Agriculture Committee on March 17th, 2010

[The Chair, Conservative, Larry Miller]

Order, please.

Thank you very much to all our guests: Mr. Minister, and your staff Mr. Knubley, Mr. Meredith, and Ms. Moritz; and from CFIA, Ms. Swan, Cameron Prince, and Ms. Wing.

Mr. Minister, I'll turn it over to you.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Thank you, Mr. Chair.

It's indeed a pleasure to be here this afternoon. Happy St. Patrick's Day to everybody, and thank you for your kind invitation to allow me to be here and to dialogue with you today.

Mr. Chair, congratulations on being re-elected. I understand you won by a landslide.

It's been a busy year since we last met. As you know, we've been getting a lot done for farmers in the agricultural industry overall. Like you, I'm proud of the gains we have made in opening and growing markets and building Canada's global reputation for producing safe, high-quality food. We've had great success in opening and re-invigorating opportunities for our sector at home and around the world.

Last month I was pleased to join our industry colleagues in Vancouver to kick off the Olympic Games with a great Canadian breakfast cooked up by five top Canadian chefs, led, of course, by our first lady of food Anita Stewart. As I said, with all of the international media there, Canadian food is the best in the world, and that's why we've been on the road marketing our great agricultural products with some success.

I'm happy to report that we have the Market Access Secretariat kicked into high gear. When challenges arise, Fred Gorrell has his team on the ground, and they're doing great work. The secretariat is coordinating our international efforts to put everyone on the same page: the department, CFIA, International Trade, the provinces and territories, and of course industry, to identify their priorities and seize every opportunity to sell our products.

As you may have heard, the Market Access Secretariat has been very well received by producers and processors across Canada. Ian Wishart, president of the Keystone Agricultural Producers of Manitoba, recently stated that “the new Market Secretariat has been showing very positive results”. I'm proud to work side by side with my colleagues in industry to get the job done for them.

We've restored beef access to the Middle East, Hong Kong, Russia, and South America, estimated to be worth more than $70 million to our cattle producers, according to the latest numbers by the Canadian Beef Export Federation. We've restored access for sheep and goat breeding stock to Russia, the estimated value of which is $8 million. We have confirmed that China's state buying enterprise intends to increase their imports of Canadian canola oil by another $180 million this year. We reached an agreement to protect our half-billion dollar pulse business with India. But there's always more work to be done. My team and I won't rest as long as there's another trade barrier to be kicked down or opportunity to be captured.

Of course, our aggressive trade negotiations agenda complements all of this work. At the WTO, Canada continues to press for progress and for an outcome that would create a more level international playing field and new market opportunities for Canadian agriculture. We're also standing up for our supply-managed sectors. The government is also pursuing an aggressive regional and bilateral trade negotiation agenda.

We're also creating opportunities within Canada through the newly signed agreement on internal trade. That agreement is a tremendous positive force for Canadian producers and continues to safeguard our supply-managed systems.

In that regard, we are working towards a comprehensive economic and trade agreement with the European Union. The EU is Canada's second-most important partner for trade and investment, with two-way agrifood trade totalling over $6 billion last fiscal year. We want to make that relationship even stronger and more profitable, to the benefit of our producers and processors.

We have also made important progress in many other areas. We have implemented free trade agreements with the European Free Trade Association and Peru. We have signed FTAs with Colombia and Jordan and concluded an FTA with Panama. Our government will certainly be pressing Parliament to move forward on ratifying these free trade agreements as soon as possible. I know the Colombia one was reintroduced last Friday, and we look for early passage of it. I know all sides will work together, because farmers and the Wheat Board are pushing for that market access.

We're also looking ahead to exploring new possibilities with trading partners including Morocco, India, and Ukraine. We're continuing that work to build a strong foundation of memorandums of understanding with a growing number of countries.

