:
Good morning, everyone.
This morning, pursuant to Standing Order 108(2), we are studying supplementary estimates (B) 2016-17: votes 1b, 5b, and 10b under the Department of Agriculture and Agri-Food.
We have with us today the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food.
Welcome, Minister MacAulay.
We also have as a witness for the Canadian Food Inspection Agency, Mr. Harpreet Kochhar. He is the chief veterinary officer for Canada, and associate vice-president of the operations branch
Welcome, Mr. Kochhar.
With the Department of Agriculture and Agri-Food, we have Mr. Greg Meredith, assistant deputy minister of agriculture, strategic policy branch.
Welcome, Mr. Meredith.
We have Monsieur Pierre Corriveau, assistant deputy minister of the corporate management branch.
[Translation]
Mr. Corriveau, welcome to the committee.
[English]
We also have Mr. Rosser Lloyd, director general, business risk management programs directorate, programs branch.
Welcome here today.
Minister MacAulay, we will leave it to you to start. You have the floor.
:
Thank you very much, Mr. Chair. I'm pleased to be back.
Bonjour tout le monde.
I want to take this opportunity to thank the committee for its outstanding work to support the agricultural sector. I know you've been working hard recently on Canada's next agricultural policy framework, and I've been hearing from many agricultural groups and Canadians. I want to congratulate you for your dedication to this important topic for our agricultural sector, and I look forward to reading your report when it's finished.
I also appreciate your concern on the bovine TB situation in Alberta and Saskatchewan. It's a very difficult situation for our producers. As the investigation proceeds, we are doing everything we can to minimize disruptions to producer businesses while ensuring the protection of human and animal health.
We are exploring all options to producers whose farms are under quarantine. We are working hard with Alberta to implement an AgriRecovery initiative as quickly as possible to cover extra costs faced by producers experiencing this income decline. This would help provide financial assistance for extraordinary costs related to feed and water infrastructure, feed for the animals, transportation, as well as interest costs on loans due to the circumstances. Producers can also access immediate help to cover the costs they are facing under the advance payments program.
I have instructed my department and the CFIA to ensure that all those affected have the latest information as it becomes available. We have approved having a feedlot set up for quarantined calves and are working with the industry on this. Once they identify a suitable location, we can begin the work quickly.
I want to assure the committee and all those affected by this terrible situation that we will spare no efforts in helping get our world-class cattle producers back on their feet again. Being a farmer, I understand the difficulty of this situation and the pressures these ranchers are facing.
Moving on to today's topic of the supplementary estimates, our government is pleased to work with you to advance Canada's agriculture and agrifood industry. Our commitment to the sector is shown in the supplementary estimates you have before you. The estimates have increased by over $23 million, to a total of $2.34 billion.
This will support joint initiatives under Growing Forward 2 with the provinces and territories. These are targeted at competitiveness, market development, innovation, adaptability, and industry capacity; the agricultural youth green jobs initiative; and investments under the AgriMarketing program to support our free trade agreements and negotiations, and to work with industry to open doors in global markets.
Today I'm also pleased to update the committee on our government's work for the sector since our last meeting, specifically our work on three important priorities—trade, innovation, and the next policy framework.
As you know, trade is vital to the success of the sector. Canada exports about half of the value of its entire agricultural food production. Canada is a top-five agricultural food exporter, with exports hitting new records every year, so it was tremendous news when the Prime Minister and the president of the EU signed CETA.
CETA will eliminate tariffs on virtually all Canadian agrifood exports to one of the world's largest markets for food. CETA could boost Canada's agriculture and food exports to the European Union by $1.5 billion. That's good for our farm businesses, good for jobs, and good for economic growth across the country. Our government has introduced legislation to implement this landmark agreement under Bill . At the same time, we're supporting our supply management by helping Canada's dairy industry adjust to increased access to European cheeses under CETA. We have consulted closely with the sector on the best way forward.
Three weeks ago, we announced a federal investment of $350 million to help dairy producers and processors adapt to CETA through investments in new equipment and technologies. Our goal is to help Canada's dairy sector grow and thrive so that it can take advantage of new market opportunities and address domestic and international pressures. We are working with the Canadian dairy sector to make it more competitive and to make sure that Canada's supply management remains strong for generations.
In the coming weeks, we will consult with the dairy sector to seek input on these programs. Both programs will be in place when CETA comes into force. We have also moved to support supply management initiatives such as the duties relief program and spent fowl.
Canada's Border Services Agency has sanctioned five users under the duties relief program who were improperly selling supply management commodities in the Canadian market without reporting these sales and without paying the required duties. We will sit down with industry to look at potential changes to the duties relief program and the import for re-export program. We will look at specific options regarding certification requirements for imports of spent fowl while ensuring that any such requirement would be fully consistent with Canada's international trade obligations. At the same time, officials are addressing the feasibility of a DNA test to screen imports of spent fowl at the border.
