Evidence of meeting #92 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.
A recording is available from Parliament.
11:55 a.m.
Liberal
The Chair Liberal Kody Blois
We'll see if we have enough time at the end, but we have to go to Monsieur Perron.
Monsieur Perron, you have two minutes and 30 seconds, please.
11:55 a.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you, Mr. Chair.
Mr. Lemaire, I discussed the reciprocity of standards with Mr. Larrass, and he told me you might be in a better position than him to answer my questions on the subject.
Do products that come from outside Canada meet the standards we set for our local producers?
11:55 a.m.
President, Canadian Produce Marketing Association
Products should not be entering the country if they have not met Canadian standards.
Mechanisms are in place at the border to protect the Canadian marketplace. If a product is crossing the border without meeting our quality, food safety and labelling standards, then it's a greater discussion we need to have with border services and the Canadian Food Inspection Agency.
11:55 a.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I see.
It throws production costs out of whack.
Mr. Larrass mentioned grapes from Peru, blueberries from Chile and strawberries and raspberries from Mexico. We could also mention carrots from China.
Are we really exercising control at the border?
Isn't there something we could do to exercise effective control?
Should we consider setting tariffs for products where standards aren't consistent with our own? The money thus collected could be used to help our businesses improve their environmental performance.
What do you think of that?
11:55 a.m.
President, Canadian Produce Marketing Association
I have a great concern on a tariff-based system, only because the country that establishes tariffs is also the country that has to deal with tariffs on their trading programs.
We've been fortunate enough in the fresh fruit and vegetable industry to be a non-tariff form of business, and we work effectively with our trading partners to ensure that we have open markets. That way, we can ensure that the Canadian grower has access to markets without the burden of additional tariffs, because we've put similar models in place, and then a reciprocal model is then in place.
I want to quickly talk about the EU. You were correct relative to the standards in the EU and access to that market: If you don't meet the standards, you don't access the market.
However, one thing we saw in the EU—and this is important—is that on their pest regulatory framework, they've stepped back from removing pest management tools from their regulatory tool box because they've realized that the growers need them and there are no other alternatives.
It's something we need to watch closely in the same context in Canada. Let's not burden the grower without having tools in their tool box to effectively grow the products Canadians need.
11:55 a.m.
Liberal
The Chair Liberal Kody Blois
Thank you very much, Mr. Lemaire and Mr. Perron.
Mr. MacGregor, go ahead for two and a half minutes.
11:55 a.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you, Mr. Chair.
Mr. Lemaire, I'd like to continue with you on the packaging alternatives.
In British Columbia we have a very strong attachment to our forest industry, and I want to put a plug in for a local pulp mill in my riding, the Crofton Pulp and Paper Mill, because they were, for a number of years, really trying to upgrade their paper line to make specialty paper products that would replace single-use plastics. They have run into some troubles because of fibre availability.
I remember that when I was at the CPMA convention in Montreal—I think it was in April of 2022—I saw an industry showcase on some of the fibre-based innovative packaging that was coming out. Can you talk a little bit more about some of the developments that are going on in that area? I understand that they are not suitable in all cases, but do you see that maybe in the next five to 10 years, some really critical advances in fibre-based packaging could help support struggling pulp mills out on the west coast of British Columbia?
11:55 a.m.
President, Canadian Produce Marketing Association
Thank you, Mr. MacGregor.
The question is good.
There is a CPMA member company whose product line is called Earthcycle. They actually were with us in Europe promoting this Canadian product. It has a fibre base, and they have a range of other products that do meet the market and meet an environmental footprint.
On your comment, is it a one solution for all? No, and this is where we have to pick the right package for the right product for the right system, and there's the complexity of what that means.
On the pulp discussion, fibre packaging had a 14% increase at the end of 2023. That was on top of a 13% increase in the spring. A 27% increase in fibre packaging in Canada has a tremendous impact to the cost of product through the system. As Stefan has mentioned, it doesn't always get conveyed to the consumer in full because the grower and the supply chain absorb some of that, but we're at the end.
