:
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 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.
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.
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.
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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.
:
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.
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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.
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.
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?
:
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?
AGRICULTURE AND AGRI-FOOD
Agriculture and Agri-Food
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Vote 1--Operating expenditures..........$620,125,000
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Vote 5--Capital expenditures..........$26,747,000
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Vote 10--Grants and contributions..........$423,115,000
Canadian Dairy Commission
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Vote 15--Program expenditures...........$3,935,000
Canadian Food Inspection Agency
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Vote 20--Operating expenditures and contributions..........$536,869,000
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Vote 25--Capital expenditures..........$14,583,000
Canadian Grain Commission
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Vote 30--Program expenditures..........$4,830,000
(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.