Evidence of meeting #4 for Agriculture and Agri-Food in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
4:30 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
He said that, in view of the integration of the Canadian and U.S. beef markets, differences in Canadian and U.S. regulations had to be reduced as much as possible.
Mr. Dessureault, do you feel those measures have not been taken?
4:30 p.m.
Chairman, Fédération des producteurs de bovins du Québec
As Mr. Wildeman said, we have been asking for harmonization since 2003, but in many areas, we are still waiting. If anything has changed, it is that standards have become even more stringent in Canada. The Canadian sector is unable to export. Yes, the high dollar is not helping, but that is something that we have always managed to handle. Nowadays, we have Canadian abattoirs. What we are talking about is how difficult it is to operate within the Canadian environment, where competition is regulated.
4:35 p.m.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you, Mr. Chairman, and I'd like to thank all of you for coming here today.
There have been some suggestions made around the table about how we need to tackle this, and I think it's important to note that we all have to work together as producers. I'm a producer in my other life, and I know there are a few more in this room. We work together as producers, as producer groups, and as government, and we shouldn't be bickering about it.
One thing I need to point out to Mr. Bellavance--and I'm sure he knows this, but maybe not--is that the SRM ban that was made in Canada was asked for by the industry. It wasn't put in place per se just by government on a whim. That was requested by the industry. Now we have some problems that all hit at the same time, like the high dollar and what have you, that have compounded things. We need to work together. As Mr. Laws said, the motion we have to deal with inspection fees is only one thing. We have to work together to come up with more ideas like that, which can possibly work.
We're always limited for time here, but I have some specific questions to some specific people here, and maybe I could just put them out there. One thing I want to know, and this is for both the pork and the beef industry, is this. What kind of advertising is there to try to increase consumption and that kind of thing? That's going to tie in with another question I have for both of you on the amount of beef and pork consumed per capita in Canada. I know at the time of the BSE crisis, in the early years of BSE, we actually increased our consumption of beef per capita. I'd like to know whether those figures are staying fairly on par. I'd like some comments on that.
This will be specifically to Mr. Wildeman or Mr. Masswohl. Was there any study--I'll call it that--or investigation into maybe moving more towards forage finishing? This goes to the high price of feeds. At one time, that's where most of the cattle in the country were finished, on grass with a little bit of grain.
Also, on better ways to use the byproducts from the biofuel industry...because I think society today wants alternative fuels, and I think governments are obliged to go down that road. I don't think there's any turning around.
I have another question, maybe directed toward Mr. McAlpine or Mr. Laws. From the retail side, as far as profit levels out there are concerned, I think we can all agree in this room that I don't think we've seen beef or pork prices in the stores go down. At least my wife hasn't told me she's seen that lately. Is there something along those lines we can maybe tackle?
On slaughter facilities, and this is maybe towards Mr. Dessureault because it was part of his comments, back in the BSE crisis, government basically tried to build up our packing industry, to no avail at the time. Because of circumstances and what have you--and it's human nature, if we can get another cent per pound as a cattle producer or as a hog finisher we're going to take it. Anyway, at the end of the day, our packing industry is leaving quickly. We can't go pointing fingers, and I don't have all the answers, but as a politician--we were in opposition in those days, but I still supported that we had to do it--I find it very disheartening that packing is now leaving us, and it doesn't seem to matter what we do.
So there are a lot of questions there, but I'll let somebody start off.
4:35 p.m.
Conservative
The Chair Conservative James Bezan
Yes, there are a lot of questions there. We don't have all day, and Larry used half his time just asking the questions. Please keep your comments as brief as possible so I can make sure I can keep things fair around the table for all our members.
Mr. Littlejohn.
4:35 p.m.
Director, Canadian Pork Council
Mr. Miller, those are great questions. At the Canadian Pork Council, we invest in Canada Pork International and Pork Marketing Canada. We do a lot and spend a lot on promoting, not only internationally but also here in Canada. In Ontario, we've gone a step further and we've come out with a homegrown Ontario program that people are now asking for. At the end of the day, when you export 60% of your product, you have to get out there and you have to compete.
On your comment on using the byproducts of the ethanol industry, regarding DDGs, five years ago in hog feeding in Canada we used virtually none. Today there are many rations that include up to 15%. The hog industry in Canada is one of the most competitive agricultural industries we have. I'll go head to head with anybody in the world. You guys give me a level playing field. You're the government.
We should be on the record here too. We do not support subsidies for ethanol production. It's an energy source. It should be able to stand on its own two feet.
Our packing industry is struggling. There's no doubt there. I believe with the technology that I've seen around the world, our packing industry will be able to compete with anybody.
I'll turn this over to Jim.
4:40 p.m.
Executive Director, Canadian Meat Council
Fair enough. That's exactly what we were asking for--some help for industries to get larger-scale...and to get the equipment they need. If you get a chance to tour a packing plant, you'll notice that there's still lots of manual labour.
