Agriculture Committee on May 2nd, 2013

[Blake Richards, Conservative, Wild Rose, AB]

I would hope that what you've heard today, together with previous testimony from this study, and the report to come, will be on your radar screen. It would certainly be appreciated.

[The Chair, Conservative, Merv Tweed]

I have to stop you there. We'll go to Mr. Allen.

[Blake Richards, Conservative, Wild Rose, AB]

Okay.

I have more questions, but thank you.

[Malcolm Allen, NDP, Welland, ON]

Thank you very much, Mr. Chair.

I thank the witnesses for being here. My apologizes for being late, but it's defending one's riding day at PROC.

The issue in Ontario around.... I come from Niagara so clearly the wine industry is a big issue for us and there are a number of pieces to that. I apologize in advance if I'm going over the ground again since I missed the beginning of the meeting. There's a debate inside the winegrowers VQA, not all of them, and those who are bigger who do ICBs as to the excise tax piece.

First of all, I'm sure you're aware of the debate. Where do you see that at the moment? Is this a place that's really stuck or is there a way to unstick it from your perspective of finding the partners to have a dialogue? They've done this for the last 25 years. They've come together and gone apart. Then they come back together a bit then they go apart again. At the moment they seem to have gone apart again. We've heard from both sides here obviously. I'm interested to hear what your take is on that and how perhaps we can remedy that piece.

[Susie Miller]

In terms of this specific situation I don't have any words of wisdom to offer. I can only say that it's not unusual for us at the department to get representation from various aspects of the industry who may have different points of view on the best solutions. What we try to do is be neutral and bring the dialogue together and do what we can. In this case I'm also certain that our colleagues at the Ontario Ministry of Agriculture and Food are working hard for a resolution of this because overall the goal is to improve the economic performance of these companies and companies that include producers. On this particular one I have no solution to offer.

[Malcolm Allen, NDP, Welland, ON]

I was hoping perhaps you had the magic bullet I could take home, Ms. Miller, because it is ongoing. You can imagine for us who live there who know the industry and the players. It's been ongoing for decades now, so it's a real challenge.

The industry is broken up into.... There are those vintners who are primary producers and growers and then of course there are just growers. They don't manufacture wine; they're not vintners. They are primarily growers.

This leads me to the next piece. You talked earlier about the tension between the grower industry, if you will.... In this case it would be a winery. I'm interested in the sense of how we try to alleviate.... We won't fix the tension; there will always be some. The difficulty for the grape-growing industry, unlike the grain industry where you can put grains in a bin and wait for a period of time, not forever obviously, is you can't do that. You can leave them on the vine to freeze for ice wine, but if you leave them on the vine because you're looking for a better price, they'll simply rot and the birds will eat them.

You're really dealing with a perishable crop that puts the grower in that tension. In my sense, talking to growers, they feel they're under greater tension when it comes to.... I'll give you an example of what happened four years ago. This is what started the unravelling, if you will—not so much the excise tax piece—the larger vintners told their growers that they didn't need the tonnage, so drop 25% in the vineyard. They were told to cut 25% and let it drop into the vineyard because there was no market to buy it. That tension became friction more than tension, if you will.

I'm wondering if, when you're talking to them, you see this tension. I'm wondering if there's a way to have a dialogue about this, because it's not a fixable issue; it's a dialogue to understand the perspectives.

[Susie Miller]

The horticulture industry in Canada offers a unique challenge given the fact that it isn't a storable product. You can keep animals such as cattle off the market, and you can store your grain, but you can't do that when it comes to seasonal products that need to be consumed or utilized in processing when they're fresh. It's not unusual that you would see more dialogue between the sellers and the buyers in this case.

There are some things we've tried to do. For example, in the Horticulture Value Chain Roundtable, one of the things the industry complained about, the producers complained about, was that they couldn't get their product into stores like Loblaws, because they just weren't buying it. The product would come on the market in July and August, and they would have no sales for it, and they'd have to sell it at a discount rate.