At the same time, our government continues to support supply management at home and on the international stage. As I said to the Dairy Farmers of Canada at their annual meeting in January, our record on supply management speaks for itself. This government has taken action under article 28 of the General Agreement on Tariffs and Trade to limit imports of milk protein concentrates. We have harmonized compositional cheese standards to bring greater certainty to processors and Canadian consumers. Canadians know that cheese must be made out of milk, and we've made sure that Canadian families know what kind of cheese they get when they go to their grocery stores.

This government is also working to ensure that the WTO's special agriculture safeguards are available, if needed, in the future.

Finally, this government will always defend interests that are important to supply-managed industries in international trade negotiations.

As I've said many times before, when it comes to agriculture, the bedrock principle for this government is “farmers first”. Canada's economic action plan continues to build a firm foundation that will make sure agriculture comes out of the global downturn stronger than ever. Our plan is supporting agriculture as a core economic driver in this country. The Canadian Agricultural Loans Act is making government-backed loans available to producers such as new farmers, who previously didn't qualify. CALA is helping producers beat the credit crunch by guaranteeing an estimated $1 billion in loans over the next five years. It's already a success, by almost doubling the amount of loans compared with last year, for a total so far of $90 million.

More great news is that more than 118 of these loans have been registered to farmers who are just starting out. The goal is to help empower our young farmers to get a foothold in the business of agriculture and become self-sufficient farm business people.

We built flexibility into our agricultural programs, and in our economic action plan we delivered on our campaign promise to implement an agricultural flexibility program. Canada is a big country, and as we all know, every region has unique challenges and opportunities that diversify and create both challenges and opportunities. We're investing this $500 million from the plan into targeted, focused investments that will serve the industry extremely well.

Farm programs come and go, but the stability built around innovation in the marketplace is what will keep farmers and the farm community strong into the future. AgriFlexibility continues to deliver for our producers through funding for branding Canadian products worldwide, livestock traceability, canola marketing, and many other strategic investments that help drive agriculture forward. AgriFlexibility is building on the foundation of business risk management programs to create new opportunities and drive new efficiencies that will strengthen the farm gate for the long term. AgriFlexibility must remain proactive, but we also must have a set of programs to help producers react to income pressures.

We have listened to industry's concerns about how this suite is delivering for producers. Let me point out just how that suite has delivered. Since it was launched, for the 2008 program year, producers across Canada have benefited from over $4.5 billion in federal-provincial assistance through the business risk management suite of programs, including the one-time federal kick-start contribution of $600 million.

At the same time, this government is constantly working with our provincial and territorial partners to make sure these programs continue to respond to producers' changing needs. That is why at our recent meeting ministers committed to engage with producers and agricultural groups on the challenges facing the sector, business risk management programs, and the opportunities that lie ahead.

This business risk management strategic review is two-fold. We are mapping the way forward for the next-generation agricultural framework and constantly making tweaks to current programs to make sure they deliver to the farm gate.

One sector that has been particularly hard hit is pork. Our government is there for our pork producers in their time of need. For 2008 and 2009, livestock producers, including pork producers, are projected to receive more than $1 billion through AgriStability and AgriInvest. We've been getting AgriStability benefits out as quickly as possible through such new mechanisms as targeted advances and interim payments.

That help is flowing to producers without the overwhelmingly high overpayment rate that producers had to suffer through with CAIS. As well, the federal advance payment program alone has delivered over $344 million to our pork producers since 2007. Last year we sat down with the national pork leadership and developed a way forward to help producers restructure their operations for the future through long-term government-backed loans, transitional assistance, and international marketing support. We continue to work closely with Canada Pork International to expand and open new markets on the world stage.

In December, Canada Pork International joined the Prime Minister and me in Hong Kong, South Korea, and China, where we were able to announce the lifting of China's H1N1 restrictions on Canadian pork.

A few weeks ago I was proud to announce that Canada has secured the first certification agreement to allow pork products to China, which means that Canadian pork products will be back in Chinese grocery stores very soon. That is a $45 billion market back online for our pork producers. Edouard Asnong, president of Canada Pork International, praised our efforts, saying that the “continuous efforts from the federal government will increase opportunities for Canadian pork exports.”

