comes to trade.

    Thank you very much.

    From a regulator's perspective, a science-based, rules-based approach is critical to predictability. Nothing makes the job of an exporter or an importer harder if they can't understand the rules, if the rules appear to be arbitrary.

    That's one of the wonderful things about Canada's commitment to a science-based approach. It provides an assurance of predictability, because the bases upon which we're going to build our rules aren't on whim, they're on solid science. That means if you have a problem with a rule we have, you have a basis for challenging it. You have a basis for taking us to account in defending why we believe this requirement is appropriate for the protection of the Canadian environment, the Canadian people.

    So for us, that commitment to a science-based, rules-based approach is the very foundation of an effective regulatory system.

    If we went away from that, it would throw our entire system into disarray, would it not?

    Well, it would mean that our system would then become based on personal interest, instead of fact. It would increase the potential for it to be manipulated in a negative sense. Most importantly, the ability to have predictability from a competitive perspective would go out the window.

     Can you talk to us a little bit about CFIA's changing role, when it comes to trade, in making sure that we have somebody there to talk science and to back up the science?

    Certainly.

    When we think about the role of the agency from a trade perspective, it's not trade promotion. Instead, it is to provide assurance to those countries importing Canadian products that they can have confidence that those products will meet their requirements. The agency prides itself on its science, and we're not shy about explaining to any country the basis on which we are confident in terms of the productions we provide. That's the role the agency plays, and that's why there are professionals in terms of agency staff in posts abroad. In all of the current cases they are veterinarians, so they can talk the science.

    Can you tell us where we're putting most of our resources abroad, at least which countries are our focus?

    Right now we have veterinarians posted in China and Russia, as the minister has said. In addition to that, we also have veterinarians in place in Japan, the European Union, and we previously had a veterinarian in Mexico, but that position is not filled at the moment.

    My last question is about the supplementary estimates and main estimates that we have before us.

    Mr. Meredith, you'd probably be best to talk about this. It's the issue that we hear that business risk management for the main estimates funding is below what it has been for the total of the last couple of years. Could you just walk the committee through a little bit about the process, and how, in the last few years when we've had floods and droughts on the prairies in different areas, it's the supplementary (A), (B), and (C)s that are more reflective of that funding level?

    Sure. I'd like to take a couple of minutes.

    The four elements of the suite are, as the minister said, demand-driven. So if there's a disaster, the program AgriRecovery responds. AgriInvest requires an application, so the producer has to stimulate the distribution of the payment. AgriStability is the most well-known demand-driven program, and when times are good, when commodity prices are high, and net income is at record levels, they are not triggering payments.

    The BRM estimates reflect the health of the sector. In the case of AgriInsurance, people just ought to take insurance. The minister has recently managed to enhance that program with the western provinces, so they get better coverage in the case of a flood. We don't expect a third flood in a row—hopefully—but the insurance product is there, and you would see payments under the insurance product. The indemnities would go up if there were a demand.

    So this is a positive.

    This is very positive.

    You are out of time, Mr. Forseth.

    Now we'll move to Mr. Easter, please, for five minutes.

     Thank you, Mr. Chair.

    Mr. Meredith, actually the Interlake area has flooded for about five years now running. It's a serious situation there.

    My question is really on the severe economic hardship advanced payments program. One of the concerns we had at the time the program came in was that it would end up adding a lot more debt on primary producers, and it certainly has. But it has been deferred twice, and that's to the government's credit.

    However, there are regions of the country.... I mean, we are a big country. We're not all Alberta, in terms of the beef industry. I know in the Atlantic region we didn't have the price recovery you saw across the rest of the country. In fact we're always at about a 7¢-a-pound disadvantage because of the way pricing works. Even though we're a deficit area in cattle and hogs in Atlantic Canada, the pricing is Toronto less freight. It should be Toronto plus freight, when we're a deficit area. But that's not the way the system works.

    So we're at a 7¢ disadvantage to begin with. And really, it's only in the last few months that producers in Atlantic Canada have seen the kind of price improvement that they might be able to pay these loans over time.

    The March 31 deadline is approaching, and I've talked to a lot of producers. I think 32 hog producers owe $6.1 million; 50 beef producers still owe $4.6 million. We have to find another option for these producers. They are not going to be in a position....