Loblaws, being one of the members of the round table, worked with the producers. Last year, as the first year of the trial, we actually posted available product a month ahead of time, because the retailers were saying that they needed to know if they were going to be able to get it, and if they didn't know they could get it, then they were going to go where they could be certain to get it, which would probably be a source in California or Florida.

Having this process between the buyers and sellers has meant a much greater understanding of what is available and of who needs what and when. We hope that's going to lead to a more fulsome dialogue on an ongoing basis between buyers and sellers of fresh produce.

When it comes to grapes and wineries, that's a special situation, because that's what those grapes are grown for. They're not good eating grapes.

I do know, to come back to the provinces and to provincial jurisdiction, this is something in which they're heavily involved. But we do try on a more holistic basis to get that dialogue going.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Zimmer.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thanks for coming again today.

Following along on what my colleague Mr. Richards was talking about, we had the legislation that came through to increase that interprovincial wine business. We're legislators. We make laws and we expect them to be productive once they're enacted.

From your perspective—and I'll ask Mr. McCauley this too, because his title is “legislative policy and regulatory affairs branch”, so I'm assuming he's going to have an answer for me—what would you recommend we do? You've seen that there are certain issues interprovincially still. What would you recommend we do to see some of those issues addressed, so that wine can more easily flow among the provinces? What can we do?

[The Chair, Conservative, Merv Tweed]

Before you answer, I'll suggest that again it's not necessarily right to ask a person working for the government what his opinion is, because he takes a different direction based on his job.

If you want to try to answer it without an opinion, I would be happy to entertain it.

[Brian McCauley]

It is just an observation. The private member's bill last year that removed what was seen to be an impediment at the federal level for the movement of wine products was a way of removing what was seen to be, at least legally, a barrier. I think most people would argue that the change meant there was no real or perceived barrier at a federal level when it came to wine.

The act is the responsibility of the Minister of National Revenue. Of course, if the committee recommended that the government look at or consider that, then that would be something our minister and the government would certainly look at, and we would support her analysis of that recommendation if it dealt with beer or spirits.

I think as much has been done from the perspective of changing a statute vis-à-vis wine and grapes, the balance would be at the provincial level or in any market or through other support from Susie.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Do you think it's fair to say that we've done what we can federally to bring down those barriers as much as we possibly can? Is it fair to say that?

[Brian McCauley]

It's fair to say that I'm not aware of any federal statute that is left that would prevent that movement. That's correct, yes.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Can you follow up, Ms. Miller, with any further comments?

[Susie Miller]

There is the comment I made earlier. We have already seen positive results by way of provincial action from the removal of the federal impediments, because they then can't blame the federal statutes for their inability to act. We have observed that they are more responsive to what citizens want.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Okay. To follow up on that, one big topic we've heard here of late—I guess it's a problem still with Canadian wine— is the problem of getting space on LCBO shelves and the like. Again I'm seeking your advice. Would you see any possibility for us as legislators to bring forth legislation on a federal level that would see that issue fixed?

[Susie Miller]

I'm no regulatory expert, but I am not aware of any federal statutes that would allow us to have an impact in that particular area.

[Brian McCauley]

My understanding is that under the Constitution it is probably an area in which active federal intervention would perhaps be difficult. That being said, I would like to think that provincial governments and provincial authorities look to the results of committee considerations like these to inform their considerations when they consider changes at a provincial level.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Again we could say that we've done what we can and gone as far as we can, and that's been quite far. I appreciate that opinion.

I think, for the record, that we certainly want to see more Canadian wines on LCBO shelves and would like to encourage provincial governments to see that happen.

Thanks for your time here today.

[The Chair, Conservative, Merv Tweed]

Thank you.

With that, I'll thank our guests for being here today. We appreciate your time.

For the advice of the committee members, next week we're doing the honey review. There are two meetings set for it.

We also have the animal welfare issue coming forward after the break week. We need your list of witnesses, so I will ask members for them, and the sooner the better.

After that we will be reviewing the draft report on grains and oilseeds and will have the recommendations on the red meat industry to finish up.

So watch your calendars, because we are going to send you the new working schedule as of today.

Thank you.

There being no further comment, the meeting is adjourned.