I have with me here today my deputy minister, Suzanne Vinet; George Da Pont, president of the Canadian Food Inspection Agency; Paul Mayers, associate vice-president of programs with the CFIA; and Greg Meredith, assistant deputy minister of strategic policy with the Department of Agriculture.
It's always good to be back at this table. I'd like to thank you for your continued hard work for the agricultural sector and the processing sector, and in particular for your thorough and timely deliberation on Bill , the Safe Food for Canadians Act, which received royal assent last Thursday, and of course your recent comprehensive reports on the modernization of the Canada Grain Act on Growing Forward 2.
As you know, we continue to keep a busy agenda heading into the new year as we work to grow this core economic sector that drives jobs and growth in Canada.
Agriculture always has its challenges, but looking towards 2013 we are seeing some very positive indicators across the sectors.
While pork producers are coming off a difficult period, commodity prices overall are strong and are expected to remain well above historic levels for the next decade.
Exports are over 6% ahead of the pace from last year alone. That includes wheat exports, which are also up, as western grain farmers enjoy the freedom to market their wheat and barley in the best way that will drive their businesses forward. This also still includes the option of pooling their crop with the CWB, which is moving through the first year of its transition into the open market.
It's great to see that without the regulatory burden of the old single desk system, overall acreage in traditional wheat board grains is up, producer car usage remains strong, and farmers are moving their product in an efficient manner, as they are no longer held hostage by high demurrage and storage costs.
The Port of Thunder Bay has seen a 15% increase in wheat shipments compared to last year. The Port of Churchill has greatly diversified, attracting the business of more prairie grain companies. That is good news. Even grain elevators in Halifax say they are seeing an increase in tonnage, thanks to marketing freedom .
Suffice it to say, Mr. Chairman, that the doom and gloom scenario painted by those who opposed marketing freedom has not materialized. In fact, as I have just explained, we are seeing quite the opposite.
Another positive indicator in the farm economy is the farm balance sheet, with net worth up 5% this year over last, and a 30% increase over the past five years. Just this week we've learned that the realized net income for Canadian farmers in 2011 amounted to $5.7 billion. That's an increase of more than 50% over the year before, 2010, Mr. Chair.
Our shared challenge is to help keep this positive momentum going and to work with industry to stay ahead of emerging competition and take full advantage of growing opportunities at home and abroad.
Our government is helping to do this by continuing to drive market development with a strong trade agenda, by modernizing the legislative tools the sector needs to remain competitive, by reforming the regulatory framework to strengthen the sector's capacity to take advantage of market-based opportunities, and by shifting our focus to more transformative, proactive investments under Growing Forward 2.
Farmers continue to ask us to move beyond the status quo, and ministers certainly took that to heart with the new Growing Forward 2 agreement reached in Whitehorse early in September of this year.
By shifting the focus from reactive to more proactive investments in innovation, competitiveness, and market development, the new Growing Forward 2 agreement will give producers the tools they need to compete at home and abroad. It will also give them the tools they need to feed a growing global population that is demanding traditional and new food products as well as sustainable agricultural production practices.
Starting this coming April, Growing Forward 2 will invest more than $3 billion over the next five years, which represents an increase of 50% in cost-shared investments for strategic initiatives including innovation, competitiveness, and market development.
Governments will continue to offer generous ongoing support for a complete and effective suite of business risk management programs to ensure that farmers across Canada are protected against severe market volatility and unforeseen disasters.
Innovation continues to be a critical driver of market competitiveness, with payback of up to $46 for every dollar invested. That's why agricultural ministers from across Canada agreed to focus on industry-led research, building on our successful science clusters that are delivering collaborative solutions across a wide range of sectors. We want to ensure that we're investing in pertinent science, not just focusing on volume of research.
Our government was also pleased to announce the creation of the first of its kind Agri-Innovators' Committee. This dynamic committee is composed of successful innovators with a broad range of expertise and skills, representing most of the agricultural sectors from across Canada. I'm pleased to say it's holding its first meeting later today in Toronto. It will be an additional forum to help advise governments on what investments will generate the results and those needed and required by Canadian producers and processors to succeed in a global economy.
