Agriculture Committee on April 23rd, 2007

[Dennis Boudreau]

Perhaps, yes.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman, and thanks, gentlemen, for coming here.

Mr. Wiseman, I don't know whether there's a connection with the previous Wiseman, but anyway, thanks very much for coming here from Newfoundland and Labrador.

I have a couple of points.

Mr. Gordon, you touched on a program and you talked about regions. My question is, do you think the government should be looking at, instead of one national program, having three or four regional programs with comparisons? You can answer that.

I'll ask another question to Mr. Wiseman and Mr. Boudreau.

Mr. Wiseman, you mentioned $1,500, and I believe I heard you correctly that the whole province basically received that under the CITI program. Are you suggesting that farmers should qualify for a program because of where they live, or because they actually qualify under the criteria of the program?

Mr. Boudreau, you talked about the cost of production and regional aspects. I'll use an example. Where I farm, I've grown corn for corn silage to feed my cattle, but I can't make money growing it as a cash crop. So when you talk about the grain industry here and tie it in with having a regional food supply, you know, people live in the Rocky Mountains, but you can't grow crops there.

My question is, should we be subsidizing farmers to grow grain where you can't grow grain profitably, and things like that? Maybe a number of you might answer that, but I think you get the direction that I'm trying to go in here. I can't disagree with having a regional food supply, but at the same time, there has to be a reasonable expectation by both those on the production side and on the government side to protect that.

So there are a number of questions. I'll let Mr. Gordon answer first.

[Robert Gordon]

Thank you for the question, Mr. Miller.

One of the highlights I've personally seen with the environment chapter has been the fact that each province, working with their federal co-chairs, has really tweaked the environment chapter provincially or regionally to accommodate some of the unique characteristics of that area.

For example, every province in the country has established an EFP program, environmental farm plan program, that they felt best fit to meet the needs of their industry, often in partnership with those industry stakeholders. So I think that's been really successful—to see a national model and to follow a national goal, but to have it so that even at the provincial or regional level there's some flexibility to be able to develop programs that make sense for the industry that exists there.

The point I was trying to make is that I really see that model working effectively with the science and innovation component in the next generation, rather than trying to fit us all through the western Canada mindset of a value chain and where the industry is going. We have different needs here in Atlantic Canada. We have different opportunities. And I think certainly under our capacity-building needs, under science and innovation and the future growth of the industry with some new opportunities, a more regional approach would be much more highly favoured, and I think much more successful.

[The Chair, Conservative, James Bezan]

Mr. Wiseman.

[Mervin Wiseman]

Thank you.

We've created an APF and we've created different pillars, and the idea I think was to nest it all together and to have it fairly comprehensive. But we didn't do that; we just simply didn't end up doing that. So we started to come in the back door and do some things in budgets subsequent to the initial one.

When we talk about the CITI or the CAIS inventory transition initiative, and should it go to Newfoundland and Labrador because they're located out in the far reaches of the Atlantic and we should take pity on them, or should we send it to the people who it's targeting, the people who got hit with BSE and the grains and oilseeds issues and so on, I don't think there's any question that the ones who are targeted should be the main beneficiary of that. But with $900 million there's some rationale here to say that if we don't build in some kind of a program, an offset from this program, to allow Newfoundland and Labrador farmers to build their infrastructure around slaughterhouses and meat inspections and so on, to do that kind of thing, they're going to be back here three years from now and they're going to be looking for the very same program themselves. We've got lots of second chances, but we have no first chances. So I don't think it's a leap to be able to say we can rationalize this, other than by virtue of the fact that we're living out in the cold Atlantic.

Again, when we look at this disjointment of fillers, I think Newfoundland and Labrador did something with a little bit of money that it had that no other province managed to do, and it was built into the flexibility thing that we always talk about.

BRM was not our major preoccupation in Newfoundland and Labrador over the last two or three years. As a matter of fact, we did not come anywhere close to being able to use up all the BRM allocation that was given to us, but we were given the flexibility to move that money to other areas and to other pillars, and primarily we moved that money into areas where we could do strategic development.

We came in the back door, if you will, to do strategic development. We've had a lot of people who said, we can't let Newfoundland and Labrador do that in the future; shut them down. I say let every other province do the same thing. Give them the flexibility to do it.

One of the real key things we did...because the Atlantic Canada Opportunities Agency, who have oodles of money, said, here's the lead government agency coming in putting up $100,000, $150,000, we will come in with $500,000 on a $1 million project. We had INTRD, another program that's not related at all to agriculture, and is not a lead agency, say, look, we're in too.

So we would have a conglomeration of about five different agencies coming in on the basis of a small percent of leverage that's brought in through APF, but without that flexibility we can't do it. I think you can call that companion, if you want, but there are all different kinds of things to do.

I'll could go on for a long time, but I'll just leave it at that.

[The Chair, Conservative, James Bezan]

Please keep your comments as brief as possible, so we have more time for questions.

Mr. Atamanenko, you're on.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you, gentlemen.

Mr. Wiseman, Newfoundland, your province, has suffered in the last two years because of the fishing industry and the restructuring and all of that, so the rural way of life is trying to survive, as in many other parts of Canada for other reasons.

