Agriculture Committee on Jan. 31st, 2008

[The Chair, Conservative, James Bezan]

Thank you.

Moving right along, Mr. Storseth, you're on.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

I have just a couple of questions for you in regard to the program itself and the rollout dates for when you expect to have the program totally rolled out--the billion dollars in the advance payment program. When will this be rolled out in its entirety?

[Nada Semaan]

The change to the advance payment program that allows a billion dollars more is actually in response to a recommendation that came in at the last standing committee, where producers were asking that it not be tied to the reference margin. Cattle producers, in particular, were saying that the reference margin was low; therefore, when it was based on reference margin or the lower of reference margin and the number of cattle, then it was low. What we did was introduce an enhancement for negative margins. So in essence, what happens is they can now get a loan for the equivalent of 50% of what their inventory is.

Now, on that introduction of negative margin, all of the amendments have gone out to all the lenders that provide support to the livestock. For cattle, for example, in B.C. it is now in place. They've already signed it back and agreed to it. It is in place in Alberta--I'm talking about cattle right now. In Saskatchewan it's also in place. In Manitoba it's in place.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

One second. As you list these off, do you have the dates they were put in place on?

[Nada Semaan]

We worked with the industry. It was done at the end of December. We put them in in January. We put out the draft in January, so it would have been in the last month. This is a new change that was made to respond to the sector needs.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

So the cow-calf producer in St. Paul has had access to this since January?

[Nada Semaan]

I would have to tell you the exact date, but it was at some point in January. It's January now, so it was at some point in this month.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

But it's been done by now?

[Nada Semaan]

It is available right now.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Okay. Can you continue with your—

[Nada Semaan]

With the list? Sure.

In Ontario, negative margin is in place as well.

In Quebec, we don't have an agreement yet. Negative margin isn't as applicable because they have the ASRA as well.

In Nova Scotia, the amendment is actually with Nova Scotia Pork for signature right now.

In New Brunswick, we're looking at Nova Scotia Pork to administer in New Brunswick, and they have said they will start that on April 1, and they will sign the negative margin as well.

For P.E.I., the negative margin is in place.

For Newfoundland, we are in discussion with the Newfoundland Agriculture Federation. We are expecting agreement by April 1.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

This is for both the hog and the pork sectors, right?

[Nada Semaan]

This is for the cattle. I have another line. If you'd like, I could also—

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Can you give me the pork sector as well?

[Nada Semaan]

Sure.

Actually, I'll go right to Manitoba. In Manitoba, we actually have an agreement in place, and it includes negative margins.

I was just speaking to the Manitoba Pork Council yesterday as part of a CPC meeting, and they have agreed to deliver in Saskatchewan, Alberta, and B.C. They've actually signed the agreement, but they are now just waiting to sign the agreement with their lender organization, and that will include negative margin.

In Ontario, it's already in place, with negative margin.

Again, for Quebec, it's the same thing.

In Nova Scotia, it's in place with Nova Scotia Pork, and negative margin is in place.

New Brunswick Pork is delivering for New Brunswick, and the amendment is with them right now, but we haven't received it yet.

For the P.E.I. Federation of Agriculture, negative margin is in place.

And in Newfoundland, the amendment is with them for negative margin, so we are hoping that it will be placed shortly.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Can you describe for me some of the difficulties you've had—and you can be specific, if you want, regarding the Province of Alberta—putting this in place in Saskatchewan, Alberta, and B.C.? And do you have a date by which you expect them to be able to access this?

[Nada Semaan]

Well, as you know, the advance payment program is delivered by third-party producer organizations. We haven't been able to find somebody in those provinces to actually deliver it.

They do take on a slight portion of the risk. There's about a 1% portion of the risk that they take on. We've been very grateful to Manitoba Pork for agreeing to take on the administration of this in all the western provinces, and we have been working very closely with them.

Basically, it's new in the livestock industry. As you know, extending the advance payments program as a marketing tool for the livestock industry came in with the recent changes to the legislation. First of all, we have to go through the program, do the administration and the forms. In a lot of these sectors it is new. We've been working very hard, and they've been very open to it. They are very pleased with the program, but it's just to get it going.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Do you have a date by which you think this will be accessible in Alberta?

[Nada Semaan]

According to the person I spoke to in Manitoba Pork, in Alberta he is expecting to have the signature with the financial institution in the next two days. As soon as that happens, he can start delivering.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Do you foresee any unnecessary complications due to the fact that it's being administered out of Manitoba?

