Good afternoon everyone.
[English]
I'm honoured to be here today and I'm joined by my deputy minister, Andrea Lyon; assistant deputy minister, Pierre Corriveau; and assistant deputy minister, Greg Meredith.
I congratulate you, Mr. Chair, and all the members, for being selected to this committee. While we all come from different backgrounds, our goal is the same, to build a stronger agriculture food industry in Canada.
I am honoured to have been appointed Minister of Agriculture and Agri-Food. It has been a busy few months on the job building relationships throughout the sector and throughout the country, which is so critical. I've been talking to industry and my provincial and territorial counterparts. I have been speaking to our international partners, including the United States, China, Mexico, and the EU. I look forward to continuing discussions with my colleagues, industry, and Canadians to help improve the agriculture industry in Canada.
We are meeting at a time when Canada's agriculture and food sector is in a relatively strong position. Net cash income is expected to hit a new record in 2015 of $15 billion and remain strong for 2016. The farm balance sheet is also strong with a lower ratio of debt compared to assets. Meanwhile, our agriculture and food exports hit a new record of over $60 billion last year, and there are more exciting opportunities for growth to come.
The purpose of our meeting today is to look at the government's financial estimates, as well as to outline the key priorities in my mandate letter. The main estimates outline the department's planned spending for the coming fiscal year. The estimates are a snapshot of the department's budget at a point in time. As members know, the department's budget can change over the fiscal year depending on the changing needs and priorities. These changes are reflected in the supplementary estimates.
Agriculture and Agri-Food Canada 2016-17 main estimates total $2.26 billion. The majority of the department's funding supports programs under Growing Forward 2.
Mr. Chair, I'd like to give the committee a brief overview of how our investments are building a stronger Canadian agriculture and agrifood industry. Growing Forward 2 is a $3-billion investment over five years to drive a Canadian agriculture and food industry that is innovative, competitive, sustainable, and focused on markets. Of this amount $1 billion is earmarked for federal programs. The balance, $2 billion, is cost-shared funding with the provinces and territories on a 60:40 basis. The provinces and territories use these resources to meet the regional needs of their industries.
In addition, this year's main estimates reflect $1.3 billion available for business risk management programs. Our investments under Growing Forward 2 are helping our agriculture and food industry stay on the cutting edge of innovation, marketing, sustainability, and competitiveness.
Turning to my priorities, a central one is supporting science and innovation. Science is the core of Agriculture and Agri-Food Canada. For over 125 years research has helped build a world-class agricultural industry in Canada. I've had the privilege of visiting some of our research centres across the country. It is amazing what our scientists do—helping farmers cut expenses with crops that are resistant to certain diseases and insects, and helping ensure efficient use of inputs such as water and fertilizer, which is good for the environment and for the producer's bottom line.
Through investments in science, our government will help the sector stay on the cutting edge. Some examples of recent Growing Forward 2 investments in science include almost $8 million with Saskatchewan for livestock and forage research, and $3.6 million to help cattle producers harness the power of genetics and open up new markets. The main estimates also outline capital investments of over $30 million to boost capacity at our research centres, as well as other improvements to greenhouses and laboratories.
Innovation is critical to delivering the government's strong environmental mandate. My mandate includes the environment, helping the sector adjust to the increasing number of issues associated with climate change and addressing water and soil conservation issues.
Farmers are already making great progress. We all know Canadian farmers are incredible stewards of the land. A recent study shows that the Canadian cattle industry has reduced its environmental footprint over the past three decades while increasing production by one-third.
Growing Forward 2 is also supporting environmental actions on our farms. For instance, we recently joined with Alberta in announcing funding under Growing Forward 2 to support solar power on farms. These kinds of investments will boost Canada's reputation for environmental stewardship at home and abroad.
Along with innovation and the environment, another key priority is trade. The government supports trade because it creates good jobs for Canadians and contributes to economic growth. We want to be sure our farmers and processors reap the benefits of the growing world population.
In these estimates you will see resources going to help our farmers and food processors grow their markets through investments under agri-marketing programs. In the past few months we have worked hard to open markets for our beef farmers in South Korea, our beef and pork producers in Ukraine, our pork producers in India, our livestock genetics in Georgia, and our beef genetics through our investment of $2.6 million in the Canadian Beef Breeds Council.