Mr. Chair, this is another example of our government's support for the supply management program. Along with Europe, another key market for Canadian farmers and food processors is China. I am just back from a major trade mission to China. We showcased Canada's world-class food, beverages, and seafood— from blueberries to beef, canola, lobster, and maple syrup—with a focus on the rapidly growing e-commerce market.
I was pleased to host events and attend trade shows to promote our products. Industry representatives have reported that these events have led to some $37 million in on-site sales and $230 million in anticipated sales over the next year.
Canada is China's second-largest customer for agriculture and agrifood with a middle class growing by the population of Canada every year.
We have set a goal of doubling the trade between the two countries by 2025. We have also agreed to expand access to Canadian beef to China as well as to continue canola exports, which average $2 billion a year.
Colleagues, when we talk trade, we must talk transportation, as they go together. You can't have one without the other. That is why our government would introduce legislation to strengthen Canada's rail transportation system, address key industry concerns such as reciprocal penalties, better define adequate and suitable service in the Canada Transportation Act, and improve access and timelines for the Canadian Transportation Agency decisions. In early 2017 we will also address the future of extended interswitching limits and the maximum revenue entitlement. Farmers have certainly indicated their appreciation for the steps we are taking. Our government will continue our work to improve the grain transportation system in this country.
Innovation is also critical to ensuring the sector can continue to take advantage of global market opportunities and keep the industry on the cutting edge. As you know, innovation is very important to our government and to me. Research and development lies at the heart of Canada's global agricultural success. Our ongoing private and public sector investments in research will be critical to Canada's ability to help feed the world and keep Canadian agriculture on the cutting edge.
For example, last month in Vineland, Ontario, I announced a federal investment of up to $920,000. This initiative will help Vineland Research and Innovation Centre develop tomato and apple varieties that are resistant to disease. That will help both the environment and the farmer's bottom line while boosting productivity for domestic and export sales.
We continue to strengthen the Canadian agricultural sector through key investments in discovery science and innovation. Our government is also investing in programs to help farmers take action on the environment, including a $27-million investment in the agricultural greenhouse gases program.
Mr. Chair, your committee is continuing its work on the next agricultural framework. Promising opportunities lie ahead for the Canadian agriculture and food industry.
A rising population and rising incomes will continue to drive demand for Canada's world-class food. We continue to hold extensive consultations with the industry, provinces, and territories. I know you are doing so as well. We certainly look forward to the result and looking at your study.
I look forward to working with you and all stakeholders to help Canadian farmers and food processors continue to keep Canadian agriculture strong and growing.
Mr. Chair, I thank you very much. Merci.
:
Thank you very much, Alaina. I appreciate your question. Being a dairy farmer before I came here, it's certainly important to me.
I'm very pleased that the Government of Canada and I had the privilege to announce $350 million. This was done after consultation with farmers right across the country. What we did over the last number of months was to meet with agricultural groups and dairy processors from right across the country. With these consultations, we came up with this package. It's $350 million, and what the industry felt needed to take place in general was innovation and to make sure they were ready when CETA comes into play, and also to modernize the manufacturing sector, the processing sector, and the dairy industry overall. The $250 million over five years to help dairy farmers innovate is, in my view, a great package.
Now, we have to sit down again with the dairy farmers and decide just how this package will be implemented, but I'm sure it will be a great asset. Having been involved in agricultural programs years ago, I understand exactly what an asset these can be for the dairy producer. What it will mean is they'll produce, hopefully, more milk for less money. That's what we have to be able to do.
On the processing side, I have to say that the farm side was interested in the processing side too. They understand how important it is that the processors are able to deal with this issue. The $100 million over four years for the dairy processors was well received. As we know, there will be allocations of cheeses allowed into this country. This will allow our processors to innovate and be able to produce high-quality cheeses themselves. Of course, I have great faith, as I'm sure the whole committee does, in our processing sector, and in general the supply management sector.
Anyhow, what we have to make sure of is that all sides of the supply management sector, specifically in the dairy industry, remain strong, and with this $100 million, it will allow the processors to invest more into their operations and be able to produce different products that will be for sale.
We have to realize, too, that with CETA, the 700 million people in Europe are available. They are customers for us too, overall. I think we have a pretty aggressive processing sector that will probably become more aggressive and, hopefully, more beneficial to the dairy industry. It just means more money for the dairy farmer and more money for the processor, which means a better economy.
I want to thank the minister for being here today and for answering the committee's questions. I'd also like to thank the CFIA official and the others who are joining us today.
Minister, I'd like to discuss the Liberal government's transition and compensation plan for farmers.
You promised to invest $350 million to compensate farmers. That investment is in the form of a fund and the support is conditional. That's a long way from covering the losses of our farmers. They are going to lose huge amounts of money, particularly farmers in Quebec.