[Nada Semaan]

No. They know the sector very well. It will be available, but we will monitor. And we will continue to work with anybody who wants to deliver it locally. That's not an issue.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Storseth.

Mr. Atamanenko, you're on.

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

Thank you.

When we look at what we've heard today and what we've been hearing over the last while, clearly there is something wrong with the way we do things in Canada. We have a minister who is a farmer, who is committed, and who understands the plight of the industry. We have very highly qualified professionals, people who are second to none, in our civil service. We have farmers who are the best in the world. And yet, in answer to my colleague's question--and the answer wasn't clear, but I got the answer after—our producers feel that our government has abandoned them, and that word was used: “abandoned”.

You've heard our witnesses. We have a report that our friends in the industry said would keep our industry alive if implemented to the letter. Yet I understand that you mentioned this morning, or just now, that you're continuing to look at the recommendations.

Well, a month and a half has gone by since that report came out. We are told that tomorrow probably will be Black Friday--that's the phrase being used--and yet we are continuing to look at the recommendations. I don't understand why these recommendations have not been implemented. We have all the capacity. Everything seems to be in place to have a top-notch response in the cattle and pork industries with support from government, and yet we're not getting it.

I'd like, maybe, each one of you to comment on this, because that's the question that's been going through my mind as I hear the testimony today.

[Andrew Marsland, Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food]

Perhaps I can begin, and others can supplement my answer.

I think what we've heard today, and what we've heard in our discussions with the industry over the past couple of months, is that this is almost an unprecedented situation. The confluence of events--the appreciation of the dollar, the inflation of feed prices, the point in the hog cycle we are in, and as we've seen over the last three to four cycles, there is much more volatility in the cycle--has led to an unprecedented situation.

I think our response in working with industry, first of all, has been to look at existing programs that are in place and were put in place to deal with cyclical problems and prices, among other things, and to make sure that the money gets out as quickly as possible. We can share with you the details of how we've done that.

We looked at existing programs, such as the APP, and at what was preventing money getting out in terms of the negative margins, and we addressed that. We continue to look at areas such as the 2008 targeted advance payments to try to get it out. There are other longer-term issues, which some of the witnesses this morning referred to, that we're also looking at in terms of longer-term competitiveness. We continue to meet with the industry to look at other appropriate responses. I think there is a lot of action going on.

I also believe, looking at the issue, that's it's not susceptible to simple answers, and I think the committee is quite aware of that.

I don't know if anyone wants to add anything else.

[Nada Semaan]

I would just add that one of your recommendations was also that we get agreement very quickly with the provinces so that we can accelerate the $600 million Kickstart program. Actually, we got our last agreement signed from the province on December 19. We had letters by the end of December to all producers, telling them exactly what they were eligible for out of that $600 million.

We've been receiving quite a bit of feedback in terms of whether they want to keep it or not, because they have a right to either keep it in their account or take it out immediately to deal with anything. As of today, for those who would like the money, cheques will be starting to issue on that $600 million. So we have acted on that recommendation as well.

I would just pick up a bit on Andrew's comments about the targeted advance. I mentioned the 2007 targeted advance and the priority of the 2006 final payments and putting the priority on hogs and cattle. We've also been encouraging the interim payments, especially for the cattle industry, because that works better than the net targeted advance, but the targeted advance works well for the hog industry.

I just came back from Winnipeg—I can't even remember now—yesterday or the day before. We literally sat down and asked, “How can we accelerate the 2008 targeted advance?”, which was a key concern for the hog sector because of their non-calendar year-ends. Some of them are already into their 2008 year.

So we are now going to start working with the provinces to get agreement to accelerate the 2008. We're hoping for a 2008 targeted advance. We can be in position to start those by mid-February to the end of February at the latest—but we're targeting mid-February—with the agreement of the provinces. For non-calendar year-ends, we could put out quite a bit. Even for those within calendar year-ends, as long as there's that six-month cycle, we could put out a good 25% to 30% of the payment.

We also put a priority on getting out all the hog and grain BPUs that are associated with hog farms so that we can finalize the 2007 final payments, so that as producers start to apply now for the 2007 final payment, we can process those very quickly. That'll be anywhere from between three to four months faster than we've ever been able to deliver because it's related to the tax year. We have been seized with it in terms of how quickly we could deliver on the programs that exist.

As our colleagues from the Pork Council have said, they have seen some of it. There are still at least three others that we need to work on.

Thank you.