Public Accounts Committee on March 1st, 2022

[The Clerk of the Committee, Ms. Angela Crandall]

I must inform members that the clerk of the committee can only receive motions for the election of the Chair.

I'm ready to receive nominations for the election of the chair, pursuant to Standing Order 106(2).

Is there anyone ready to move a motion for the election of the chair?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I nominate John Williamson.

[The Clerk]

Okay. Are there any other motions?

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Do you need a motion to cease nominations?

[The Clerk]

No. If there are no other motions, the motion proposed by Mr. Lawrence is that Mr. Williamson be elected chair of the committee.

Is the committee willing to accept the motion?

(Motion agreed to)

Mr. Williamson, take the chair, please.

[Some hon. members]

Hear, hear!

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Congratulations, Chair. I look forward to working with you.

It's almost a new team. We still have Philip there, a constant.

[The Chair, Conservative, John Williamson]

We've had a big bench change.

I know we're in good hands with Mr. Lawrence on our side who will guide us all, and I know the government members are well versed in this, as are the other opposition members.

I will gavel the meeting to order.

I would like to thank you for electing me as chair of this committee.

I'd like to welcome you all to meeting number seven of the House of Commons Standing Committee on Public Accounts.

This being my first meeting, I'll say I represent a fishing riding back home, and when you're in stormy or uncharted weather, you hold the tiller straight and you ride it through. I'm going to run this meeting as efficiently and as best I can today, and I will refer to the clerk and the analysts as needed. However, I know this is an experienced committee that runs well, so I think we'll have no problems.

Pursuant to Standing Order 108(3)(g), the committee is meeting today to undertake a study on “Report 12: Protecting Canada's Food System”.

Today’s meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in this room and remotely using the Zoom application.

The proceedings will be made available via the House of Commons website. Just so that you are aware, the webcast will show the person speaking rather than the entirety of the committee. I would like to take this opportunity to remind all participants in this meeting that taking screenshots or photos of your screen is not permitted.

Given the ongoing pandemic situation, and in light of the recommendations from health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain two-metres of physical distancing and must wear a non-medical mask when circulating in this room. As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.

To ensure an orderly meeting, I'd like to outline a few rules.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of the floor, English or French. If interpretation is lost, please inform me immediately and we will ensure that interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.

For members participating in person, proceed as you usually would when the whole committee is meeting in person or in a committee room. Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you are not speaking, your mike should be on mute. I remind you that all comments by members and witnesses should be addressed through the chair.

With regard to the speaking list, the committee clerk and I will do the best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.

I would now like to welcome our witnesses.

From the Office of the Auditor General, we have Andrew Hayes, deputy Auditor General; Kimberley Leach, principal; and James Reinhart, director. From the Atlantic Canada Opportunities Agency, we have Francis P. McGuire, president. From Canada Economic Development for Quebec Regions, we have Manon Brassard, deputy minister and president, and Marie‑Claude Petit, vice-president, operations. From the Department of Agriculture and Agri-Food, we have Chris Forbes, deputy minister. From the Department of Crown-Indigenous Relations and Northern Affairs, we have Daniel Quan-Watson, deputy minister; Paula Isaak, associate deputy minister; and Wayne Walsh, director general, northern strategy policy branch. From the Department of Fisheries and Oceans, we have Timothy Sargent, deputy minister; Niall O'Dea, senior assistant deputy minister, strategic policy; and Hugo Pagé, assistant deputy minister and chief financial officer. Finally, from Pacific Economic Development Agency of Canada, we have Dylan Jones, president, and Naina Sloan, vice-president.

I'd like to thank these accounting officers for being here today and I will issue a reminder to any department or agency invited to appear before the public accounts committee that we invite the deputy minister or equivalent accounting officer because of their responsibility for the issues we are studying and their obligation to appear before parliamentary committees. I think an important aspect of this committee, as we study the reports by the Auditor General, is to ensure that we have the appropriate public officers who can address concerns that the AG has raised. I know the Government of Canada is anxious to ensure that challenges are corrected so that we can deliver better programs for all of Canadians.

Each of the witnesses will have five minutes to make their opening statement. I assume that is five minutes per organization.

I will go to Mr. Hayes.

You have the floor.

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General]

Thank you, Mr. Chair.

We are happy to appear before the committee today to discuss our report on protecting Canada’s food system, which was tabled in the House of Commons on 9 December 2021. I want to start by acknowledging that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabeg.

Joining me today are Kimberley Leach, the principal who was responsible for the audit, and James Reinhart, the director who led the audit team.