By focusing on research and innovation, we're making sure that taxpayers' dollars are producing real results that are most relevant to producers. A renewed focus on innovation will set us apart from the competition in world markets as well. Last year, Canada's agriculture, agrifood, and seafood exports reached a new record of more than $44 billion. Our farmers earn a major portion of their income from exports—up to 85% for some commodities, such as canola.
Of course, more exports mean more jobs for Canadians, more money for farmers, and stable, long-term growth for the Canadian economy. As a government we continue to open up new avenues for income across the entire sector by advancing free trade and investment agreements and working to overcome trade-restrictive measures and obstacles while promoting science-based approaches to trade.
Leading trade missions with industry to our key and emerging agrifood markets around the world is key. Our government has embarked on the most ambitious trade expansion plan in Canadian history. Some of the wins over the past year include restoring beef access to South Korea, for a potential market of $30 million by 2015; maintaining access for Canadian canola to China, a market worth on average $1.6 billion; and a successful WTO ruling against country-of-origin labelling in the United States that unfairly discriminated against our livestock producers.
If members would like more examples, I urge them to read the recently released annual market access report, which is up on the department's website. This government will continue to work closely with provinces, territories, and industry to open new export markets while continuing to strengthen and expand existing trade corridors.
Under Growing Forward 2, we're strengthening the Market Access Secretariat so that it can step up its efforts to increase industry engagement and advocacy for science-based international standards. Of course, we're continuing to advance free trade agreements as well. We've completed FTAs with nine countries over the past six years and we have a number of other FTAs in the hopper.
Key among these, of course, are the Canadian-European free trade agreement and the Trans-Pacific Partnership, which would open up a market to us of more than half a billion consumers and a GDP of nearly $18 trillion. A number of our key exporting sectors stand to benefit, including but not limited to the pork industry, which exports two-thirds of its production.
All the while, we continue to have a balanced trade position, which benefits all sectors, including supply management. This approach has served the overall Canadian economy well and will continue to do so into the future.
If our farmers and processors are to capture these new markets, they need a legislative framework that fosters innovation and growth in the agricultural sector while ensuring consumers' food safety is not compromised.
Our government is delivering this framework through a number of key pieces of legislation, including the Safe Food for Canadians Act, which, as I said at our last meeting, strengthens and modernizes our food safety system to make sure that it continues to provide safe food for Canadians, and amendments to the Canada Grain Act that will modernize and streamline our grain system while safeguarding quality and safety and removing excess costs to producers. There's no question that our government continues to ensure that Canada's farmers and food processors have the tools they need to drive new economic growth and compete in a growing global economy.
Of course, the new Growing Forward 2 envelope will include proactive investments in food safety. In fact, the estimates you have before you include more than $26 million for food safety under the current Growing Forward and the initiative for the control of diseases in the hog sector.
The CFIA has an approved budget of $315 million for food safety programs, and we will see additional investments from these supplementary estimates.
As you well know, Mr. Chair, through economic action plan 2012 our government is investing $51.2 million for the CFIA, the Public Health Agency of Canada, and Health Canada to strengthen Canada's food safety system overall. That's on top of $100 million over five years in Budget 2011 to modernize our food safety inspection.
Our record on food safety investment speaks for itself. Since we formed government, the overall budget of the CFIA has gone up by some 20%. We continue to make sure the CFIA has the ability, through our regulatory system, and the capacity, in terms of both budget and staffing, to protect the food of Canadian families.
In conclusion, Mr. Chair, our government will continue to build a strong agricultural industry in Canada by opening and expanding agricultural markets around the world, by giving industry the legislative tools it needs to compete in the 21st century, and by delivering proactive investments to help farmers and food processors meet consumers' demands for safe, innovative, high-quality foods.
Agriculture plays an important role in driving jobs and economic growth in Canada. With the ongoing support of our government, we remain confident that it will continue to do so.
Thank you. I look forward to your questions.
The changes at the CWB actually predicate the need for changes at the CGC, the Canadian Grain Commission. Once the mandatory single-desk requirement of the Canadian Wheat Board was eliminated, we no longer as farmers were held hostage throughout the whole system for the costs incurred to move that product right onto the vessel at port.
