Agriculture Committee on May 8th, 2023

[The Chair, Liberal, Kody Blois]

Thank you very much.

Mr. Steinley, I think you have a point of clarification. You have the floor, but please be brief.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much, Mr. Chair.

To Mr. Gillespie, you said there was a 24-day turnaround for emergency temporary foreign worker visas. Are you able to supply the committee with that data just to make sure that it's accurate?

Eighty per cent of the casework in our office is visas and working with IRCC, and 24 days seems pretty much unheard of when working on things. If you could just make sure that's the number and supply some data to this committee, I would really appreciate it.

[The Chair, Liberal, Kody Blois]

Thank you very much, colleagues. That is the end of the session.

Mr. Gillespie, if you would like, you're welcome to provide that to the committee. If there is any clarification, you can also provide that in writing.

We are over time, but I would like to thank our witnesses for coming here today to talk about a really important subject.

Colleagues, we will suspend for a few moments to get our next witnesses in and then we'll get back at it, so stay close by.

[Voices]

Thank you.

[The Chair, Liberal, Kody Blois]

Colleagues, welcome back to the second round of our meeting here tonight.

I'm looking forward to our witnesses joining us in the room.

From the Canadian Pork Council, we have Mr. René Roy, chair, and Mr. Stephen Heckbert, executive director; Mr. David Duval, president and hog producer, Les Éleveurs de porcs du Québec; and Mr. Eric Schwindt, director, Ontario Pork.

Each group is going to have up to five minutes for opening remarks. We'll start with the Canadian Pork Council.

Mr. Roy, you have the floor for five minutes.

[René Roy, Chair, Canadian Pork Council]

Mr. Chair, members of the committee and guests, good evening.

My name is René Roy. I am a hog producer in the Beauce region and chair of the Canadian Pork Council. With me today is our executive director, Mr. Stephen Heckbert.

Thank you for inviting us to join you today at this very difficult time for Canada's hog producers.

My voice echoes that of 7,000 hog producers in Canada.

Let me begin with some basics.

The pork industry in Canada is responsible for almost 1% of our total exports or almost $5 billion every year. If there is no reversal, the closure of this plant could reduce our pork production in Canada by 12%, and the impact will be outsized in eastern Canada.

I want you to leave with three main points today.

The situation is not a local one. It impacts farmers across Canada, and it will have a ripple effect that could impact our ability as a country to produce food for the world. This situation can be an opportunity for us to diversify the processing industry in Canada and to match production with processing capacity. This situation can serve as a reminder that food production is an industry of strategic national importance in Canada, and trade deals must be appropriately negotiated.

Why is this of national concern? Our producers are directly impacted by the closure and, if nothing else is done, the excess supply of animals can have long-term impacts on our industry. It's not only Quebec producers who are affected but also producers from Atlantic Canada and Ontario. The impact will be felt throughout the country, notably by the price they receive for their animals. To that end, we will be seeking the federal government's support to our farmers so that they can still be farmers when this temporary downturn has ended.

Second, we need to be strategic in how we think about our food processing and food production in general. The Canadian pork industry has benefited from the diversity of its players, and we can reverse the trend of market concentration we observe now. Processing capacity is still available and, if we act quickly, we can bring new players into the market. Our industry is willing to work with the government to grasp these opportunities.

Third, we need to accept a fundamental truth. Agriculture is an industry of critical strategic importance for Canada. Pork produced in Canada is produced with one of the lightest environmental footprints in the world. We have the opportunity and the responsibility to feed the world with our products. The new Indo-Pacific strategy is a good step, but we need more. We, with our partners in our sector, will be working on a national pork strategy in the coming months, but we need a national agriculture policy, particularly in a world undergoing the climate transformation we are witnessing on our farms.

We need a commitment to strengthen agriculture and agricultural exports. That's why we need a more aggressive stance on trading agreements. Our sector is shut out of markets like Europe, where we have three agreements, because we accept non-tariff trade barriers.

We need to think strategically. We need to think about an industry where Canada is already leading, where our geographic advantage is clear, and where we can bring food to our people here and around the world.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Roy.

Mr. Duval, you have the floor.

[David Duval, President and Pork Producer, Les Éleveurs de porcs du Québec]

Good evening, Mr. Chair.