We are also focusing on other key markets in Asia, including Indonesia. That work is paying off, as we see pork prices rising, and projections on the futures markets are well above the five-year average. We will continue to work with the leadership to chart the best way forward for Canada's pork industry.

While helping farmers weather immediate pressures, we are also helping them position their businesses for a profitable future. Innovation has always been a hallmark of agriculture, but never more so than today. Our government is helping farmers compete through investments such as the $8.7 million dairy research cluster we announced in January.

Science and innovation are at the heart of what matters to Canadians--the safety of their food, their health and wellness, and a clean environment. Agriculture, probably more than any sector of the economy, is under constant pressure from shifting social, economic, and natural forces. Our government is playing a strong role to help the sector seize opportunities and face down these challenges.

We continue to invest in science so that our farmers can compete and keep growing our Canadian economy. Our approach is to create partnerships between governments, universities, and industry researchers to focus investments where they can have the biggest impact at the farm gate.

Scientists at our 19 centres across the country are working with our partners in industry, through federally funded research clusters, to help our producers compete through innovations in disease, pest resistance, and nutritional values.

I've spoken a lot about what we've done, which leads me to mapping out the way forward. This government is committed to supporting agriculture in the future.

The main estimates you have before you reflect that commitment, with a $340-million, or 13%, increase for 2010-11. I want to repeat, agricultural investments by this government are going up by 13%.

The Speech from the Throne underscored this government's strong commitment to agriculture. The speech highlighted our work for Canadian producers, including our unwavering commitment to give western Canadian farmers the freedom to choose how they market their grain, our support for supply management, and our action for Canada's livestock sector.

Budget 2010 introduced two critical measures to backstop our livestock producers. We will dedicate $75 million to ensure that Canadian cattle producers continue to have access to competitive cattle processing operations here in Canada. The Canadian Cattlemen's Association has expressed its strong support for the measures we've presented in this budget.

Producers and processors all understand that the industry can only succeed if every link in the value chain remains strong. Jacques Laforge, president of the Dairy Farmers of Canada, welcomed our commitment to beef and dairy producers by saying,

The Government of Canada has really stepped up to the plate.

The Canadian Cattlemen's Association issued a similar statement:

The Canadian Cattlemen's Association (CCA) strongly supports measures contained in the 2010 Federal Budget aimed at ensuring producers have access to competitive cattle processing operations in Canada.

As the minister responsible for the Canadian Food Inspection Agency, I am pleased to report that the March 2010 Speech from the Throne restated the government's intention to reintroduce legislation to protect Canadians from unsafe food and consumer products.

Immediately following the Weatherill report on the listeriosis outbreak, this government committed to move forward on all 57 recommendations of that report. Many of these commitments have been met and are well under way. To support that effort, the government announced an investment of $75 million to enhance the food safety system in September 2009. We're hiring and training more food inspectors and putting them to work on the front lines as we speak.

I'm proud of our government's track record of listening to farmers' needs and delivering on them. I'm also very appreciative of the hard work that goes on around this committee table.

I know you have a full agenda, but I would urge you to devote some time to private member's motion M-460, brought forward by our colleague, the member for Lambton—Kent—Middlesex. The motion, as you know, aims to speed up farmers' access to new farm inputs by having countries share their science, basically so we're not reinventing the wheel every time. I urge this committee to study this issue in depth so that we can help our farmers get new technology in a more timely fashion and compete on a level playing field.

Time and time again, Canadian farmers have proven that we can succeed with hard work and good ideas.

Thanks again for the opportunity to speak with you today. I look forward to your questions.

[The Chair, Conservative, Larry Miller]

Thanks very much, Mr. Minister.

Did anybody else with you here plan to make a presentation?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Nobody has opening remarks.