Our farmers can compete with the best, but they need a level playing field to do so.
We took a big step in this direction in December when the United States repealed country-of-origin labelling for beef and pork. I am pleased that the USDA has now officially repealed the legislation. This is positive news for our pork and beef industries.
The government also strongly supports supply management. Having worked both in the dairy and potato business, I have a good appreciation of how important supply management and trade are to our farm businesses and to our economy. We will continue to advance all Canadian agricultural interests as we consider trade matters, which include the Trans-Pacific Partnership. The government has committed to hearing from Canadians on TPP before determining whether the Canada will ratify the agreement, and we have committed to a comprehensive debate on the TPP in the House of Commons.
I have already been discussing the TPP with farm organizations to get their view. Our message is clear, the Government of Canada fully supports supply management. We understand the importance of compensation to the supply-managed sector should the TPP enter into force. We will continue to engage with farmers on this important issue.
Just over half the money budgeted under the main estimates is available for our business risk management programs. Farmers look at government to help them manage risk and recover from the impact of disasters and disease. For example, in January we announced investments to help the tree fruit growers and maple syrup producers in Nova Scotia to recover from weather-related damages.
The estimates include an increase of $5 million for agri-risk initiatives. The initiatives are focused on helping to develop new and innovative risk management tools for Canadian farmers.
We are also moving forward on improvements to the advance payments program. These changes were requested by farmers and are now in force. They will make the program more user friendly and flexible while covering most commodities.
The has asked me to engage with farmers and provincial governments to ensure our business risk management programs are meeting their needs.
Before I close, Mr. Chair, I will give the committee a brief look ahead.
In the coming months I'll be working with the provinces and territories to position the sector for even greater success through the next agricultural framework. We've been listening to farmers, processors, and Canadians. More and more customers around the world are looking for the great products coming from Canada's farmers and food processors. The new framework will help ensure that the industry can meet and benefit from the growing demand. For the longer term, we're also committed to beginning discussions with governments and industry on the direction of food policy in Canada.
Mr. Chair, I hope that this has given you a sense of my priorities as minister. To sum up, I want to listen to, work with, and invest in our agricultural industry. Thank you for the opportunity to visit you, and I'm pleased to be here.
:
Thank you very much, Mr. Gourde, and I appreciate your question. Basically, I guess I can say that I inherited the issue.
Over the last couple of years, there has been an increase in diafiltered milk in this country, and we're certainly aware of the concerns regarding the use of diafiltered milk in the making of cheese. We're looking at an approach that ensures that the cheese compositional standards are clear for everyone. Under the standards, diafiltered milk was never meant to be allowed to be used as milk.
Canada recognizes the importance of effective import controls and administers its imports in accordance with the international trade obligations. Milk protein substances, including diafiltered milk, can be imported into Canada under NAFTA, as long as they contain 85% or more milk protein on a dry matter basis.
The industry has been engaged in negotiations, and there are differences of opinion on the way forward between some producers and processors, and between some dairy farmers in different provinces. We are working with the industry, and intend on having further discussions on this issue to ensure that the standards are clear.
Quite honestly, Mr. Gourde, I understand the problem. As you are aware, there are discussions taking place with the processors and the industry in different provinces. What I am trying to do, and have tried to do since becoming minister, is to make sure that all of the sectors understand the regulations and what standards are required. That is, in fact, what I have done to this date.
:
I understand and I've heard your concerns. Of course, as you're no doubt fully aware, my officials are doing their work on an ongoing basis on this plan in order to make sure that we can, as a country, accomplish what we have achieved in the trade deal, and to make sure that the regulations are well understood.
Deputy, you could add to that, but that's basically what we do when there are difficulties. There always are, no matter what commodity you're talking about. I think you're fully aware of this, too. Whether it's dairy, grains, oilseeds, or whatever, there are always difficulties with regulations.
Sometimes there's agreement on regulations, but as you're fully aware, then something else enters the deal and causes some trade problems. I think it's a problem continually with the countries that are involved in trade deals.