Quebec's dairy farmers are asking for $750 million in additional assistance. Earlier today, you said that, further to your consultations, you had determined that $250 million for producers and $100 million for processors over a period of four years were sufficient investments. The industry, particularly in Quebec, is not satisfied with those measures and sees them as nothing more than smoke and mirrors. Producers in my riding are extremely frustrated at the massive losses this agreement is going to cause them in the long run.
Can you tell us why Quebec dairy producers are asking you for $750 million more in assistance?
:
Thank you very much. I appreciate your question, and I'm again not overly surprised.
I think in the first part of your question, you basically answered the question when you indicated that farmers have already invested millions of dollars. I have to say that in my area...not two or three miles, as we say, as the crow flies, there was a barn built that's probably the most modern dairy farm in the world. The fact is that people do believe that their government is going to make sure that supply management remains strong. If farmers in your province have invested millions of dollars, business people normally do not invest unless they have faith in their country, their government, and their system. I can assure you that when you have people investing this kind of money, they certainly have faith in the supply management program. I have dealt with it and worked under it, and I really think it's a great program.
You mentioned, too, who will be eligible and who will not be eligible. We'll be sitting down with farmers to see. Normally programs are not retroactive, but we will be sitting down with farmers across the country, or the farm organizations, to decide. With them, as we have done in order to put this package together, this will be put together the way that most people....
It's pretty near impossible to put a program in place that every last human being will agree is absolutely right and has absolutely enough money. I've been in politics a long time, and I've never heard them say, “No, that's a little bit too much.”
:
Thank you very much for the question. It's truly a good question, and having just come back from China, having been in this business for a while, and having been at a number of trade shows around the world, I know it's vitally important that people understand what we have. It's so important that the world understands what we produce. I truly like your question.
What they need to understand is that it's the regulatory process that we work under. We work on a science-based regulatory system, and in the end the buyer is the one who's in charge and becoming more in charge. They decide even more than government sometimes what will be used, how a product will be produced, and this type of thing.
What we need to do as a country is make sure that the EU in particular, in this instance, understands exactly what we have. The government is important, but it's also important that the consumer understands what we have in Canada, how our crops are produced, what's put in place in order to produce seeds that are better for the environment, and what's put in place in order to make sure that they use less fertilizer.
On the animal side of the issue, consumers should know how they're produced under humane conditions to make sure they're slaughtered properly, to make sure all the regulatory process is followed, and they understand what our regulatory process is.
When they come to see, let's say the piece of beef or fish or whatever it is in the cooler, and they see the Canada brand, what we need to do is to make sure that's the brand they want. They want the Canada brand because we have the best farmers, ranchers, and fishermen in the country, and a lot of changes have taken place in the fishing industry. Not that they weren't before, but a lot of regulatory processes have come in to make sure that it's top-quality product.
What the European Union needs to know is what a quality product they have. What we need to have happen is to have more demand than we have supply. Then we will be doing our job, because the demand for protein worldwide is expanding year by year. When you look at what's taking place in China and in the Asian community around the world, we have more people entering the middle class, and more people want to eat like you do. They want to eat well.
My job as Minister of Agriculture and Agri-Food is to make sure that the European Union understands exactly what we have, and to make sure that they want it. That's part of my job and your job, too, in order to make sure that everybody understands what we have. Then it would be better for our farmers and it would be better for the economy of this country.
Thank you.
:
That's a very important question. It's a big program at $350 million.
No, the department will not decide how it's going to be spent; that will be done in consultation. We're going to sit down with the dairy industry. I hope and expect that with the dairy sector we will find out just how this money should be spent. That's what we want to do. We want to make sure that this is a bottom-up issue; this is not a top-down issue at all. We want to find out what the farmers really feel they need in order to innovate.
I've been in the dairy industry, and just as a small example, I milked cows sitting on a stool. The last milk I shipped went through a bulk system with automatic cleaners and automatic washers and pipelines and all that. There's no end to the innovation and what we do in this world and line to innovate. Either you're on the cutting edge or you're not.
We as a government, and I know everybody at this table as members of Parliament, want to make sure that our agricultural farmers are on the cutting edge, but they will decide, with the other groups across the country and the department and me, how this program will be put in place.
The same thing applies for the processing sector. We want to make sure that the processing sector is on the cutting edge so it can produce these quality cheeses in order to compete. I know you feel that your processing sector is every bit as capable as any other processing sector in the world. They have $100 million of federal funding in order to make sure they are innovative, and I'm sure they will be.
With that, when CETA comes into play, you will find that they will be able to deal with many of the issues, not to mention the 700 million new customers that are available in the European Union. This is a great deal for Canada and I hope and feel that it would be a great deal for the supply-managed sector, particularly the dairy sector. We will end up with a much stronger dairy sector in this country. That's what I wanted to see happen and I'm sure that's what we will see happen.