[The Chair, Conservative, Larry Miller]

Before we go to questions, I just want to read something from House of Commons Procedure and Practice, as a reminder to all of us, from pages 1068 and 1069:

Particular attention is paid to the questioning of public servants. The obligation of a witness to answer all questions put by the committee must be balanced against the role that public servants play in providing confidential advice to their Ministers. The role of the public servant has traditionally been viewed in relation to the implementation and administration of government policy, rather than the determination of what that policy should be. Consequently, public servants have been excused from commenting on the policy decisions made by the government. In addition, committees ordinarily accept the reasons that a public servant gives for declining to answer a specific question or series of questions which involve the giving of a legal opinion, which may be perceived as a conflict with the witness’ responsibility to the Minister, which are outside of their own area of responsibility, or which might affect business transactions.

From there, we'll move to the Liberal Party first.

Mr. Easter, you have seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Welcome, Minister, and officials.

I listened to your remarks, Minister, and I just can't help but sit here and wonder, have you been on the ground in Canada at all? Have you been at the farm level in Canada? The message you're portraying here is not what I'm getting on the phone every day or in any part of the country that I'm in.

You said you're getting a lot done for the agricultural industry; well, maybe on the agrifood side you are, but I'll tell you, we're losing 5,000 farmers a year. That's 14 farmers a day. Canada's farm debt is $59 billion, with $9 billion under your government's watch. You may be putting farmers first, but it's first in line for debt, at least from where I sit.

We're facing the worst crisis in hogs in Canadian history. The beef industry is wondering where to turn next. I tell you that in my area in Atlantic Canada, farmers are leaving the land in droves. In the potato industry, we've had two potato plants cut back on contracts for lack of markets. We could have 12,000 to 15,000 acres of potatoes this year in P.E.I. without a home.

AgriStability is just about as bad as CAIS, and that's been pretty bad, I will admit, in terms of people not getting payouts. The reference margins aren't working. Beef and hog producers are not meeting the viability test. Over 3,000 farmers in Ontario don't meet the viability test, so they can't draw out of it anymore, yet you come in here and say that things are great on the farm.

Let's just take a look at the hog industry. I don't know if you've looked at the numbers, but in my region in P.E.I. we're down 70% in breeding stock in five years and 65% in terms of hog production. Atlantic Canada is down to the point that we're losing our last hog plant.

Then you come to the budget, and there's not one new dime. I heard what you said in terms of $314 million. Finance officials tell us that there's not a new dime in this budget. Where's it at? I certainly don't see it, nor do Finance officials.

We had the hog producers here the other day, and they are in dire straits. They basically said under questioning that there are four things that could assist their industry. I'll direct these four at you, and maybe you can answer them.

First, they've said that when the HILLRP program was originally anticipated, they expected that there would be 75% uptake. There's only 3% uptake. They've said that the banks are not providing the credit and Farm Credit's not providing the credit, so they're saying there could be upwards of close to $200 million left in that fund. Will you commit today that those dollars will still go to the hog industry, and not back to the Department of Finance?

We know that the program was designed so that the first requirement was that you had to pay back the advance payment program money, so the Government of Canada got paid and farmers were left with more debt under that particular program, but will you commit here today that the $200 million, if there's that left in the program at the end of this month, will be committed to what the Canadian Pork Council requested in terms of their program going forward?

AgriStability is easy to fix, and it doesn't violate a trade agreement. Will you change the viability test so that it allows hog and beef producers to be able to get a draw-out of funds? They agreed to that the other day.

Third, would you establish the emergency advance payments program again, only at a higher level and on what pork production is really at?

The fourth has to do with United States imports. You're talking about the markets we're gaining. The problem is that while you're gaining markets elsewhere, we're losing our biggest market: the United States. We're not shipping as many hogs to the United States as we were, nor beef, and 25% of the pork that's coming into this country now is American pork. We're losing our own market at home, so will you put in place a marketing program so that Canadians can actually eat and get a Canadian product?

Those are my questions for the moment.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Easter.

I'll start with AgriStability. The federal government does not operate arbitrarily. As you well know, it's a jurisdiction shared between the federal government and the provinces and territories, so changes to AgriStability I do not make arbitrarily. We just had a meeting of the FPT, the federal-provincial-territorial ministers, roughly a month ago in Toronto. We have expressed a willingness to re-crunch the numbers and work forward towards our annual meeting coming up in Saskatchewan in early July. We will have a look at some things at that time.