When the COVID‑19 pandemic emerged in Canada in early 2020, not only did it directly threaten the health of Canadians, but it also disrupted Canada’s food system. For example, outbreaks in food production and processing facilities reduced or stopped production. Unemployment and loss of wages during the crisis also increased the risk of food insecurity, especially among vulnerable populations.

As part of its broad response to the pandemic, the Government of Canada announced a wide range of new programs and additional funding to existing programs. We examined three initiatives aimed at reducing food insecurity for Canadians: the Emergency Food Security Fund, the Surplus Food Rescue Program, and the Nutrition North Canada subsidy program.

We also examined initiatives meant to support the resilience of food processors in the agriculture and agrifood sector and the fish and seafood sector.

Overall, we found that these emergency programs helped mitigate some of the pandemic's effects on elements of Canada's food system. For example, we found that the additional $25 million that the nutrition north Canada program received in COVID-19-related support enabled the program to increase the amount of subsidized food that it shipped to remote and isolated communities during the pandemic.

However, problems with data and performance measurement prevented the departments and agencies from knowing whether the initiatives achieved all outcomes for reducing food insecurity or supporting the resilience of food processors in the agriculture and agri-food and the fish and seafood sectors. They also could not always measure the contributions of these programs to gender and diversity outcomes or to sustainable development commitments.

While we concluded that the responsible departments and agencies implemented many oversight controls for the delivery of the emergency food programs, we noted that there were some inconsistencies in program design across three of the initiatives. These inconsistencies led to unfairness for applicants and recipients across regions.

We also found that the government had not developed a national emergency preparedness and response plan that considered a crisis affecting the entire food system and Canadians' food security despite the government's having identified food as a critical infrastructure sector since 2009.

The departments agreed with all five of the recommendations we made in our report and have prepared action plans to address them.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

I will now turn to Mr. McGuire.

[Francis P. McGuire, President, Atlantic Canada Opportunities Agency]

Thank you very much and congratulations, Mr. Chair.

Good day to committee members. Thank you very much for the invitation.

I'd like to respectfully acknowledge that I am joining you today from the traditional territories of the Mi'kmaq, the Wolastoqiyik and the Peskotomuhkatiyik.

I'm here today to talk to you about the delivery of the Canadian seafood stabilization fund by our department, ACOA, the Atlantic Canada Opportunities Agency.

ACOA is a federal department charged with fuelling Atlantic economic growth. It works with business and community leaders to build a strong and inclusive economy. ACOA has a regular suite of programs, along with limited COVID-19 recovery measures, such as the Canadian seafood stabilization fund. We're helping Atlantic Canadians deal with the impact of the pandemic while supporting them to grow and to be more competitive and innovative at the same time.

As you may know, Canada’s fish and seafood processing industry is an essential part of our collective food security and our national economy. This sector has faced increased financial strain and market instability over the course of the pandemic.

The $62.5 million Canadian Seafood Stabilization Fund, launched in April 2020, provided urgent support to our country’s fish and seafood businesses so they could deal with the unprecedented loss of markets for their products, remain stable, keep paying their employees and eventually recover their prosperity.

The Fund, delivered through regional development agencies like ACOA, helped address funding gaps created by the pandemic, taking primarily into account regional needs and realities of this important industry. The Fund supported investments to improve the health and safety of employees, as well as the efficiency of business operations.

Specifically, and to deal with a lot of the inventory issues, funding was provided to fish and seafood processors in Atlantic Canada to do the following: increase freezer, cold storage and live storage capacities to deal with excess inventories; implement health and safety measures with PPE for the plants; adopt new advanced manufacturing and automation technologies as firms adapted to new market realities and new opportunities; and adapt to changing consumer demands.

ACOA was mandated to deliver the program on behalf of the Department of Fisheries and Oceans because of our nimbleness and proximity to the businesses and the processors.

Through ACOA, the fund supported in Atlantic Canada 132 projects with 97 seafood processors, for total of $42.7 million. An estimated 10,800 jobs were safeguarded through this funding and the continuing operations through the pandemic.

I would be pleased to give a few examples, but I think the members of the committee have it in our report. In the interest of time, I will pass the mike back to the chair.

Congratulations, John.

[The Chair, Conservative, John Williamson]

Thank you very much.

I should say that was the Atlantic Canada Opportunities Agency, an organization that I'm well familiar with, coming from Atlantic Canada myself.

Next up, from the Canada Economic Development for Quebec Regions, we have Manon Brassard.

Ms. Brassard, you have five minutes.

[Manon Brassard, Deputy Minister and President, Canada Economic development for Quebec Regions]

Thank you, Mr. Chair.