Do you see the agriculture industry being able to step in and somehow build up rural Newfoundland? If so, how?

[Mervin Wiseman]

Yes, if we can get some strategic arrangements built into the development. If we're not so paranoid with countervail and being able to use the word “expansion”, that we don't run and scurry and get—We're so afraid of what's happening south of border.

One of the things we do in Newfoundland is we're on an APF advisory council, and it puts the producer at the table with the decision-making process. We were trying to make a decision one day on something that we're going to do for a vegetable farmer in Fortune Bay, Newfoundland. All of a sudden he was rejected, and the rationale was because we're afraid of countervail. How the hell does a farmer in Fortune Bay, Newfoundland, who's farming on 20 acres of vegetable property, get caught up in countervail? We've taken this too far.

Yes, we have to have strategic investment, and if we bring that in—But agriculture in the province of Newfoundland and Labrador is the only renewable commodity that has got any growth potential. Everything else, the forestry, the fishery, everything, is just at a standstill, the status quo. It's going backwards if we don't get investment in research and development.

For example, we talked about R and D. We have a blueberry industry, with the best blueberry in North America, the highest in antioxidants; it has everything. We produced half a million dollars' worth last year while there was $81 million from Nova Scotia. We started out 12 years ago on the same playing field. Where did we go wrong? It was because of investments.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I know, for example, in British Columbia, and I think this is the case for the rest of Canada, that prior to NAFTA we had in-season tariffs. That's probably an argument for the folks saying, how can we have a viable vegetable industry if we have to compete with the border and we can't slap any tariffs on? How do you see us getting around this?

[Mervin Wiseman]

Well, I think we've contrived more of the issue than actually is there in reality; we're a little bit afraid. It's all, don't do this because we'll get hit with countervailing duties.

I also sat in on that when we were trying to do something about the declining margins for farmers at the NCC, where we had a fairly high-level official from the United States talking about a program for compensating their farmers. At the end of it, one of the producers said, what if we come up with the same program to feed our producers the kinds of money they should get? They said we'd be subject to countervailing duties, as they wouldn't stand for it. So there's something wrong there.

I believe for most of the issues around this, there are clauses in the WTO and other trade agreements allowing for regional flexibility and allowing one to bring somewhat economically depressed regions up to certain levels. The same rules don't apply. But, again, we're applying the same rules to all the regions, such as Newfoundland and Labrador, as we are to Ontario and B.C. and to all the rest of them.

So I think we need to get inside this a little bit and understand the issues. Producers have been bamboozled. I believe politicians have been bamboozled by the bureaucrats, who have no accountability to anybody. The difference in the United Sates, of course, is that the politicians are tied to the producers who put the policy together and elect them and kick them out of office if they don't perform. That's one of our big problems.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

So should our federal government be getting more teeth and have more of a will to protect our local industry?

[Mervin Wiseman]

Absolutely. Let's start with the farm bill. The CFA has done a pretty good job with it. They can make some improvements to it, but I think we have to have the farm bill, otherwise we're on a tilted playing field with the U.S. It is a lot about the U.S. versus Canada and the EU versus Canada; it is an awful lot about it. And until we empower ourselves to be able to counter that with the right kinds of programming, and with policy, first of all, because it's your chart—If you're a navigator and you're heading across the ocean to England, you won't get there if you don't have a chart. That's policy, and that's where you're going. We have no policy.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

I have a question for Pork Nova Scotia. Am I right, Monsieur Boudreau, there used to be help with transportation and there is no more? Could you explain that, please?

[Dennis Boudreau]

I'm not sure of the year, but I would suspect it was in the mid-nineties, when there was federal subsidization of grain transportation from western Canada. More or less, it brought the same feed cars across Canada. So provinces that were deficient in grain production, such as Nova Scotia, benefited from that. If that hadn't been in place, the hog industry would probably not be in place here, so in theory we would probably not be screaming and saying we need help.

You can't start an industry on a certain basis and then eliminate its support program, because you're then killing the industry. Then you have to deal with what you do with an industry that's dying.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

So if we don't want to be at the mercy of American corn producers, for example, would you envision having some kind of assistance for transportation of grain from western Canada, or central Canada, to the Atlantic provinces?

[Dennis Boudreau]

I fully support that for the Maritimes, and especially for Nova Scotia, because we don't have the grain base. I fully support having regional subsidization of grain transportation, and then I suspect we'd be at the same playing level as our counterparts in Ontario, Quebec, and the west. By then, if we were a few dollars a pig short, we could probably find ways to find those, but we can't find $60 a tonne.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Atamanenko.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks, Mr. Chair.

I think on the last point, Alex and Dennis, on the feed business, it's another case of where Merv hit the nail on the head, that pretty nearly everything we do on policy development in this country relates either to international trade rules or how they might feel about it south of the border. I think you made a really valuable point in terms of your 20-acre vegetable farm.

The fact of the matter is there are two acts involved in feed, the Maritime Freight Rates Act and the Feed Freight Assistance Act, and both were dumped to meet WTO requirements in 1995, I think. And, Merv, Newfoundland is a different industry. A number of us have been there, and it is growing and expanding, whereas agriculture in the rest of the country is in a different situation.