What we've done on the HILLRP program is extend the deadline by some three weeks. We have extended the liability of the federal government from 70% to 90%. There are still roughly two weeks to go until the deadline is up. We're hopeful that this will drive more producers to actually make an application.

It's a little bit of a misnomer to say that it's only 3% of pork producers. That's if you take 3% of 8,000, certainly, but not everyone has come in to make an application. I have statistics from Farm Credit Canada showing that 75% of the applications they've received have been successful in going out with a loan.

When you talk about paying back the federal government first, yes, that's the way it was set up, but then it also created the opportunity for that very same hog producer to apply for and receive another--a new--cash advance, so it's just basically a flip-over. Under Treasury Board guidelines, you know you can only go so far. What we did was ask them to repay what they had out, and then they were eligible for the same type of money again. That's the necessary situation that was created there.

Certainly we're concerned about the domestic market. There's no doubt about it. That's why we brought forward “Product of Canada” labelling to make sure people had a better idea of what they were buying on our store shelves. That program is working quite well for those who want to make use of it. When we brought the program out, we said that we would assess it to see the efficacy of the program. That process is going on right now. We have a timeline, and I think it's the end of April, for us to have all of the submissions in from industry processors across the country as to what's working for them, what's not, and what we need to do to make sure that it is in their best interests, so we are adapting and addressing.

Certainly you recognize the point that our major trading partner, the U.S., is in the worst shape of any country in the world because of this global recession. They have far less money to spend than they ever did before. There are hamburgers rather than steaks going on the barbecue. Country-of-origin labelling, as you well know, we have challenged under the WTO, and we continue to push forward on that. I know I have another call lined up with my counterpart, the Secretary of Agriculture, Tom Vilsack, tomorrow afternoon. We're constantly in their face and in their thoughts with our presentations on that panel. We are starting to exchange documents on it. The panel has been struck, and we're moving forward on it.

There are a number of balls in the air, and of course we don't intend to let any of them drop.

[The Chair, Conservative, Larry Miller]

Thanks.

Your time has expired.

Go ahead, Mr. Bellavance, for seven minutes.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you very much.

Mr. Minister, I encourage you to turn to the proper channel, unless you understand French, now.

Good afternoon and welcome to you and your officials. If I go by your figure, I would conclude that no cuts were made to the Department of Agriculture and Agri-Food under the budget. That is not necessarily a bad thing.

Mr. Minister, I am going to ask you some very specific questions, and then I will give you a chance to respond. You may want to jot the questions down, especially those about the livestock industry.

The recent budget included $25 million to compensate for the additional costs related to specified risk materials. First, I would like to know when the money will be available and, above all, what the terms and conditions of the program will be. When you managed to convince the Minister of Finance to implement the program, I would think that you did not just suggest investing $25 million to compensate for the additional costs associated with SRM. Behind that idea, there must have been a program that was all planned out. I want to know the terms and conditions of the program.

In addition, I want to understand the comment made by the Minister of State (Agriculture), Mr. Blackburn, in the newspaper La Terre de chez nous. He said it was important to specify that the $25 million to compensate for the additional cost of collecting and disposing of SRM and the $40 million for technologies were tied together.

What does that mean exactly? Does it mean that if you do not invest in new technologies, you are not eligible for the $25 million program? And, if the amounts are tied together, how do you decide whether the Colbex-Levinoff slaughterhouse is sufficiently involved in new technologies to qualify for the program? I mentioned the Colbex-Levinoff slaughterhouse, but it affects all slaughterhouses. I would like to know whether they are able to qualify and what they have to do to benefit from the program. Are you confident that this announcement will address the gap of nearly $32 per head arising from SRM standards? It has been calculated that the $25 million will cover approximately one year. Do you have something else planned for afterwards, once the year is up?