Yes, we want to make sure that we work to make sure they're harmonized as well as possible. My officials have been working on this.
Perhaps you can add to that, Deputy.
[English]
This is an issue that I see in my province too. As you know, there was a great problem with the temporary foreign workers over the last couple of years. It's not my ministry, of course, as you know. It's under . She has indicated they're going to conduct a review.
It's my understanding that's what we did for the fish processors. It's just something that the previous government had done the year before, and we had just arrived on the scene and this happened, which I believe was a good thing to do.
The whole program is under review. We have to make sure that we hear from sectors across the country, which I hear from, like the beef processors outside of Calgary and the processors in Quebec. It's vitally important that we hear from the sectors across the country and make sure that this program is put back in an appropriate manner.
It's very difficult if you have the product, you have the market for the product, but you can't manufacture it in your own area. I understand that fully. But I think you also understand the problem that was faced, and what we want to make sure is that this evaluation of the program is done properly and that the people who are concerned, wherever it is in the country.... It's awfully important that you contact me, if you wish, or any member of the government or any member of the House of Commons, because you have positions right here and in other places to indicate your support for these types of—
Yes, you were going to say something and I don't want to stop you.
You're competing against everybody, and everybody is striving for the cutting edge and that's where you have to be. When I arrived in this job I was shown a number of things, including the growth of the middle class in the Asian community. They want to eat as well as you do, and they want to eat the quality food that you do. What it showed me was what an opportunity we had in this country to produce whatever, as long as we do it right. But you have to stay on the cutting edge, as you indicated, and that's what I am attempting to do, to make sure that we do that.
When you go across the country and look at our science centres and what they're doing, like producing the new seed that we talked about in 2014, and the big growth in production on the prairies, that was because of scientific work, too, of course. The seeds continue, and they continue and continue, to produce more with less. No matter what sector you're in...and with the beef producers I think it's 30% more production and a 15% reduction in the footprint. That's a big issue now around the world when you're trying to sell products.
My job and our job as government wherever we are is to make sure, to the best of our ability and with the funds we have, that the scientists are able to stay on the cutting edge. There are some things that are not that expensive, whether it was 4-H or whatever it was, and they cut down a different type of barley in the fall—
Ms. Andrea Lyon: Swathing.
Hon. Lawrence MacAulay: Swathing, and I forget the proper name, but it's swathing. That itself saved one dollar and some cents per head per day.
It's so important that you're able to have the people who know what they're doing work on this. In the laboratories they're able to develop resistant seeds that are resistant to different diseases, different insects. That makes us more competitive worldwide. We have to produce the best product the cheapest way we know how to make sure it's done right, and that's what our job here is as the government and that's what I intend to try to do.
I fully understand your concern. We have it in our area too. There was a provision made for the fish processors. That had been done before.
As you know, we have indicated a commitment to review this program, and we will. As I indicated, is in charge of this. She will put a review in place, and it will be a place to make sure that what you feel, what your apple producers feel, what your beef processors feel, and what whoever works in this country feels...it's vitally important.
There was a problem with this program. It's a good program, in my view, whether I should be saying that or not, but it has to be run properly. What we have to do is make sure that gets the information where the work.... As I said before, if we have apple growers or processors of some kind in your riding—or in anybody else's riding—and we do not have the workers to do the processing, and if you have the apples or the potatoes or whatever it is but you don't have the manpower to run the plants, it's vitally important that this message is steered directly to this review. We want to make sure that it's put together properly. We certainly don't want to hurt the economy. If you feel that it would help the economy to have these workers in place, it's very important that you do that.
I think it's very important for everybody to do that, because no matter what minister or what government it is, if you have feedback from entrepreneurs or stakeholders across the country and you make different changes, then you have something to indicate why you've made these changes. That's in fact what she needs and what the government needs in order to put this back in place. I cannot tell you what it's going to be. I come from an area where there were quite a few temporary foreign workers used, but I suppose I have to be a little careful in expressing my full view on it. It's an open discussion, and it's important that you and your stakeholders do that.
Thank you, Minister, for being here. I do appreciate that you've taken the time to come today. I know that you're very busy.