Good evening, ladies and gentlemen of the Standing Committee on Agriculture and Agri-Food.

First of all, on behalf of Quebec hog producers, I would like to express my gratitude for having been invited to participate in this meeting.

The announcement of the imminent closure of the Olymel processing plant in Vallée-Jonction will have an impact on many people. Our hearts go out to those who are directly and indirectly affected by this closure.

Many commentators have spoken out about the reasons for this closure, and they criticize the acquisitions and management of Olymel and the Sollio group. I am not here to do the same, but to explain the repercussions that the closure of the Vallée-Jonction plant will have on the breeders.

Before talking specifically about the closure, I would like to tell you that hog farming in Quebec represents an economic impact of $3.7 billion and 38,000 direct or indirect jobs. We represent 1,600 hog farms and 2,500 producers, 32% of whom are women and 25% of whom are under 40 years of age.

In 2016, Olymel and Sollio acquired the companies Atrahan and La Fernandière. By creating a partnership with the Robitaille Group, they acquired Aliments Lucyporc and Viandes Dunham. Aliments Triomphe and Pinty's, in Ontario, followed in 2018. Finally, in 2020, Olymel integrated F. Ménard and its market share of 15%.

On November 8, 2022, in an article in La Presse, we were reminded that these acquisitions, made between 2015 and 2021, increased Sollio's long-term debt from $220 million to $1 billion. Let's remember in passing that Sollio is also the biggest player in Quebec in terms of inputs, the grains that are used to feed hogs, and a major player in hog farming itself.

I am the president of the Éleveurs de porcs du Québec, and it is in this capacity that the Competition Bureau of Canada contacted me as part of its examination of the merger of Olymel and F. Ménard in 2019. The Competition Bureau did its review of that merger and gave its approval, as it did in 2018 with respect to Pinty's, and in 2016 with respect to Atrahan. It would have been relevant to have people from the Competition Bureau to ask them why they gave their endorsement without any restrictive measures or discussions.

I can confirm that Olymel has been in a perfect storm. Given the geopolitical situation with China, the labour issues that have not yet been resolved, the COVID‑19 pandemic, and so on, who is responsible for what is happening now? I think the responsibility is shared between the government and Olymel. In any case, the situation has certainly affected producers.

Hog farmers are concerned. In recent years, they have paid the price for this situation more often than not. There is a crying lack of liquidity in Quebec's hog businesses, and it is time for both levels of government to help us. Right now, for every hog sold in Quebec, we lose an average of $50. That's close to $225 million in costs to producers in 2022. In 2023, additional losses of $250 million to $300 million are announced. This is a real catastrophe for the liquidity of farms, and it is dangerous for the morale of our producers, who get up every morning to feed Quebec, Canada and the world.

We need workers on the farms and in the slaughterhouses. I employ the same temporary foreign workers every year, but I have to do the same paperwork every year. This is absurd. It seems to me that the Government of Canada should be able to simplify the hiring, retention, but more importantly, the re‑hiring of these foreign workers.

The federal government could help us open up new markets and find new players to invest in the industry and the slaughterhouses.

The federal government could also simplify the Canadian Food Inspection Agency's accreditation process for the creation of new slaughterhouses.

These are some of the ways in which the federal government can help us through this difficult period. In the short term, farms need an injection of cash.

I thank you for your attention, and I will answer your questions as best I can, based on my knowledge.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Duval.

Mr. Schwindt, you now have the floor for five minutes.

[Eric Schwindt, Director, Ontario Pork]

My name is Eric Schwindt. I'm a pork producer from the Waterloo region in Ontario and a member of the board of Ontario Pork. I appreciate the opportunity to be here tonight to talk about the effect the closure of Vallée-Jonction will have on Ontario hog producers.

Ontario Pork is the voice of the province's pork farmers and a leader in the agriculture industry. Our mission is to foster a vibrant business environment for our producers. Led by producers, we're committed to sustainable growth in the pork sector, delivering government representation, research investment and industry improvements in areas including animal care and environmental sustainability, while growing the brand and reputation of producers and our product.