Committee members, good morning.

It is with great pleasure that I speak to you today as Deputy Minister and President of Canada Economic Development for Quebec Regions. Let me start by telling you that we have carefully read the Report of the Auditor General of Canada on Protecting Canada’s Food System.

The report looks at various measures, including the Canadian seafood stabilization fund, implemented by the regional development agencies, including CED.

The report does not make any recommendations regarding this fund. That said, as an agency, we take the findings into account with a view to ensuring the continuous improvement of our practices.

In Quebec, in villages such as Sainte-Thérèse-de-Gaspé, Paspébiac or Grande-Rivière, the impact of the pandemic on fishery product processing was expected to be disastrous for the communities. And so, Fisheries and Oceans Canada launched the Canadian Seafood Stabilization Fund. The primary objective of this one-time fund was to help fish and seafood processors, as well as the non-profit organizations that support them, cover COVID‑19–related costs incurred since the spring of 2020.

CED implemented this initiative in Quebec and received $9.1 million to help seafood processors remain operational and seize new business opportunities. To date, CED has provided almost $8 million for some 30 businesses and organizations in the Lower St. Lawrence, the Gaspé, Magdalen Islands, the North Shore and Saguenay–Lac-Saint-Jean regions.

This funding not only allowed them to remain in business and adjust to new health and market requirements, it also helped them ensure their long-term viability and future positioning and maintain jobs in the context of the economic recovery.

This support for our Quebec communities and businesses has helped maintain a safe and effective food system in Canada.

Since the beginning of the COVID‑19 pandemic, CED has been centre stage, working with the other regional development agencies to implement one-time, targeted initiatives to meet the needs of SMEs and communities in Quebec.

Considering the Auditor General’s report on protecting Canada’s—and therefore Quebec’s—food system, we recognize that this system is essential to the well-being of Canadians and the strength of our economy.

We remain committed to working with all the community stakeholders to ensure that we are ready to deploy solutions in future crisis situations.

I will conclude by saying that I’d be pleased to answer any questions.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Brassard.

Up next is Chris Forbes, from the Department of Agriculture and Agri-Food.

You have five minutes, please.

[Chris Forbes, Deputy Minister, Department of Agriculture and Agri-Food]

Thank you, Mr. Chair, and congratulations on your election.

I am coming to you today from the traditional unceded territory of the Algonquin nation here in Ottawa, and I'm pleased to provide a few opening remarks about Agriculture and Agri-Food Canada's response to the recommendations in the Auditor General's report on protecting Canada's food system. We welcome the findings of the report, which will certainly help us to better serve Canadians in the future.

If we look back during COVID-19, large swings in demand and labour shortages and closures put severe pressure on the food system and the food supply chain. Our objective as a department was to do what we needed to do to keep the supply chain strong by addressing pressure points as quickly as possible and making course corrections as needed.

We drew on a strong foundation of existing programs and mechanisms to create new programs quickly. We engaged broadly and forged connections among stakeholders and partners across the food system. This included new partners who were able to help deliver immediate program support for producers and other Canadians.

Over the first several months of the pandemic, we were able to deploy a number of programs quickly to help farmers and food processors maintain their cash flows and workforces, keep their farms and facilities safe and to manage supply chain disruptions. At the same time, we helped organizations working to address food insecurity meet increased demand at a time when they had to reorient their operations due to closures and disruptions.

Canada's food systems were stressed during the pandemic, but in the end they proved to be resilient and adaptable. The government put in place a number of specific emergency programs during the pandemic, including the $87-million emergency processing fund, which helped companies across Canada adopt health protocols and to automate or modernize their facilities to manage COVID pressures. The $50-million surplus food rescue program redistributed over 7 million kilograms of food, and our investments of $330 million under the emergency food security fund helped to improve access to food and increase food supply for vulnerable Canadians during the pandemic.

Our pandemic response gives us the opportunity to identify gaps so we can develop more resilient and equitable food systems that better meet the needs of Canadians going forward.

I can touch briefly on the report's key recommendation. We certainly acknowledge the need for national emergency preparedness and response planning for future crises with impacts across Canada's food system and the need to integrate food security into our emergency planning. We will continue to strengthen our engagement with FPT and indigenous partners and stakeholders to help Canada's food systems prepare and respond to future crises.

My department has committed to developing an action plan for engagement with federal, provincial and territorial governments and stakeholders, including indigenous groups, on emergency preparedness and response. We have already begun to strengthen key engagement mechanisms and departmental supports. For example, soon after the start of the pandemic, we brought together hundreds of stakeholders for regular roundtable calls through our food sector network. We will continue to learn from the experience acquired over the last two years and from the challenges facing Canada's food systems, in order to be better prepared for future emergencies.