Furthermore, you must know that hog producers were the first witnesses to appear before the committee on Monday, because of the urgent nature of their situation. Questions were asked about the applications for the government-backed long-term loans. The deadline is approaching. It has already been postponed until March 26. We were asked what was going to happen after that. Do you plan to renew the program?

Another deadline is approaching, the deadline for the stay of default to repay APP cash advances. It is September 30, 2010. In this case, as well, I would like to know what is going to happen afterwards. Do you plan to extend the stay?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Bellavance.

When it comes to when will we release the deadlines, it depends on when the budget passes. There will be a piece of budget implementation legislation coming forward. And since all of the opposition parties vote against the budget, I'm not sure how you can sit there and take the high ground when it comes to when this will happen.

It would be a lot handier and a lot easier if you supported the budget. And I think maybe Colbex-Levinoff--

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Let's talk about the budget.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

--will be calling you to say, please support the budget so that we can have access to that money.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Be serious.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

With regard to the $25 million, that will drive innovation. I've had a number of meetings with the Canadian Meat Council. One of the major representatives on that council is a fellow named Brian Read, who was the managing director for Colbex-Levinoff, so he understands the situation there extremely well.

They are quite excited that this will drive innovation. We have moved everyone off this idea of a per-head payment basis. Certainly that would be countervailed within a heartbeat, and, of course, we want to drive innovation that has a chance to get back to the farm gate. That was the problem we saw back during the BSE crisis originally, when the moneys were sent out and got stuck somewhere away above the farm gate in that processing cycle. The processors themselves had access to some $130 million since then to help them build innovation. The money has disappeared; no innovation was put forward on SRMs.

The $25 million will drive innovation similar to what we're seeing in other jurisdictions around the world. The CFIA has been and visited, and has certified things like thermal hydrolysis, technology that allows us to put SRMs back into a fertilizer chain...without the restrictions that it cannot be used for livestock feed or grazing. Those types of things are out there and need to be put on the end of each plant. I know there is a big desire to do that.

There is never enough money when it comes to doing those types of things, but certainly we want to drive innovation with that $25 million, followed up with the $40 million to help do some of the bigger projects. The details will come out. We've already begun working on the details with industry, and they are quite accepting of what we're planning to do and how we are planning to do it.

When it comes to the hog situation, certainly we're as concerned as anyone. We want to see our programs work. We put money up on them. We've extended the time period; it's not up yet. We'll assess that when we get closer to it. We want to make sure that farmers actually apply. That's what we need to have, farmers who actually go in and apply.

I've talked to several in my riding who went to their historical banks, got rebuffed, phoned me, and asked what to do. I said, “Go to another bank. There are a number of them out there. Credit unions and Farm Credit have been doing great work when it comes to the hog loans. Don't stop at one.” As is the case with any other business, when I was in farming and running my general contracting business, my lumberyard, I didn't stop at one bank when it said no, and neither should farmers. As the businessmen of tomorrow, they need to keep banging on those doors. A lot of them are, and I give them credit for that.

Hog futures are looking good. July is showing a 14% rise over January in that first six-month cycle. We're seeing the numbers for fed hogs above the five-year average, which is a good thing. We're starting to get calls from hog producers in southwestern Ontario saying that those gosh-darn Americans are up here paying $50 for a weanling, and they can't compete. That's a good thing--not that they're having to compete, but that the price of weanlings is coming back up, because that's the basis. We are starting to see some turnaround. We need to make sure that our guys have an opportunity to buy in and build on that.

You talked about deadlines. The next one coming up on the advance payments is in September of next fall. Historically any comment made on extensions is generally made in the July-August period, and certainly we'll be looking at that situation again.

[The Chair, Conservative, Larry Miller]

Thanks very much, Mr. Bellavance.

Go ahead, Mr. Atamanenko, for seven minutes.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Minister and officials, thank you very much for being here.

Before I ask my questions, Ms. Swan, as I mentioned to you earlier, for the record I would like to thank you and your officials again for the help that you gave Costin Cold Storage. There was a question of trying to store their apples, and you were able to navigate a lot of bureaucracy to help them store their apples in the United States. They really appreciate that, so thank you.