    There are some who can roll it over, depending on what other commodity they're in. The other difficulty is that when you default on your emergency advance, if you're a potato producer, or canola and soybeans, you lose your advance payment on your other commodity.

    Can you see any other options for us?

    I don't expect the government to defer the whole country for another year because of our situation in Atlantic Canada, but it is extremely serious. I know some producers are waking up at three o'clock in the morning worrying about this issue—almost suicidal.

    Are there other options, or is there any way this program can be broken up somewhat regionally for different regions for some distance into the future?

     Mr. Easter, I'll start with generally where the program is at.

    With the second stay of default—and you're absolutely right, there were two stays after the 2008 severe economic hardship advances that were offered to livestock producers—we did look at all the flexibilities within the legislation. We looked at what was within the minister's authorities to see how we could make that less onerous for the producer should we be in a position where some would not be able to have the repayment, especially in the hog sector, which is actually due for the final payment on March 31, 2013.

    There are terms and conditions to this stay that are very different from what would normally be in the legislation under the advanced payments program.

    What we have been doing with producers who have signalled there may be difficulties is explaining all of the terms and conditions and the different ways that repayment could be done using either BRM payments or payments from other commodities without penalties, the conditions around the penalty, and the fact that repayment could be renegotiated for an additional five years with the APP administrator as well, under much better conditions than would normally be in the legislation.

    We have had some positive feedback that it's helpful for people to see all of the different possibilities.

    Right now I can't speak to changes. It's the legislation, and we've exercised all of the flexibilities we have in that legislation.

     Thank you very much.

    Mr. Lemieux, you have five minutes.

    Thank you very much.

     Thank you for being here to discuss the estimates. It was good to have the minister here--

    My apologies, Mr. Lemieux. I thought your name was there and got stroked out. It's actually Mr. Hoback.

    Mr. Pierre Lemieux: Go ahead, Mr. Hoback.

    Well, it doesn't matter which one of us it is, we would say something intelligent, I'm sure.

    I assume you're going to start my five minutes now, Mr. Chair. Is that a yes...? I assume you're going to start my five minutes now and you're not going to take away from it.

    Yes, of course.

    I appreciate that.

     Ladies and gentlemen, it's nice to have you here today. One thing I want to commend you guys on is that you've been great for this committee. You've been willing to come and present to us. A couple of weeks ago, we had members of the agriculture department talking to the committee in camera about some of the programs, and you're here again today. We appreciate your time and your efforts and we thank you for all the work you've done in this last year.

    There are a couple of places I want to go to on the research side of it, because I think we need to keep our eye on that ball. I think that ball is very important for our agriculture producers as we move forward. We've seen in the past.... I know that we've had Mr. Allen and Mr. Valeriote and the western producers talking about how we're not spending enough in agriculture money. I think they don't understand or they don't want to talk about DIAP, science clusters, and the agri-innovation program.

    Can you just talk about page 38 in the main estimates? Under the line “Science, Innovation and Adoption”, we have $339 million budgeted for the upcoming fiscal year, which is an increase of $87 million. Can you tell us how you're going to use this money, or how this money is being used, and just what types of things our government is investing in?

    Okay. Can you just point me to the figure you referenced?

    If you look at the $87 million, you see that it's an increase of $87 million, so basically what I'm looking for is for you to explain to us how the department is using the science and innovation money that our government is investing in. Just generally, then, can we hear from the department itself on how that money is being invested?

    Mr. Chair, I'll start with explaining the numbers. Then maybe my colleague Greg can talk in more detail about the programs.

     Basically, the increase of $87 million that you see on page 38 looks at two main elements. One is the new agriculture innovation program that was announced in the last budget. My colleague Greg can explain the details of that program. Also, there is the extension of the ecoABC program that was announced recently. That money is being carried forward from past years.

     As you can see, we have different chunks of the innovation pie that we're responsible for. Maybe I can start with the agri-innovation program. This is a two-year program. That would be part of the funding that you see in the main estimates, and it's up to $50 million.

     This program is broken into what we're calling streams. There are two streams. The first part of it is really under knowledge creation, research, and knowledge transfer. We're looking at the innovation continuum almost from start to finish and at starting to harmonize programming so that the service is better for the client and we start to see the impacts of the front end, which is the research.