We also agree with the report’s recommendation for greater fairness and transparency in program input and design. We are committed to delivering all programming with greater consistency, fairness, and transparency. Likewise, we’re committed to improving oversight controls and the development of performance measurements. Finally, we will reflect the diversity of Canadians, and the spectrum of social, economic, and environmental realities in future programming.

And we will continue to improve how we measure and report on contributions towards sustainable development commitments and gender and diversity outcomes in all our future initiatives around food.

Mr. Chair, as I said, we welcome the findings of the Auditor General’s report.

Thank you and I look forward to our discussion of these issues.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Forbes.

Next, from the Department of Crown-Indigenous Relations and Northern Affairs, is Daniel Quan-Watson.

Go ahead, please. You have five minutes.

[Daniel Quan-Watson, Deputy Minister, Department of Crown-Indigenous Relations and Northern Affairs]

Kwe kwe, ullukkut, tansi. Hello and bonjour.

May I start off, Mr. Chair, by congratulating you on your election today.

I'd like to acknowledge that I'm located on Treaty 6 territory, a traditional meeting ground and home for many indigenous peoples including Cree, Saulteaux, Niitsitapi, Blackfoot, Métis and Nakota Sioux peoples.

Access to healthy and affordable food has been an issue for too many isolated and indigenous communities in the north. Food insecurity is a drain on individuals and communities, saps away at the spirit, and is a roadblock towards development.

This department is working hard with partners to put in place measures to improve both the accessibility and affordability of nutritious food and other essential household items in northern and indigenous communities.

One of the programs we have developed to help address these challenges is the nutrition north Canada retail subsidy program.

CIRNAC officials have been in regular contact with indigenous and northern partners and the nutrition north advisory board, which comprises members who have extensive experience living and working across nutrition north Canada's delivery area, to understand and address their immediate and long-term food security concerns.

Nutrition north Canada programming is also directly informed by two working groups—the indigenous working group and the inuit-Crown food security working group, both of which ensure that northern indigenous and community perspectives are heard and considered.

We have also held ongoing discussions with territorial governments and other federal departments on collaborative long-term solutions towards food security. The Auditor General recommended that the department collect pricing data on pre-subsidy food items so that the program can show if it is meeting its objective of making food more affordable.

We agree with this recommendation and we have taken it to heart.

We've committed to working with registered retailers to collect pre-subsidy prices for eligible items. The program will also review and amend agreements with all retailers to require that pre-subsidy prices be submitted with monthly subsidy claims. We will make the results public on the CIRNAC website.

As the Auditor General's report highlights, the program increased access and, where data was available, affordability of nutritious food and essential household items to residents in isolated northern communities during the pandemic.

I can give you some examples. In June 2021, in Iqaluit, Nunavut, the impact of the increased retail subsidy can be seen in items such as these. A dozen eggs cost $7.05 before the subsidy and $4.29 after. Five pounds of fresh carrots was $16.13 before the subsidy and $7.99 after. We can show items that are now more accessible to northerners due to increased shipping volumes. For example, in 2021 over 42 million kilograms of subsidized food and essential items were shipped to isolated northern communities. This represents an increase of roughly 10 million kilograms or 30% over the previous year.

These examples show that the program has been successful in both making food and essential items more accessible and more affordable in the North.

The Government of Canada will continue working with partners to ensure that healthy food is available in northern and indigenous communities.

I look forward to any questions you may have.

Meegwetch, merci, marci and thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

Next, from the Department of Fisheries and Oceans, we have Timothy Sargent.

Go ahead, please. You have five minutes.

[Timothy Sargent, Deputy Minister, Department of Fisheries and Oceans]

Good morning, Mr. Chair.

The Canadian seafood stabilization fund was one of the emergency support programs implemented in response to the COVID-19 pandemic. It was a temporary fund. It was established to support Canada's fish and seafood processing sector through the crisis, support economic recovery, and help in supporting broader food security objectives during a period of significant uncertainty in Canada and, of course, around the world.

The fund provided $62.5 million in new temporary funding to the fish and seafood processing sector. It helped fish and seafood processors put in place health and safety measures to help protect workers against COVID-19 and maintain Canadian jobs. It also helped to increase plant capacity to process, store, package and distribute healthy high-quality products, and to adapt processes and marketing to suit changing consumer demands.