So there's still lots of opportunity, but nevertheless it takes a lot of money, and we appreciate the government's capital cost allowance depreciation.
Concerning the comments about retail, I'm not qualified to comment, but I do the shopping. I was at Loeb here yesterday in Ottawa, and there was extra lean ground beef for $4.41 a kilogram or $2 a pound. There were lots of features on beef, and there's really incredibly cheap pork in the store. I pick it up and think, this is too inexpensive. If you wanted to call in someone from the George Morris Centre, which looks at that type of data on a regular basis, I'm sure they would say the same thing.
4:40 p.m.
Chair, Canadian Cattlemen's Association
First I'd like to state for the record that the industry did not ask for what we got on SRMs. I have a letter—it was widely circulated—written February 10, 2006, to then Minister of Agriculture Strahl asking for two things: firstly, don't do anything on the SRM ban unless we can harmonize it with the U.S., because we knew it would place us at a significant competitive disadvantage in a country that was classified in the same risk category as us; secondly, if we did have to move, we would go to the short list and to an outcome-based approach.
Neither one of those things has occurred. That's what has caused this problem we had. Secondly, the time to implement it was so drawn out because of the fed-prov agreements and the lack of clarity—I should let CMC talk about this—that we were never in a position to do it.
So I would disagree that we asked for this. We asked for what was necessary, we asked for harmonization, and we asked for the minimum, and we got a lot more than we asked for, which is maybe consistent with the idea that you shouldn't get what you wish for sometimes.
Secondly, forage finishing is certainly going on. Economics are going to drive that, so we're seeing a lot more of it. Actually, there is quite a difference in the cost of forage versus grain right now, so we're seeing new programs come out. It likely takes a couple of years to do that, as we have to change our production methods to do it, but economics will drive it.
On the byproduct side, there's no question there's a lot of research going on. I've been in that game for 16 years. We've done a lot of research ourselves. We feed a lot of byproduct and have for a long period of time. But there are a couple of things I'd point out.
First, there's some new funding available now, which will kick off a very significant and major research project on feeding of byproducts, that just got approved in the last few days, so I think you'll see a lot of new outcomes.
Second, we've indicated in our biofuel strategy, which we presented to this committee several months ago, that we require some new research. We think there are new grain varieties out there that can help the ethanol industry to produce more but that could also supply the kinds of byproducts that have the highest nutritional levels. So we need to do those things as well.
Finally, I'd just say that if there were one silver bullet, we would have figured it out, but I think there's a suite of things that we need to do to make this industry competitive. I think we've pointed that out.
4:40 p.m.
President, Fédération des producteurs de porcs du Québec
We are essentially talking about demand. Canadian products enjoy a good reputation among pork exporting countries. Nevertheless, we are concerned as to how long it would take us to get our markets back if we lost them.
I also wanted to say that if you really want to promote Canadian pork, then it should be labelled as such so that people know what they are getting. That is something that needs to be studied.
In addition, at the World Pork Conference, which was held in China in September, it was clear that, internationally speaking, the American and Chinese producers are the only ones who are making any money. Everybody else is running losses because, rather than basing prices on productions costs, retailers are influenced by dumping practices. Producers from around the world were unanimous that retailers should set their prices based on production costs.
4:45 p.m.
Conservative
The Chair Conservative James Bezan
Thank you. I think Mr. Wildeman is going to have all of us checking our CCA correspondence for the last three years to see what he said. My recollection is like Larry's.
Mr. Atamanenko.
November 26th, 2007 / 4:45 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you.
Mr. Dessureault, you mentioned the competitive approach by the American government and suggested that we adopt the same approach in Canada. Clearly, we have to play hardball.
This whole idea is that we're not competing against producers, rather we're competing in governments. I think this is a question and I've thought about it. How do we get tough? If we do, do we have the support of industry?
That's a question, because often the answer is that if you get tough with the Americans, our producers are going to suffer. Yet in a report we brought out, I think Larry's last recommendation was on food security, and we had one there on institutional buying.
The answers we always get from the government and the minister are that we have these agreements and we can't overstep our bounds because we've got equal access; we have to give equal access to products coming from outside the country. It seems we do that in all sectors, and it seems it's been happening for a long time. I know that even before I got into this business, I asked why we were always playing by the rules; nobody else is.
My question is this. If the minister and the department and the government decided to get tough with the Americans in this case or others, would industry stand by them? If so, what are the concrete steps? We've talked a lot. We go around and around the table, but what are the concrete steps in the immediate future that we can put into place so that folks don't go out of business in the next two or three months? Is it that we should waive the inspection fees? Is it some injection, and what kind, while we look at long-term solutions?
I'll just throw that out and see if we can get some answers before time runs out. Thank you.
4:45 p.m.
Rory McAlpine Vice-President, Government and Industry Relations, Maple Leaf Foods Inc.
