Public Accounts Committee on May 14th, 2014

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

I would like to point out that your final conclusion is still rather harsh, especially coming from a man who is as reserved as yourself. Paragraph 8.59 states:

We concluded that Agriculture and Agri-Food Canada does not adequately manage the federal role in providing disaster relief to producers.

I think it is very important that we give Agriculture and Agri-Food Canada an opportunity to speak. What could you do, quickly, even very quickly, to make sure that this conclusion stops being the case?

[Tina Namiesniowski]

Mr. Chairman, as I had referenced before, the earlier audit that had been referred to did raise questions of timeliness around two other business risk management programs: AgriStability and AgriInvest. I would say we've made significant progress and we are currently exceeding our standards in relation to timeliness for both of those. So I am equally hopeful that, in relation to this particular audit, we will make progress in terms of implementing the responses to the recommendations and improving our timeliness.

In terms of trying to do this quickly, as I have said repeatedly, this is a shared jurisdiction issue, and we are engaged quite aggressively with our provincial and territorial colleagues to try to address the findings that have been raised in the context of this audit. We will continue to do so until we come to what we believe is a satisfactory implementation of the actions associated with the recommendations.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

I have a very brief question.

It was pointed out that one of the ongoing problems was not only the timelines but also—and this is very unfortunate—your criteria. In fact, you act when there is a request for provincial-federal cooperation and not when the producers realize they have lost their harvest.

If an apple tree loses its flowers in May, the grower knows this in May. If that request is only made in October, then four months is added on to the ten months.

You calculate your administrative timelines. However, the grower's timeline is dictated by the bank, not by you. That is when you missed the boat, and in a big way. That is one of the strongest criticisms expressed by producers.

Given that the timelines have sometimes been four months, could we hope to see approximately four-month criteria?

[Tina Namiesniowski]

I will try to answer that question.

[The Chair, NDP, David Christopherson]

Please be really brief, because that was a very long “short” question.

[Tina Namiesniowski]

We realize that the growers face immediate problems. That is why we try to have a certain level of interaction with each of these individuals in order to determine whether or not an existing program can be used to improve their situation. We attempt to find a way of immediately using one of the three following programs: AgriInvest, AgriStability and AgriProtection.

In terms of the AgriRecovery Program timelines, we need to obtain the approval and agreement of other authorities.

[The Chair, NDP, David Christopherson]

Wrap up, please

[Tina Namiesniowski]

We have to apply the criteria and decide whether we are going to have a specific initiative to respond to that particular situation.

[The Chair, NDP, David Christopherson]

Good. Thank you.

Now we go over to Mr. Albas.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Thank you, Mr. Chair.

Now, Mr. Auditor General, a number of points were raised in the Agri officials' submission earlier today. On pages 8 and 9, in a series of responses and achievements, I want to read out the second to the last paragraph on page 9 of their submission: “These achievements ensured that approximately 90% of the funding under all initiatives made it to producers within the 10-and-a-half-month timeline.”

Is that correct?

[Michael Ferguson]

I can't speak to initiatives that they have undertaken. That's what the department has said.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

OK. That’s fair enough.

I'd like to cover what Mr. Hayes referred to earlier, specifically that it seemed to be that there are different issues with trout, with disease, when we have flooding or excess moisture, as it says here. He suggested that perhaps the department should look at creating, instead of an arbitrary 45 days—and we've heard from the officials here today that it is a very arbitrary 45-day deadline that they are going to be renegotiating with the provinces so that these kinds of issues get dealt with.

I do notice that your recommendation in paragraph 8.44 says that, “Agriculture and Agri-Food Canada should assess risk for each AgriRecovery initiative and streamline its administrative effort for smaller, lower-value initiatives.”

Are you saying, very similar to what Mr. Hayes suggested, that perhaps there should be a different risk assessment and perhaps a different time period for these more complicated matters so that it's based more on a situation? Is that what the recommendation is saying?

[Michael Ferguson]

We've recommended a few things. One thing we recommended was that they do the analysis to understand why they are missing the timelines in certain cases. Based on the understanding of why timelines are missed, you can then determine how to structure the program. It could be based on value of payment, possibly, it could be based on the reason or the underlying event.

I think, though, the other thing to keep in mind is that the program is there to provide quick, targeted assistance to producers to facilitate their return to work. It needs to be taking into account not only how long it takes to process something, but also it needs to very much be based on when the producers need to receive the payment.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Mr. Chair, forgive me. I forgot to say I was going to keep my comments brief and just pass it to Mr. Hayes—but, to me, I think that in this matter, we'd probably see a lot less issue with that 45 days because it does seem to me rather arbitrary. I hope officials take note and can find a more workable assessment period.

If you don't mind, Mr. Chair, I’m giving Mr. Hayes my time.

[The Chair, NDP, David Christopherson]

No. Very good. Mr. Hayes has the floor.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

During the course of this audit, $54 million was paid out for 28 events. Do we have any data on how many producers actually went out of business as a direct result of a payment that did not meet the targeted payment deadline under AgriRecovery?

[Michael Ferguson]

We certainly wouldn't have that. I don't know whether the department would have any information about producers.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

I'll ask that question to the department officials.

[Rosser Lloyd]

We have no data. We have no indication that any such situation exists.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

I'll go back to payments for a second.

Who coordinates the payment? It's a 60-40 split between the feds and the province, so I'll put this to the officials: who coordinates the ultimate handover of the cheque? Is it a 60-40 two-cheque handover? Is it a one-cheque handover? Does it occur at the same time?

[Rosser Lloyd]

In the vast majority of situations, it's the provinces that deliver the funding. They tend to rely on their AgriInsurance, their production insurance staff, to make those payments.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

So you reimburse the province, do you?

[Rosser Lloyd]

That's correct.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

OK. I see. I have one more question.

I want to talk a little bit about the assessment process. How difficult is it to determine under the assessment process if criteria are met? Of those people that apply under the assessment process, how many actually get approved for the assessment process? Or is it a really difficult process to get approved for?

[Tina Namiesniowski]

I can start on that.

I think I referred to it earlier, Mr. Chairman. There is a two-step assessment process. It's triggered—that was the word I was looking for before—either by the federal government or by the provincial government, but most normally by another jurisdiction.

The first step in the assessment process is a preliminary assessment, and there are specific criteria that are looked at. One is that the disaster event isn't a recurring event. One is that the disaster event is an abnormal event and therefore is something that producers could not have foreseen and prepared for. The third is that the disaster would result in extraordinary costs to producers, which are costs that they would not normally incur resulting from actions they must take in order to mitigate the impacts and/or resume production as quickly as possible. In terms of that preliminary assessment, those three criteria must be met to trigger a formal assessment.

In terms of the criteria that are looked at from a formal assessment point of view, it's that the incident would be a collective experience affecting a large enough number of producers in a region such that it has an impact on the sector in that region; that it results in significant negative impacts on affected producers and their capacity to produce or market agricultural products; and that it results in significant extraordinary costs. Again, those are defined as costs that would have a substantial impact on producer's income and are large enough that it makes sense for governments to help with those costs, and that it be beyond a producer's capacity to manage even with the assistance available through existing programs.

That last point is what we've been trying to underscore: that we really attempt to use the other business risk management programs, and if they're not sufficient, that's typically when you would have an AgriRecovery initiative approved by governments.