Minister, recently you made a recommitment to putting an end to the Canadian Wheat Board as we know it. You're saying that decisions on the Wheat Board will be made in Canada, but there is fear by some that one way you would like to do this is to allow the current text to remain unchallenged at the Doha negotiations, which would then do away with state trading enterprises by 2013.

Could the committee be provided with a study or a document that would indicate that the government has actually undertaken an accurate accounting of a possible economic impact on grain farmers that would occur in 2013 and the years afterward if no action is taken to challenge this text and, as a result, farmers lose their marketing board?

That's my first question. I'll rattle them off and hope that we'll have time for some answers.

My second one concerns food safety. Minister, your own special investigator, Sheila Weatherill, made a number of recommendations following her investigation of the 2008 listeriosis crisis. These recommendations include an assessment of the compliance verification system; an audit into CFIA's actual resource requirements, which you said would be completed early this year; and the hiring of an additional 70 food inspectors.

To your knowledge, is it true that the compliance verification system has not yet been evaluated? How many inspectors have actually been hired, and have they gone through the hiring process? The audit was to be completed by January 2010; apparently there has been a delay.

Here's my second question. According to the CFIA and the agriculture union, inspections of domestic plants are conducted just once a week, while those shipping internationally are inspected every 12 hours. Both undergo the same set of tests, which means the only difference is that food for Canadian tables is checked less often. I am wondering if you can explain this double standard and why there are fewer resources for a Canadian inspection.

Third, it's been two years since the listeriosis crisis that killed 22 Canadians. How many boots are actually on the ground today? We hear figures, but how many new inspectors are actually on the ground today?

Finally, CFIA has been told to recruit 170 new inspectors to meet the shortage, yet it will soon be responsible for a mandated wage increase and a cost-of-living increase, and there is a budget freeze, so where will you cut CFIA's operational budget to make up the difference, and how will CFIA equip new inspectors, given its lack of resources?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Atamanenko.

Let me start with the last one first. There are no cuts to CFIA, just as there are no cuts to Agriculture Canada. They both received 13% increases in their overall budgetary capacity for this coming fiscal year. As to boots on the ground, I'll have Cam Prince outline that aspect.

Let me talk about the Wheat Board. We have never, as a country and as a government, accepted the text at the WTO at this particular juncture. We've always disagreed with, and have always said that we disagree with, their definition of products that we can secure under supply management and with the notion that some other country or body should tell us what to do with our state trading enterprises. We've always said that those are our decisions and that we will do them accordingly.

We have never, ever agreed to the text. No one is prepared to ratify the text. Every country, globally, has a concern with some portion or part of that text. That's why there has been no agreement. That's why there is no movement forward at this particular juncture.

When it comes to food safety, certainly we are well under way and moving forward on all 57 recommendations that Sheila Weatherill brought forward. Some of them, you will recognize, are for industry to do, and we are carefully watching them move forward as well.

I will turn it over to my colleagues from CFIA, but I can assure you that the CVS audit is under way and I can assure you that the resource audit is under way. It is actually quarterbacked by John Knubley, who was chosen by the PCO in order to do that. I know he has some interim reports that he will be bringing forward in the next couple of months.

I will let Cam speak to your question on the actual numbers of inspectors. I can assure you that we do have new inspectors on the ground and on the front lines in the ready-to-eat meat sector. We had pledged 70 over two years; we're well on the way to having the first half, the first tranche, out there on the ground doing the job. We're moving forward on that.

As I said in question period the other day, these folks don't grow on trees, and no one wants untrained people out there inspecting their food, so there is a period that they work through.

Cam and Carole and Sandra, could I get you to comment on the rest of that?

[Carole Swan, President, Canadian Food Inspection Agency]

Thanks, Minister.

Let me just ask Cam to comment on the issue of inspectors, in particular the with regard to how many inspectors are on the ground.

