Agriculture Committee on May 15th, 2008

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

I do believe the department watches what's going on around the world every day, as a lot of us do. In looking at what's happening around the world right now, we're going to get in a lot of countries...wheat production is going to go up. Of course, with Burma being one of the largest rice producers in the world, with the tragedy that's happened there, there will be problems for those countries.

I do believe the United States had a 10% carryover of its corn crop from last year. Have you heard that? It didn't go into—

[Andrew Marsland]

That's true. While for most commodities the stocks-to-use ratio is at record lows, corn is one exception. I think the figures that came out this week showed there was a fairly high carryover in the corn sector.

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

Also, I want to talk about the environment program. In there, you have put that it is an improving trend. What does “improving trend” mean? How will you measure that trend?

[Andrew Marsland]

Perhaps I can begin with that. When we introduced the agricultural policy framework, we introduced comprehensive environmental programming related to environmental farm planning and the introduction of beneficial management practices. What we saw, particularly in the latter years of the APF, was a lot of take-up on environmental farm programming. Up to about 70,000 producers participated in that, and a significant subset of them participated in beneficial management practices. As we've consulted on the Growing Forward framework, that has been a key part of it.

A key aspect is how to measure the effects of that. We learned the lesson in the APF that you really have to be perhaps a bit more sophisticated in how you do that, rather than try to measure broad trends, which are very difficult to attribute. You have to link the particular actions taken by producers and the investments made by producers on farm to changes. What we're trying to focus on is particularly water. I think what we'll see in Growing Forward is in line with the provincial flexibility: more targeted actions, for example, dealing with issues such as the Lake Winnipeg watershed and the effects of agriculture production on that.

What we will try to do, and we will be doing that over the next few months in terms of developing performance indicators, is to make sure we are adequately targeting the effects of those, adequately measuring those.

[The Chair, Conservative, James Bezan]

Thank you. Your time has expired.

Mr. Atamanenko.

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

Thank you very much for taking your time to be here.

My first question is for the folks from the CFIA.

I'm just looking at my notes here, and in the financial resources, if we look at 2008-09 and 2009-10, there seems to be a significant decrease in the budget. I am just wondering; it seems there is more need for strong regulation from our CFIA with the scare of products coming in. Are we decreasing the number of inspectors? Are we farming out services that were done by the government before? That is of concern to me.

Maybe I'll just give my other questions first, and then hopefully we'll get back very quickly.

With regard to barley, wheat, the Wheat Board, I'm still not sure if there is or has been a socio-economic study with regard to market choice. If so, is it happening? Has it finished? If so, can we get the results? I'm still not clear on that.

The third question is with regard to biofuels, on this investment that you mentioned is $2.2 billion. Is it realistic to assume that, for example, part of this money could go to a company like Husky Energy, which in all probability will be importing corn from the United States to fuel the plants? In other words, our money will be going to this big company that will be bringing in subsidized corn. Hypothetically, is that possible?

I will stop there with those questions.

[Dr. Brian Evans, Executive Vice-President, Canadian Food Inspection Agency]

I'd like to make a few comments and then ask Mr. White, our chief financial officer, to provide the details on the financial position of the agency.

It's critical for the committee to recognize that we have seen significant growth. We owe a lot of credit for that to this committee and the government over the past number of years. We were provided with tied funding to address specific circumstances. The agency has worked hard to implement this funding. It has allowed us to provide some ongoing capacity and infrastructure that didn't previously exist. This will sustain us in the future. It will ensure that we continue to provide the outcomes that the committee and Canadians are looking for in food safety and animal health protection.

As our estimates show, while there is basic funding, there are other attributes associated with supplementary estimates. The agency has been asked to deal with some aspects of zoonotic diseases, areas where we had short-term plans put in place to respond to immediate events. We were also asked to come forward with a longer-term strategy related to BSE and other zoonoses this fall. We would expect that with the support of this committee and the government these measures will over time play on those bottom lines.

I would like to ask Gord to give more precise information on where the funding is, where it's leaving the organization, and the adjustments that are being made. We were one of the first agencies to go through the strategic review process on expenditure management, the re-profiling of some of the moneys internally from some of the lower-performing priority programming. We will be transitioning into some of the critical areas of interest to the committee.

[Gordon White, Vice-President, Finance, Administration and Information Technology, Canadian Food Inspection Agency]

Mr. Chair, perhaps I could address the honourable member's question.

With respect to the planned spending, I assume you're referring to the numbers in the agency's report on plans and priorities.

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

Is the plan to maintain the level of inspectors, decrease it, or increase it? That's what I was trying to get at.

[Gordon White]

In the long run, the plan is probably to increase them. We're getting new funding by way of the food and consumer safety action plan, which will require an augmentation of our inspection capacity.