We now have commercial agreements. When you as a farmer take your wheat—at $9 plus, which everyone is loving—to an elevator and drop it in the elevator pit at the elevator of your choice, you're graded and paid and you go home. You're no longer held hostage for the storage, demurrage, grade changes, weight changes—all those other things that used to accrue and were hidden in the pooling accounts of the Canadian Wheat Board. You now have your money and you've gone home. Now it's up to the line company, the elevator, the railways, the port authorities, and the shipping authorities to have commercial agreements that move that product through expeditiously. We're seeing that happen.
As I noted in my speech, we're seeing increased volumes at Thunder Bay and Halifax, which have been ignored for years, because shippers are picking the most advantageous route to make their commercial agreements work. We're no longer held hostage by the CWB, which was very prescriptive as to where the grain had to go and how it was handled. Any delays, of course, came out of the pooled accounts, because you were at the bottom of the scale.
With the changes at the CGC, then, we no longer require that inward inspection between the line company, the elevator, and the port, because you're no longer in control of the grain; it's no longer yours, so we can get rid of that mandatory inward inspection and weighing. It can be done now by third parties. If the line companies decide they want to blend to get a different grade, they can do that using a third party, but at the end of the day, you're no longer held hostage.
There's about a $20 million benefit to producers and taxpayers of Canada who used to be charged for that service. It will no longer be required. That's the main change.
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Thank you, Mr. Chair. I have a couple of comments and a question.
I listened intently to Mr. Mayers' explanation. We are talking about a memo that went to the Brooks XL plant. There are two things.
One is—and Mr. Da Pont, you also said this, or it may have been both of you or just one or the other—that this is an explicit instruction to a food safety inspector, whose mandate is to inspect food, that they should do one piece and one piece only, and that is to inspect the Japan stuff and ignore the rest; that's what you're saying this is. Then we'll catch it later—don't worry about it.
Square the circle. You just had the largest beef recall in Canadian history from this plant. What happened to all of your safeguards on the other side of this? If we were even to believe that somehow this didn't impact upon anything else, that somehow this was all well and good, you just suffered, sir, the largest beef recall in this country's history. This memo comes from the same place, and you were still re-issuing it last year.
I find it absolutely dumbfounding that somehow we can't just say, “This should never have happened. We won't let it happen again; we're going to change this. We're going to tell our food inspectors that when they see something wrong with food, no matter where it goes, we're going to fix it”, yet you're trying to explain to me that it's okay to ignore it, because somewhere else we'll catch it.
We didn't catch it, sir, so help me understand how this system, which you say works, did in fact work—because it didn't, quite frankly.
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Growing Forward 2, when it comes to science and research, innovation, and marketing, builds on the very strong successes we had under Growing Forward 1. Growing Forward 1 led to the development of the Market Access Secretariat, which has proven that they punch well above their weight in working on technical details, opening trade corridors, and making sure that science-based decisions are applied. We will enhance that in Growing Forward 2.
That's on the market development side. It builds on the work that the whole government is doing on trade and financial investments with other countries and so on to facilitate agriculture. Every free trade agreement that we have signed as a government has expanded our access for agriculture and has been very positive from that standpoint, to the point that we exported a record number of commodities last year with a record value.
We will continue to build on the science and research side coming out of the science clusters. This was the first time ever that industry was involved in developing what the end result should be. Then we started to target the result that industry needed and required and then put together academia, provincial dollars, federal dollars, and industry itself in order to come forward with a complete envelope to deliver the result.
We're no longer going to base research on the volume of research you can do or how many new varieties of potatoes you can do, but on how many are actually wanted by industry and what the traits are that industry is requiring. It's a much more targeted, focused ability to produce.
Over the five-year period of the next Growing Forward suite, starting next April, there will be some $3 billion. That's a tremendous amount of money. It's $600 million per year. It will help us leverage investments from around the world, too, to develop the science and research in that capacity here in Canada, again delivering the results that farmers are asking for. It's very focused, very targeted, with a good, solid pot of money.