    At the other end, the second stream of the agri-innovation program is on commercialization, as the minister mentioned, and that is really to see whether we can put what we learn in the knowledge transfer and the research into practice or commercialize it: it's either whether it is on the farms or in the industry that it's being used or is something that we can actually have as a Canadian invention and can commercialize. Those are the two bookends of that program right now.

     Again, it's a two-year program for now. It was launched on November 10. As of February 10, we have already had 35 applications under the commercialization stream and 64 under the knowledge creation and transfer. We're in the process of evaluating those as quickly as we can to give responses back.

    Are they mainly from universities? Or are there innovation groups or...?

    There are all shapes and sizes of proposals, so yes, there are some partnerships with universities, but there are others from industry as well. There seems to be quite a bit of innovation going on in the sector.

    Okay.

    I'm down to my last minute. I'd like to stay in research, but in the same breath, I have to talk about the Canadian Wheat Board. I know a lot of farmers who are asking about transition and the process in the transition. If you have an update on how that transition is going, could you maybe provide that for us?

    Yes. Thank you.

    I would say it's going very smoothly. As the minister mentioned, the Wheat Board is building its network of partnerships for infrastructure, which was a concern when we went through the legislation. They've got to deal with Cargill, and if you read the paper you'll see that there are rumours or media reports about Viterra linking up with the board.

    In terms of the process forward, as you know, by August 1 we've got a completely open market. In a very short period of time I think you'll see the regulations that support a check-off for our research-based organizations that were formally funded by producers through the Wheat Board. Shortly you'll also see an economic incentive for Churchill that will drive grain freight through that port.

    There are a number of dimensions of advancement with the Wheat Board, and I would say they're all going very well.

    Okay.

    Chair, I think I'll stay there; otherwise, I'll be another five minutes.

    You're out of time anyway.

    Ms. Raynault, five minutes.

    Thank you, Mr. Chair.

    Right now, business risk management programs or BRM represent around 53% of the total departmental budget. The 2012-2013 fiscal year is the final year for programs under the Growing Forward policy framework. Next year, the estimates will be for the new Growing Forward 2 policy framework.

    With Growing Forward 2, can we expect to see a shift in spending from BRM programs to programs that will not be BRM-related?

    You are right. We are discussing with the provinces and negotiating another policy framework, including BRM programs. However, we cannot forecast the sums that will be earmarked for such and such an area under the policy framework.

    As the minister said, programs are demand-driven. BRM programs will be able to meet the demand of sectors during the next year.

    Still on the topic of main estimates 2011-2012, cuts of more than $216 million were applied to the whole portfolio. Could you tell me what portion of that amount comes from cuts in departmental and agency resources as opposed to cuts from scrapping programs and a decrease in the estimates for BRM programs?

    Mr. Chair, I would like to answer that question.

    Direct cuts are at around $3.8 million and they are related to the latest strategic review program. As the minister explained, reductions have to do with a type of forecast. They are around $47 million and affect BRM programs. Given the link to demand, we will come back to that, as required, for the supplementary estimates (A), (B) and (C).

    There is a total of about $100 million. In terms of the main component, which is the administration of BRM programs, we are talking about $58.4 million or so. The department is in the process of getting the authorization required to set that up. In the next estimates, there will be an amount for that.

    One of the programs that ended this year is the slaughter improvement program. There is also the community development fund for rural communities in tobacco-producing regions. That refers back to the question you asked the minister just now about rural programs. That is the program that ended this year.

    Thank you.

    You have a little less than two minutes left.

    Once again, on the main estimates 2011-2012, operating expenditures for BRM programs went down by about 63%.

    Could you tell us more about how the department was able to make those cuts?

    Like I said, we are in the process of obtaining authorization for that.

    My colleague might be able to tell you how we are improving the delivery of programs that are not really directly related to the financial system. We will come back to that in the supplementary estimates.

    As Pierre mentioned, this is not a reduction per se, given that we are trying to get authorization right now. Meanwhile, we are trying to improve the administration of those programs. On a number of occasions, some of our clients mentioned improvements that could be made. We are working with our colleagues in the provinces that are delivering those programs. In some cases, the federal government is responsible for that and, in other cases, it is the provinces. We are really working on improving the administrative component and we are always trying to reduce costs. That is not what the numbers show, but we continue working in that direction.

     You have about 30 seconds, if you want it.

    Thank you for being here.

    With that, we'll move to Mr. Lemieux. You have the last five minutes.