Between 2008-09 and 2009-10, our BSE funding will come to its first stop point. We will be looking at where we go with the next round of our BSE programming. This funding will need to be dealt with in that context. You'll see that the funding drops at the end on 2008-09, but we are moving ahead with our proposals for the continuation of that funding, and we would expect to see it increased. That's a high-level answer to your question.

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

What about the study?

[Andrew Marsland]

Over the years, a number of studies done on marketing choice have come to different conclusions. One would have to look at the studies and understand their terms of reference.

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

So there's no current study that you're relying on as we move to a shift in policies? There's no latest study that's been commissioned, apart from all the other studies that have been done, determining why we're going into a marketing choice for barley?

[Andrew Marsland]

I'm not aware of a specific study. We do a lot of analysis—it's part of our job--but I'm not aware of a study like the one you seem to be referring to.

[The Chair, Conservative, James Bezan]

The time has expired. Do you want to give a brief reply to the rest of the question?

[Andrew Marsland]

Yes.

On the biofuels question, the principal program is the ecoEnergy program run out of Natural Resources Canada. The program does not and cannot distinguish between inputs in the sense that you were referring to. It would have to be neutral in regard to our trade obligations. Even if one had that policy objective, it would probably fall outside our trade obligations, similar to the excise tax exemption that didn't distinguish between sources of feedstock.

[The Chair, Conservative, James Bezan]

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair. I have four questions and I'll run through them. I also have a fifth, if we have time.

First of all, thanks to the CFIA for the cost comparison. We haven't had time to go through it, but there's a lot of meat in the issue there, I believe.

I earlier asked the minister about the farm families options program and I'm wondering if any of you folks can give me an answer on that. The commitment was made when the 50¢ on the dollar was paid out. Where is the remainder of that, to pay it up to 100% of what was originally committed, and when can we expect it? That's question one.

Question two you may not be able to answer. I am wondering if the gag orders placed on the board of directors of the Canadian Wheat Board are still in effect. Has there been any consideration by the department to provide compensation for the firing of Adrian Measner--it was a government decision to do so--to compensate the board for that? What might the calculations be?

Third, the minister mentioned increasing food aid. Am I correct, though, that under the new arrangements, under the new announcement, none of this product has to be Canadian? How does that compare with American food aid? I understand American food aid has to be American product, so what's the relationship in Canada?

Finally, to the CFIA, as we know, the hog and beef industries are in huge trouble. There are two major areas in the beef sector that are a problem. There's the 30-month-aged cow decision. On inspection of cattle, if your animal is 30 months old or has the teeth, then immediately the price of that product drops massively, to be in fact worthless. Can that be changed? And if not, why not?

I'll read you what a producer...I mean, a little common sense would go a long way. A producer loaded cattle in Prince Edward Island the other day, drove 30 miles to the plant in Borden-Carleton. On the way to the plant, the animal broke its leg. It was put down the next day--in other words, thrown in the rendering tank, because the new regulations won't allow the slaughter of hurt or injured animals.

This was a perfectly good beef animal with one broken leg, and the animal was destroyed and the farmer took a substantial loss. Why is that necessary? When the animal went on the truck, it was in fine condition--in fact, it walked on the truck--but the animal broke its leg. I'm wondering why there can't be a little common sense in the system to ensure that the farmer gets a little bit of money out of that.

[The Chair, Conservative, James Bezan]

Before you answer those questions, I want to draw the committee's attention to chapter 20 of Marleau and Montpetit, page 864, that “...public servants have been excused from commenting on the policy decisions made by the government.”

So you don't have to answer anything you feel might compromise your ability to do your job in the ministry. Pick out what questions you want from Mr. Easter's list, and I'll add on 30 seconds.

[Nada Semaan, Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food]

I will start with the options question. We did actually finish the initial payments. However, as we were processing the initial payments we found about 500 participants who had not met their renewal obligations. In order to not disqualify them, we went back to them and gave them some time to meet their renewal obligations and come back. They had to do that by the end of April. Now that we've received those, we are processing them and we intend to do the final payments by June.

[Wayne Easter, Liberal, Malpeque, PE]

Will that be 100%?

[Nada Semaan]

It was never intended to be 100%, even in the actual program. The program was always designed as a two-year program, in which the first year was 100%, the second year was no more than up to 75%. That was clear right in the guidelines.

We did not want it to be a consistent...it was supposed to be to--

[Wayne Easter, Liberal, Malpeque, PE]

But Ms. Semaan, the fact of the matter is that the program was cancelled with--I forget the figure--something like $246 million left in it. That money was transferred elsewhere. There was obviously enough money in the system originally to pay at 100%.

[Nada Semaan]

Basically it was augmented—

[Wayne Easter, Liberal, Malpeque, PE]

We know that the government went back on its word, though.