[Cameron Prince, Vice-President, Operations, Canadian Food Inspection Agency]

I'll start with the global figure, and the question of how many inspectors we have on the ground. The answer is that 3,315 staff in CFIA are involved in front line inspection.

As you take that pool of inspectors, we look at what resources have come to the agency in the last couple of years. We go back to 2008 and the food safety action plan. The CFIA received $223 million over five years. So far under that program we have engaged the equivalent of 57 inspectors. Some of them are part time, so the actual number of inspectors is higher than that. Around 120 have come into the agency under that program.

That was followed up last September by the government announcement of $75 million over three years. What that allows us to do on the front line is to hire 70 new inspectors for ready-to-eat meat. So far we've hired 35 of those and we will be hiring another 35 in the coming months, in the next fiscal year. So that's another 70. And now, just in the last week, we have been made aware of an additional $13 million to allow us to hire another 100 new inspectors.

That tallies up to over 200 since 2008.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Prince.

Mr. Meredith, were you going to say something? Okay.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

In terms of inspection domestically and internationally, Cam, do you want to comment on that as well, on the misconception that somehow one is less than the other?

[Cameron Prince]

Yes.

I wasn't sure if you wanted me to get into that detail, but certainly I'd be glad to talk about the presence in plants. The policy with these new resources is to move to more coverage in all meat processing plants. We've started with the larger plants that produce about 80% of the production. These plants naturally, being larger, not only supply the Canadian market but also supply the U.S. market. We're starting there with increased presence on the second shift.

In those plants that are only shipping domestically, we have not yet phased into the daily presence. However, the total amount of time spent in those plants is exactly the same. So there is no difference between the inspection presence between the two plants. It's just a matter of how it's spread out over time.

As I say, we will be moving very quickly to having 100% coverage of all shifts in meat processing plants with these new resources that we've just received.

[The Chair, Conservative, Larry Miller]

Thanks, Mr. Prince.

We'll move to Mr. Albrecht.

I understand you're splitting your time with Mr. Lemieux.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thank you, Minister, for being here today.

Probably many of my colleagues aren't aware that the riding I represent of Kitchener--Conestoga, while it is a large urban riding, also has a very large rural area with three large townships: Wilmot, Wellesley, and Woolwich. Hundreds of farmers are there in beef, hogs, sheep, dairy, and poultry. I have the opportunity to visit these farms on a regular basis. Just recently I met with a large group of dairy farmers. They were very appreciative of the support that our government has given to the supply-managed sector.

You mentioned in your opening remarks, Minister, about the action that our government took on section 28 under GATT to restrict the import of milk protein concentrates and also the change in the cheese compositional standards. These have made huge differences for the farmers in my area.

Could you comment on where you see the government going in terms of its ongoing support for supply management? What impact will that have for those who want to maintain a viable family farm?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Like any farming enterprise, this is big business, whether it's supply-managed or cash crop or whatever other diversity you have in your area, Mr. Albrecht. Certainly we support them all. But when we see one sector under attack--whether it's domestically or internationally--of course we step up and protect them to the best of our ability. We also make sure that what are coming in as imports are not coming in under the guise of something else. That was the nature of the milk protein concentrates.

The new technologies that are out there today are astronomically better than anything we've seen before. That leads to situations where we face non-tariff trade barriers on some of our exports, but other people argue that we shouldn't be doing that on our imports. We certainly make no apologies for protecting our supply-managed sector from those outside forces. We will continue to do that because we have a consistency and quality of supply on those five SM situations that is second to none.

When I was at the Dairy Farmers of Canada meeting in late January, we announced $8.7 million for a new innovative science cluster for dairy that's never been done before. We've developed canola meal in the dairy rations, which gives us a litre of milk more per cow, per day, than before. We're starting to export that technology.

Canadian dairy genetics are probably the hottest-selling item outside of Canada. There's unbelievable demand from countries around the world because they know that our dairy farmers, with the supply-managed sector and the ability to have a solid bottom line, have developed cows that milk far better than anybody else's.

So that's a tremendous asset that we have here. We certainly respect the hard work of farm families in the supply-managed sector.