Minister, farmers expect that you will be their voice at the cabinet table. We've heard that again and again. Many farmers and farm organizations have already had or attempted to have meetings with you and your office in the hopes that you will defend their interests at the cabinet table.
I think it is distressing when we hear from you that if people have concerns with regard to certain issues that affect the farm, they shouldn't talk to you, but to some other minister. Today I asked you a question in the House of Commons with regard to labour issues on the farm, specifically as it relates to the slaughter facilities across the country, and you didn't take the question. I understand that it may not have been your decision, but did take the question and basically said not to worry about it because she made a speech in Winnipeg last week. Everybody who listened to that speech was assured that she wasn't clear about what the issues were, and she certainly didn't have solutions.
Minister, if you're going to be the defender of farm families and the defender of the industry at the cabinet table, what are you saying as it relates to TFWs and the necessity for labour in slaughter facilities across this country and on the farm? What are you saying at the cabinet table? The rumour is floating around that the has more pull with your seatmate than you do, and he got his exemption last week. You didn't get yours.
Just so that we can put this rumour to rest and assure farms and farm families that you have their backs, what have you said?
Mr. Minister, it's great having you here. It's wonderful to see you and all your staff again. I think we're all trying to work together to solve issues around agriculture and agrifood for Canada and our economy and for the people who are feeding families here and around the world.
I have a question from both sides of the farm gate, if you will, where we're looking at our trade. We're looking at our efficiencies within Canada and, on the producer side, at using science in trying to increase production with less inputs. You've covered that well in your introductory remarks.
There are also cases of around 40% of food being wasted in the supply chain and at consumers' tables. How can we use big data on that side of the farm gate in terms of science and analyzing what's going on in order to be as efficient as we can be on that side of the gate, and then on the processor side of the gate as well, in saying that it's a business that we're trying to run here?
As a country, we're trying to have our businesses be efficient, cost-controlled, and competitive, and we need to bring that together with the provinces, which, as you know, is a challenge sometimes, but I think you've done well. You were in Guelph last week and you met with the provincial and federal organizations, producers, and farm associations. We even had some farmers there who were talking about their challenges.
Maybe you could expand on how you see your department working on these market opportunities in using the scientific information that we have available on both sides of the gate, and then trying to pull it together with the provinces and the different stakeholders. That's not an easy question for six minutes, but could you highlight what you're seeing so far from your talks?
:
Thank you for the question.
I'll answer briefly so as to avoid having my colleagues attempt to speak on behalf of the agency, which I know puts them in an awkward position.
As it relates to the issue of the resource profile in the agency, of course the commitment on the part of the government is a matter of policy, and I won't comment with respect to that matter. However, as it relates to the issue of current resources for the agency, again I'll note, as I did earlier with the information we provided to this committee, that since the listeriosis event in 2008 the agency's front-line inspection resources have been significantly increased through a very strong commitment on the agency's part.
In terms of front-line inspection, I certainly am very aware of the polling you refer to. As an agency, we will pay very close attention to the views of our staff, but at the same time, we'll also work with the resources that were allocated. We bring a very strong focus in the agency on prioritizing our actions in relation to risk and to focusing on delivering front-line inspection in relation to those risks.
The actions on the part of the agency in delivering for Canadians have been recognized not just domestically but in the international context. The Conference Board of Canada's review of OECD member countries' food safety systems has ranked Canada number one, along with the Irish food safety system. We're proud of that outcome.
We don't rest on those laurels. We continue to focus on continuous improvement. We will take very seriously any of the views of our own staff in terms of where opportunities are for continuous improvement, but I can assure you that our commitment to food safety outcomes for Canadians will continue to be paramount.
:
I think in the context of the estimates, that's the method by which we are appropriated and receive the funding that supports all of the programs that we deliver. In the context of the current agricultural policy framework, we of course have three major programs that we deliver federally, one of them being the agri-innovation program, one of them being the agri-marketing program, and the third one being the agri-competitiveness program. In addition to that we have a few programs that fall outside our agricultural policy framework.