I want to talk about a couple of other components in a study. In Canada, as you know, I'm the chair of the Global Coalition of Fresh Produce. Labour costs are up 18% in Canada. This was in 2023. There was a 16% increase in plant-based material costs, a 21% increase in crop protection costs, a 24% increase in energy costs, and a 20% increase in the cost of machinery and equipment. These are generalized numbers across the fruit and vegetable industry, but those costs have to move somewhere. The growers cannot burden themselves with them anymore. We're at a tipping point.
Noon
Liberal
The Chair Liberal Kody Blois
Thank you, Mr. MacGregor.
Mr. Lemaire, you know I'm supportive of BIll C-234. I supported it at the House level. You mentioned $22 million of carbon price-related costs. I believe four-fifths of on-farm costs are exempt, but for the one-fifth that's not, it's $22 million.
Can you quantify that in the size of the industry? Again, I'm sympathetic to this and I support it, but just for the committee's benefit, given $22 million in cost, how big is the greenhouse sector in the country in terms of—
Noon
President, Canadian Produce Marketing Association
Off the top of my head, I'd say the greenhouse sector is just under $1 billion.
Noon
Liberal
The Chair Liberal Kody Blois
Thank you.
On behalf of the committee, I'd like to thank Mr. Spurr for coming from Nova Scotia and Mr. Larrass for coming on behalf of Fruit and Vegetable Growers of Canada. We also thank Mr. Lemaire, who is no stranger to this committee, for coming on behalf of the CPMA. Thank you.
Colleagues, before we suspend, we talked about a grocery code of conduct and sending letters to grocery CEOs. We've done that work. I suggested to the analysts that we would include a press release explaining that the committee is calling for that. I'm looking for your approval in that regard.
Are there no issues with a press release to inform folks of what we're doing? Good.
Okay. The meeting is suspended. We'll be right back. Please don't go too far.
12:05 p.m.
Liberal
The Chair Liberal Kody Blois
Colleagues, we're going to get started on the second hour. That was a great first hour of testimony.
For our second hour, we have three different witnesses with us.
We would like to welcome Catherine Lefebvre, president of the Association des producteurs maraîchers du Québec, and Patrice Léger Bourgoin, general manager of that same organization. Welcome to you both.
We also have Jennifer Pfenning, president of the National Farmers Union.
It's nice to see you online, Ms. Pfenning.
From the Nova Scotia Fruit Growers' Association, and no stranger to our folks in the Annapolis Valley, we have Emily Lutz, executive director, and Jeffrey Walsh, who is a director and an apple grower.
It's great to have you guys here in Ottawa.
We're going to have five minutes for opening remarks, and then we'll turn it over to questions. We might have to go just beyond one o'clock, but I'll do my best to manage the time.
Mr. Léger Bourgoin, go ahead for five minutes.
12:05 p.m.
Patrice Léger Bourgoin General Manager, Association des producteurs maraîchers du Québec
Ladies and gentlemen, thank you for inviting us to appear before you and for the time you are giving us.
For some months now, fruit and vegetable growers in Europe and Quebec have obviously expressed despair at a challenging economic and societal climate. Last summer, 60% of Quebec farmland was affected by excess water, which resulted in estimated lost sales of at least $143 million. Climate vagaries have also resulted in additional costs of approximately $7.3 million.
These few numbers illustrate the economic pressure that our businesses are now facing. Every season, fruit and vegetable entrepreneurs have to invest millions of dollars in their farms if they are large producers, and tens—or even hundreds—of thousands of dollars if they are small producers, before they can make a single dollar. To finance their operations, farmers are, now more than ever, forced to put their land up as collateral in order to get financing. This cannot go on for much longer.