Our sector represents a farm-to-fork impact in 2022 of 997 producers marketing 5.9 million hogs with $1.35 billion GDP, $3.78 billion in economic output and almost 20,000 full-time jobs. Ontario pork is sought after for its high quality and is exported around the world, with Ontario pork producers being among the world leaders in animal care, food safety, quality and traceability.

In Ontario, we have a competitive advantage, including our land base, an abundant water supply, an efficient transportation network and a highly skilled labour force with the knowledge to produce pork in a sustainable and efficient manner. This strong infrastructure will be further enhanced by the opening of a new national research facility in Ontario, which will benefit pork producers and the pork sector across Canada.

Processing capacity remains a significant obstacle to our industry’s growth. Last year, our sector exported 2.7 million pigs outside of the province. Just three years ago, our sector was not experiencing processing plant challenges. COVID-19’s impact on the global supply chain and its effect on processors is now further worsened by the Olymel plant closure.

This impacts 25,000 market hogs per week that were going to Olymel from Ontario, a 23% loss of markets for our producers. There are also 5,000 Ontario feeder pigs per week that are being displaced. This results in lower prices, longer transport distances, trade issues and economic and environmental impacts.

On hog processing capacity, there is no more hog processing capacity in Ontario currently. We have to look for markets outside the province, including Manitoba and the U.S. In terms of transportation, the processing deficit means that animals must be transported further and longer with higher transport rates, and there are limits on the amount of time an animal can be on a truck before needing feed and water.

In terms of environmental impacts, it means more diesel fuel and greenhouse gas emissions from transporting these longer distances. This means an additional $25 per hog in transport costs to other jurisdictions. I was marketing 10,000 pigs per year to Olymel in the past. That's $250,000 a year net impact if I didn't make changes to my farm operation.

We support initiatives that would have additional processing capacity located closer to home. Domestic processing allows value-add to happen in Canada, resulting in more jobs and economic activity.

Ontario Pork is open to working together with government and industry to bring solutions to these capacity challenges and better balance processing capacity over the short and long term. We want to work with all parties. Despite these processing challenges today, we know there's an increasing worldwide demand for the pork we produce in Canada.

Thank you.

[The Chair, Liberal, Kody Blois]

Thank you very much to all our witnesses.

We'll now to turn to questions from committee members.

Colleagues, we're only going to have two rounds. There won't be an ability to do three rounds, so govern yourselves accordingly.

I think I have Ms. Rood, but I'll turn to the Conservatives for up to six minutes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Chair.

Thank you very much, witnesses, for being here today on this very important topic.

This plant closure will impact a lot of Canadians in multiple provinces, especially producers in my home riding of Lambton—Kent—Middlesex, where I have a large number of hog producers. They're very concerned about this plant closure.

In 2020 with COVID, we saw a backlog of capacity due to shutdowns, slow production and social distancing measures. Producers in Ontario at that time were forced to find alternative processing such as in Alberta, Manitoba or the U.S. Those are some long distances for live animals to travel, as some of you have mentioned here today.

When I spoke with producers back then, I know that many of them were facing a lot of psychological distress from having to deal with all of a sudden trying to find somewhere else to send live animals. This isn't like produce or like grain or oilseeds. These are live animals that have to be sent somewhere to be processed.

I'm wondering, Mr. Schwindt, if you would comment on what this plant closure will mean for Ontario producers. Second, how will this closure impact capacity, potentially for some organic pork producers as well? I have some organic folks in my riding, and they were also affected by this plant closure during COVID.

You alluded to having to ship animal farther distances. I'm also wondering if you can comment on how, in having to transfer animals to other provinces, the new e-logs will come into play with the transport of live animals farther distances.

[Eric Schwindt]

Definitely, this is creating a lot of heartache for producers. We're good at producing pigs. We care about our animals.

Marching them halfway across the country to Manitoba or even Red Deer is hard on the animals, and it's hard on the infrastructure. We don't have enough trucks or truck drivers to move that number of animals that far.

In the pork barn or production system, pigs are produced. They are born every day, and they go to market every day. Every time the system is backed up, pig welfare could be compromised if markets aren't found. The result is an economic cost to the farmer, because we need that market today. The $25 a hog, or $50 per hog, as Mr. Duval spoke of, is crippling for family farms across Ontario and across Canada.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you for that.

On that as well, if we lose access to the U.S., what would that do to our pork producers here in Canada, in Ontario especially?