Thank you, Mr. Chairman.
I can perhaps make a comment on the first issue of playing tough with the Americans. The one thing that has been mentioned here is the growing tide of imported U.S. meat. We certainly see it in the pork sector. It's coming in large volumes, particularly the trailerloads that come in on feature for weekend specials and so on. Absolutely there's a risk; we have to be careful in that trade relationship, but at a minimum we should expect regulatory compliance with respect to that produce. I think you'll often see non-compliant labels on some of that meat coming in.
There's a clear set of requirements in terms of how meat is to be labelled. It's a combined responsibility of the packer and the retailer, but the combination of the information on the label has to be consistent. We don't believe that's always the case, and that is at a minimum what we should expect. In the current public environment with the concerns about imported food safety and the problems with China and so on, I don't think the retailers want to be in the situation of putting out product that doesn't have the correct labelling and the country-of-origin identification, as is required by the meat inspection regulations.
Thank you.
4:45 p.m.
Chairman, Fédération des producteurs de bovins du Québec
We are working hard, together with our producers, to ensure that Canadian products are properly labelled and traceable. Livestock identification at the farm lies at the heart of any great labelling and tracing system. Since 2002, Quebec producers have practised livestock identification on all animals from the moment they are born until the time they are sent to the slaughterhouse.
The same system exists elsewhere in Canada and is in the process of being strengthened. It allows Canadian beef producers to be truly competitive on the international market. Canadian beef producers primarily sell cattle that are younger than 20 months. Japan, which has stringent criteria in place, has insisted that it only wants animals younger than 20 months. In Quebec, were we asked to, we could provide the age of all of our marketable livestock. We could do the same across Canada, if need be.
Setting up such a system, however, requires support. Yet in Quebec, our system was entirely funded by our producers, with a little help from the provincial government. They got no help from the federal government. Federal funding went elsewhere. Federal support is provided in Canada, but it has not attained its objectives. I support clear labelling, and I believe it should also communicate the quality of Canadian products.
Our discussions often lead us to the infamous topic of countervailing duties. How is it that the U.S. can have an agriculture support program worth tens of billions of dollars without anybody batting an eyelid, yet Canada runs into difficulties if our government provides a few million dollars to help its beef and pork industries? We have to sit down at the table and come up with some solutions.
It is the same government, the same international organizations and the same WTO. When has the Canadian government ever attempted to take legal action against the United States for dumping by selling pork in Canada at ludicrous prices? We often see the same problem with veal. Quebec is a hub for the veal industry in Canada. Why is it that veal is being imported when we produce it here in Canada? It can be imported. The answer is because there is not enough control at our borders.
4:50 p.m.
Director, Canadian Pork Council
Thanks, Mr. Chairman.
From my point of view, this is kind of a fine line when you ask, “How do we get tough?”
We've talked for a long time, for example, about American farmers being allowed to use carbadox and we aren't. We're not allowed to use it, yet the meat that's grown with carbadox in the U.S. comes into Canada and we decide that it's safe. That's a grey area for us. We're hesitant to go down that road because we obviously have products that may be unavailable in other countries. We play by the rules; in Canada, that tends to be the way we do it, and I'm proud to be a Canadian. But I would go farther than that and say that we do very much need to start to get a little more tough.
Several of the other speakers have mentioned a lot of the cost-recovery fees and that we need to make the effort to level the playing field, and we need to get tough. That's going to cost us a little bit of money, but it's just not justified to be charging us the cost-recovery fees that our direct competitor doesn't have to pay.
We need to get tough on things like the Canada-Korea free trade agreement. The Americans have an advantage in Korea that we don't have, and we need to get a little tougher with some of those things. We need to get a little tougher with our access into Russia, for example. Americans, again, have access into Russia and into the free trade. You guys can explain this better than I can, but I know it's a real issue.
We need to get a little tougher on some of those things. We need to just work hard at some of those things.
4:50 p.m.
Conservative
The Chair Conservative James Bezan
Thank you.
To follow up on what Alex was asking about on the regulatory burden and what we can do differently, what is this costing us on a per head basis? It's all coming out of the marketplace.
4:50 p.m.
Chairman, Fédération des producteurs de bovins du Québec
The regulatory burden for cull cattle costs us between and $35 and $50 a head, and that does not include the extra labour costs involved.
4:50 p.m.
Conservative
4:50 p.m.
Director, Canadian Pork Council
If you look at it very quickly, we have estimated about $30 million in plant inspection fees and border crossing fees. That's maybe $1.50 or $2 a hog.
4:50 p.m.
Liberal
Lloyd St. Amand Liberal Brant, ON
Thank you, Mr. Chair.
With respect to the hog industry, the background notes we've received reflect that over the last two years there have been 800,000 fewer hogs in Canada than was the case two years ago. Are there more or less the same number of hog producers now as two years ago?