In the specific case of Ireland, a new and troubling trend began in the summer of 2023. Many vegetables, such as cauliflower, carrots and broccoli, temporarily disappeared from grocers' shelves. One prominent economist, Jim Power, outlined his analysis to industry leaders, noting that the number of Irish field vegetable producers had decreased from 377 in 1999 to 166 in 2014, a 56% decline. And that number has fallen even further since then.
In light of this observation, a more equitable sharing of risk among supply chain partners has become inevitable. For several years now, for example, the European Union has been considering measures to improve protection for farmers in the supply chain, and an act has been passed to prohibit 16 commercial practices.
In the circumstances, we welcome the efforts that Mr. Champagne, the Minister of Innovation, Science and Industry, is making to identify solutions for price volatility. However, the consequences of those solutions must not undermine the economic health of fruit and vegetable producers. In Ireland, economist Jim Power has observed that rising imports and the increasing concentration of a small number of very powerful retailers have had a significant negative impact. The growing market share of the discount chains has had a significant effect on the prices that fruit and vegetable producers have received for their products. Consequently, again according to Mr. Power, many farmers have been forced to shut down operations.
A safety net must be put in place to protect small and medium-sized businesses from the giant food chains.
12:10 p.m.
Catherine Lefebvre President, Association des producteurs maraîchers du Québec
In addition, our main sustainable development concern is the level of regulatory requirements in both Quebec and Canada. We're being hurt in three ways in Quebec.
First, most consumers perceive no added value in purchasing fresh fruit and vegetables that have been produced in accordance with high social responsibility standards.
Second, our governments don't rigorously observe reciprocity in international standards the way they should.
Third, with respect to environmental, social and governance factors, ESG factors, all major retailers in Canada boast about the constant, sustainable efforts they make, but they in fact don't abide by their own rules. If they did apply those factors, Canadian products would be favoured over others, and purchasers would pay a premium on those products for meeting the applicable standards.
Consider this example. In January 2024, a major food chain purchased an entire shipment of products from a Quebec producer and raised the farm gate price by 114% to set the retail price. A few days later, the producer was told to take back more than two-thirds of the shipment because the retailer had been offered a lower price by a Mexican producer. Despite the cut to the price paid by the retailer, the in-store selling price remained unchanged. Consequently, there was no benefit for consumers.
Now let's consider solutions. It's impossible to address climate change without seriously attacking it head-on. It's almost essential that the federal government introduce a food security and climate change adaptation plan together with producers and the provincial governments. To do this, financial support for businesses is critical in enabling them to adapt to climate change.
In the circumstances, we would welcome an enhancement of the AgriStability program to reflect successive years of losses as a result of weather and climate change. The interest-free tranche for early payments, which was increased by $100,000 this year, should also be maintained at $350,000.
In conclusion, whereas the Canadian population is now—
12:10 p.m.
Liberal
The Chair Liberal Kody Blois
Ms. Lefebvre, your allotted time is unfortunately up, but I trust that committee members will have an opportunity to question you during the period reserved for that purpose.
We will now hear from Ms. Pfenning for up to five minutes.
12:10 p.m.
Jennifer Pfenning President, National Farmers Union
Thank you.
I am a farmer and a mother of the next generation of farmers. Founded in 1981, our family farm has grown to approximately 700 acres of organic vegetables. The third generation on this land, my sons and nephews, have chosen to make their careers in farming food in the family business. We grow carrots and a variety of other root crops, as well as leafy greens and cooking vegetables. We are also a distributor, providing market access for a network of other local farms.
Thank you for inviting us to participate in your study of this critically important issue. Canada’s food guide recommends, as you heard from Mr. Lemaire earlier, that half our plate be made up of produce, horticultural crops, at every meal. We can’t overstate how important it is for Canada to have a thriving horticulture sector to provide this food.
I am a farmer and I need to make a living. I need affordable seed, affordable land, suitable water for irrigation when necessary, a return that allows me to pay employees a fair wage and provide safe working conditions, and as predictable a climate as possible to accomplish all of this. We know that long-lasting GHGs will keep warming the planet even if we stop emitting today. We must adapt, and we must drastically reduce our emissions.
