Agriculture Committee on March 4th, 2008

[Susie Miller]

As I indicated, there are three organizations that have access to this. The Canadian Beef Breeds Council is an organization made up of the various breeds--Simmental, Charolais, etc--and that is for semen, embryos, and live-breeding animals, whereas the Canadian Beef Export Federation will work on beef but also on live animals for slaughter.

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

If there's a bit of time left, I was interested, Ms. Semaan, in comments you made about consultation when you cancelled the farm options, or CAIS, in the second year but with plans to....

It was good to hear that consultation was taken. I think it needs to be noted. The member for Malpeque was very, very critical, both outside this room and in this room, about that program. In fact I remember him calling it nothing but a welfare plan for agriculture. Also, the member for Huron—Bruce made the same comments. I can provide those dates.

I think that maybe those comments were a little stretched on what it was. I know that I heard, and we heard at this committee, from farm leaders that this program wasn't working.

So, again, could you cement that? You did talk to basically members from all sectors when you made the decision or recommendation to phase this program out. Is that a fair statement?

[Nada Semaan]

Actually the consultations were on all programs and all policies that we did. We consulted over 3,000 producers in terms of the “Growing Forward” consultations to see where we were going, and we did hear a lot about options at those. There wasn't a consultation per se about options, but people were providing a lot of feedback at those consultations.

Also, when we were doing targeted ones, especially business risk management, there was a lot of feedback at those as well, so it wasn't the national CAIS committee per se, the national safety nets advisory committee. A number of committees made comments and there were always a lot of letters coming in. We did not go and make consultations just on that program, but on all programs, and we did receive on that one program.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

But the comments you did hear on that program helped to make that....

[Nada Semaan]

The comments were very much in terms of questioning its applicability and how it would work, and that was part of why limiting the second year was identified as a potential way of still testing the pilot, still getting what we needed to try to learn whether that will help, without upsetting everybody in terms of the program.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Okay. Thank you.

[The Chair, Conservative, James Bezan]

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Just spinning off Larry's comments, I have never had so many complaints about a cancelled government program from accountants as I had from that one. Accountants looked at that program and they legally, under the law, had designed their advice and recommendations to producers on how to do their accounting and whether to sell cattle in December or January—all above board, all legal—and whether they would qualify for that $18,000, or close to it. And three months after the fact the government cancelled the program.

I'm not blaming you for that. The minister has to accept full responsibility. But the accountants told me that for a government that lays out a commitment and then breaks its word and violates its word, that is absolutely wrong. He said he has never seen that happen before in terms of programs where accountants give farmers advice and after the fact it's cancelled. What the minister did in that program is a disgrace.

Let me come to the cost of production in AgriInvest. I'll read you two letters, and my question to you in the end will be on cost of production.

Letter number one is from Mary and Wayne Haugh, hog producers. They said:

Our share of the $600 million Kickstart is $287.85 for each of us. We'll try to spread this as thin as possible, but really what good is it, as it will only bring us up to the cost of production on six pigs each? Our share of the cost of production money that came in the week before Christmas was $39.39 for each of us. That equals a total help of $654.48 for our family farm.

The second letter is from Diamond X Ranch Ltd. in B.C. It reads:

In our mailbox the other day we received a check from the federal govemment for “cost of production”. Now we have, in the past three years averaged one hundred and sixty-seven head of cows to calve each spring. The check was for $316.32, which works out to approximately $1.89 per head. How do you figure the cow/calf operator can produce a calf for $1.89?

In Ottawa we can talk about the big numbers, the $600 million, which is nothing for the agricultural industry, and when we put out $1.2 billion, $1.3 billion, and $1.4 billion in the previous government it still wasn't a whole lot. The government talks about this $600 million as if it's the be-all and end-all. It is a good program, NISA was a good program, and AgriInvest will be a good program. I'm asking you this in all seriousness: How do you formulate the cost-of-production program? How do you formulate the cost of production?