[Eric Schwindt]

We'd be in a lot of trouble. The U.S. market has been a good market for us for many years. Definitely the last two to three years as Olymel began reducing their capacity, we've moved more and more hogs south. The Coldwater plant in Michigan has become an excellent customer. We're a valued partner with them today. Without that home, we're talking Manitoba and Red Deer.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

We know that processing capacity is at a premium. It doesn't matter what animal we're looking at. We definitely need more processing capacity in this country, especially in Ontario.

Our producers are resilient, and they're problem-solvers. They're always looking for ways to solve capacity issues. I've spoken with some of my constituents directly who would like to build a new facility, a federally inspected facility, here in Ontario. It would create a lot of jobs, 700 jobs.

I'm wondering if you would comment on what the government could do right now to increase domestic processing for pork production in Ontario.

[Eric Schwindt]

Definitely marketing pork is a tough business, but there's huge opportunity around the world. Asia loves pork. It's their protein of choice.

The government's role is twofold. Mr. Roy talked about trade agreements and market access. We definitely need trade agreements. We also need the practical application of those agreements so we can get the pork into the markets. The second major thing is the workforce. Temporary foreign worker programs and pathways to citizenship are ways to improve the competitiveness of our market. Also, we need a partner. The government has a huge role in building that bridge between producers and processing companies to develop a viable business plan to grow our industry.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I mentioned the e-logs, and we're dealing with live animals. I'm wondering if you could comment on what these new e-logs are going to do. Will they put animal health at risk? What are some of the impacts that these are going to have on this industry, especially now that we're going to have to try to find different places to send these hogs to?

[Eric Schwindt]

As an industry, we believe in looking after animals well. The e-logs are proof that we're doing a good job on transportation.

The biggest issue is going to be loading and unloading hogs at Thunder Bay. The question I would have for government and academia is how we improve animal welfare and do the best job of moving the animals across the country. Is it unloading and loading? Is it moving trucks to keep them moving instead of pausing?

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I think I only have about 30 seconds left. My colleague has a quick question here for you.

[Richard Lehoux, Conservative, Beauce, QC]

Mr. Duval, you talked about labour problems. Is it the same for producers? Perhaps we should send a clear message to IRCC.

[David Duval]

Yes, clearly. On the labour side, I've had seven employees for seven years now and every time I have to go through the same application process again. This work should be much more fluid. There are also announcements about the possibility of some workers becoming Canadian citizens. I have two employees who want to become Canadian citizens, but we have been in the first stage of this process for two years. It is very long and very discouraging for producers.

Thank you, Mr. Chair.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Duval and Mr. Lehoux.

Now we go to Mr. Louis for up to six minutes, please.

We go over to you, Mr. Louis.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Chair.

I also want to thank the witnesses whether they're here virtually or in person.

We're here, and we appreciate our witnesses being here, because we sympathize with all those affected by this recent news. We're all concerned about plant closures whether they happen in Quebec or Ontario or anywhere across Canada. You can see our support here is non-partisan.

In my riding, Mr. Schwindt, as you know, Conestoga Meats is a farmer-owned co-op model. It's the second-largest pork producer in Ontario. As a co-operative, Conestoga Meat Packers has 160 members. Those are farmers who own shares in the co-operative. Each member has also a shipping share, which represents the right to ship products. These are factors that help secure a reliable place to ship hogs and also a premium above market pricing for their shipment.

Mr. Schwindt, what can you tell us about the benefits of this kind of structuring, and what are the challenges?

[Eric Schwindt]

Conestoga has been a huge win for the Ontario hog industry for the past 10 years. It's been a 30-year process to get to where it is today, but the current membership takes out a lot of volatility. We heard in the previous session Olymel is a victim of volatile markets. By expanding down the value chain, producers are selling pork, not just pigs. It takes that volatility out. They're able to capture value from the marketplace and be more diversified. That's been a huge win over the past eight to 10 years.

Duplicating that model would be wonderful. As an outside producer, however, I don't know how realistic it is on its own. Marketing pork is a tough business and to enter a new marketplace a producer co-op would need marketing expertise for pork. Partnerships and working together on that could be a good opportunity to replace some of the Vallée-Jonction production.