You as members of the agriculture committee have a duty to do everything you can to reduce emissions from the oil and gas industry and to stop the destruction of the wild areas and biodiversity that remove atmospheric CO2.
The existing BRM solutions are designed for broadacre crops and so do not work well for horticulture, and even less well in the context of climate disruption. The costs of applying can exceed any potential return if AgriStability is triggered. The high value per acre, diversity and perishability of our crops make damage assessment so complex that it is extremely difficult to create formulas to assess weather and storm losses. Thus, any compensation available is low and may not be adequate to keep affected farms in production, particularly if claims are processed so slowly that the next revenue-generating crop is unduly delayed.
We must invest in the on-farm infrastructure needed to adapt to our changing climate. Some specific examples are water treatment infrastructure for sustainable irrigation, photovoltaics integrated into shade structures and greenhouse design and technology that integrate photovoltaics and heat storage. We also need public plant breeding of locally adapted horticultural crop varieties made available royalty-free to growers.
Class 1 and 2 farmland located near urban centres must be protected for our food sovereignty. Canada needs policy solutions to ensure that this land is protected and reserved for farmers growing food. To ensure that farmers can succeed under changing climate conditions, the NFU proposes that AAFC establish a Canadian farm resilience agency to provide farmers in horticulture and other sectors all across the country with trustworthy advice delivered by independent extension personnel who are not tied to agribusiness corporations.
With public agronomists to provide practical advice and researchers to develop new methods, farmers can increase their farms’ resilience to climate change and reliably produce the food Canadians need. Spending just a dollar or two per acre of Canadian farmland could result in the necessary adaptation and resilience. Savings from preventing crop losses and BRM payments would greatly exceed the cost of extension services, so these important services for farmers could be had at no net cost. By promoting the resilience needed for Canadian horticulture farmers, we can expand their market share and keep a much higher proportion of the Canadian food dollar within our economy.
We are here to address the climate impacts threatening the economic viability of our farms. We also face a rapid rise in costs of production, accompanied by downward pressure on the price we can command.
The farmer’s share of the consumer food dollar is small, so grocery store price increases disproportionately benefit the large retailers. Increasing ownership concentration in wholesale and food processing further depresses our returns. Falling returns are creating a structural deficit. The difference is being taken out of the land, farm workers' labour and the farmer's income. Failure to address these issues means ever fewer Canadian horticultural farms; less of our food being grown in Canada; and vulnerability to environmental, political and economic conditions in the countries our imported food comes from.
Addressing these overarching issues is supported by Canada's food policy vision, which is: “All people in Canada are able to access a sufficient amount of safe, nutritious and culturally diverse food.”
12:15 p.m.
Liberal
The Chair Liberal Kody Blois
Ms. Pfenning, I've given you a few extra seconds. We're at time. If you have any final quick thoughts, please convey them very quickly.
12:15 p.m.
President, National Farmers Union
A viable, resilient horticulture sector is a critical component of Canada's food system, and if we don't support it, we erode our sovereignty as a nation.
12:15 p.m.
Liberal
The Chair Liberal Kody Blois
Thank you, Ms. Pfenning.
I apologize to the witnesses. We're always constrained in time here on Parliament Hill.
Mr. Walsh, it's over to you for five minutes.
February 15th, 2024 / 12:15 p.m.
Jeffrey Walsh Director, Apple Grower, Nova Scotia Fruit Growers' Association
Good morning, everyone.
Distinguished committee members and fellow presenters, my name is Jeffrey Walsh. I am a third generation apple farmer from Rockland, Nova Scotia. I'm here representing the Nova Scotia Fruit Growers' Association as the recently elected vice-president.
Our association represents tree fruit growers of Nova Scotia, which means primarily apples, but we also grow pears, peaches and other stone fruit.
The NSFGA was created in 1863 and has a long history of promoting education and advocacy among farmers. Over the last 30 years, Nova Scotia apple growers have invested in high-density orchards of valuable new varieties, making us a leader in Canada's production of apples.