In establishing this fund we took an approach to leverage already established programming infrastructure to deliver funding support in an effective and timely way. The fund was developed in collaboration with the regional development agencies, including the Atlantic Canada Opportunities Agency, the Canada economic development agency for Quebec regions, and what was then called Western Economic Diversification Canada, now PacifiCan. The RDAs took a leading role in delivering this important funding to organizations on the front line.

This audit recognizes the speed with which the design and development of the emergency measures were put in place and the effectiveness of the coordinated response. Leveraging existing mechanisms from previously established programs and directing funding and delivery through the three RDAs that serve the Atlantic and Pacific regions removed the need to build a new program from scratch.

The audit found that despite the need for a rapid response the fund met requirements for accountability and transparency. It applied the needed oversight controls to the review and approval of applications, largely met service standards for funding decisions, and applied the proper oversight of spending by documenting the approval and tracking of payments to recipients.

The fund provided $62.5 million in support to 245 businesses and organizations in the Canadian fish and seafood sector, with approximately 5% of the funding going to businesses owned by women and 9% to indigenous-owned businesses. The funding helped the sector overcome challenges associated with the COVID-19 pandemic by increasing cold storage and inventory capacity, supporting retuning technologies and marketing efforts, and enhancing health and safety measures to minimize risks to workers.

Although the fund was intended to address the immediate and unprecedented challenges due to the pandemic, we recognized the importance of developing targets and indicators that help us measure and report on program contributions towards sustainable development commitments and to gender and diversity in order to improve assessment and outcomes. Therefore, the department agrees with the recommendation made by the Auditor General to ensure that future food-related initiatives measure and report on contributions to sustainable development and to gender-based analysis plus.

We addressed this recommendation by developing guidance material to support program managers or programs to better align program results with federal and departmental sustainability goals and GBA+. These guidance materials will be used by existing and future programs, including those supporting future food-related initiatives, thereby reinforcing the importance of considering both sustainable development and the needs of diverse groups across Canada in the planning and delivery of the programs as well as when measuring results.

Thank you, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you very much.

Our last witness, from the Pacific Economic Development Agency of Canada, is Dylan Jones. You have five minutes, please.

[Dylan Jones, President, Pacific Economic Development Agency of Canada]

Good morning. Tansi, Mr. Chair and honourable members. My name is Dylan Jones. I'm joining you today from Edmonton, which is Treaty 6 territory and within the Métis homeland.

I am the president of PacifiCan and the interim president of PrairiesCan. These are the successor agencies of WED, which delivered the seafood stabilization fund in western Canada on behalf of Fisheries and Oceans.

I will be brief in my remarks because I don't want to be redundant or boring.

I was also the deputy minister of WED during the relevant time, so overall I hope I can be helpful.

In western Canada more than $9 million was invested in 85 projects, primarily with seafood processing companies. Projects focused on storage to deal with excess inventory and measures to ensure workers' safety. It was important to maintain food supply chains during this crisis and to look after the people who worked in the food supply chains.

Overall we were happy that the Auditor General found that we made progress on these outcomes. I'm happy to answer any questions you have. Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll turn now to our members for questions, beginning with Mr. Patzer.

You have six minutes. The floor is yours.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Mr. Chair.

Thank you to all of the witnesses for being here today. I'm going to start with Agriculture and Agri-Food Canada.

We're facing challenges to our food system and food security for people in this country. Right now, according to the Auditor General, we don't have a plan to respond to a crisis that would affect the entire food system. Your department's response so far is that you want to develop an action plan and have a stakeholder approach by fall of 2022. Stakeholder engagements are estimated to be finished in September to outline a path forward.

I want to make sure that we're not in the middle of planning another plan to make a plan for half a year from now. We're talking about food and the ability for Canadians to eat. Are we doing anything more than simply making a plan to have a plan?

[Chris Forbes]

I hate to use the word “plan”, but my plan is that we would certainly have actions based on the lessons we've learned over the last two years in our close collaborations with provinces, territories and stakeholders, and the ability to roll out quickly if we were to have another food crisis come upon us.

I would point to the recent experience of floods in B.C. as an example where the mechanisms and processes we had in place allowed us to work with the Province of British Columbia—admittedly on a smaller scale—to respond quickly and tackle a number of the problems that emerged.

That said, we think that a more robust and fulsome and a kind of broader stakeholder engagement is what we need to have a plan that will prepare us to deal with a wider range of emergencies.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

In the Auditor General's report, it mentions that governments back in 2009 identified food as critical infrastructure. If it was identified that far back, I'm wondering why there weren't some actionable items when an actual emergency struck. Why are we where we are right now?