In the dairy industry we have a formula in supply management. We have a formula that actually returns to producers the cost of production of the efficient producers in the industry. This one obviously doesn't. So is this program really dealing with cost of production, or is it only a name on a program to confuse the general public?

When somebody downtown hears about this program and it's announced as cost of production, they actually think, “My God, the farmer is getting cost of production”, because it's the name of the program. Is it just a name to confuse, or can you unequivocally tell me today that the cost of production is returned to producers?

[Nada Semaan]

The $400 million cost-of-production program was designed to partially compensate producers for the decline in income experienced over the past four years due to the costs of production increasing at a faster rate than the output prices. So the calculation was based on the cost of production to provide a partial....

[Wayne Easter, Liberal, Malpeque, PE]

Ms. Semaan, it isn't, then. Is this program not designed to return the full cost of production to farmers?

[Nada Semaan]

No; it's designed to compensate partially for the loss of cost of production.

[Wayne Easter, Liberal, Malpeque, PE]

This is a huge problem, because your consuming public.... We're only 2.5% of the population. I can see this coming out of the Prime Minister's Office, because they spin messages, but for farmers out there who are suffering financially to be told they're getting a cost-of-production program, and it's $1.89, is pretty sick.

[Nada Semaan]

Just to respond to a number of those, first of all, production insurance also has a cost-of-production element to it. CAIS also has a cost-of-production element to it. When you add all those, there are a number of elements that actually respond--

[Wayne Easter, Liberal, Malpeque, PE]

But they're not called cost of production.

[Nada Semaan]

No. This was to help support the increased cost of production. It was an additional $400 million. In addition, just on those numbers--and I can't talk about specifics--when the $400 million went out from the cost-of-production program, the first payment went out at 90% so we could get as much money as possible out to producers. That leaves only 10%. The cheques they would have received by the December timeframe only--

[The Chair, Conservative, James Bezan]

Time has expired.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Chair, could I ask the honourable member for Malpeque to table those letters he read into the record?

[Wayne Easter, Liberal, Malpeque, PE]

It's not a problem.

[The Chair, Conservative, James Bezan]

Okay. Time has just about run out on this first round.

I just had a couple of quick questions. One is on the Auditor General's study on the department and the CAIS program. Have most of those recommendations on CAIS been implemented? I know that one of her concerns was the issue of how transfers into the department are dealt with and the tracking of those transfers, especially as they relate to BRM. Has that been taken into consideration?

[Nada Semaan]

We actually have all the Auditor General's recommendations, and we do have a management plan to implement all of them. I'm not familiar with that one in particular, in terms of transfers. But if it's with reference to the error rates, we did have--

[The Chair, Conservative, James Bezan]

That was just in CAIS. There were error rates in the administration.

A good example is that in the main estimates we voted on $2.4 billion for the department, and now we're sitting at $3.6 billion, which is a $1.2 billion increase above and beyond the mains. But today we're only actually voting on supplementals. The question becomes one of tracking how those transfers come in that are statutory expenditures and making sure there is accountability so the Auditor General can have a tracking mechanism.

[Pierre Corriveau]

Maybe I can clarify that.

If you look in the supplementary estimates (B), I know it says statutory, but there's an amount of $37 million, basically, that is the best forecast we have now on the CAIS expenditure for this year, which is going to bring it to $607 million.

Just to reiterate what Nada has said, we have an action management plan that in fact looks at the issues raised by the OAG. As for the main estimates, we now in fact provide the Department of Finance with a monthly update on the cash forecast in terms of the requirements from the treasury on this.

[The Chair, Conservative, James Bezan]

Okay, thank you.

Time has expired. I'll ask that the witnesses leave the table and we'll suspend and allow our next group, from CFIA, to come up.

We are suspended.

[The Chair, Conservative, James Bezan]

We'll call this meeting back to order.

We welcome to the table representatives from the Canadian Food Inspection Agency. We have Cameron Prince, vice-president of operations; Sandra Wing, vice-president, policy and programs; and Gordon White, vice-president, finance, administration, and information technology.

I understand that Ms. Wing will make the opening comments, and then we'll open it up for questions and answers.