Good afternoon to you all. Thank you for your invitation to participate in this meeting of the Standing Committee on Agriculture and Agri-Food, which is studying the issue of residual material. This is a topic which, in my opinion, we have talked about for far too long, without ever coming up with a permanent solution to the problem.
The Canadian Federation of Agriculture represents, through our general producer organizations in each of the provinces, a very significant number of beef and hog producers who use the dead stock recovery services and who are affected by the increase in slaughterhouse operating costs as a result of the specific risk material regulations in Canada.
The agricultural media and government officials often tell us, and repeatedly so, that we need to be competitive. Canadian producers are being asked to be competitive everywhere. Having travelled just about everywhere in Canada, in the United States and elsewhere in the world, I can tell you that Canadian producers have no problems competing with any other producer in the world. We do our job, and I think that we do it very well, thank you very much.
However, we cannot be competitive if the government regulations are different from those applicable to our competitors. I am here therefore to ask the Canadian government to be competitive with respect to regulations and our competitors.
Actually, we are out of the market because of the Canadian regulations. It's not our job as farmers to solve that problem. It's your job and it has been for years now. This cost is very important because the meat market is a sector where 1¢ per pound is a large amount of money, so $31 per animal is something that we cannot face. We need and we want an urgent answer to that problem.
We are fully supportive of the figures in the studies conducted on this subject. We participated in a joint letter, and it's not very often that we have in Canada as large a consensus as the one on this subject. We'd better use that consensus now. I don't know if you are aware, but we are at risk of losing this industry in this country.
In certain slaughter plants, the critical mass of the slaughter numbers are gone. Those plants will have difficulty continuing their business. If you don't change the rules or cover the costs, this country risks losing its animal killing capacity. This is not a dream that something will happen in the future; it's here. Plants have already closed. In eastern Canada it's finished. In Quebec it's tough. In Ontario they reduced volume. Elsewhere in Canada they have reduced volume. More and more livestock are going to the U.S. to be killed and processed. The joke is that our own product is coming to our market by following the U.S. road.
So you have no choice but to regulate something somewhere, to change those market rules. If you do not act, we are at risk of completely losing this production, this processing, this value-added within this country. With all of those processing plants in Canada, we cannot transport livestock to the U.S. forever. Yes, some farmers will continue to do that, especially in the cull cow market. We have to act very rapidly.
On top of that, at the farm gate, as it was mentioned before, we have a problem with dead animals. I don't know any farmer who is able to pay $100 for the recovery of a dead cow. The service is no longer available because there is no value in the byproduct. That's the reality at the farm gate. A lot of farmers have to compost or find other solutions to get rid of that stock. We have to look at that very closely before some accident happens.
In conclusion, if you want a competitive sector in Canada, don't ask only the farmer to be competitive. Ask the government. Ask the person who regulates to be competitive with the market we have to face. Anyone in Canada who thinks that the U.S. will move towards our regulations is being unrealistic. Years ago, a staff person from the government said there was no problem with the high regulations in Canada, that it was only a matter of time before the U.S. joined in. They will never come to our long list. So you'd better be prepared to look at the short list or be prepared to pay the bills, because I don't think this industry is able to do more than what we have done in the last couple of years. I've been there for years now. We were quite certain a couple of months ago that it would solve the problem, but we are in November now and we are still discussing the opportunity, or not, to cover that cost or to change the regulations. So we urge you to do something as soon as possible.