But my question would be, what about companion programs? They weren't in ATF I. They were taken out. The CAIS program was going to be the be-all and end-all of programming and there was never going to be ad hoc funding again, and there certainly wasn't going to be companion programming. Companion programming might meet some of the needs in Newfoundland. It might meet some of the needs that Mr. Gordon talked about in terms of the environmental area.

So I'd ask the witnesses three questions. What's your view on companion programs? Secondly, we do things very differently in this country than in the United States. They have all kinds of subsidies that aren't seen as agricultural subsidies. On some of the things you talked about in environment, should the public pay if it's done for public good, whether it's environmental or anything else on the farm?

Havey, you were saying that supply management should be part of the new APF as a risk management program. How should that be worded? This really goes to our researcher here. Are you saying the three pillars themselves should be stated and not the words “supply management”.

And lastly to the hog producers, we don't have a national energy policy in this country. We have a new ethanol and biodiesel policy, which I support to a great extent, but what I'm worried about is that all we're going to do is make another profit centre for the oil industry. They don't need another profit centre. Should the energy policy for Canada be more all-encompassing, including wind, biomass from manures, for instance, and other areas, and be tied into an energy policy that benefits Canadians and rural communities rather than just the oil companies?

[The Chair, Conservative, James Bezan]

I would ask everybody who wants to comment to keep their comments brief.

[Mervin Wiseman]

Companion programs, yes. We have this issue about developing land. We don't have a lot of land when it comes to agriculture in Newfoundland and Labrador, so we have to use everything we have. Almost, sometimes, when a little bit of dirt falls on the rooftop, we need to go after it.

But we have a policy that we don't develop land in this country. We have to develop land, and you know what we did with our APF agreement? We came in the back door. We said okay, we have an environmental filler that tells us if we expand our dairy industry, we have a certain amount of land to spread our manure on, so we came in the back door and said we want 150 acres cleared and developed to spread manure on, not to develop because we need forage.

We shouldn't have to use the backdoor approach. We should have a companion agreement that allows us to meet the goals and objectives of the environmental filler and also to have some level of economic sustainability. It did both. What's wrong with that?

We are seeing now the development of the life sciences industry in this country as we've never seen before, and we're going to see a lot more. I see the main focus being on ethanol, on biodiesel, biofuels, and so on. That is not the main focus in Newfoundland and Labrador and I would suggest other parts of the Maritimes. We are looking at a different component of life science. We're looking at functional foods and nutraceuticals.

I don't see the same kind of focus, and I'm worried that we're going to slip through the cracks on that. We can produce a multi-million, probably a multibillion, dollar industry in our province because of biodiversity in terms of what we can do with northern berries and the benefits of that and other products, but if we don't have companion programs that fit into that overarching arrangement of how we do strategic development in the life sciences, then we're going to fall through the cracks again.

So that's a somewhat better example, and I'll just leave it at that.

[Dennis Boudreau]

Yes, in Nova Scotia we're very much in favour of companion programs. We think that's the only way to diversify a national program. I think it's fair to say that over the last five or ten years, creating national programs and looking at trade has so far not been beneficial to the farm industry.

I think we have to look at what the effects are of doing a national program. Bureaucrats or politicians don't really look at that. They can create a program, but they don't know what the program will do two years after that. So when you design a program, it's very important to look at what you foresee in terms of the effects of the program. Is it going to kill somebody? Is it going to make somebody survive? It's very crucial to look at that.

Concerning environmental and public good, I think it's past time that in this country we made the public pay, or found a way. The public pays for things like bottle exchanges. We make laws for every other thing, and they pay for them, so why can't we put agriculture in that bracket? We're just too shy, or we don't we have enough voice, to say what agriculture needs in this country? There's a problem there.

With regard to biofuels—I'll try to make this short—I think this is another issue that the U.S. started, or maybe it was started overseas. If this Canadian government doesn't see the effect of pushing...and I'm not saying biofuel is not good. What I'm saying is that there is going to be a huge effect from supporting a biofuel industry in Canada.

We have a huge livestock industry. We don't say one is better than the other. But if one is going to benefit the environment or whatever, if it's all for the benefit of the environment, we should take some of those benefit dollars and put them into the livestock industry. We need to have food here. If we don't take care of our food supply, there is going to be a problem.

[The Chair, Conservative, James Bezan]

Mr. Whidden, very quickly.

[Havey Whidden]

On whether it's supply management or the three pillars that need to be recognized under the BRM, definitely it's the three pillars. It's very important that we have those three pillars identified as this business risk management pillar.

Just to add to that, in Nova Scotia, for example, we have a small industry here. In total, dairy represents about 25% of the farm gate receipts in this province. Without a very strong, viable dairy sector, it will affect all the sectors. For example, the hog industry right now is in a serious financial situation. To maintain our infrastructure here in the province, we need all sectors of the industry to be strong and viable. Because we're so small, when businesses start to close up because of unviable sectors of the industry, it affects us all.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Devolin.