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.
5:10 p.m.
Conservative
Carol Skelton Conservative Saskatoon—Rosetown—Biggar, SK
I'd like to know whether you feel harmonization between the provinces would help all your industries. Do you think getting rid of a lot of the provincial rules and regulations would help all your industries across this country?
5:10 p.m.
Vice-President, Government and Industry Relations, Maple Leaf Foods Inc.
I can make a comment just with respect to labour. Certainly, a company like ours, which has operations in different provinces, is subject to different labour regulations in every province, and there is a compliance cost to that.
The other thing I could mention right now is the labour shortage. The foreign worker program has become extremely important to the meat processing industry, yet we're dealing with its application province by province. It's a national program, but every province sets slightly different rules, particularly in relation to unskilled labour. Again, it's been very frustrating trying to find a common approach that will rapidly get the approvals we need to bring in labour in all provinces.
Alberta is a particular problem. The backlog in Alberta is just enormous.
5:10 p.m.
Director, Canadian Pork Council
A lot of the discussion earlier was about harmonization of regulations and so on. Most often we talk about harmonization with other countries, with other competitors, but I would say that on our part, we are very concerned about trying to standardize the situation from one province to another. One of the reasons we're very anxious to get this kind of program through the federal government is because it's then available to all producers.
It's a little bit of an issue that some provinces are a little bit more able than others to support their producers. Certainly, from a government program point of view, harmonization is a big issue for us.
5:10 p.m.
Conservative
5:10 p.m.
Chair, Canadian Cattlemen's Association
I'd just say quickly that these provincially inspected plants.... Of course, “regulation” is a big word, and I guess it depends on what part of those regulations you're talking about having harmonized. But I know in BSE, provincially regulated plants played a very important role. They serve a different segment of the industry, and they did a lot for us to help in the cull cow situation.
Certainly, when you have different regulations between provinces in other areas--and we are talking about this right now with respect to high-risk material--you can put tremendous undue pressure on some of these small plants. We've seen a number of these small plants close because the provincial regulations were different between provinces.
5:10 p.m.
Conservative
5:15 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
Thank you. Merci beaucoup, monsieur le président.
Thank you to the witnesses.
I was saying to someone earlier that I come from a riding, Halifax West, that is primarily suburban, and it also contains a few small fishing villages. But the one thing people all have in common there, like the rest of us, is that they like to eat. And they like to eat good protein, and good pork and beef are among those things, of course. Most of them I think would prefer to have the confidence of knowing that it's well-produced Canadian product that meets Canadian standards in many ways. That's important to people.
This whole issue is one that should concern all Canadians. In the same way that the dollar--in this case, it isn't just the dollar, because obviously the cost of grain is a huge element of this--is hurting a lot of industries, as we've heard, I can tell you that the fishery is hit hard by this as well, along with agriculture and forestry, and so on, certainly in my province and across the country.
Let me ask you about what you're proposing. I think you've talked about a new program, and I'd like a clearer understanding of how much that's going to cost over the long term, in your view. For instance, if you're talking about a loan program, obviously you want to avoid it being countervailable. We don't want the Americans saying it's a subsidy. So if we're going to have a loan program, how are farmers going to pay that back when they're already having problems with their existing debts? And as we go on, how much do you see this costing per year?
5:15 p.m.
Director, Canadian Pork Council
The answer to the first question--and this is a very common question, and I think it's important that we answer it--is you're right, we've asked for a loan program as opposed to some kind of an ad hoc payment, and essentially that's because of the concerns about CVD. I'm a producer and I'm suffering the same stress everybody else is, and I would very much prefer if you'd write me a cheque and I didn't have to pay it back. But having said that, because of the CVD issues, we, as the Pork Council--and we work very hard at this--really see that as the only viable way to go ahead and provide the liquidity to producers that they need.
You're very correct in saying that. Producers often say, well, gee, don't give me a loan, that just gives me a liability on my balance sheet, but don't forget, you're going to give me that liability on my balance, but you're also going to give me the cash, so I'm going to take that cash and I'm going to pay my feed bill. Many producers right now are at the point where we think two weeks from now.... There are producers who don't have money to buy feed. I got a call from a guy in my province who said there's a producer who can't buy feed. We're thinking maybe some of us will chip in and get the guy a little bit of feed, but obviously we can't support him.
That's the issue. We need to get cash in that guy's hand so he can buy feed and he can meet his payroll in order to keep going. Having said that, six months from now, if the prices turn around and he obviously has to pay that back...if you didn't give him that cash, he still would have that feed bill and six months from now he still has to pay it back. So from a balance sheet point of view, you're not making him better off, or you're not making him worse, you're just making him more liquid. You're giving him more liquidity and the ability to buy feed to feed his pigs and carry on with business.
5:15 p.m.
Chair, Canadian Cattlemen's Association
It's a tough question to answer, because it all depends. But if you look at it...and we tried to do an estimate to the maximum cost. We think there are about five million cows in Canada, and if everybody took it, that's about $500 million. If you think there's about the equivalent amount of feeder cattle in Canada, and if we're talking about our ask, about $150 a head, that's likely $750 million. So it's $1.25 billion.
However, we estimate that a relatively small percentage of producers would actually take that, probably 50% or less. So it would be something less than that. Again, a lot of this money is money that producers are expecting to get from programs, business risk management programs, that are in place but simply take too long to administer. So a good portion of this is money that will likely be coming to them eventually anyway. This is a matter of getting it out there now when it can do some good, so that they can make rational decisions about the future.