Today I'm going to speak on three issues facing our industry.
The first issue is pest management and crop protection products required for growing apples.
As a farmer, I see the challenges that arise when certain products are either deregistered or limited to the extent that it's impractical to use them at all. The PMRA, or Pesticide Management Regulatory Agency, is responsible for rules and decides which products are allowed or not. The pest management centre, or PMC, is a different body that helps generate new data for guiding rules around pesticide use.
While the PMRA has been undergoing work to become more transparent and accountable, the PMC does not seem to be receiving the same support. The PMC collects data through research and studies that provide information on important decisions that have enormous impacts on our industry. As an example, many apple farmers in Canada are facing a serious disease in orchards called “fireblight”, which causes trees to die. There are limited products to fight this disease, and the ones we do have are essential to protecting our orchards. If we lose them, our entire industry is in jeopardy.
We need to invest in solid data and evidence to prove the safety and efficacy of these products and also to seek good alternatives if there are reasons to, so that we can continue to grow food. This leads me to my final point on this topic, which is that our association supports private member's Bill C-359. We should take advantage of work in other trusted jurisdictions to allow quicker access to safe and tested crop protection products for our Canadian farms.
The second issue is labour. Most horticulture farmers take advantage of seasonal agricultural worker and temporary foreign worker programs. These programs are essential to our businesses, and we could not farm successfully without them.
Some of these programs require the provision of on-farm housing, meaning that farmers are either buying or building accommodation, which is a huge cost. Due to the current housing market, many are choosing to build new; however, as I recently discovered after investing in accommodations of my own, none of the HST on the new build was eligible for an input tax credit, due to a policy of the Department of Finance. This came as a shock, as most other commercial necessities on farms are eligible for a rebate.
Along with the Nova Scotia Federation of Agriculture and the Canadian Federation of Agriculture, we are requesting that this be changed, and we encourage you to support us in this work. It would help farms with cash flow and encourage more investment in worker housing. It's really important that farmers provide high-quality homes for employees to live in, as we want them to feel safe, valued and comfortable in their housing and hopefully return to us year after year.
As a final note on labour, I want to recognize the Government of Canada for implementing the recognized employer pilot, which has made it easier for farmers to apply and has reduced red tape while also ensuring that those who do not follow the rules are restricted in accessing these programs. It's imperative that we work together to make sure the employees and the farmers are benefiting and the rules are being followed.
The final issue I want to briefly to speak on today is cost. It's becoming more expensive to grow food, and despite high prices in grocery stores, farmers are seeing declining returns. For costs like labour, trellises, trees, orchard maintenance equipment, fuel and even the bins to put apples in, everything is going up. We are competing with exports from other countries and with states like Washington that put downward pressure on our prices. Oftentimes, those countries see less pressure in their costs of production than we face in Canada, and many of them are well supported by their government in the work they do.
I encourage all of you to keep fighting on behalf of farmers so that we can continue to compete. I appreciate the work all of you do on this committee to support growers and farmers in our sector. I appreciate your time today and I thank you very much for the invitation to speak.
12:20 p.m.
Liberal
The Chair Liberal Kody Blois
Thank you very much, Mr. Walsh.
We'll now turn to questions.
I'm going to turn to Mr. Lehoux for up to six minutes.
12:20 p.m.
Conservative
Richard Lehoux Conservative Beauce, QC
Thank you very much, Mr. Chair.
Thanks to the witnesses for being with us today.
My question is for Ms. Lefebvre or Mr. Léger Bourgoin.
Bill C-280 is now at the second reading stage in the Senate, and we hope it will receive royal assent as soon as possible.
Do you have a clear message for us regarding the direction and relevance of Bill C-280?
12:20 p.m.
President, Association des producteurs maraîchers du Québec
Bill C-280 is very good for us. It represents financial security. Given the number of clients we have, I'd say it really represents financial security for Quebec.