I've been talking to a lot of the industry groups. I attended the GrowCanada forum the other night. They're all excited about this and about the ability to move forward. They recognize that we need a reactive suite of programs on the business risk side, but that the future of agriculture relies more on the proactive side—the competitive advantage that science and research will give to farmers, the innovation that will be driven out of it, the efficiencies that will be driven out of it, and then of course coupling this to markets to make sure that we can sell all that great product.
To start off with your opening comments, you talked about trade and travel, and I do that in conjunction with industry. It's a great one-two punch. The Market Access Secretariat is there as well, to work on some of the technical issues. It's a tremendous feeling to go into some country and start to resolve the issues that have slowed down trade from a non-science basis.
When it comes to the Canadian Wheat Board, we said early on that we would not see farmers held hostage to extraordinary costs when it came to winding down the single desk and bringing up the ability for the new CWB to pool and continue on. We have a government guarantee on the new entity for up to five years on the transactions they do. That gives them some stability in the marketplace.
They also have the ability now to market grains other than wheat, durum, and barley. I know the CWB has moved some canola into export position, which is good news. It gives you another person buying that commodity as well.
The dollars that we allocated on the extraordinary costs were workforce adjustments for people. They had a staff of some 400, and going forward they feel that 100 or so people will probably do the job credibly. There were changes to an antiquated computer system, which they still owed a lot of money on, the rail cars—a whole number of things—and the building itself. I know there were some farmers who said that all the net benefit was being lost. I'm here to tell you that there was no net benefit; everything was leveraged pretty heavily.
The federal government, using taxpayers' money, has levelled that playing field so the CWB has a chance to move forward in the world and continue to market. They have a great Rolodex around the world, and they will make use of that.
When it comes to Churchill, there was a special program in place for a number of years, again using the pool accounts to offer enticements to use the Churchill port. We continued those for another five years so that Churchill has a chance to adjust. I'm here to tell you it was fully subscribed this year by a number of new players on the block, which is good news. They've now taken advantage of the Churchill port to get into certain markets. We won't limit them to the amount of volume they want to move, but there is a limit to the incentive. Churchill continues to be a valuable asset for Canada, and we wanted to maintain that through the incentive.
I will just pick up where I left off. I'm actually focusing these points in a particular area. It's not about how Mr. Allen dresses.
The point, Mr. Chair, is that when the opposition is imprudent and reckless with their comments, it undermines the entire food safety system. In fact, their points do not reflect reality.
I think we had an excellent discussion here when we had the minister. We asked very pertinent and pointed questions about the food safety system. What we heard, and certainly what I heard, was that there is a stringent food safety process in place and that there were many inaccuracies in the article. We spent 20 to 25 minutes on an exchange between various MPs and various parties on these points about food safety and the importance of it in the processing system.
Mr. Chair, I meet with the industry. I know that my colleagues on all sides of this table meet with the industry. They are concerned that these types of comments, if they are reckless and imprudent, undermine the commitment of processors and producers to food safety and to producing top-quality food for Canadians. They undermine their hard work and their commitment, and they're not based on reality. They're based on scoring political hits.
I've been an MP for a while. I understand that the opposition needs to score political hits. I get that, but they have to be careful, Chair, not to undermine the industry, not to undermine the processors, and not to undermine the confidence of Canadians in a robust food safety system. Those are the answers we heard today to multiple questions posed by multiple MPs from multiple parties.
That's the comment I wanted to make, Chair. I think it's an important comment. I make it on my behalf, but I also make it on behalf of producers and food processors I have met and spoken with throughout these last couple of months who have expressed that very same concern to me.
On a question, Chair, I would like to ask our witnesses about the Safe Food for Canadians Act. This is a significant legislative update of our food safety regime. Our food safety regime has been rated world class. There was a report on OECD countries that said that Canada has a superior food safety system. I believe that Canadians have confidence in that system, although it is a system that can always be improved. No one should ever stand still on this file.
We had some good discussion here. We had good witnesses come in front of the committee when we were reviewing the Safe Food for Canadians Act. Now that we have CFIA here, I'm wondering if you can explain to the committee how the Safe Food for Canadians Act will help the CFIA in the work it does and how it interfaces with industry, particularly the food processing industry.