    Thanks.

    Let me just say thank you again for being here.

    I'd like to talk a little bit about food safety. As you know, food safety is very important. As I go through the mains, I see that there are some reductions in food safety. A natural knee-jerk reaction is that cuts to food safety are very bad. I think that there are other explanations. For example, there's a line item called “Internal Services”. I'm seeing a reduction of close to $14 million. It's $13,905,000. I'm assuming that internal services would capture things like hospitality, perhaps photocopying, and travel, which are things that support the work of CFIA in a more general sense but aren't the core work of CFIA.

    I'm wondering if you can comment on those types of savings. If these are administrative savings, I'd say that those are good savings. You're reducing the overhead in the food safety system, and that's a good thing. That reduction or those savings should not be misunderstood.

    I'm wondering if you could comment on that.

    Thank you.

    Of the nearly $14 million, about $11 million is related to Shared Services Canada, which was established in August last year. That represents a resource transfer to that agency. In that sense, we still receive the services. It's part of the government's movement to rationalize that whole area of government and to reduce costs.

    We maintain very stringent oversight of the other overhead activities. We have driven down hospitality by 13% and travel by 20% this year. We try to squeeze as much as we can from our overhead.

    That's good. As I said, I think that's commendable.

    A first reaction when you see a reduction in spending by CFIA is that it's somehow bad. Actually, these are good cost savings. They are good initiatives.

    I'd also like to talk a little bit about food inspectors. We had this conversation in one of our committee meetings. We were studying Growing Forward 2. We had CFIA here, and then we had Bob Kingston here. In particular, in the discussions with Bob Kingston, I was explaining that there are sometimes areas where perhaps fewer food inspectors are needed on the federal side of things, because we are transferring responsibility to the provinces, which is where they rightly belonged in the first place, but for some reason we have been doing it.

    I'm thinking of inspections of some of the provincial slaughterhouses in some of our western provinces. I believe that we're having a look at that and saying that it is actually a provincial responsibility. We're transferring that responsibility back to the provinces, which is where it belonged in the first place. Of course you won't need federal inspectors to continue inspecting provincial slaughterhouses, so you might see a reduction, perhaps, in the number of inspectors. That's not a bad thing. That's simply a transfer of responsibility back to the provinces, where it should have resided in the first place.

     I'm wondering if you can comment on some of those changes that might be captured in the estimates.

    Thank you for that question.

    We have for many years delivered inspection activities in three of the ten provinces: British Columbia, Saskatchewan, and Manitoba. In delivering those services, under an arrangement with those provinces—all provinces in Canada have their own inspection regimes—we have been working with them to deliver against the standards set out in those individual provinces. Those are the only three provinces where we provide that service. The other provinces, in addition to setting their own food safety regimes, deliver the inspections within their provinces.

    Consistent with your earlier question, we are working very hard at the agency to bring down administrative costs and to ensure that we are focusing on our areas of responsibility. With that in mind, we are working with those three provinces to transfer responsibility for delivering provincial meat inspection systems back to those provinces.

    A number of CFIA employees are involved in that. We have 68 federal meat inspectors involved in that transition, and that transition will take place over the next 18 months or so.

     Right. Just to summarize, what we would be seeing, then, is a savings at the federal level, but there's no change in food safety because the responsibility has simply been transferred to provincial inspectors, who are now conducting provincial inspections on provincial facilities.

    That's absolutely right. The safety systems themselves are not changing; it is a question of who is doing the delivery.

    Very good. Thank you.

    Thank you, Chair.

    I'd like to thank the witnesses for being with us here today. We appreciate it.

    I'd just remind the members that we have some motions here to deal with.

    Shall votes 1, 5, and 10 under Agriculture and Agri-Food, vote 15 under the Canadian Dairy Commission, votes 20 and 25 under the Canadian Food Inspection Agency, and vote 30 under the Canadian Grain Commission carry?

    (Votes 1, 5, 10, 15, 20, 25, and 30 agreed to)

    The Chair: Shall the chair report votes 1, 5, 10, 15, 20, 25 and 30 under Agriculture and Agri-Food to the House?

    Some hon. members: Agreed.

    The Chair: That is carried, and I will do my best to do that tomorrow morning shortly after 10 o'clock.

    Thank you very much.

    The meeting is adjourned.