In terms of the agri-innovation program in particular, it is the program that supports the funding of research and development, and that funding is often provided.... We support, for example, science clusters. We have 14 of those science clusters, and that funding can flow over a five-year period. They're quite large projects that support research and development that ultimately, at the end of the day, will be of benefit to producers. For example, we have a beef cluster, and the intention is that over time that research will actually translate and migrate at some point on farm and help producers who produce that particular commodity, and that would be true of all of our research clusters.
In addition, we support a variety of research and development projects that are often shorter in duration and much more focused. Again, the intention is really to have the results of those research projects transition over time and play out at a farm level. Not every one of them happens immediately. Sometimes it takes a period of time for the research to actually translate to a point where it can be commercialized and applied on farm, and of course, all of our provinces and territories fund innovation programming as well, through the cost-shared strategic initiatives funding that's provided to them. Again, that would be programming that would support projects, at a local and regional level, that would be of benefit to the sector in all parts of the country.
It's a comprehensive framework that provides support to individual projects that ultimately are supporting our producers.
I have a quick question to ask, but before that, I would like to come back to Francis' comment and Mr. Poissant's answer.
Mr. Poissant, congratulations on being appointed parliamentary secretary to the Minister of Agriculture and Agri-Food. It's true that the code of ethics contains special provisions because, following your appointment, you become a public office holder. So there must be special and extraordinary provisions owing to the fact that you are an elected official.
Francis talked about the chief of staff, who is also a public office holder, but is not elected.
So I am asking Mr. Drouin to check whether the standards are the same. For our part, we don't believe that they are necessarily the same. A chief of staff is someone a cabinet decides to hire, an employee. They are not an elected official. There are extraordinary provisions because an elected official with agricultural holdings cannot be discriminated against.
So I ask that you look into that and, if you want, send us the information later, as I want to use my time to ask another question that really affects me.
This is for the department representatives.
Two or three weeks ago, I talked about an important agricultural niche market we are currently hearing a lot about—maple syrup production. The Gagné report indicates that there is a problem in Quebec. The Americans are increasing their production significantly. According to the Gagné report, the Americans are being subsidized to increase their number of maple tree taps. We are not doing that because we are complying with free trade laws.
There are a number of ways to subsidize maple syrup producers. It can be done directly or indirectly. The government can fund the roads leading to the sugar bush or a power line. It can fund a number of things without providing direct subsidies.
I asked the department representatives to check whether it was true that the Farm Bill allowed for direct or indirect subsidies for the production of maple syrup in the United States and, if so, if that was in compliance with NAFTA rules.
:
I want to thank the member for the question.
I was not aware of that request, but we could indeed look further into the issue and follow up, if the committee so wishes.
The U.S. Farm Bill is a piece of legislation that has a very broad scope and contains many elements. That is why we constantly have to look at many of the elements contained in the Farm Bill to ensure not only that they do not hinder the economic interests of the Canadian agriculture and agri-food sector, but also that they comply with the rules, as you pointed out.
I can't tell you right now whether the support for the U.S. maple syrup industry is causing compliance issues with NAFTA rules or World Trade Organization rules. That's something we can look into.
Generally speaking, since maple products are a Canadian symbol, we support that sector in various ways, whether we are talking about developing international markets, developing innovative farm practices or other initiatives. We are trying to do as much as we can to help the sector improve.
Let's hope that the Americans are also complying with international rules.
Gentlemen, lady, thank you for appearing, most of you, again, in front of the committee.
I'd like to follow up on Mr. Breton's question and make it more specific to British Columbia and metro Vancouver.
There are a variety of very good programs, the trinity of agri programs you talked about for innovation, marketing, and competition. There's also the shared program with the province of B.C. As you know, in British Columbia the big movement about 10 or 15 years ago, which I think is now expanding, was based on a regional food security agenda. It started out as a small-scale farmer's market but is now very lucrative and includes the whole of the Pacific northwest. We've reached a point of critical mass where we can start exporting beyond simply California, Washington, and Oregon.
How specifically can we work within these clusters that you have? I asked the minister about a program at Kwantlen. If I wanted to create a research centre dealing with mixed farming that would look at how we can expand and make more commercially viable our security policy for British Columbia and that whole area, how would I go about doing that? Maybe I'm also following up on Mr. Longfield's question.
How would I go about doing that?