5:15 p.m.
Conservative
The Chair Conservative James Bezan
You costed everything out as to what it is for the cattle industry, but what would be the cost for the hogs?
5:20 p.m.
Director, Canadian Pork Council
We've been asked that question, and I'm not sure we know exactly, but we're probably thinking somewhere in the same range. We know there will be something like a $700 million loss in the hog industry for 2007, and CAIS would cover a third of that, so obviously there's a need for about two-thirds of that amount of money. If we go into 2008, it's going to be something beyond that.
James, I'm not sure, but it's somewhere between half a billion and $1 billion. I would think $1 billion would be the extreme. We certainly think it would be less than that.
November 26th, 2007 / 5:20 p.m.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
Thank you very much, Mr. Chair.
Welcome, gentlemen. I'm glad you took the time, on very short notice, I understand, to come today.
One of the things that I think Mr. Wildeman alluded to and I think through all your conversation.... It seems that we've been dealing with the CAIS program, and right now, as you mentioned, CAIS sometimes doesn't meet the needs quickly enough. There are some obvious shortcomings with CAIS. So that message got through under BSE, under different problems that we've had over the years.
The current agriculture minister--as did the former agriculture minister--is trying to address that with our Growing Forward program, which I would imagine you're all familiar with.
What I'd like to know is.... We're going through this problem now and we have to address it now, there's no question about that, but five years from now, if you're looking into the future--and we have the Growing Forward up and we've gone through this trough, and hopefully you've had some good years--do you think the Growing Forward program would trigger solutions quicker?
5:20 p.m.
Chair, Canadian Cattlemen's Association
I'm not an administrator, but my answer would be that I think it can. I think the foundations of the program are realistic, and I think it's workable.
Right now it isn't getting the job done, quite frankly. I think part of the main reason is that, at least on the cattle side, we've fiddled with it to try to get these other disasters to fit in there, and it didn't work very well, firstly. That has confused the program. It slowed down the payment schedule.
Secondly, they're dealing with a budget. It's pretty hard to deal with an agricultural problem and still make the number, whatever that number may be. So we've had some serious frustration, for example, with the way they try to estimate out what the sales value of a particular animal might be. For example, right now, while we're looking at interim cash advances, they're using last year's values for cattle. Well, simply, they're probably overestimating those by a third, and then it doesn't trigger any payments. This is what's causing the frustration.
The foundations will work. In our paper we talk about the things it takes to make it work. I think if we work together we can get this thing to work. But there has to be some flexibility, and we haven't seen that yet.
5:20 p.m.
Conservative
Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON
Well, that's it. This is a framework, and what we're hoping for is to get.... That's what the minister is looking for. That's what we're doing now, steadying this, so that if we are faced with a crisis two, three, or four years down the road, we'll be able to trigger some help a little quicker.
Mr. Laws.
5:20 p.m.
Conservative
5:20 p.m.
Executive Director, Canadian Meat Council
In terms of the long term, we made these comments as well at the agricultural policy framework.... If you look back, you will see that the vast majority of the money that Agriculture Canada spends goes toward business risk management and farm income support.
But we need to be more strategic in the future and look at other programs that benefit the entire agrifood sector. At the same time, don't stop, perhaps, some adjustment within the industry. We think things like West Hawk Lake or inspection fees, things that apply to everybody, should take some of that money. And it's certainly not included in the Growing Forward program. It seems as though the food processing sector has been left out of those discussions.
5:20 p.m.
Chairman, Fédération des producteurs de bovins du Québec
In my opinion, a program as wide in scope as the CAIS will never give farms what they need. A program based on farm earnings will never perform during difficult periods, because of input costs, fertilizers, energy, feed, and the relative value of the dollar. All of these are factors during times of crisis.
Programs based on earnings are completely out of touch with the reality on the farm. Five years from now, producers will come back and say that the program is not up to par. It only works during high-profit years. When profits are up, we do not need an assistance program.
To our mind, we need programs that truly factor in production costs, that take production costs directly into account, as is done in Alberta. This would perhaps provide one way of rebounding during a crisis.
5:25 p.m.
Conservative
The Chair Conservative James Bezan
Thank you.
Your time has expired, Mr. Lauzon.
We have a little bit of time left. I'm going to give each opposition party a chance to have one supplemental question.
Mr. Steckle.
Be short and to the point, please, Paul.
5:25 p.m.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
Quickly to the point, we were having a little discussion here, because we need to put something on the table. We need to go from this meeting knowing what it is you really want from us.
I believe that in the long term, unless we as a country, as a nation, believe in a national food strategy, unless we, as governments of any stripe, whoever they are, accept that principle, that we believe in the security of our food system here as much as we believe in a national defence policy.... If we don't ever come to that point, we'll never come to support agriculture, because we can import it. You know, and all of us know, we can import anything we want, and probably a lot cheaper than we can grow it here.
Now, either we get on with this issue of a strategy or we get on with importing it. We have a choice to make and I think the time is now.
5:25 p.m.
Director, Canadian Pork Council
I think we can compete with anybody anywhere in the world, given a level playing field. But you asked what it is we want and you want a simple answer. For the red meat industry, we need cash by Christmas.